Patience on the Lindex
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-04-2006 15:59
I'm going to start this thread by giving my qualifications. I have none, I'm just an astute interested observer. When I joined SL less that three weeks ago I was looking for just a fun game. I found that and so much more. All I'm going to discuss in this thread is the devaluation of the Linden. There many more knowledgeable people than I on economic theory in SL especially after the Business Week article. However this is what I have observed. There are a number of very inexperienced traders selling Lindens on the LindeX and many more impatient ones.
The inexperienced traders are probably not hurting the value as much as the impatient ones though. The inexperienced traders trade well above to highest listed sell order. People, if the highest listed sell order is 300 to 1, you can sell at the next spot purchase of Lindens by offering at 301 to 1, there is no need to go to 305 to 1 like someone did today or 320 to 1 like sombody did yesterday. And, what is the deal with someone selling at 2762 to 1 on 4/26. I know they don't give awards because I checked on 4/28 by selling 316 Lindens for 1 USD so I would be the highest listed trade. This was done a 11:40 PM BTW and no other trade was offered after mine was executed.
Ok now everybody who bothers to read this should know how to get the most value for their Lindens when offering them for sale on the Lindex. lets look at patience. As I watch throughout the day the fluctuations of the offering price, I see people rushing large blocks of Lindens for sale when the price dips below 300 to 1. It is this action that keeps the Linden from rising in value by trading at more favorable rates such as 295 to 1 or even 290 to 1.
I generated an Excell spreadsheet using the data from the LindeX sell orders at 14:30 4 May. In the spreadsheet I track the total amount of lindens offered at any given price and cumulative total of all offered at or higher than that price. For instance if I bought on the spot market 3,495,289 Lindens, the next offering price would be 296 to 1. And if I was real ambitious and bought 8,137,684 Lindens, the next offering price would be 291 to 1.
Ok there lots of business people in SL reading this right now saying go for it dude, please. Well nobody who wants to make money will do that however if there is a way to claim the lose on your US income taxes maybe we could advertise. Back to reality, although no one person may be willing to do that the LindeX moves about 8 million per day anyway so if no one entered any sell orders above 290 for only one day the Linden would be trading at 291 to 1.
Ok I have much more to say on this subject but I need to get back into the game and go play Greedy.
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-05-2006 00:52
I'm back and will finish my thoughts. There is no way you can get everyone to refrain from placing sell orders above the going price but the small seller doesn't effect the market as much as the large seller. I would consided anyone placing one or more orders to sell a total of 100,000 Lindens at any given price a large seller. If you look at historical data you see single blocks of Lindens sold as high as 500,00 at a time and I don't know how many people may place multiple small sell orders at a given price that total over 100,000. The thing is these large sellers drive the market. Their sell orders influence other sellers. Don't worry about 10 people selling a total of 75,000 lindens at any price. They are gone in less that 1 hour if they have the highest offer in terms of number of Lindens pre dollar sold.
I suspect that more that 1/2 the total market is made up of relatively few very sucessful buisness people who are converting Lindens into USD. If that is true they are controlling the market by not waiting for the price of the dollar to come down to the level they want to sell. If I'm right, the very people who would benefit the most from a stable or rising Linden are hurting themselves by not being patient and waiting for the dollar to drop. Granted the Linden wouldn't rise in value as fast as it would if everyone stopped placing sell orders above a price of about 295 to 1 but 4 million Lindens not sold in a day by the elite few big business people would bring the Linden down to between 297 and 296 in a single day. Aw but you say they would just try to sell 8 million the next day plus the 4 million from the small fry. If that happended you are right the exchange rate would just go back up. However, if the elite few saw the power of holding Lindens for further improvement in the value of the the Linden they would affect the psychology of the thundering herd (the small fry) who would slowly stop selling as fast as previously and selling would slowly decrease driving the Linden to further high values. What do the elite few get out of all this? Simple, higher profits on the same volume of business. What does every other business person get out of all this? They get the same thing.
Alright what do I get out of all this? Yeah what is this guy really after? Has he bought up 10 or 20 million Linden at a rate of 300 or better to 1 and is trying to unload them at 250 to 1? I'm sure someone has but it isn't me. I really want to play in the Linden Currency Market but wont if all I'm going to do is lose money. A stable or rising linden should insure a vibrant currency market and I get to play. Yes I said play, there is no way I can make the kind of money in SL that I make in RL, the market only trades at $27,000 dollars per day. I don't trade anything short term because I don't want to pay the taxes and if I had my way I would never sell one of my long term investments either. Sometimes that isn't possible but that is my problem. I just want to come in here and have fun. So far I have.
Thanks for listening and feel free to comment on anything I said, just rember I'm no expert and these are just my opinions.
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Fade Languish
I just build stuff...
Join date: 20 Oct 2005
Posts: 1,760
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05-05-2006 00:56
Svar I'd just comment that sometimes you can only be patient for so long. If tier is coming due, and you've been holding out for a better price, sometimes you just gotta do it anyway. Also, if something like bulk sim auctions comes up, people may need $US quickly, and will wear a loss on the sale to take advantage of the opportunity. Welcome to SL, BTW.
