Second Life Stock Market

This follows on from a post I made on the land traders thread. Repeated here for seperate debate


Well my interest in Second Life has always been more or less financial, either to promote my first life business or to make some real money in game.

It seems to me that the land model has more or less broken insomuch as the relentless tier payments can erode all profit, and because of the increase in the Second Life population together with some more efficient land search tools, the land market is actually quite efficient. It’s rare to see a large block of land priced way below "the money"

We need to think of ways to exploit Second Life to OUR legal profit advantage, rather than that of almost solely benefiting Linden Labs. For those of us who do not have endless time working for "wages" that are below that of your average 3rd world country, this link here may be a possible answer.

http://www.wselive.com/ is the link to the first proper Second Life Stock Market that has reasonable liquidity and may offer the more passive investor the chance to benefit from the very best ideas of emerging Second Life/First Life businesses

The Sim is Friedman.

Currently there are now 24 main board stocks and at least 17 IPO’s pending.

In my own opinion this market is exploiting something known as the Macmillan Gap, here is a Google link that explains this concept

http://www.google.com/search?hl=en&...G=Google+Search

In short what I am saying is this.

The old days of SL have gone. In other words many of the "in house ideas" other avatars have had, that have enabled them to form a penny business on the back of a single premium account and make serious real life money are no more. There is too many of us and far too much competition for most in game Second Life businesses to really work. Of course there will always be the odd exception but this post relates to the more general "broad concept" theme.

We need to emulate real life from within our virtual world.

First life companies are moving into Second Life to see how they can exploit and/or use this virtual world for profit and gain.

We need to look out of Second Life into First Life for our profit

There are many real life potential businesses that could thrive within Second Life, some examples include the casino and general gaming business for decent real life stakes, the legal sex industry, architecture, first life real estate (models of houses and/or communities for sale) the media and film entertainment business, consultancy, and many other concepts, some of which may not have occurred to us.

Why let First Life companies come into Second Life, pay us peanuts for our experience, and allow the first life companies to walk away with lots of real profit.

Here (at the virtual stock market) is the chance for those of us who are interested to back what we believe to be the best and brightest of Second Life talent.

More or less any First Life business needs start up capital to get off the ground. The same is more or less now true of Second Life.

Say you have got a great business idea and having experience of Second Life need capital to start rather than that of pocket money. Try explaining to a real life finance house or bank how Second Life works, why your business will make a fortune, and say $5,000 to $10,000 real US is all you need.

Not every Joe Six Pack or Jack on the London Tube has easy access to that type of money. That’s the concept of the Macmillan Gap

Finally from a trader’s viewpoint here this might be better than land, after all there are no tier fees to pay and you just might make a decent return on your virtual shares. And it is backed by some very respected people here in SL

Just a view

The WSE is a very ambitious project. I like the idea (and am glad to see Delicious Demar has her own IPO) but for this to gain mass appeal, we need a lot more regulation and oversight. How does financial reporting work for companies on the WSE?

I am very interested in something like this. I have set aside a small seed to invest somewhere. I don't want to run a business myself, and don't want the headaches of managing real estate, so I will be looking further into this.

On the other hand, what about looking on SL as a source of entertainment and enjoyment, instead of trying to wring every last dollar out of it?

Your World. Your Imagination.

My entertainment is reading about people complaining about those who not only enjoy SL, but make money there too.

I for one am glad I made enough selling land to cover my fees for the year. I hate giving this company money from my own pocket.

Exactly. This sort of thing I would find entertaining and enjoyable. Any profits I would more than likely be plowed back into the game anyway, in addition to what I allot myself monthly from my RL budget. It'll just add another dimension to the game.

Drama ON: Since Age Players, Furries, Campers, Sound vs No Sound, have been flogged to death in the Us vs Them threads, is this the next topic? Drama OFF

Well I think the beauty of SL is that you can start a business with nothing, and have it be sucessful. You don't need land to do that. I don't really see any need for a "stock exchange" in the traditional sense. The basic building blocks of SL (prims) are free and plentiful. But I imagine it will be fun Roleplaying that one is a investor and a lender.

