Wow, clever flattery. My favorite type of post.Soul Systems wrote:Yup, that's definitely a Marmaduke kmbp*
Crazy Power Prices!!
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Guest
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Guest
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Guest
Finally, I find some time to type other things in my mind. Havent been able to do so due to exams. : X
Good and interesting post by knolls, however, I disagree with some of your points stated. I shall start with a real life example.
In my country, there used to be no bubble tea selling shops. One day, a foreigner noticed this, invested and introduced bubble tea in my country.
Sure enough as it is a new type of drink, consumers were initially interested in the 'freshness' of the drink and 1 cup was charged 3 bucks. A minority of businesspeople (Group A) noticed this and started emulating that foreigner and they started opening chains of stores.
After a period of time, this drinking of bubble tea become a fad and a lot of businesspeople (Group B) swarmed towards selling bubble tea. Every neighbourhood has several bubble tea shop and soon the price dropped to 1 buck.
After a few months, the fad died and quite a number of shops closed down.
If according to your theory, since the bubble tea price is expected to drop till near the cost price, why did the foreigner and Group A enter the market at the first place.
Well... It is simple. It is actually the smartest to innovate. The next to observe the trend, demand and supply fast and earn a hell of profits before the market become saturated. But it is not that smart to enter the market when there is oversupply.
The same applies for power. If everyone were to hold your thinking and just pray for some other people to build power plant, would there is supply of power? This is the risk that they face which you didnt account for.
You are assuming that the Contrarian thinking is not building power plants. Which could be wrong.
What if everyone is not building power plants? Then, the Contrarian thinking is building power plants.
You have the theory but you are not really using and supporting it. A deeper and better analysis is required.
In my case, at the start of the realm, I looked at the market, and saw the power prices at .22 - .24.
However, it is just the start of the realm, so obviously there cant be people who are able to sell much power.
Thus, I have this idea of purely buying power from others, but I knew that will be a hastily decision without checking things out.
Next, I proceed to check the forums out. Wow, although it is like about 12-24 hours of the start of realm, several companies started posting what they wanted.
And there were 2-3 companies willing to pay power for a high price, which goes to show there are several companies with Contrarian thinking.
Following which, I went to check those companies out, well, they are big in size (several mills within 1 day!), meaning they have a big capacity for power and not building any power plants to be self sufficient.
Thus the demand is >> supply at the current moment of time and entering the market will definitely be a wise decision in contrast to the Contrarian thinking mentioned by knolls.
Thus, I build myself a power plant, supplying myself power and selling excess power. I have earned accounting profits during the days of peak power price period to compensate for the cost of my power plant. In other words, in merely a few days (around 4 days), especially at the start of a new realm where profits are relatively low due to low prices, I earned a FREE power plant through selling power.
I did contemplate on building a second power plant during the hike, however, it will be risky if some players make the wrong move and over invest on power. Thats why I had only one. And how to roughly gauge how many players are making power when it is not a fully competitive market, we have no idea what other companies are building (It is too tedious to igm everyone).
Well simple, normally those companies who decide to go out on a single product will name their company related to power. So I went to look through STATS - FA ranking and fair enough I saw several companies with power, energy used in their name and among the top few FA there is one - power****. Well, unless he is [censored] around with his nick, he must have gone all out into power.
Therefore, I decided to stick with 1 power plant, true enough, the power price declined rapidly afterwhich.
In summary, we need to analyse the market before deciding whether to enter it or not, as there are many different people with all kinds of thinking, be it rational or irrational. Thus, making your wise move. Its all about strategising and planning.
Good and interesting post by knolls, however, I disagree with some of your points stated. I shall start with a real life example.
In my country, there used to be no bubble tea selling shops. One day, a foreigner noticed this, invested and introduced bubble tea in my country.
Sure enough as it is a new type of drink, consumers were initially interested in the 'freshness' of the drink and 1 cup was charged 3 bucks. A minority of businesspeople (Group A) noticed this and started emulating that foreigner and they started opening chains of stores.
After a period of time, this drinking of bubble tea become a fad and a lot of businesspeople (Group B) swarmed towards selling bubble tea. Every neighbourhood has several bubble tea shop and soon the price dropped to 1 buck.
After a few months, the fad died and quite a number of shops closed down.
If according to your theory, since the bubble tea price is expected to drop till near the cost price, why did the foreigner and Group A enter the market at the first place.
Well... It is simple. It is actually the smartest to innovate. The next to observe the trend, demand and supply fast and earn a hell of profits before the market become saturated. But it is not that smart to enter the market when there is oversupply.
The same applies for power. If everyone were to hold your thinking and just pray for some other people to build power plant, would there is supply of power? This is the risk that they face which you didnt account for.
You are assuming that the Contrarian thinking is not building power plants. Which could be wrong.
What if everyone is not building power plants? Then, the Contrarian thinking is building power plants.
You have the theory but you are not really using and supporting it. A deeper and better analysis is required.
In my case, at the start of the realm, I looked at the market, and saw the power prices at .22 - .24.
However, it is just the start of the realm, so obviously there cant be people who are able to sell much power.
Thus, I have this idea of purely buying power from others, but I knew that will be a hastily decision without checking things out.
Next, I proceed to check the forums out. Wow, although it is like about 12-24 hours of the start of realm, several companies started posting what they wanted.
And there were 2-3 companies willing to pay power for a high price, which goes to show there are several companies with Contrarian thinking.
Following which, I went to check those companies out, well, they are big in size (several mills within 1 day!), meaning they have a big capacity for power and not building any power plants to be self sufficient.
Thus the demand is >> supply at the current moment of time and entering the market will definitely be a wise decision in contrast to the Contrarian thinking mentioned by knolls.
Thus, I build myself a power plant, supplying myself power and selling excess power. I have earned accounting profits during the days of peak power price period to compensate for the cost of my power plant. In other words, in merely a few days (around 4 days), especially at the start of a new realm where profits are relatively low due to low prices, I earned a FREE power plant through selling power.
I did contemplate on building a second power plant during the hike, however, it will be risky if some players make the wrong move and over invest on power. Thats why I had only one. And how to roughly gauge how many players are making power when it is not a fully competitive market, we have no idea what other companies are building (It is too tedious to igm everyone).
Well simple, normally those companies who decide to go out on a single product will name their company related to power. So I went to look through STATS - FA ranking and fair enough I saw several companies with power, energy used in their name and among the top few FA there is one - power****. Well, unless he is [censored] around with his nick, he must have gone all out into power.
Therefore, I decided to stick with 1 power plant, true enough, the power price declined rapidly afterwhich.
In summary, we need to analyse the market before deciding whether to enter it or not, as there are many different people with all kinds of thinking, be it rational or irrational. Thus, making your wise move. Its all about strategising and planning.
Last edited by Guest on 16.11.2007, 11:53, edited 5 times in total.
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Guest
This applies to the retailing as well.
http://www.forum.kapilands.com/viewtopic.php?t=8478
People need to read more, learn more, observe more and improvise more. With old traditional ideas, we cant improve!
PS: Hope you guys learn something new. : )
http://www.forum.kapilands.com/viewtopic.php?t=8478
People need to read more, learn more, observe more and improvise more. With old traditional ideas, we cant improve!
PS: Hope you guys learn something new. : )