TMC Followup: Burn Jita

Burn Jita: An Industrial Perspective

This article took longer to write than I originally expected.  I should have anticipated that a factual article is going to take longer to gather together and present.  Also, continued trouble with Google Drive processing power keeps putting a damper on my progress.

Why Freighters?

The simple answer is freighters have been at the front of my mind recently.  With the JF Project, my own BPOs, and my historical charting work, freighters have proven to be the most directly useful and recognizable to the widest player base.

Also, by combining the data into freighters as a group, rather than a specific ship, I can accomplish a whole list of things:

1. Avoid graph overload.  Having to reference 4 charts is worse than referencing 1 chart
2. Provide a higher level to talk at, rather than get tangled in the minutia of each item's behavior
3. Not share "secret sauce" to the global audience that reads TMC while still making useful content

I did want to also show T2 mirrored the post-event dumps, but it ended up on the cutting room floor.  I instead used the semi-interview with Warr Atini (head of Miniluv), staying on-topic.  I was afraid of running off the rails with 5 pages of analysis for each sub group and speculation therein.

Pre vs Post Event

This was another topic that fell out pretty fluidly.  The TL;DR, which matches my intuition, is that as a producer, pre-event is nearly useless (except for volume spikes, if you're wanting to cash out), but the post-event is an enormous opportunity to save a lot of money.  I don't usually stock raw materials, but come the next big gank-event, I make efforts to buy up some percentage of materials to suit me for 30 days.

The interesting thing I learned was the speculator side of the equation.  I've never had success participating in the margin/speculating trading, and I'm starting to see why.  Burn Jita was a margin trader's paradise, peaking prices on gank fittings, but that price bubble evaporated once the event was complete.

Missing Part of the Picture

The big missing slice of my article is other hub analysis.  I did start fiddling with feeds to try and generate that data, but found the results too messy and hard to display in one or two graphs.  I also skipped T2 production as a topic because it added another page without adding a lot of value.

I expect to take both the T2 and "everywhere but Jita" topics into their own articles.  The not-Jita article will probably be next, since I still would like 2 weeks for the T2 market to shake out. 

The To-Do List looks something like this:

1. Write Decryptor Tutorial with new decryptors
• Working on refreshed 2.0 tools
2. Draft Mining Report artcile for TMC
3. Draft "Anywhere But Jita" article
4. Write T2 Post-Odyssey analysis
• Working on new charts to group data intelligently 

Data Sources

One of the themes I'd really like to drive home here is "this data can be mined".  These graphs were generated purely using EVE-marketdata's history API.  To increase quality, I had to download their private data pusher to get the history graphs to reflect reality.  

As I wrote before, it took writing some custom code to process it, but I now have a moderately easy to use tool, except when Drive is under heavy load.  In an effort for transparency, so I don't get accused of making it up, I hope to publish all my data sources for review.

• Freighter Data
• Gank Fitting Data
• Mineral Data

DISCLAIMER: history feeds tend to break 9a-5p M-F US TZ.  This is a limit of Drive, please be patient.

None of this data was collected with any special privilege.  The gank fittings came from goon's killboard, the price data from EVE-Marketdata.com.  A theme I would like to push among my articles is "the data is already out there", though you may need to process it.

Error Bars

There's one glaring assumption I made that still makes me uneasy: summing sales volume where prices were averaged.  On every graph that shows volume, I just summed together the volumes to get a general picture.  I feel reasonably okay on the freighters (everything is similar order-of-magnitude), but had a lot of trouble justifying it on the ship fits and mineral report.  I played around with a few different weight modifiers, but never found a combination that I felt was truly honest.  

We Must Protect Our Precious Bodily Fluids

This is going to be wildly off topic, but I was tickled enough to warrant a quick post on the matter.

I'm the kind of guy who always has a plan... and contingencies to those plans.  Though I do not hold myself to strict guidelines of those plans, I always have some sort of 6mo plan, 1yr plan, 4wk plan.  As such, I am always referring to Plan A, Plan B, and so on, to try and keep the horizon for goals on track.

Then, there is always the "terrible plan".  The sort of plan I never seriously intend to follow through on, but makes an intriguing threat.  Plans like "join Miniluv and gank freighters to specifically destroy competing product", or "tell my IRL VP's the truth".

