Wait for it....

So, this week is when I officially switched from selling to buying.  This is of course extremely anecdotal and based only on my server (and furthermore, on my minimal playtime), but I get the feeling that now is the appropriate time to bargain hunt in order to get ready for December 7th.  I think many of the players that were hanging on to raiding, PvP, etc. a few weeks after 4.0.1 are now in "break mode."  We've seen the new talents in action, have a sense for what's coming, and I just don't see as much activity from people buying stuff or even playing.  And certainly not the higher margin enchants, gems, etc. that have been my bread and butter.  I also think that the pre-expansion bank emptying process is underway, in some regards, so bargains abound.

Timing is everything, and while there's some margin for error, I'll definitely be scouring for the items I mentioned before -- and those listed by many other great blog guides -- to fill up my bank before Cataclysm.  Based on looking at some of the blogs on my blogroll, it looks like a few folks out there have been burned by speculative items/rep grinding, so I feel for them but view it as validation (to some small extent) for my pretty boring AH existence.

Anyhow, as far as value items (measured by price-per-slot), abyss crystals are darn cheap right now.  Maybe it's people DE'ing their old gear as part of wrapping up this expansion, maybe it's people buying the honor PvP shield and DE'ing it (something I'm not a fan of, by the way).  Either way, I bought a ton of crystals at 17g the past few days.  It varies, sure, but overall these and other enchanting materials seem to be declining.

Bring it on, I say.  Holding onto abyss crystals is virtually no-risk, as you can just shatter them and sell the mats if needed as there will undoubtedly be a sufficient market in Cataclysm.  The functional lack of deposit fees is also a reason I love enchanting mats or scrolls.  Rare-quality gems have been a time/money sink lately, and I'll likely just cut and vendor the bulk of my piles leftover from the past few months.  N.B. the shatter-to-profit point has been made by others, again I'm not trying to plagiarize.  It's just an illustration of timing the market to increase future earnings.  Buy low, sell high, right?

As an aside, I've been working on leveling a shaman and really love it.  I actually enjoy healing more on the shaman than my paladin at the moment.  My shaman, by sheer coincidence, is also on the server of another respected gold blogger, so it's fun to watch an expert in action from the sidelines.  Still, it's all time-killing until I dust off the pally in December.

Happy hunting!

Regrets, I've had a few...

Quick note here...while I'm sure that most of you are here due to Markco's blog carnival via JMTC, just in case you aren't, please make sure to check it out!



Anyhow, cheesy Sinatra reference aside, I'm less concerned with providing a few anecdotes regarding my tactical mistakes than with trying to convey the larger philosophical errors that befall me (and likely many others).  So with that in mind I've compiled my top five pitfalls that every auctioneer has likely experienced at some point:

1) Being too timid.
I'm very risk averse, to a fault.  One theme you'll notice on this blog, and I hope to expand upon in Cataclysm, is that I tend not to follow the quick tips or one-off items.  Other auctioneers are far, far better than I at noticing items mispriced in the marketplace and capitalizing quickly before the profiteering flames out, or snatching a rare item and flipping it a few weeks/months later for obscene profits.  That said, if something is fundamentally sound, go for it and go for it big.  If there are 50 stacks of saronite ore on the AH for 12g and you are down to your last 600g, buy them all.  Don't stop at 5 or 10.  I've done that all too often myself (well, not the "last 600g" thing) and only dipped my toes in when I should've gone head first.  Recognize the fundamentals and keep an eye on margins, and you can't lose.  The rest is only a question of scalability.

2) Getting involved in niche markets without understanding them.
At the end of the day, you are solely responsible for your actions.  I've followed quite a few tips, despite my own misgivings, because so many sources said they were wise.  The off-hand Inscription items Faces of Doom and Iron-bound Tome are prime examples.  I know plenty of people made a handy profit off them.  I just could not sell them.  Period.  For long stretches of time.  I stuck with it too long because others insisted it worked.  I don't doubt them, but it wasn't worth my time.  Thankfully I only crafted a few, but it was a hassle I wouldn't revisit.  The point being, although I just finished saying you shouldn't be timid, that doesn't mean you should go hog wild.  Know your markets.

3) Not using the trade channel enough.
 I hate /trade.  Absolutely, completely, and totally hate it.  At best, it's 95% stuff I'd rather ignore and at worst it serves as a stark reminder of so many things wrong with WoW and people in general.  However, it's also one of your best sources for bargains, mostly on the buy side.  That impatient guy who just cashed in his honor for gems who is selling epic gems at very negotiable prices?  Yeah, that makes /trade worth it.  Well, in non-election years...

