How do you make your money?

[pdxmike]

Hi all! I have been a huge fan of this game since the DOS ages. I wanted to see what some of you have tried to make your fortunes.

My starting strategy is to create a company in the bio tech field. When the game gives me an opportunity to test my morals, I fail, and then cash out. I then use the money to start again in the same industry and repeat until I get approx 30-50 billion. I then cash out and start/buy an integrated oil company and build that up. This company will be the company I use until the end.

I will then buy a company in the oil service industry and then in precious metals. I found that these industries have the best bang for the buck. After I achieve 2nd place in market share I take the profits and invest in all the other companies in those industries at a 19% level. Managing all of the companies becomes too time consuming.

I then look at the most cash/highest market share list for companies to invest in as well. All of these transactions are through the original oil company.

After I invest in the other companies I start my own bank and continue making capital contributions to it. With the bank I buy all bank loans rated ‘A’ or higher and then I buy as many gov/corp bonds as possible. With this method I have achieved a net worth of 2 quintillion (2 with 18 zeros) and still going. I plan on buying 19% of every company in the game next. After that I will probably start over.

So, what is your strategy and what type of results do you get?

[kludge]

Start a bank. Sell off all the consumer/mortgage/gov't bonds.

Split. Either:
A. Buy up as many BBB loans I can to capitalize on the higher interest rate and relative security
B. Buy up D loans, freeze lending immediately. Wait for company to sell enough assets to call in their loans or if I have to write half the loan off (which means I'd split even), start calling the loan as often I can.

Both req. constant monitoring of the loans list to see when I call in the poor saps' loans.

From there, I simply build assets and begin to buy/sell bonds as the market cycle permits.

With around 100 billion, I start to issue ridiculous amounts of bonds when prime rate is below 6%. With bank's great supurb financial status, the loan is around 4% interest. In a couple years, the billions of dollars are bought back at 40-60% of what I received. This continues throughout the game in greater amounts. It's invested in major businesses of a B or BB rating (frozen immediately) so that they can be called when market crashes and I need the cash to buy back my bonds.

Once I reach the trillion mark, I become even more hostile and aggressive, buying out small companies with a low (no more then 90%) price to net worth in a failing industry. I quickly reorganize (and rename) the business so that the management receieves a "Very capable" rating and then I start buying out the competitor's loans. The loans will be called and frozen as needed.

Once the major players' loans are claimed, I make huge capital contributions to the company and start to buy assets of the failing companies with a negative goodwill. If this isn't possible, I buy enough assets to conquer 20% of the market share and set a 60% growth rate to start a battle of attrition with the competitors. Once a healthy 99% market share is acquired, I start using my "satellite companies" to file frivilous lawsuits of 500+m. dollars against those who dare file an antitrust lawsuit against me until they're dropped and the company is bankrupt.

Repeat until all industry's are controlled and the opponent has no company left not under my loaning jurisdiction, being called and frozen at every moment until he's finally starved out of his comfy CEO positions.

[Scott]

Nice guide there to banking Kludge.

[mike]

Cool sim, played the demo way back when (ca. 2000), and glad to see it's still here.

Banks are indeed king of cash, but I don't bother buying any loans other than D's at a good discount. Sell all C's, and get my A's and B's only from liquidations of subsidiary banks.

Negative net worth isn't much of a problem until it excedes your bad debt reserve...then you're in trouble

The next best money-maker is insurance, available almost from the start, huge bunch of cash at your fingertips, easy to merge/liquidate into $100B+ in assets.

The most difficult is industry, unless you decide to make one of those bad "moral" choices and take the money and run. I do nearly as well with buying 70-80 percent undervalued companies, and liquidation.

Tax-Free Spinoffs are the by far best source of personal cash. Say you own a holding company with a qualifying subsidiary, pay off all debts, spin off the sub, issue new stock, saddle it with a huge bond, and sell off all your shares. Loads of personal cash plus full ownership in debt free company.

There are more, but I'm sure someone else has good ideas as well...

-mike

[rudd]

It is addictive as all hell, until you figure where the cracks are.
Always start with REL insurance, buy a company - contribute all the capital you can into it through the ins. co. - then sell all corporate assets and stocks, etc - pay all the cash back as extraordinary divs. - Sell the company (a sad little overpriced shell) and for a bit of spice use your player to short the Shell to death. Rinse and repeat.
QED

[nygmatron]

My strategy is fairly simple. I begin by buying an internet company for about 800 million. Generally, the growth rate is quite great and the P/E ratio tends to get very high very rapidly. Note that i have no debt yet.

When I tripled or so my initial investment and i am the major force of the sector (by merger), i look for overvalued stocks in big markets the ones that are trading at 6 times book value or more. Then i sell call options for the lowest price possible. I sell calls in the range of 500% of the total market cap. I buy some puts too just to have a cash inflow when i settle all of those options. Once i did all that, i buy the poorest company of the sector in question, inject some capital in it, buy a 20% share of the company which i shorted like hell. I then sell all the assets to my newly acquired company and i just sit back, relax and watch the value of the target plummet when my short soars. When i am major in every market of importance, i then start a very well capitalized bank i then switch all my corps to it and then i leverage them to maximum (when market conditions are favorable of course)

Right now I am in 2018 and i have 25 trillions and there is a full blown recession right now (-15% gdp growth)

[dfxdeimos]

Ohhh, I am going to try that out rigth now nygmatron. Sounds interesting.