Today's PSA is brought to you by the letter R



Plan R is worse than suicide.  It's a "I'm going down and taking you all with me" plan.  Plan R is the AWOX. Plan R is bombing your boss by ruining your department's reputation with the board.  Plan R is something so insanely stupid, destructive, and suicidal that no clear thinking person would contemplate it beyond a joke.

It's somewhat useful to have the terminology for it though.  Every once in a while you are in an organization or situation where there is absolutely no-win scenario.  Even rarer than that, you may be actively at the bottom of the chain on something particularly nasty.  And though in 99.99% of situations where there are completely reasonable paths to exit, abort, or lose... once in a while you need a FU-bomb of such magnitude that everyone is killed during the fallout.

I joke about Plan R's, but rarely have them.  Plan R is the last of last resorts.  I just hope this PSA will add Plan R to your lexicon, and people will stop giving me clueless looks when I use it as reference.

Also, if you have not consumed Dr Strangelove, you're really doing yourself a disservice.  I put it in my top 10 movies for all EVE pilots.

Anshar Project - First Fruit

Behold the first fruit of the collaboration between @K162space and myself.  This calls for spaceship cheesecake.

Ze Numbers:

• Build Cost: 5,325 M ISK
• Raw Material Value Today
• Pre-Odyssey math: 4,910 M ISK
• Post-Odyssey math: 6,315 M ISK
• Market Value at time of post: 6,250 M ISK

Working as Intended?

So far, the plan is ticking away largely at the intended pace.  Patch market shakeouts however, are not.  While I write this, the market is sitting at 6.3B.  As I've pointed out in my previous posts, market prices tend to track instantaneous build costs, and right now the market is upside down.

There's only so much I can sit on my hands with Anshar1.  I've overextended the budget slightly preparing for Odyssey, so I need the proceeds from Anshar1 to pay for Anshar3.  Though, if numbers are to be believed, it's going to be a good weekend to start building T1 freighters... unfortunately my personal Fenrir BPO is in research to satiate my own OCD about build times.  Though that advice may be wrong, since I have no real intuition about how low can low-end minerals really go.

What Did You Learn?

So far things are going pretty well, but there are some notes worth sharing

Don't Make Assumptions

I ate a little margin because I was watching one graph, expecting the others to match the same trends.  I've had my focus on all things Minmatar over Odyssey because those ships will be the most expensive once things settle out.  Unfortunately, T2 changes have no baring on T1 products.

Watch The Market

Traditionally, I have just ignored the various ups-and-downs of the raw materials market.  Usually, the large shifts wash out by the time I come to market, and the small shifts are so small they aren't worth chasing (<5%).  This practice isn't good enough with Jump Freighters.  The post Burn Jita dip was an excellent opportunity to make a lot of extra margin, but I was just barely late to that party on Anshar1.  

Thankfully, now with histories becoming a stronger tool in my arsenal, I'm able to make slightly better buy-in choices.  Unfortunately, with the rather ambitious production schedule and Odyssey financing, I've given myself less area to maneuver than I would like.  Not taking things too seriously, but trying to fit work into appropriate schedules is a little more juggling than I am used to.

Planning Is Everything

The real life saver on this project was a well thought out plan of attack.  Without at least a framework on how to execute, I would have fallen into many of my classic pitfalls.  Thanks to an attention to accounting and a plan that fits around IRL events (rather than the other way around), I have been able to do this project with very few hitches.  Also, the pre-planning for Odyssey should put us in a position to really ride the wave through the turmoil of the summer and see slightly stronger margins than expected.  As long as financing stays on the rails, we should beat expectations (~6B profit total)

ISK is a Hell of a Drug

As I wrote back during Fanfest, Odyssey is changing moon components.  The biggest changes are:

• ThuliHaf + ProMerc added to increase R64 utilization
• Racial composites (Amarrium, Caldarium, Gallentium, Matarium) added for more R64 demand
• Capacitors, Microprocessors, and Reactors had their materials changed

I also pointed out that the price for nearly everything T2 was going up.  Though that sheet is pretty much obsolete today.

This means, for every savvy T2 builder, it was time to stockpile.  My least favorite thing to do, as I've written again and again about.  Combine my current 10B buy-in purse with my collaboration with @K162space, and I've backed myself into a bit of a corner. 

When I build, I usually leverage the vast majority of my liquid ISK into each work week.  This leaves me with very little ISK to play with in the middle of my work week.  Though this usually works just fine -- it leaves me with enough ISK to cover my butt play-wise AND leverages the most ISK possible for best returns -- it has left me in a bind for preparing properly for Odyssey.

