Let's Play W$R v7.81 - Episode 1

RakeM is playing Wall $treet Raider v7.81, and takes some big risks in the early going--and fails spectacularly.

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Closed Caption:

I am NOT a destroyer of companies I am a
liberator of them point is ladies and
gentlemen greed for lack of a better
word is good
greta's right reid works
hello everyone and welcome to let's play
Wall Street trader 7.81 I'm reagan your
host this is gonna be a new let's play
we're going to start a brand new game
and we're going to play all 35 years of
it hopefully this time if you are new to
Wall Street trader and you've never
played it before I suggest that you go
to either the Getting Started tutorial
or watch the first eight or so episodes
of my let's play for version 7.6 in that
lets play i cover a lot of the
fundamentals and basics of you know what
buttons to click and whatnot that I'm
really not going to cover this time I'm
going to assume going into this
particular let's play on this version
that you already are familiar with the
game you are familiar with how the
trading desk is laid out where the menus
are and what what the different reports
show you and stuff and mainly going to
be talking about the strategies that I'm
using and not so much about the buttons
that I'm clicking so if you've never
played the game before his go watch some
of those others and some other videos
and come back to this one after you kind
of have a feel for how the game is
played the first eight or so episodes I
cover most of the basics I think another
interesting one to watch would be about
the first 20 minutes or so
episode 11 where I cover the size of the
entire market and some of the math
behind my spreadsheet so go take a look
at those and then come back and join us
for this one so before I start my game I
want to point out something that I
didn't talk about in the last series
and that is down here in the bottom left
her commodity prices indexes indicators
these numbers are all pretty much the
median value for each of these
categories of prices and indicators so
what the primary here show seven and a
quarter percent The average crime rate
is anywhere from six and three quarters
percent all the way up to eighty percent
that's that's the median values for the
prime ministry trip on a long but of
course that's just the yield to par
value on those is always wondered spot
crude average price is $100 per barrel
while gold average price of 1,200 per
ounce GDP growth here shows 2.5 percent
according to the manual and just so you
can look this up on your own it's on
page 96 of the manual it says that the
GDP typically grows at about 3 percent
shows 2.5 here so over the median value
is $20 per ounce wheat is actually $6
per else and you can look those up on
pages 136 and 137 horn five dollars an
ounce or $5 a bushel is the average
price right so those are the averages
never forget you look at it before you
start a game and they'll give you the
approximate number to remember right so
let's go to new game and we are going to
make the computer player this time I'm
going to call it an id10t
miss me and we're gonna make this a
billion dollars to start thirty-five
year game and we're gonna do level 3 on
the difficulty level this time so we're
gonna have more taxes more restrictions
more regulations to deal with this time
out than we did last time so it's gonna
create the database here will play first
he's finished now it's my turn
gonna give me two notices what about how
to find the church which already know
the others about interest rates
and they're gonna go to easing which is
good
pausing the ticker going to save my
number one
two schools of thought
thought when we're starting a new game
the first one is to be very conservative
and to make sure that whatever you
invest in its gonna go up so you're only
going to bet on a sure thing the other
school thought is to gamble like crazy
and run your net worth up as much as
possible or go broke immediately before
you have a lot of time invested because
if you go broke right now it's not going
to be a big deal you just started a game
of the school of thought in the second
category where I will I'd like to gamble
a lot in the first few months of the
game and it used to be that you could
start on day one
doing just that but in version 7.7 runs
off put in a restriction that you can't
do a whole lot until February the first
but the only thing you can do is buy and
sell stocks and I think you can still do
swaps interest-rate swaps and you can do
physical commodities but beyond that you
really can't do a whole lot so I'm gonna
do pretty much what I did last time I'm
going to look for a company that I can
buy a hundred percent of eliminate some
of its debt to help its earnings
increase right away
hope that a cheat scenario comes up to
bring along a huge cash influx of cash
that will immediately raised the stock
price and that we can sell it before
february first and then we'll do a bunch
of gambling after that right before I do
anything else I want to change my
settings here to her speed of sixty 60
what my law firm to be the expensive
lost her and
and everything else i think is right pop
ups in earnings reports to show so
that's good but it's a sophomore gonna
exercise the options we're not gonna
make delivery we want our options to get
futures to be settled so those need to
be both be no your gonna pay off any
loans from cash that we get I like the
large charts so that's good you want