How are you going to pay wages and live. Almost any start up business needs total commitment to make it work. Unless you are very lucky and/or have fantastic timing.

Suggest you pop over and have a look first, no disrespect intended

Regards

John

We don't NEED a Stock Exchange, that's true. We also don't NEED bathrooms, or kitchens in our homes, either, or homes at all, for that matter. But we have them to make our experience more enjoyable. This is no different.

The "stock markets" in SL are really just a joke at this point. No regulation, no oversight, nothing. You can literally go onto one of their websites, fill out their little application with total BS, take your IPO public, back it with pure lies "Things are going great!" then pump the stock until you sell your own shares and run or simply take the IPO funding and run.

At this point, investing in any SL stock is the same thing as gambling. How can you value a stock with no balance sheets, no nothing? You don't even have the "CEO's" real world name in most situations.

I'm waiting for the first crash and/or CEO to run off with the investment. That will be interesting.

You are right there, just as it's possible LL can pull the plug on SL, go under or sell out. So any money put into something like this would be money I am prepared to lose.

Actually, it's a lot like any new "emerging-country" market: the Wild West, baby, no transparency, no trustable disclosure, lots of opportunity for corruption and fraud - in an economy that stands to gtrow like Topsy and make some people a fortune, even an honest fortune. What fun!

It's like Gingko Financial, or starting a business of your own here: absolutely no guarantees. If you don't want to play, that makes perfect sense: Just ignore it. If you do, don't complain if you lose. "Yer pays yer money and yer takes yer cherce."

Not the first.
http://www.slsolutions.org/

*moves*

In real life I trade stock -- I'm not a day trader, but a "value" trader, and have done reasonably well with my savings. Several issues here:

1) There are not balance sheets representing cash flow for any of the "companies" (are they legally incorporated?) listed. You CANNOT invest responsibly without this. No other way of saying this. You simply CANNOT, no no no. Audited balance sheets are required to determine the value of an investment, as well as assets, cash on hand etc.

2) There is no contract enforcement in SL. Your company could simply vanish with your investment, and no one will help you retrieve it.

3) Unless you are buying land, capital requirements are small in SL. Meaning one should be a little suspicious of companies with grandiose plans requiring large amounts of capital -- very little capital is needed to succeed, so wanting large amounts of money usually means no track record in generating money.

4) No Board elections for companies. No stockholder voting.

If you have a surplus of money in Second Life that you want to invest, cash it out to U.S. $ (or Euro's or whatever) and invest in RL stocks. In RL you have contract enforcement and legal oversight, no guarantee of success but more so than a virtual environment with no rules.

This stock market could be fun as game, but without any independently verified balance sheets and no contract enforcement it could suddenly become not fun when you lose everything. And besides, RL stock markets are much more interesting, and if you learn how to invest wisely with them you will make real money over the long term (i.e., it is worth gambling a small amount of money in the real stock market to understand it, then invest for the long term when you do).

Absolutely fascinating John!

I've got all my usual "extreme caution" commentary, but getting past that, this is the most developed system I've seen so far.

I have to agree with Darius though - as a responsible businessperson they don't quite have the information I'd need to do business on it yet, or the inworld tools that would create a 'public' company. Could *almost* do it with a group I guess.

Watching with extreme interest, but keeping my wallet in my pants in any case.

It looks fun and there is another stock exchange in SL somewhere ran into it one day, but the bottom line is that because of how SL works and lack of accountability to me this would just be a game and although I might give it a go because I am always fascinated with this stuff it kinda reminds me of vapourware for some strange reason as far as the companies go etc etc. I would go in expecting someone to go poof with my money I stuck in there and I think most people need to look at it this way hehe.

I would never list either because I would I think get way stressed if i took a holiday or something and something happened leaving investors wondering where I went.. I just want to be able to get sick etc (also like many operations in SL most are one man/avatar bands really ) so although they say you need a board the board can be alts and no one would know it..

Okay... does anyone have a working link? Or care to explain "the MacMillan Gap" to those of us who aren't investor gurus?


