*ISFL Stock Watch - Week 1 - Printable Version +- International Simulation Football League (https://forums.sim-football.com) +-- Forum: Community (https://forums.sim-football.com/forumdisplay.php?fid=5) +--- Forum: Media (https://forums.sim-football.com/forumdisplay.php?fid=37) +---- Forum: Graded Articles (https://forums.sim-football.com/forumdisplay.php?fid=38) +---- Thread: *ISFL Stock Watch - Week 1 (/showthread.php?tid=28033)

*ISFL Stock Watch - Week 1 - slate - 11-30-2020 With the revamping of the Stock Market that occurred over the postseason and offseason between Season 25 and 26, I have seen a renewed interest in the Market, understanding how it works, and trying to make good investments. While I do not know the inner workings of the stock market, I have asked @wonderful_art a lot of questions about it and think I have a solid understanding of how it works. I have thus decided to stake my reputation on my understanding and try my hand at making a series of articles throughout the season giving advice to those brave enough to try their hand at playing the market. With any luck, I will help some folks make money (besides the money I'll be making through these articles). Introduction to the Market For anyone who hasn't touched the casino, or who hasn't stayed up to date as the Casino Team has heavily revamped it in the past few weeks, I will try my hand at writing up a quick guide to how it works as best I understand it. Trading Each team has 300 shares of stock available to be bought and sold. 50 per team are currently being held by the casino, so that means that there are 250 total shares available for each team. (Source) While a team has fewer than 250 shares outstanding among ISFL users, shares can be bought directly from the casino for the price listed in the master Casino sheet (linked here). If you are lucky enough to hold any team shares, you can sell back to the casino for the price listed in that sheet, minus a 10% tax. In addition to transactions directly with the casino, sales are also possible between two users. Open auctions may be held where a user posts a number of shares that they are looking to sell, with other users bidding on them. The highest bidder at the end of the 24 hour bidding window purchases all the shares for their bid, and the seller receives the bid amount minus a 5% tax. The Formula This is the part where people justifiably have the most concerns, and obviously is also the part I understand the least because it's a secret. Before the major tinkering that the Casino team did, it was pretty much strictly an Elo rating system underlying the stock prices. When a team won, its price went up - more if it beat a team that appeared to be much better than them. When a team lost, its price went down - more if it lost to a team "perceived" to be much worse than it (in terms of its Elo rating). That element still exists, but on top of it are I believe multiple systems that attempt to make the dynamics of stock prices behave more like a real life stock market where they are also driven by users' perceptions of the teams' strength beyond just the cold unfeeling Elo rating system assigned by the computer. The first part of this is that buying and selling stocks affects the price. If someone buys a bunch of stock in a team, that team's stock price will increase as it reflects "consumer confidence" in that team, effectively telling the computer that it is an "underrated" team by strictly the Elo rating system. Likewise, selling stock will presumably decrease the price by telling the Elo rating system that it is "overrated". This has recently been adjusted to result in a gradual change over the course of several weeks, rather than a sudden spike as was happening previously (Source). Secondly, as far as I understand, there is some system added so that user-to-user transactions are factored in as well. While I haven't seen much evidence of this as of yet since there have been few user-to-user stock sales, presumably what this means is that any winning bid price is used as a sort of benchmark - in essence a revealed price of the asset. If someone wins a bid for Wraiths stock at $1.3M per share, then it would make sense to use that as to adjust the fair price for Wraiths stock moving forward since at least one user valued it at that much. I would love clarification from someone on the Casino team if I have drastically misinterpreted anything, but as best I know that is how it works. The changes made over the offseason have clearly led to some strange shifts in stock prices (the massive drop that almost every share price took in between week 16 and the playoffs in S25, Baltimore stock being worth $1.8M right now, etc.), but I personally believe they have reached a relatively final place for the formula and there hopefully won't be too many adjustments like that going forward. I totally understand if anyone else doesn't trust them, that seems to me to be a reasonable position to take regarding some of the movements in stock prices also. And none of the Casino team are even aware that I'm writing this article right now, so please don't take this as some paid-off endorsement of the Stock market. But I think it's a cool idea, the changes are taking it in a direction that I really like, so if you like me trust that the people in charge of it are trying to make it cool, then let's dive into some analysis! State of the Market: Preseason From the Stock market sheet, here are the current prices of each team's stock, how many stocks are outstanding for each team, and solely the Elo rating component of THE FORMULA. I have also added a column representing the "Price per Elo", which is just the stock price per share divided by the team's Elo rating. "Per Elo" is kind of meaningless, but the ratio between price and Elo rating I believe is very useful to decide what to do with stock. Market Trends Right now there are many teams that still have tons of room left before hitting the 250 share cap, while other teams are starting to approach that cap, at which point their stock will only be able to be acquired via user-to-user sales, or by pouncing as soon as someone sells it back to the Casino. In particular, New Orleans has only 5 shares left to be bought in the Casino, Arizona has just over 75 available, and a few other teams have around 150 shares available. The market is also strangely inverted right now. the teams with the worst Elo ratings