that on and we want this off
ok good everything set the way like all
right so the next thing is to go to
biotechnology and the reason why I like
biotechnology is because it always has a
high demand in the early stages of a
game and generally easy return on
capital assets is usually in the usually
in the high teens is doing better this
time which is actually even better for
us tonight paws the tickers because in
the first few minutes of the game all
the stocks rice usually so I want to buy
the stock before the stock prices rise
so I
the ticker right away so it's like that
and go to projection and see who we can
get a good price and take note of what
you see here a lot of ones and $100
hundred percent range to 200 percent
range that's gonna change between now
and February 1st these are all going to
be elected three hundred percent range
all right let's see who we will again I
guess HGSI to be a good one
although he may be more than we can by
usually get one like the one of them
but the one and a half range but these
guys are all kind of highly leveraged
those who would probably be alright
let's take a look at spending about 1.3
billion on him so we wouldn't we
wouldn't have any extra cash to give him
to knock this down
controlled
all right let's look at Jen's on
that we can afford it we would have a
lot of money left over to eliminate this
death
genzyme
595 million left to give him let's give
them 575 let's pay all of it off in this
level 2 percent for prepayment penalty
let's buy back our bonds alright so we
made up
made a process I'm buying back the bonds
which is why we have taxes do we have 64
million in cash no debt in our stock
prices already so we've got a gain
already of 40% alright our projection is
43 cents we only made seven cents all
last year a reasonably competent so
let's protect that and go make our
management already setting high enough
in our management will stay good it's
the highest when I see here is 9% so
what we'll do is we'll make cars 1003
will make that see we're making late
teen percent to this right here we'll be
right where it needs to be for us not to
go into more debt of this let's make it
20 2010 10:22 and we don't have a
dividend over at one so that's good
right so productivity 10 percent growth
rate 22% he declares earnings on the
10th of January which is only nine days
away so what we'll do is we will turn on
the ticker and run the simulation to the
10th January and then we'll figure out
what we want to do next
ok well instead of making three cents we
basically broke even
we lost two hundred and ten thousand
dollars as well as a gonna be next time
exporter let's take a look
13 cents to our prices go way up as a
result of that projection we have more
money now than we did before the
earnings declaration so we could
probably increase our growth rate during
sick going up to 18 a half from 17 we're
still the biggest spender in terms of
R&D so let's make this growth 326
percent
everything else looks
still reasonably competent the industry
is deteriorating but there's not much we
can do about that right now and
everybody isn't so much dead I don't
think that's gonna continue for very
long so much did all these guys have
very few were the only ones well known
quite not quite at the only ones but
closed only one of two that has an eight
credit rating so you guys should have to
slow down here pretty soon
alright so basically we're just waiting
for things to happen we want our stock
price to get up to like see our net
worth is 21 to get up of 16 and what
he's up above sixteen what we're gonna
do is we're gonna issue new stock so
that I am no longer a hundred percent
shareholder and what's what's we reduce
our holdings down to like 80% we will
start selling some options are him once
we issued a stark and you know it's
February 1st rights are just going too
fast or too February 1st unless cheat
scenario comes up
February
in our stock prices only at thirteen
which is too bad these others off this
list
right
projection has gone way up so we should
be seeing a bump in price but we haven't
yet force projection is free figured at
the end of the month so maybe maybe
you'll start going up at this point but
168 we should get up to like 250 see how
few of them are in the 100 to 200 range
now here we are February 1st and almost
all of them have had a huge jump in
price the only exception being biogen
appear he's too big too big for us to
mess with no credit is under water in
terms of debt for him the interest rates
are low and going lower still using
alright so at this point can mess we
have options and futures and everything
else so we want to sell short we'd you
can sell short silver is well here we
can buy gold but what the interest rate
going down are really want to
well actually that's good time to buy
gold interest rate down first let's
let's do well one that we think is gonna
be the biggest winner here i think is
gonna be silver so we went all the way
up to 30 alright let's sell short so
both of these so I've got about I've got
credit of 1,403 what to do about seven
million on each of those is like I said
we're gonna gamble big and see if we can
read it up quick
alright so wheat we're gonna sell short
and I could afford 1500 contract so I'm
gonna make this six hundred and yes I'm
gonna borrow alright Andrey select two
silver so it short here I could afford
378 something to make it 250 yes and see
your waist and we've got four hundred
million credit left so well just got cut
in half so we just lost a bunch of money