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Shaun Altman
Fund Manager
Join date: 11 Dec 2004
Posts: 1,011
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05-05-2006 01:34
Sometimes patience can be a valid strategy on LindeX. Generally speaking though, the only direction that the L$ value moves is down. So, patience can often cost you value rather than gain you value.
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mcgeeb Gupte
Jolie Femme @}-,-'-,---
Join date: 17 Sep 2005
Posts: 1,152
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05-05-2006 05:24
An example of no patience and a loss is yesterday when someone sold at 305 when the next best was at 300. No time was gained selling at 305, no one undercut them. If they sold at 301 or even 300, it still would've sold the same day. In fact it went all the way down to 298 briefly. So this person selling at 305, could've sold at 299 if they had the patience to wait a whole 12 hours or so.
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Introvert Petunia
over 2 billion posts
Join date: 11 Sep 2004
Posts: 2,065
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05-05-2006 05:30
There are often intangibles that set market price for a thing. Patience - or lack thereof - is one of those intangibles. That is, so long as someone is factoring their patience into their personal L$ valuation, the market will reflect that.
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-05-2006 08:59
From: Fade Languish Svar I'd just comment that sometimes you can only be patient for so long. If tier is coming due, and you've been holding out for a better price, sometimes you just gotta do it anyway. Also, if something like bulk sim auctions comes up, people may need $US quickly, and will wear a loss on the sale to take advantage of the opportunity. Welcome to SL, BTW. Thank you Fade for the welcome. I know there are many underlying reasons for people wanting to sell quick. Last night before I went to sleep there were 400,000 odd Linden offered at 299. This morning there were still 400,000 odd Linden offered at 299. In the mean time over 1 million Linden were purchased. Since starting this post the amount offered at 299 has gone from 600,000 odd Linden back to 300,000 odd Linden and I see that the Linden has also traded at 300 to 1. The thing is if people who want to sell today will just set their sell orders at 298 instead 299 for two or three hours we would clear all the 299 to 1 offers and see how much demand there is to sell today. It should be about 7 to 8 million but if it is only even 6 million and 8 million Linden are purchased the Linden will rise in value. I can talk about this all day but today I'm with my 10 month grand daughter, so this post has taken over an hour.
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-05-2006 18:57
Congratulaions everbody who showed patience, the Linden is currently trading at 298 to 1 and rising in value.
If more patience is shown tomorrow we should be at 297 to 1.
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Keiki Lemieux
I make HUDDLES
Join date: 8 Jul 2005
Posts: 1,490
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05-05-2006 19:11
It's very common for the value to rise between Thursday night and Saturday night.
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Gigs Taggart
The Invisible Hand
Join date: 12 Feb 2006
Posts: 406
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05-05-2006 20:09
From: Svar Beckersted Congratulaions everbody who showed patience, the Linden is currently trading at 298 to 1 and rising in value.
If more patience is shown tomorrow we should be at 297 to 1. Heh, this reminds me of those silly "boycott gas stations on this day" chain letters. You can't subvert the invisible hand by waiting an extra day to buy or sell your goods. It has absolutely zero long term effect.
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Shaun Altman
Fund Manager
Join date: 11 Dec 2004
Posts: 1,011
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05-05-2006 21:18
This thread makes me smile. 
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-05-2006 22:46
From: Shaun Altman This thread makes me smile.  Shaun, Thank you for your post, without it I would never have known there was a SL stock exchange. I can't wait to investigate, do you trade on the NYSE in RL?
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-07-2006 04:30
This is very exciting, the Linden traded at 297 and the last time that happened was 21 April. The average rate for the last 24 hours was 298.5 and the last time that the rate was better than that was 16 April. With 2 million more Linden prurchased we could be trading at 296 as long as the elite few don't place sell orders higher that 296. That is only 6 to 8 hours from now.
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-07-2006 07:43
Wow, we are trading again at 297 to 1 and people are actually entering sell orders at 297 and 296 to 1. A couple of interesting observations from last night. At about 11:30 PM there were 5 sell orders totalling about 200K Lindens at 298 to 1. Next there were 6 sell orders totalling 835K Lindens at 298 to 1. One of the elite few just dropped over 530K lindens in a single order at 298 to 1. By 6:00 AM today the total number of orders at 298 to 1 was again 5 for a total of only 55K Lindens. The person who moved over 500K Lindens very early this morning gave up $25 USD by not waiting 8 hours. Also, when the number of orders hit 5 at 298 to 1, another 300K Lindens were offered at 298 to 1. Both of those large sell orders have been completely executed and probably still would have been executed today at 297 to1 or even 296 to 1.
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mcgeeb Gupte
Jolie Femme @}-,-'-,---
Join date: 17 Sep 2005
Posts: 1,152
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So much for patience
05-08-2006 00:34
At the most wonderful time of night too. How about 664K Lindens at 300 by one lone person. Doesn't anyone understand the best time to sell is most likely during the evening or late afternoon hours. If you sell in the middle of the night, your orders will sit there until tomorrow and pile on top of everyone else's and get undercut. Some patience would do wonders. How about selling a portion of those 664K Lindens a little at a time. I bet they would sell faster and not be undercut which it did by 92K. Say 300K per day? Feel free though, it may sell within the next day, but if it were me I would sell in little pieces at the current rate or one below if they aren't over a million Lindens.