4) Being a packrat.
One near-universal truth of AH-ism in WoW is that item values decrease over time.  Yes, there are some items that hold up well or even increase over time (adjusting for inflation, and there have been a litany of posts lately about this topic), but in general that bright shiny thing everybody wants so badly today will be passé
tomorrow.

As an example, I knew that redeeming frost badges (well, the former frost badges) in order to sell primordial saronite would've been smart when I quit raiding back in April.  I had accumulated a pretty hefty stack of badges with no real outlet and no desire/hope for top tier PvE gear.  I cashed in and sold a few at 1.2k gold or thereabouts, but was content to sit on a stack of 700 frost badges for months and months.  Those saronites now go for 300g if you're lucky, and my newly converted points aren't really helping me much (nor will they confer any tangible advantage in Cata).

We're at a unique time now where being a packrat can actually be helpful, but notwithstanding the last month or two of an expansion, in general you should not really be holding onto all that much stuff. 

5) Beware of sunk cost fallacy! 
Sunk cost fallacy occurs in real life quite frequently.  It happens in gambling when someone continues to play despite having lost tons of money because, well, they've already lost tons of money.  The reverse can occur when you're up big (i.e., had a nice day of sales) and you go purchase something frivolous.  You should always know when to exit a market or strategy, and the amount of time/money/effort you've already put into it should not factor into the judgment thereof.

Happy Hunting!
-Q

Saronite Shuffle Redux in Cata?

What I don't know could fill a library (or a blog?), but I do know that Blizz likes to repeat themselves quite a bit throughout WoW and that there are definitely observable cycles w/r/t crafting and professions.  Waaaay back before this blog existed, or many others for that matter, I found that you could prospect saronite, craft some cheapo rings, disenchant them, and sell the dust for tons of gold (back when stacks of dust would go for amounts that would make your mother gasp).  I know others did it first, and I was hardly a trendsetter in the saronite shuffle -- it would be ridiculous for me to be such a revisionist -- but it made me enough to get a Traveler's Tundra Mammoth in very casual fashion. 

My problem back then was that I wasn't greedy enough, or I was too risk averse.  I stumbled upon a real gold maker and was too stupid to capitalize fully.  I'll likely write about this topic if I participate in the upcoming JMTC blog carnival, but I was happy enough just conservatively working toward the mammoth and once I got it I stopped the shuffle.

So, flash forward the better part of two years, and I'm thinking "hmmm, what will the saronite shuffle be in Cataclysm?"  I checked out the Cata version of wowhead to just sniff around a bit, and three items.  Full disclosure on a few points here: 1) if someone has posted this on another blog before, I apologize.  I haven't seen it, but it's extremely likely someone wrote about this ages ago.  2) I've only just started researching this superficially, i.e., about 5 minutes of time invested.  3) I'm very likely wrong!

That said, the items that raised my eyebrows were:
Hessonite Band
Alicite Pendant
Jasper Ring

Now, I don't see any disenchant info, but these are BoE rings made by combining a cheap vendor item (or so the comments say) along with some uncommon quality gems that are prospected from the beginning ore in Cataclysm.  Sound roughly familiar?

This, my friends, has saronite shuffle redux written all over it.  I'll vet this further in the near future, but assuming the cycles alluded to above run their course again, keep a very close eye on things.  The initial rush won't be an opportune time, as ore will be too costly, but once supply and demand balance out a bit I'd be prepared to go all in on this.

Stockpiling for Cata as a "store of value" and hedge against inflation

As alluded to in my previous post, the guys at Call to Auction were gracious enough to field a question from me.  I was a bit long-winded, but in short was trying to draw comparisons between the real world and WoW in how commodities are used as a store of value to hedge against inflation.

Store of value, you say?  Hedge against inflation?  Quaaid, you're going crazy and taking this too seriously!  You may be right about both, but there are very legitimate (and useful) conclusions that can be drawn from the real world into Azeroth.

The Real World

The example I used in my Call to Auction question was gold...as in, the precious metal that costs something like $1,350 per ounce these days.  Without regurgitating my long-winded statements/questions, the gist is that holding certain valuable commodities has two effects (for our purposes): 1) it guards against inflation, and 2) it's a safe haven.  $10,000 in 1970 was a lot then, and not so much now -- in the "needing to survive" sense -- however, if you plunked that $10k into gold back in 1970, you'd be in pretty nice shape today.  Alternatively, if you lived in a developing country whose currency was subject to hyperinflation (South America and Africa are ripe with examples), turning your money into gold would guard against that.  Regarding the "store of value", in the real world gold is a safe haven.  Go look at the price of gold since 2005 or 2008 and look at it now.  One can argue this point ad nauseam, but investors frequently flea uncertainty in equity markets by putting money into gold.