are also those with the highest stock price. I believe everyone has tried to "buy low" with these bad teams so much that they have made these teams expensive, while several good teams can be gotten as steals. Buy/Sell STRONG BUY: These stocks are just absurdly cheap. I was considering putting the Second Line as just a Buy because I'm not super optimistic about their on-field performance this season and could see their Elo rating slide if they start the season slowly. However, there are only 5 shares available and there's a very strong cartel holding onto their stocks right now. (Hi @Simo !) so I could see a scenario where they do well and their price gets inflated quickly by bidding wars in small sell-offs by the users who currently own some. Getting in with the last 5 stocks is a great opportunity for a lucky reader of this article. The Outlaws and Hahalua are basically in the same boat. Cheap stocks backed by a solid team. Arizona has under 80 shares available, while Honolulu has only 20 owned shares. Either of these are fantastic deals and could quickly double in value. BUY: The Sabercats, Yeti, and Sailfish are all strong teams with cheap stocks. Unfortunately this means that if any of them struggle to open the season their price could tank since their Elo doesn't have a ton of room to move upwards but a lot of room to move downwards. Still, as the market corrects itself and the expensive bad team stock gets sold off, I believe these good teams should all see an improvement in value. The Copperheads likely aren't a great team this season, but their stock is dirt cheap and there's not very much of it currently held by people. Could be a decent buy just for those reasons. HOLD As a starting heuristic, I was using the market average $659 price/Elo baseline as a guideline for what stocks are worth buying and what are worth selling. Everything cheaper than that is currently undervalued by the market relative to its past Elo rating, whether because people think they will get worse or just because the market is immature. My current guess is that the latter is the driving force. With that said, all of these stocks are hovering somewhere around that baseline, or slightly above it. I don't necessarily recommend buying any of these stocks because there are better deals available and I am not sure where to expect that market average price/Elo baseline to move to. But if you own some of them right now I think it's alright to hang onto them and wait for a bit. (Of course, it would probably be worth selling to convert them into BUYs if you are willing to take a little risk). The Wraiths and Fire Salamanders were not very good teams last year and have below-average and league-worst Elo ratings, respectively. I'm personally optimistic that both of them can improve this season, and so they could see an increase in price due to Elo rating that makes it worth sticking with them. The Otters and Butchers have roughly average Elo ratings, yet they figure to be two of the best teams in the league next season based on not only my subjective evaluation but also a lot of the discussion I've seen around season predictions. While they're starting at a higher baseline, I could also see them improving on their Elo ratings and gaining value that way as the season progresses. But there are still better deals elsewhere on good teams (Yeti, Sailfish, and your preference of Hahalua/Outlaws) to go to if you're looking to buy. SELL: The Liberty are just above that Price/Elo baseline, but their roster has serious holes in it and they are likely at the start of a lengthy rebuilding process. I could see an argument for holding onto their stock, but it would probably be better to dump it now and look to buy back in at the end of the season if you're optimistic. STRONG SELL: These are the two most expensive stocks in the league and two of the worst teams in the league. Not only that, but their Elo ratings are likely a little high right now and likely to drop if they struggle to open the season. Easiest decision in the stock market is to sell all shares you own of these teams right now. The End Thanks for reading! I'll look to make this a recurring series as the season continues (so I can afford more stock purchases ), so please let me know if there is anything else you'd like to know about the Stock Market or anything I should add to my analysis! RE: ISFL Stock Watch - Week 1 - Duilio05 - 11-30-2020 This is actually a great write up. Really hope it becomes a series. I was recently made Casino King by @AdamS so i guess I'm most qualified to answer questions, though @wonderful_art has been doing a great job of answering questions in the discord while I was at work. Lot of the changes this offseason were made as collaboration by Art and I with Art doing the heavy lifting. Think you understand correctly how the market is currently working, granted there have been so many market updates it is kind of hard to track them all. Maybe I should get someone to compile all of them into a nice Market Rule google document. Only thing you have wrong is that final auction value doesn't affect the market value. So that 4th paragraph in The Formula section is wrong and is not actually occurring. That said the casino would love to see more p2p sales, so thank you for reminding me that we are holding 50 shares of each stock. Since NOLA has hit 245 shares the next buyer can only buy 5, which i believe has already occurred as i type this. That said I'm only slightly confused on your take about Baltimore. I agree they're a sell, but not a hard sell, in fact potentially a hold. Some how Baltimore has buck the trend of needing to be a high tpe team to do well. last few seasons they've been among the lowest teams by tpe, but of the last five seasons they've pulled of two 8-8 records and a 9-4 record, which was good enough for 1st in the NSFC. Now they have the highest tpe QB, and brought in a slew of offseason talent while losing only one player. Maybe I'm just more optimistic than rest of the league because i play for Baltimore RE: ISFL Stock Watch - Week 1 - wonderful_art - 11-30-2020 Just want to drop in and thank @IthicaHawk for the whole market and all of the maths behind it. Honestly ingenious how a lot of this runs, and I've loved working with him on it. Happy to help him and the Casino out with it all. And love the media slate, going to keep us busy processing transactions with a series like this.