[dfxdeimos]

Oh you are bad.

[aristocratie]

In previous versions a cross industry merger would add a lot of value. Now that only seems to work for a biotech-pharmaceuticals merger.
Now most of the time I start buying call options in Microsoft, BP of Exxon. They usually go sky high in a short space of time.

[wigglypuff]

I'd hate to admit it, but I'm getting my arse handed to me in this new version. In previous versions, I would be able to spank the computer with no problems, especially on the 1 setting. Now it seems like the computer is like 10 times more aggressive than previous versions. I'm as aggressive as I can be and I cant seem to beat him. I come close but it always seems like the computer comes from behind and beats me in the end. Its a lil frustrating lol.

[blizzy]

Later in the game I end up with a holding company and most of my accumulated assets in it...I had two tech companies, one software and one Network/TelCom both were thriving in a tech boom market with 60%+ growth rates. There was some special message about how the dow had gone through the roof and they went from like..200 bucks a share to like 700-800 bucks a share in a day or two.

[candew]

Jan 17, 2008 18:52:37 GMT -5 kludge said:

Start a bank. Sell off all the consumer/mortgage/gov't bonds.

Split. Either:
A. Buy up as many BBB loans I can to capitalize on the higher interest rate and relative security
B. Buy up D loans, freeze lending immediately. Wait for company to sell enough assets to call in their loans or if I have to write half the loan off (which means I'd split even), start calling the loan as often I can.

Both req. constant monitoring of the loans list to see when I call in the poor saps' loans.

From there, I simply build assets and begin to buy/sell bonds as the market cycle permits.

With around 100 billion, I start to issue ridiculous amounts of bonds when prime rate is below 6%. With bank's great supurb financial status, the loan is around 4% interest. In a couple years, the billions of dollars are bought back at 40-60% of what I received. This continues throughout the game in greater amounts. It's invested in major businesses of a B or BB rating (frozen immediately) so that they can be called when market crashes and I need the cash to buy back my bonds.

Once I reach the trillion mark, I become even more hostile and aggressive, buying out small companies with a low (no more then 90%) price to net worth in a failing industry. I quickly reorganize (and rename) the business so that the management receieves a "Very capable" rating and then I start buying out the competitor's loans. The loans will be called and frozen as needed.

Once the major players' loans are claimed, I make huge capital contributions to the company and start to buy assets of the failing companies with a negative goodwill. If this isn't possible, I buy enough assets to conquer 20% of the market share and set a 60% growth rate to start a battle of attrition with the competitors. Once a healthy 99% market share is acquired, I start using my "satellite companies" to file frivilous lawsuits of 500+m. dollars against those who dare file an antitrust lawsuit against me until they're dropped and the company is bankrupt.

Repeat until all industry's are controlled and the opponent has no company left not under my loaning jurisdiction, being called and frozen at every moment until he's finally starved out of his comfy CEO positions.

Given the relative inactivity of the board, I am taking a chance and hoping I can get a response from the original poster.

Here Goes:

I have tried to follow your strategy with very limited success thus far and I have a few questions.

(1) Do you use your Bank as the company to buy up the other businesses you refer to? In my present game I am limited as to how much stock my bank can own relative to my other assets (loans and bonds). I assume you use a holding company with which to start up the bank?

(2) By Split do you mean do a stock split or split the buying up of BBB or D loans?

(3) What do you mean by the term 'from here I simply build assets' do you mean accumulated cash (CD's) over time from loan nterest? more BBB loans? Purchased stocks?

(4) Do you maximize your advertising from the get go?

(5) As the game is only 35 years in length, what milestones should I be looking at to determine success with this strategy? Is it conceivable to reach the 100 billion mark in say 5 to 10 years? (assuming difficulty level 2)

Thanks for any and all assistance.

[nygmatron]

Jul 12, 2008 19:57:58 GMT -5 nygmatron said:

My strategy is fairly simple. I begin by buying an internet company for about 800 million. Generally, the growth rate is quite great and the P/E ratio tends to get very high very rapidly. Note that i have no debt yet.

When I tripled or so my initial investment and i am the major force of the sector (by merger), i look for overvalued stocks in big markets the ones that are trading at 6 times book value or more. Then i sell call options for the lowest price possible. I sell calls in the range of 500% of the total market cap. I buy some puts too just to have a cash inflow when i settle all of those options. Once i did all that, i buy the poorest company of the sector in question, inject some capital in it, buy a 20% share of the company which i shorted like hell. I then sell all the assets to my newly acquired company and i just sit back, relax and watch the value of the target plummet when my short soars. When i am major in every market of importance, i then start a very well capitalized bank i then switch all my corps to it and then i leverage them to maximum (when market conditions are favorable of course)

Right now I am in 2018 and i have 25 trillions and there is a full blown recession right now (-15% gdp growth)

The only problem with this strategy is cash management. There comes a time when you make so much money that you barely can keep youre AAA rating on the bank... so theres a risk that youre capital ratio freefall like hell and that makes your bank collapse... the trick is to make an insurance company youre main holding, take all the money in every one of your companies and then contribute every penny to the bank.. that should do the trick to up your capital ratio ^^

by the way this technique still works in 5.2 ;D