The Not-Real World
So, are there any items in WoW that act like real world gold?  Well, not really, or not any that would have the same impact.  However, there are some items I'm going to start stockpiling over the next month.  I am very concerned that my decent amount of gold now will become not-so-decent once inflation hits in Cataclysm (and, boy, will it ever).

Markco's response to my question above on the Call to Auction podcast was to listen to their last few episodes for items to stockpile.  He's right.  They've covered this a lot.  However, my unstated point was how do you dump gold now into something that can be easily liquidated in a few months?  The key point here is liquidated.  The two considerations in my mind are:

1) Liquidity.  Sure, you may throw 200k gold into a Swift Spectral Tiger and sell it in six months for 750k.  I think that's a real possibility and honestly not a terrible idea.  Yeah, the aforementioned concentration risk (see my other post from a couple weeks ago) is a headache, but I think you'd come out ok in the long run.  However, I want to toss gold into something liquid, such as cloth, ore, mats, etc. and be able to recoup that amount (and then some) a month or two after Cata drops.

2) Price-per-slot.  This is a real killer.  The most liquid items also tend to have low absolute value.  Saronite Ore can frequently be bought from the AH, turned into bars, and sold at a slight profit.  That's risk free.  Awesome.  However, the ore essentially vendors at 12g50s, meaning you don't get much bang for your buck per slot.  Sure, you could pre-smelt it into bars and then titanium, but see point #1 about liquidity.

So, the idea is to find items that are fairly liquid and yet yield a decent PPS for storing in your bank.

Things I Love

• Enchanting mats and some scrolls - dusts and essences have demonstrated their ability to hold value in every expansion, and this one won't be any different.  I'll be holding onto raw mats as a good PPS and liquid investment. 
• Scrolls - an adjunct to the above, enchanting is a powerful profession.  BoA gear creates an eternal market for old world mats as well as new world.  Plus, if Cata is like WotLK, there might still be a few worthwhile mid-tier enchants that sell (e.g., sort of how Mongoose does now).  These also stack incredibly well, so the PPS is through the roof.  Not as liquid as I would like, but should do ok.
• Glyphs - "Quaaid, you're nuts, glyphs are still going for 40g to 50g and higher right now even a week after the patch!"  Why yes, good reader, they are.  They'll also likely complete their crash in a few weeks, and I imagine you can pick up some fairly cheap or just crank out your own if you have a scribe once herb prices settle down.  So, it can be assumed that most players currently playing will be fully stocked on their glyphs.  And what happens when all those people who quit in the pre-Cata lull come back in December?  Oh yeah, they'll need glyphs.  Others will get bored or frustrated and level new toons as well.  That guy that rolled a DK right away when WotLK came out?  Yeah, he'll be leveling a worgen too.  And he probably plays enough that he's not broke, so he'll get glyphs too.

Things I Like A Bit

• Argent Tournament pets - not very liquid, but I think they'll store value really well.  I've sent a few Horde pets to Alliance side and can pretty reliably net 900g to 1,100g right now.  Given that Champion's Seals will dry up in Cata, and that these pets are pretty cool and should increase nicely over time.  The PPS is thus awesome.  I'll be fetching any that dip low enough, but this is more of a "buy and hold" item.
• Saronite Ore - sure, I just said that the PPS is low, but Saronite has so many uses I still think it's low risk enough to justify stockpiling.  You can prospect it (best choice in my opinion), craft it for leveling sets, or just flat out vendor it.  It's versatile enough that I will devote space to it.

Things I Don't Like

• Netherweave cloth/bolts/bags - with new bags apparently available pretty cheaply in Cata, I think those doing massive stockpiling of Netherweave are in for a jolt.  Yeah, it'll probably hold up ok, but the low PPS and high risk mean it's a no go for me.
• BoE items - I've read that a few people are grabbing various BoE items to sell to goblin and worgen levelers.  I'm sure that'll work just fine, good luck.  However, the high deposit cost for most of these items and "hit or miss" approach is extremely unattractive to me.  Can you see that super leet level 49 axe for 100g?  Probably.  Did it just take up 8 weeks in your bags and another 20g in sunk deposits before selling?  Likely.

Anyhow, if this blog is to be useful, this is the kind of conversation I want to initiate.  There are a lot of gold bloggers out there now, and sometimes it's a bit cumbersome or intimidating to post on their forums or blogs refuting ideas or generating new ones. 


Oh, and because anybody that read this far probably needs a random crazy picture:

Happy Hunting!
-Q