Risk Vs Reward - Cataclysm Speculation Study

Flipping via auctioneer is a simple and efficient way to make gold. Flipping via speculation, however, is a dangerous and often risky game. In order to help you better use speculation and decide on items to buy for the purpose of flipping, I'm going to show you a thing or two using examples from the current auction house situation.

Saronite Ore - Low Risk, Low Reward

Saronite ore can often be purchased or bid on for close to or even below vendor price. If you were to stockpile this for cataclysm because you want to sell it as bars to alchemists, ore to jewelcrafters or as gems to other jewelcrafting levelers, you would have a very low risk thanks to the vendor option. Even if you are forced to vendor all the saronite you purchased (absolute worst case scenario and highly unlikely), you still would not lose much gold in the process. What's more, you know that the ore will be worth more than the vendor price on the auction house, so you're going to be able to make some gold no matter what.

Saronite's reward looks very promising. Since you will have so many options to sell the ore to multiple professions, I can't see the ore or the results of prospecting/smelting being useless in cataclysm. If anything, golden draenites and thorium ore should teach us that it will be quite valuable, possibly double the current value.

If you don't have much gold or even if you do I would highly recommend stockpiling a decent stack of saronite ore to hedge against the imminent cataclysm inflation.

Mage Armor Flip - Medium Risk, Medium Reward

When glyph of mage armor became uncraftable (bug!), I did my best to let everyone know that flipping these for hundreds of gold was probably a good idea. There was always the chance that the same day blizzard could fix this glyph and it would go from amazingly profitable to nothing more than another mage glyph. The risk was medium and predictable; odds are it would happen on a tuesday so flippers could plan accordingly and attempt to run out of stock close to the next tuesday.

I highly recommend at least trying strategies like this one, you don't necessarily have to spend all your gold on them but giving them a shot is usually worth it.

Polymorph Turtle - High Risk, High Reward

Here's the most dangerous type of speculating. You're playing with fire (as many of you learned with epic gems) whenever you second guess what blizzard is going to do with an item in an expansion or major patch. Polymorph Turtle, eventhough it is going to be available in cataclysm, is still a high risk, high reward item because we don't know HOW the item will be attainable. Will it be a quest, a vendor item or a super rare drop? The last one means that stockpiling the now is a good idea, the first two mean you're S.O.L.

High risk, high reward type speculating should be treated the opposite of the low risk, low reward but many players choose to gamble and put lots of gold into this type of thing. Play it smart, only invest a small portion of your gold into high risk, a medium portion into medium risk and a high portion into low risk.

For ideas on what to stockpile, check out my top ten list for preparing for cataclysm. Remember to apply what you've learned today about risks and rewards.

7 comments: on "Risk Vs Reward - Cataclysm Speculation Study"

  1. The mage armor one has been amazing on all 3 occasions I bought all of them I could (alliance,horde, and alliance on another server) so far i've been charging around 200-400g per glyph and they have been selling! good work markco!

  2. Tome of Polymorph Turtle have been going for 250G on my server with people trying to get something assuming it will be worth not much in Cataclysm.

    I grabbed a couple of these, figuring it's worth the 500g for the potential big payoff.

  3. Hey Markco ive been reading for about a month now and while I havnt tried anything yet because I want to wait for cata realease before I get game time again, if the Tome of Polymorph turtle becomes a vendor item like the black cat it could still be very profitable the black cat sells for 2500 vendor price with no rep so you could potentially still make alot of gold of of these.

  4. Good post. I think they announced that they're putting in a way to get the polymorph tome already though.

  5. Some good info there Markco.

    I've invested considerably in flipping Borean Leather for Cata, I bought about 600 stacks at 7-9g/stack (some farmer must have been unloading all stock) and will sit on it till the expac.

    I've had several opportunities to flip portions of it at up to 14g/stack, but I think I will hold out until until the power levelers in Cata start up.

    If the BC leather is anything to go by Borean Leather should sell at a discounted rate of 17-20g stack and with in game inflation it should see 25g/stack after a time.

    At the very least I've tagged a good chunk of gold to increase with inflation. Any gold sitting in the bank when the expac comes out will slowly devalue as the economy jumps up.

    This isn't my only investment strategy, but probably the best for my situation in terms risk V reward.

  6. Polymorph Turtle will still be available in 4.0.3. Don't spend too much money trying to gather them now.

    http://blue.mmo-champion.com/t/27291810112/mounts-and-items-removed-in-4-0-3/

  7. "You're playing with fire (as many of you learned with epic gems) whenever you second guess what blizzard is going to do with an item in an expansion or major patch."

    Is this a reference to stockpiling transmute mats in hopes that the cooldown would go away? If so, I'm not sure that it's much of a burn. The bulk of the cost on my server was from eternal purchases. These are already expected to go up in price during cata, so in all likelyhood it seems that they're just a longer payoff and different class of speculation.

    That said, I noticed some people that sold off some or all of their epic gem stocks in the weeks leading up to patch. They might have gotten burnt a little, but as far as I can tell they're a small minority.

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