Yesterday's post seems to have been a wee bit controversial and I am honestly thrilled with all of the comments and feedback - even if a lot of it is disagreeing with me. Based on the comments I believe that perhaps parts of my arguments were misunderstood (yesterdays post could have been written in a clearer way) and I would like to clear that up before I get into why I am stockpiling Pyrite Ore.
There are a lot of people who believe I am arguing that one can NEVER make a prediction. This is not true. I believe that predictions can safely be made when we have an abundance of data. I have no problem predicting that the sun will come up tomorrow because we understand why the phenomenon occurs and have billions and billions of data points in the past indicating that the sun will rise tomorrow. When it comes to things like Pyrite Ore, however, I believe we often ignore the fact that we actually have almost no data. Vanilla Wow + two previous expansions isn't exactly a bountiful font of information. What factors does Blizzard look at when deciding how to release epic gems? How high is releasing them on Blizzards priority list? Do they plan well in advance how they will be released or is it a decision they take closer to patch release? Are they looking at any other changes that could change the gem market? etc. Basically we know jack. Despite this we all WANT to make predictions because making a prediction about what will happen is convenient for us. So we come up with a prediction using our complete lack of information and say something like, "Stockpiling Pyrite ore is medium risk". We ignore the fact that we have NO IDEA how accurate our prediction is. We assume that because we have a mathematical model it is reasonably accurate but we have absolutely no way of knowing if our model accounts for everything that needs to be accounted for. Because of this I think we are better off just acknowledging that we don't know what the risk of stockpiling Pyrite Ore is. It could be low, medium, or high - no one knows.
Another thing that I should have done a better job explaining in my first post is that while Black Swans appear to be unlikely before they occur after they occur they appear pretty obvious. In other words Black Swans aren't necessarily low probability events - they often just APPEAR to be improbable due to a lack of data when people are making predictions. Take 9/11 as an example. If on September 10th you had told people that planes would fly into the Twin Towers most people would have said that you were alarmist and nothing like that would ever happen. Looking back on the event, however, we realize that Al-Qaeda had targeted the towers before, had planned another attack involving multiple aircraft, assassinated Massoud in Afghanistan, etc. All of these events were indicators that something like 9/11 would happen - but we didn't realize/know that until after the event. In the same way there are numerous possible Black Swans that could greatly effect the risk involved in stocking Pyrite. Right now these possible events all appear to have a low likelihood of occurring - but we don't know if this is because they actually have a low likelihood of occurring or because we aren't looking at/don't have all the necessary information.
Okay. Now that that is out of the way I would like to talk about why I have decided that I am going to stockpile Pyrite Ore. I am not recommending anyone else does the same (you should make your own decision) but my thought process might be of interest. I don't believe I have any idea if stockpiling is low, medium, or high risk. While talking with Catharsis, however, he made an excellent point that has nothing to do with risk. He simply stated that stockpiling Pyrite is the only endeavor that he can currently think of in which he can possibly make tons of money very quickly and since he wants to make a shitton of gold he is going to stockpile. I can't argue with this and it is also why I plan to stockpile Pyrite. I don't know if it is a high or low risk endeavor - I just know that it is feasible and it is the only feasible strategy that I can think of that has such a hig possible pay off.
Now I am also helped in my decision by the law of diminishing returns. While I usually hate this law's attempts to place a limit on how much gold I make in this instance I am using the law to my advantage. I have decided that because there is relatively little meaningful difference in whether I have 100k, 250k, 500k, or 1,000k gold I am alright to risk quite a large chunk. Whether I have 500k or 100k I can still afford to equip multiple toons with mounts, epics, etc. So while I want to have a few million gold I have also come to the realization that I am okay with any 6 digit figure. Because of this I don't have a problem risking gold on Pyrite Ore. If I lose my entire investment I will still be able to buy what I want and will be able to grow my money back. If my investment pays off I get incredibly rich. Both are okay with me.
So because I can't think of a better way to make a lot of gold quickly and I am okay with losing a large chunk of my gold I have decided that I am going to spend up to 1/7th of my liquid gold on Pyrite Ore or buy 1,500 stacks - which ever comes first. I am not setting a minimum price point (although I would like to buy around 6g and below) but I obviously want to buy as much Pyrite as possible while spending as little gold as possible. Even if I end up spending 1/7 of my gold on Pyrite and I end up losing 100% of my investment I will still have well over 100k - so I feel fine with this level of investment in the market.
So what about you guys? Are there any other potential huge money makers coming up that you can think of? Are you planning on stockpiling Pyrite? Still think I am crazy?
On another note I will be leaving for the airport to fly back to Bangkok in about 5 hours so this is my last post for a few days. This means that I won't be posting here for a few days and if I haven't responded to your comment on yesterdays post and/or I don't respond to your comment on this post - don't feel left out. I am probably in a plane over the Pacific and I promise I will respond to the comments in a few days when I land and get unpacked.