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-08-2006 00:51
From: mcgeeb Gupte At the most wonderful time of night too. How about 664K Lindens at 300 by one lone person. I saw that one hit mcgeeb and it was 700K Lindens. It looks like merchants cashing in on a good weekend, I didn't see the 249K Lindens at 305 to 1 hit but suspect it was an even 250K Lindens. It is going to be interesting to see how high these panicky merchants will run the exchange rate to try to convert their Lindens to USD before sunrise but by 320 to 1 I will be buying.
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mcgeeb Gupte
Jolie Femme @}-,-'-,---
Join date: 17 Sep 2005
Posts: 1,152
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05-08-2006 01:02
More in the middle of the night
302 - 200K one person 305 - 111K one person
Clearly someone has an issue or feels like messing with the Lindex.
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Kazanture Aleixandre
Here I am.
Join date: 5 Oct 2005
Posts: 524
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05-08-2006 01:10
From: mcgeeb Gupte More in the middle of the night
302 - 200K one person 305 - 111K one person
Clearly someone has an issue or feels like messing with the Lindex. Maybe it is about LL will start to sell on lindex soon?
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Fade Languish
I just build stuff...
Join date: 20 Oct 2005
Posts: 1,760
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05-08-2006 01:13
From: Kazanture Aleixandre Maybe it is about LL will start to sell on lindex soon? Certainly not much point in being patient after today's announcent.
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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05-08-2006 01:29
From: Kazanture Aleixandre Maybe it is about LL will start to sell on lindex soon? That is a good explaination but I'm new here and wonder if this doesn't happen Sunday night when successful merchants just want to convert the weekend sales receipts. Can anybody confirm that this is the weekly pattern. Earlier someboby commented that the Linden typically gains value during the weekend. On May 1st I entered 3 test sell orders for 10K Lindens each offered at 299 to 1, 298 to 1, and 297 to 1. The 299 to 1 order was executed at 19:32 May 1st for an effective rate after commission of 309.9 to 1. The 298 to 1 order was executed at 18:28 May 5th for an effective rate of 308,9 to 1. The 297 to 1 order was executed at 9:04 May 7th for an effective rate of 307.8 to 1. That shows a pattern of a strengthening Linden as the week progresses.
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Keiki Lemieux
I make HUDDLES
Join date: 8 Jul 2005
Posts: 1,490
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05-08-2006 06:50
This pretty much happens every week. Usually at the end of the weekend people post a lot of new lindens for sale. Just like every week there is usually a run on available lindens between Thursday night and Saturday night. The best time to sell Lindens most weeks is Saturday.
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mcgeeb Gupte
Jolie Femme @}-,-'-,---
Join date: 17 Sep 2005
Posts: 1,152
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05-08-2006 23:16
From: mcgeeb Gupte At the most wonderful time of night too. How about 664K Lindens at 300 by one lone person. Doesn't anyone understand the best time to sell is most likely during the evening or late afternoon hours. If you sell in the middle of the night, your orders will sit there until tomorrow and pile on top of everyone else's and get undercut. Some patience would do wonders. How about selling a portion of those 664K Lindens a little at a time. I bet they would sell faster and not be undercut which it did by 92K. Say 300K per day? Feel free though, it may sell within the next day, but if it were me I would sell in little pieces at the current rate or one below if they aren't over a million Lindens. So much for those 664K lindens at 300 to 1. Now there's 6 million on top of it. So this person will need to wait even longer unless they move it. If they want it to sell better post in smaller pieces.
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Keiki Lemieux
I make HUDDLES
Join date: 8 Jul 2005
Posts: 1,490
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05-08-2006 23:22
What a difference a day makes, huh?
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mcgeeb Gupte
Jolie Femme @}-,-'-,---
Join date: 17 Sep 2005
Posts: 1,152
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05-08-2006 23:28
Yes, I'm glad I sold some at 300 Sunday evening right before the crash.
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Svar Beckersted
Registered User
Join date: 14 Apr 2006
Posts: 783
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Data, I need data.
05-08-2006 23:49
From: Keiki Lemieux What a difference a day makes, huh? Yes, this has been a huge dissapointmnet to me. SL really doesn't have a free market when LL can drop a bombshell like they did and panic the market. It appears all of the extra Lindens parked at or above 300 to 1 are in addiiton to what has been above 290 to 1. Not only that but most of that was placed in large blocks by nervous large holders of the Linden. I can't say I blame them. That said I now am looking at other sources of data. I noticed the number of users actively online peaks at about 6,800 users on the weekend and saw 6,700 sometime today. Does data exist to show the number of active users online as a function of 'time of day' on a daily basis? Also It appears that about 1000 new users were regestered on both Saturday and Sunday. Does data exist to show the total number of registered users on any given day? I want the number of new users but that is a simple subtraction problem. There some very smart people in SL who do great things with math but I can at least do subtraction. I'll wait and watch what happens during the comming week and weekend, it will be interesting.
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