Ah yes, the Metaverse Stock Exchange was the first -- OTOH it should be noted that they've merged with the WSE now. The wonderful software behind that spiffy new WSE is written by none other than SLSolution's Shaun Altman.

http://secondlife.reuters.com/stories/2007/02/13/rival-second-life-stock-exchanges-merge/


Actually, some of these companies are reporting this info.


And if you look at the US$ value of the amount of stock being traded in these companies, you'll notice it really ain't that much. Even the most expensive of these stocks are cheaper than any RL "penny stocks". Indeed, the comparison to penny stocks is quite apt -- very often in RL these stocks are traded with little in the way of solid information. Of course, that's precisely why gurus often advise people not to gamble in penny stocks, and it's good advice. Don't put any money into any penny stock, RL or SL, that you aren't willing to lose entirely. Of course, that goes for any stock. But understand the risk is a lot higher with penny stocks.


Geez, no more generalizations please, at least not without explaining further. Yes, to the best of my knowledge, none of these companies have had any shareholder votes yet, but some have already said there will be. Do understand that this thing, despite their attempts to get it off the ground earlier, in fact just got off the ground this month. (IIRC it was a week ago Tuesday that trading finally opened.)


Absolute baloney. There's no guarantee of success, RL or SL, period. Precisely zero is not greater than precisely zero.

That having been said, there's always risk and reward to consider. Is WSE risky? Hell yes, and indeed a hell of a lot more risky than the NYSE, for all the reasons you cite. OTOH, can you tell me where I could have invested money last month on the NYSE and gotten an 850% (not annual, actual) return today? And more importantly, could you have told me last month? I couldn't have, but I was pretty sure I'd make a killing on any HCL stock I bought at its IPO, and I was right.

Yes, I know, I could have lost everything, which is why I didn't put in any more money than I could afford and was willing to lose. But instead, I made enough money to cover the cost of my private island for another six months at least (which I didn't need to, since I'm now making enough to cover it in profit from my business, so instead I'm looking at expanding my estate).

RL stock markets may very well be fun -- in fact, now that I've gotten my interest piqued by WSE, I'm seriously looking at doing some RL investing. This is fun! But I'm certainly not going to stop playing the WSE. You've given plenty of excellent reasons why we should be cautious, and I am. You haven't given any good reason to not play at all. The rule is, be aware of risk, and account for it. It's not avoid risk entirely.

And again, look at the amounts being traded on this stock market, and translate into real world currency. It's all penny stocks being traded at low volume. Average share price is about a third of a US cent. I think anyone would be hard pressed to actually lose much real money, here. I bought a clock last month for more money than I invested in WSE, was that a better investment? Granted, it's one nice clock, interfaces with my iPod and everything, pretty cool, but it hasn't increased in value 850% since I bought it.

You're right to point out the risks. You're wrong to say no one should be taking them. Even if I never make another dime off the WSE, I've had more fun playing that I'll ever get from that clock.

Ponzi scheme.

Troll.

QFT

While it is true there is no investment without risk, it is a fallacy to say that all investments carry the same risk. You CAN lower risk by learning how to invest, and RL stock markets can provide that investment education. This website lacks the qualities of a real life stock market. I'm not saying these are bad people, sounds like they are having fun. But I am saying that if you have a modest amount of money to invest, you can do so in a way that will have a far more meaningful impact on your life (and at a lower risk); even if you don't have a lot of money now learning to save and invest in RL is very worthwhile over the long run.

I get a solid return on my money, even when the stock market "crashes" like last month. Nothing exciting, no "quick rich" stuff, but 20% year after year DOES add up (and I did miss some big opportunities).

I didn't realize they had merged.

I have an account on MSE, how are my shares going to be transfered to WSE?
Or to state things a different way, how do i access my new account on WSE?
(or have my shares evaporated?)

I actualy went to the location listed on the website its the same location as the previous stock exchange everything looks pretty much like it was the time i was puttering around in there once before a few months ago so I am pretty sure all your info is still intact ..

I was gonna go buy some shares for some entertainment but had a hard time finding the atm where you get your password hehe (bad sense of direction) anyhow by the time i found it i had to log so tomorrow or the next day I will give it a try

Cool concept. It'll be lots of fun investing