Stock Price Event

[jeffryfisher]

I had another weird thing happen today. I tested an event that drove down stock prices by 70% (1929 stock market crash). However, instead of declining 70%, prices went down about 98%, and not all companies were affected the same amount. There were no other effects in this event. The economy stayed at normal (the Depression will come, but not quite yet)

Has anyone else worked with stock price events? I guess I'll have to run several cases to calibrate another broken feature.

[cogeo]

The event fired multiple times maybe?

[jeffryfisher]

Couldn't have fired twice. It's a one-time-only event with no territory, company or player loops. I recorded stock prices immediately before and after.

My current theory is that the game has a "true" (internal) price for each stock, and that economic and event fluctuations act as a percentage of that value. If the mods in effect sum up to -100%, then stock prices would be floored at $1 (and I've seen a stock drop to zero under selling pressure).

I'm going to recalibrate all of my Great Depression stock price adjustments based on this theory. In the mean time, the test-game I'm in is still playable, and I expect (hope) that stock prices will recover when the temporary adjustments expire.

[immpy]

Jeffry, I can only speak from gameplay experience, as I don't read program codes etc., but it sounds like you are onto the culprit of the BIG drop in stock prices when you mention a "true" price for each stock. Instead of Market Share Price, Book Value Price per share is probably where this value originates (just guessing, I have no way of proving this), and it may be modified by the actual and/or potential profit, or loss, for the current year in which the event occurs. With it's negatively biased crystal ball the Stock Market seems to me to have an uncanny knack for downgrading stocks quickly based on these criteria. It's motto would appear to be "expect the worst until proven otherwise". By infusing a -70% economy event, indeed the "sky would begin to fall" as you have witnessed.

I pay very close attention to all of these phenomena during gameplay. it happens with regularity if one watches closely in scenarios that feature downturns such as this.

I too, have had to "water down" an economic decline in an event in my Southern Map...or risk not being able to recover before going bankrupt. With experimentation, one can achieve the desired result of the downturn.

Edited December 14, 2016 by immpy

[jeffryfisher]

Oh wow, I forgot about this theory. I have since made more discoveries (but neglected to update this).

When my esteemed AI rail barons are way out on margin and stock prices decline suddenly, they will receive margin calls. They're then forced to sell, which drives down prices more, which cascades to more robber barons and more selling etc. This turned out to be the real reason that my already-devastating 70% downdraft was magnified to 98%.

Because each company has different levels of AI player investment, each company was affected to a different degree (mine least of all because I held most of the shares and had no debt).

Thus we have a general safety tip for map designers: There may be knock-on effects of your event's effect. In the case of the US History map, I think I dialed back my event's effect so an "average" end result after magnification is somewhat like the historical crash. YMMV!

PS: Right after such a crash, if not all of the AI dominoes have fallen, then that might be a golden opportunity to run a "bear raid" by shorting a few shares aimed to topple the next tycoon over the edge.

[immpy]

Yes, you are right on with your excellent description of the "perpetual blackhole" that can occur if conditions are ripe for it. The amazing quality of this phenomenon is the speed with which it occurs. Given a major economic downturn, a crash, or some other map event that weakens the economy considerably.....pause the game......instantly you will be able to see who is in trouble by checking AI CEO's on the Stock Market screen. The ones with negative purchasing power will begin to sell off, as you stated. The size of that negative value determines if they might make it through the crisis, depending on which company or companies they hold shares of, as well. Un-pause the game, and in mere seconds, by pausing again, you can catch blocks of holdings being sold off, and plummeting prices. This pausing and un-pausing can be done as often as one likes. But by the very next turning of the calendar month, usually, they will either be wiped out financially, or they will be in survival mode, with a good chance that they will make it through the downturn. Times will still be tough, but they will have managed to avoid the powerful suction of the "blackhole" for the time being.

I never had any real success with a "bear raid" myself. The surviving CEOs are simply too strong to be broken at this stage. The damage has already been done. My shorting shares of their stock never pushes them over the edge. I much prefer taking this opportunity to buy as many shares as I can comfortably afford of the surviving CEO's companies at rock bottom prices. The market can only go up from here, it is just a matter of when. And I do this quite aggressively with takeovers as my goal. Then you may attain that 51% or greater ownership in the company or several companies, and you will have a nice choice to make. Merge with them and expand your empire if that seems useful, or take them over by assuming chairmanship (if the map allows it) and literally run them and their company into the ground using various means of a "scorched earth policy" (bulldozing tracks and/or buildings, running up debt, etc.).

This sure is a beautiful game.....

Edited December 19, 2016 by immpy

[jeffryfisher]

The 1929 crash in my US History map often provides such takeover opportunities. Unfortunately, by 1929, you can be about 100 years into the game, so most of the AI companies are debt-laden husks sporting crap rail that you wouldn't even want to pay maintenance on. To compound the disaster, a well educated player will know that stock prices will continue to suffer for about 25 years. In the rare case that an AI company somehow reaches the 1930's in the black, I won't touch it until after the depression within a depression "strikes" in 1937-38.

[MaglevForever]

There aren't too many good opportunities for "bear raids" during most plays, but they're fun when they show up. My experience is similar to Jeffry's, most AI don't make strong companies that are stable or slightly growing even in a steady economy for more than 17 or so years of game-play. This very much limits the upside one might gain as any jump up will likely be weak. Which leaves the main reason to wipe out AI chairmen's net worth. For this purpose it doesn't matter if you even lose a little money. I always target the stock of the company to which the AI chairmen have most exposure. If you really want to take it further, try to coax an AI chairman into a higher level of margin before the raid. You might even sell some of your stock to encourage him to buy it on margin at a "bargain" price. After the raid he might be completely wiped out.