Musings on minting money on Malygos…and more

Foo, this one’s for you

Here’s the link to the full wowflation spreadsheet.

Nice observations on “last expansion” items (i.e. Wrath:Cata :: Cata:MoP) …you are right, for my money, these are the best bets to not only hedge against, but to handily beat inflation.  Thanks also for the plugs.

(I began drafting a white paper based on the data and my observations, but I may never get it done, and it was about time I made the full data available anyway.  Hiding columns was beginning to get to be a pain.)

As far as my opinion counts, anyone is free to use or reproduce the data for non-commercial purposes.  Attribution would be nice.  However, all of the data originally came from The Undermine Journal, which may have its own rules – you’d need to check with them.

1 Comment

  1. Some observations:

    (i) The Classic index has been moderately volatile (in the range 98-206), with perhaps a slight upward trend (if you take out the first data-point, the trend becomes hard to see).

    (ii) The BC index has been very volatile (in the range 100-374, sometimes doubling or halfing in a month), with again perhaps a slight upwards trend (which again becomes hard to see if you take out the first data-point).

    None of that seems very surprising: Classic and BC have remained old content for the whole of the period covered by the index, so we wouldn’t expect either supply or demand to vary dramatically, but because they’re small markets, we would expect them to be volatile (and because BC is a smaller market, we would expect it to be more volatile). Of course if WoW markets were efficient, then the volatility would be arbitraged away by people buying BC mats when there’s a glut of supply, and reselling when prices rise. It’s fairly well known (I think) that you can make easy gold by doing that, but obviously not enough people bother to smooth the prices.

    We might perhaps have expected the secular trend to be more marked, but I’ve always felt that moaning about massive inflation in WoW was overdone.

    (iii) The Wrath index climbed massively between November 2010 (i.e. just before the expansion) and July 2011. At first sight, I might have expected the opposite: that the mats would become cheaper once they no longer related to current content. But of course, people still need mats to level professions, whereas the supply will tail off drastically once people are no longer playing that content. Both demand and supply will fall, but clearly demand fell by less than supply, pushing up prices dramatically. Since July 2011, the Wrath index has gone more or less sideways, with a moderate about of volatility. Curiously, the prices of ore, cloth and herbs have all ended up remarkably close to the prices of cata ore, cloth and herbs.

    (iv) The Cata index fell sharply early in the expansion and has broadly drifted upwards since then. Again, that’s not too surprising. We expect prices to be high immediately after the expansion hits (since supply is very limited), so they’re bound to fall in the first few months, after which we would expect the secular upwards trend to take over.

    So in retrospect, if you’d bought a mixed portfolio of Wrath mats in November 2010, and held it for 8 months, you’d have more than quadrupled your money. Unfortunately, that would be hopeless as a gold making strategy. To invest even 100k, you’d have been buying 1350 stacks of ore, 1600 stacks of cloth, etc, which is obviously impossible to warehouse, would be difficult to buy without moving the market, and would have completely swamped the (much smaller) market when you tried to sell it.

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