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 By Maelstrom Baphomet, CEO
Dragon Global Diversified
The markets took a shock when Ginko collapsed and with the gambling rules, but it’s starting to show gradual signs of recovery in sectors that are not heavily ingrained in land. New ideas are filtering into SL involving marketing, advertising, and creative scripting such as with MECH, which promises to be a potentially very fulfilling operation assuming technical difficulties can be overcome. There are still very strong concerns though which merit note. Land prices are still in a catastrophic spiral. This can be good for some, bad for others. For sub-letters it offers the potential for better margins, for landowners trying to profit on a resell or monthly sim rental it poses a nightmare demanding greater vigilance and marketing expense to achieve the slimmest of margins.
Despite the finance sector hit from Ginko many banks still remain resilient though there are murmurings against the Allenvest bank over its liquidity crunch, it still stands strongly on debts owed and has strong likelihood of recovery. If you're properly diversified you should not be feeling a huge impact from all the troubles as the sectors that have excelled tend to have offset the sectors that have not if you’ve actively managed your positions. I recommend that everyone begin to consider moving away from speculation. The SL market is rapidly nearing their first full year of maturity. Some companies have lasted and some have issued steady dividends in this time, those are the gems that wise investors seek. A company that does not have an ROI is not worth holding in your portfolio unless you anticipate large capital growth potential. Don’t be a fool and buy a stock that’s not issuing a dividend at a high price you’re just asking to take a loss and making someone else a very happy trader to have put his losses onto your shoulders. Sorry BNT, AIG.. I just can’t advocate holding you without performance. However, I will note that BNT is currently trading at an all time low, .23 as of the time this is being written. It does leave room for capital growth, but there’s this looming specter of the CEO owning a massive 84% of the company that would leave any wise investor still hesitant to make a buy. Then there’s that other shareholder that caused a bank run a mile wide. Nicholas.. of Ginko. If the price goes up, will he take profits and utilize that equalization to cover his debts? I’m sorry Intlibber, you’re a good friend, but the skeletons are in your ownership listings. Fix that, get an ROI or a capital growth vector with a stronger upward potential, and maybe your share price will stabilize. Risk Mitigation Last week I spoke on economic risks in SL. This week I’m going to add a small segment on how to mitigate that risk. Below is a list of a few tips I highly encourage.. 1. Day trade on large spreads if you can. Leave orders out just within the market and hope they fill both sides in the same day. The net result is small profit. Do not day trade large sums, you may get caught with shares you don’t want, or selling more than you intended, do it a little bit at a time. Every linden matters when you do many trades. 2. Diversify banks, not just stocks. Banks in SL are not extremely secure, If you are trusting one person with all your money and you do not know this person on a face to face basis you are running a severe risk of loss, it’s good to have at least 5 banks with your liquid funds split evenly among them. Even then, you may want to consider more than 5 if you have large sums in each account. 3. Make sure your diversification is real. When institutions or companies are extensively interdependent, then investing in them is not really diversifying. If you buy 50 different stock issues on one stock exchange, and that one particular exchange somehow ceases to exist.. what happens to your funds? Scary thought isn’t it? So, how many exchanges and banks can you diversify? Here’s a short list of links to the exchanges of SL in no particular order A. https://www.intlstockexchange.com/login.php (The international Stock Exchange)
B. http://www.slcapex.com/ (Second Life Capitol Exchange)
C. http://www.wselive.com/ (The World Stock Exchange)
D. http://www.vstex.net/ (The Virtual Stock Exchange)
E. http://dse.anshechung.com/ (The Dreamland Stock Exchange) That’s all for this week. Hopefully you find this information useful. Have the best of luck and skill with your investing and trading.
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