Plan A: In a Perfect World

There were two critical pre-Odyssey goals to hit, both revolving around the changes to Capacitors, Microprocessors, and Reactors.  Get the components built for both normal production AND the JF project before Odyssey hit.  

Normal production only needs to cover one work week, since my 10-12d cycle time should be long enough for the first "time constant" to play out on the market.  The JF project was more critical.  There's a lot more ISK on the line that's worth saving, especially with the ridiculous build times on JF's.  In this case, it was important to build the remaining components for all planned builds.  This means leveraging +1 JF worth of materials, but should save 10-15% on each of the final builds.  

Plan A revolves around a perfectly executed schedule, planned several weeks in advance.  In this perfect plan, I would have the current work week ending the weekend of the 31st, letting me cash out to start the following work week buy-in on Sunday or Monday, directly before the patch.

In Plan A, I was forfeiting the highest spike of post-Odyssey market swings, but securing a more stable middle ground, saving in the long run.  Also, it worked well in my accounting scheme to pretty much cash in this cycle's profits into stockpiling through the most unstable time.

Plan B: No Battle Plan Survives Contact With the Enemy

Spoiler: I wasn't able to execute Plan A.  Half due to delays on my part, half due to the Sunday outage.  So, it was a case of adjusting the plan to try and hit as many of Plan A's goals as possible.  This was achieved by splitting the 10-run frigate builds (6d) to 5-runs (3d).  This helped get ISK in the bank in time.  Unfortunately, the Sunday outage really FUBAR'd that plan.  

Instead of having 10B to pay for both JF and post-Odyssey kit, I was left with ~5B.  So, it was time to call in the some help.  Thanks to a corp mate of my new GENTS home, Koshaku, I was able to get the finances needed to achieve the next-best-thing.

The worst part about ending up behind schedule is coming up against the patch-day limit with only minutes to spare.  Thanks to the ongoing network issues, I was kicked out right as my raw materials reached my factory, leaving me in a frothing rage.  Raw materials do me no good unless I can build before the Odyssey launch!  Thankfully, the servers came back up in time and I was able to put in all the jobs required.  This has left me 2-3d further behind schedule.  In this case I will trade a few days to save potentially several billion (predicting ~4-5B).  

Final Results

I am ending up in a pretty decent position to play the market game this weekend:

• Sleipnir: 10 already delivered to Jita
• Anshar #1: Delivers before weekend
• Hound: 150 of 200 will be available by weekend
• Purifier: 100 of 200 will be available by weekend
• WW12 pre-build: all Capacitors, Microprocessors, Reactors cooking (no overstock)
• JF project: 3x Reactors, 4x Microprocessors, 4x Capacitors (4 BPC's remain to be built)
• Module/Ammo build: not impacted by Odyssey
• -5B debt to repay (+1.5B banked already)

In the grand scheme, this went MUCH better than expected.  I am trading most of my WW11 profit and some banked cash to pay back the generous personal loan.  Also, my production schedule is a bit screwed up, leaving me with starting WW12 probably 3-4d behind the intended schedule.  This is less than optimal, but beats idling my entire ship line while the party plays out without me.  I hope to still come out ahead significantly over the next two weeks.

Hitting the Big Times

My first staff article just went up at themittani.com.  This is my second article for the site, but I only wrote as a guest-author before.

• The Machines are Taking Over: about cache scraping realities in 3rd party dev sphere
• Last Minute Odyssey Speculation: about predicted market impacts for Odyssey expansion

It has been an amazing experience being in the newsroom at TMC.  I find the staff is incredibly open to my ideas, despite my misgivings about how many hits they will actually generate.  I am finding it a really refreshing experience to work collaboratively over at TMC, and it's breathing new fire into my inspiration to write/create elsewhere.

My (few) readers may believe that now that I've "hit the big times" I will neglect my blog here.  This is absolutely false.  Where TMC content is "for the masses", I believe that there are still a lot of personal and hyper-focused topics to talk about here.  As I make new tools, I will debut them here.  As I find mass trends worth reporting, I will use my TMC soapbox.  I hope to leverage both sources here for maximum scope.

With Odyssey just around the corner, there is a torrent of industrial topics to write about, so I hope to be busy on both sites.  I look forward to talking more about industry all summer!