Convert, convert, convert

The honor-to-gems vendor will be removed as of 4.0.1, so my approach today is to cash in my Wintergrasp marks and Stone Keeper's Shards for Wintergrasp Commendations and then convert those into red gems.  I did some (very) back of the envelope math and don't believe any other conversion after 4.0.1 will be favorable to try to monetize honor or justice points, so am hoping to capitalize on the rush this Tuesday.

Bracers of Dalaran's Parapets

While I can't claim to have thought of this, it's brought up infrequently enough that I wanted to devote a post to a quick method I use for cashing in my emblems.

If you're anything like me, you probably run a few heroic dungeons a week (if not every day) and have a surplus of Emblems of Triumph.  One popular technique is to use the vendor in Dalaran to trade down for Emblems of Heroism, and then convert those into gems.

However, if you look a bit more closely at the vendors you'll notice that the Emblem of Valor vendor sells wrist armor that is bind on equip!  For 60 emblems you can purchase the Bracers of Dalaran's Parapets, which is a nice-ish entry level tanking piece.  While you can test the waters with the other pieces, I generally go for the tanking bracers because 1) there's always a market for tank gear, and 2) most importantly, tanks are willing to overpay more than perhaps any other spec.

This isn't a cash cow, but it is a great way to liquidate your supply of otherwise useless emblems.  Check your AH, as server mileage may vary, but it's a pretty quick and dirty math exercise to determine how to proceed.  Assuming you are a JC, or have access to one, if the selling price of 3 top epic gems is less than the cost of bracers, then go for the bracers.  If for some reason gems go for a lot (and I can't imagine how they would at this point), then go ahead and cash in for gems.  Most cut red gems on my server go for 150-ish gold on a good day, so even rounding up very liberally, let's say I could sell 3 for 600g total.  I usually sell the bracers at 900g, for a 50% increase in what I could expect from cut gems.  The volumes aren't super high, but I average about 3 sales a month (my scan below is missing one as well):

One additional reason I like this so much is that the deposit cost is de minimis.  If it takes a week or so for these to sell, no big deal, you're not wasting nearly as much on deposit fees as you would for the gems.  Plus, given that my primary professions are enchanting and jewelcrafting, it helps me avoid concentration risk.

Happy hunting!

Arbitrage

Arbitrage (pronounced arb-eh-tr-ahj, btw) is a term tossed around on gold blogs quite frequently, but I don't think there's a firm grasp of what it means.  It's included in some addons as a basic price point comparison, but there are many forms.

In the real world -- and I hope that this blog ultimately touches on economic concepts beyond WoW so I can both educate and learn from other players -- arbitrage is most easy to understand from a market standpoint.  If Sam's Club sells boxes of Snickers for $10, and the corner store sells that equivalently for $18, an arbitrage opportunity exists to exploit the difference and sell for $17 a box outside the corner store.  You'd pocket $7 per box and likely get your face stomped in pretty quickly.  Not a wise choice.  Plus, it's probably technically illegal anyhow, and you'd be evading taxes.

The case above is an overly simplistic example of market disparity, but arbitrage also exists on stock markets, foreign exchange markets, and elsewhere.  On one hand, stocks can be priced differently from one exchange to another or versus their derivative instruments (i.e., futures).  There is also tax or regulatory arbitrage in some cases.

So what does this have to do with WoW, and how have you made it this far without falling asleep?  If you've read my previous posts (and nobody has), you should be rewarded with actual advice!!!  I believe there are two major forms of arbitrage in WoW, namely conversion and market arbitrage.  I don't count laziness arbitrage, i.e. buying pets in Netherstorm and reselling them, although I suppose I should.

1) Conversion arbitrage

Look at your AH.  Now look at the price of Borean leather.  Now look at the price of Arctic fur.

60 Borean leather = 10 heavy Borean leather = 1 Arctic fur

Such a simple example, but highly illustrative.  On my server, at a randomly selected time (well, as of this post), it's not even a particularly opportune moment for purposes of my demonstration and would STILL yield a nice profit.  About 14g per stack of Borean leather and 60g for one Arctic fur.

This can be done with almost all ore into bars, provided you have someone who can smelt.  Also, always keep an eye out for frozen orbs into eternal fires.  If the price of frozen orbs deviates from the price of eternal fires significantly, buy 'em, convert 'em, and repost 'em.


It's an oyster with two tickets to that thing you love.


2) Market arbitrage

Hypothetically this should increase proportionally with any population imbalances between Horde and Alliance for your server.  Mine is pretty Alliance-heavy.  If you can orchestrate a circumstance where a friend can babysit the neutral AH with you (or if you have a second account), do some scans of your respective Alliance and Horde AHs.  Both large ticket and small ticket items should have a disparity.  If that disparity exceeds a percentage sufficient enough to make it worth your time, likely 20%+, then try to move items cross-faction.  I know many pro auctioneers make a killing at this.  Due to various constraints it's something I've dabbled it marginally, but am looking to really take up in the near future.