Owning a financial group!

[fumitsu]

Let me join the party too. It's my dream to own a conglomerate of financial companies.

I really want to own a FINANCIAL GROUP!!!

1) Own a bank
A lot of people has already suggested this, so I'm not gonna say it again. It's the most basic and essential company in a financial group. A bank sells loans and gets profit from the interest. However, a bank cannot sell loan more that its pool of money (money reserve). To increase its pool of money, the bank must sell 'accounts'.

2) Rework investment companies/Build mutual funds
Capitalism Lab already has investment companies. However, it's so lacking and disappointing. It would be great if we can build a mutual fund, manage its portfolio, sell its unit, take profit from the fee and investment gain. The game already has the stock portfolio system, so this is not going to be difficult.

3) Own an insurance company
The more customers we have, the more money we get monthly. However, there is a risk that we have to pay the compensation each month. Just a type of company that gains profit from probability.

4) Own a brokerage company
The more customers we have, the more money we get daily from stock trading. Just a simple cash cow company.

Please let me have a financial group. Pleaseeeee. And thanks for hearing me!

[David]

2) Rework investment companies/Build mutual funds
Capitalism Lab already has investment companies. However, it's so lacking and disappointing. It would be great if we can build a mutual fund, manage its portfolio, sell its unit, take profit from the fee and investment gain. The game already has the stock portfolio system, so this is not going to be difficult.

For this to work, there must a separate stock market other than the one in the game, as the market caps of all companies in the game's stock market are too small. It will only take a few mutual funds to acquire all floating stocks in the stock market.

[chengtsai]

We have 50 companies already existed in the game, if we can create another batch of 50 VIRTUAL companies. This can be done.
Liquidity on real companies will be limited, but instead doing a mutual fund we could do a ETF. Then liquidity is NO longer an issue.
I really like the idea of having virtual companies where I can test my trading strategies and a great place for parking my company's profit.
In fact, if we can go deeper, having a trading market for metal and other commodities are great too.
I would love to invest money on gold, oil, etc...just another way to hedge against inflation or deflation.
Of course, prices changes should relate to the actual game itself and vice versa.
In our current game setting, raw material prices does increase over time but if I hold on a Silica mine for years and the price become ten fold (10x) I should be able to cash it out, but it is not happening in the game.
For example, if I purchased a Silica Mine in 1990 for $10 millions and 10 years later the price of Silica went up by 1000%, then I sell the mine without using it at all. I should be able to cash it out $100 millions.

[David]

We have 50 companies already existed in the game, if we can create another batch of 50 VIRTUAL companies. This can be done.
Liquidity on real companies will be limited, but instead doing a mutual fund we could do a ETF. Then liquidity is NO longer an issue.

In real life, the fund that goes into an ETF will in turn be used for buying stocks that the ETF is comprised of. So, the amount of floating stocks will still be an issue for ETFs.

It seems that a viable solution will be to create a separate stock market with a whole batch of new stocks with larger market caps that are not tied to any companies in the game.

The interface for such a stock market can be the same as the current stock market and it can be called "International Stock Market" to distinguish it from the current one.

I think the biggest challenge in implementing such a stock market is how the stocks' price movements should be simulated when they are not based on actual companies in the game. Ideally, the stocks' price movements should not be entirely random. Could anyone think of any credible ways of simulating the behaviors of the stocks that have no linkages to companies in the game? Any ideas?

[chengtsai]

Just like you said, a stock market need to be created it. We could call it "international markets" or "virtual markets". Either way is fine.
In this international market, 50% of listed companies are real companies in the actual game and the rest 50% are just simulated companies that are virtual.
So course, stock's price should not be a random thing, but we could use the real 50 companies as our bases and simply create a mirror images to reflects the actual ones.
For example, the total revenue growth for 50 combined companies are correlated to 50 virtual companies, as well as their profitability, P/E, P/B ratios ...etc.
I do believe this can done.