Thursday, December 15, 2011

Trading simulators and EVE

Remember back in the good old days of yore in high school business class where as part of the project for the semester was to partake in a stock market game ? You know the one I'm talking about. The one where you got 1 million dollars o invest in anything and you looked at the financial section of the paper for the first time ever.

If you were like me, you probably just put all you cash into a couple of penny stocks and hoped for the best. New entrants into the market are always clueless. The markets is something of a game for the driven, the bold, the beautiful, and the risky. The tiny numbers in the newspaper was all we had to go on, what determined the winners from the losers. That and Lotus 123.

Remember a little time later on a small company called yahoo came along and gave us the gem which is yahoo finance section which would provide free charting tools so for the first time ever we could visualize our stock picks and their past history? It was a godsend, and back seat investors popped up overnight. Case we all know that past performance is a great indicator for future gains. (disclaimers be damned!)

Well fast forward to the teenies, and we have EVE online. At first glance it's just a space mmo, where the primary goal of players is to get a bigger ship than others, blow them up, amass wealth, and build empires. On close inspection though one finds a hidden gem almost created and sustained as an afterthought to this virtual ultra capitalist economy, which is, a working virtual market. Note that I qualified it with "working" as there are plenty of games out there tooting a virtual economy including WOW and others. But in truth, those are all false economies as they lacked a free market. Additionally the economy of the other games are flawed because the basic building blocks of the economy ( raw materials ) required nothing other than time an effort to obtain, and there lacked a system of private ownership of property and land, thus private means of economic development. Also, not to be overlooked is the fact that you have a bunch of snotty nosed teens just wanting to pwn orcs in the game and lack of a sophisticated expert market participants. In EVE you have for the first time all these proponents and thus a virtual market is born.

You have speculators and hedgers, consumers and producers.

And thus we finally have a game where one can truely test ones mettle at guessing the markets. And playing the stock market game. It's taken 20 years but it's progress over the financial section of the local newspaper.

1 comment:

Planet Huddleston said...

Great post Digitsu!!