on silver so let's see what happens here
if I go broke reddaway will just start
over
alright so I'm gonna
forward until we get a cheat scenario or
we hit the next earnings date for
Genzyme or we get a margin call
ok I'm pausing because
cuz genzyme
has gotten up above $16 a share so let's
go to Genzyme and issues in stock
public stock offering we want
twenty-five million shares we got 411
million dollars out of that and now I
only own 80% now I think genzyme is
going to continue to go up so I'm going
to buy calls and sell puts on Genzyme so
by call genzyme and I'm gonna set up to
$20 basically you want to split the
difference between where its trading now
it what the maximum is no its not do
that let's so puts first so this time so
he puts we're going to 220 same thing
but the difference basically that's what
I can do 10 percent and I just received
forty seven point four million true that
so I'm gonna sell 100% inputs fast
forward while I do that and I'll be
right back
ok sold puts
the stock and now I have some money to
work with so I'm going to buy calls for
its stock goes much higher I wanna get
all those calls blocked so I'm gonna do
this again for the same price of 20
bucks and this time I'm buying them so
it's gonna cost me money to buy a
hundred percent and I will be right back
ok we now have two percent calls in a
hundred percent puts and we have made
money here but fifty million so far this
one is flat so basically it is price
goes above 20 we're making money if it
stays right where it is we're goes down
we're gonna lose money we have two
billion dollars i guess im making it off
we so it's else short some more solar
cover we sell some or seller so shorts
were silver yes we should have bought
gold to look at that can sell short
creed two but so right now is the one
that's at the high end of its range so
let's sell shorts or silver
can afford 2325 contracts let's make it
two thousand have to borrow for that yes
pay close right now it's gonna be real
important for this to go down right
let's take a look at Genzyme real quick
industries deteriorating reasonably
competent but our estimate still high
from projection earnings we got four
hundred million to work with here
question is what we want to do with it
with all these guys in depth trouble
let's go and see if there's anything for
sale
here's a bunch assets for sale slips by
some of these four hundred or so that
spies from soma gym had any fire engine
doesn't have any for sale
see maybe I should just take from him
let's go with that one will buy 400
pioneer hybrid here so every good credit
rating in everybody's increased their
growth rates but they are gonna run out
of credit
so its march 3rd and we have another
earnings report due in a month
happy to see that silver is gone down
maybe we should sell it short somewhere
right now let's let's keep doubled
doubling down here so it short
silver so short
so I can do all right let's do five
hundred
know I can only do 500 I got plenty of
1000 Genzyme selected thats why let's do
so for me so short it's a should I
looked a little closer is more like it
or at least to 6,500 write it down just
jump to let my wife
crap just wiped
bankrupt humans don't do very well do
you know we don't know when we gamble
long-term investing like seven hundred
years yes i know im alright let's
restart and try this again open save
game and we're just gonna open up number
one
ok now we know we're gonna buy Genzyme
we've got 550 million we can give him
let's play up
get we have a little bit of tax due
because we made money on the bonds are
indeed of 10 growth rate of 22
January 10th
right so here we are January 10th
and we lost more money this time than we
did last time but it's still not very
much so let's take a look and see where
he got a cheat scenario right so
Research Committee on the tentacles
completed research after a year's tax
credits corrected from the school play a
show that grows in the jungles of Peru
and Ecuador testing has been done under
heavy security and absolute security
blah blah blah referred to it as herb 27
tests of a straight extract shown that
in ninety percent of cases it totally
cures any and all cancers including
formerly incurable types such as liver
and pancreatic cancer we're standing it
does so with none of the harmful side
effects are top-selling chemotherapy
drug new talks so loud he died he does
we are in somewhat of a quandary if we
release our research findings about the
effectiveness and lack of any side
effects of the natural plant extract it
would quickly displace our new talks in
doing is the primary treatment for
cancer and could be sold cheaply by any
of our competitors as we would have no
patent protection of the natural herb
extract the other hand if we can see our
research we could receive some very bad
publicity if ever leaks to the press
that we have discovered an almost total
cure for cancer but have sat on it and
kept her knowledge of its huge benefits
to sit two societies a secret so
basically being offered a choice between
releasing the results of the research
and giving the world to cure for cancer
which will take the sales at our drug
new talks in where I can bury the
research
and hope that we're not find out found
out basically but neither of these
really put any money in my pocket is
basically suppressing the research only
allows me to continue to sell a drug
that been selling for wile so I think
actually gonna say no to this one and
release the cure for cancer we probably
is that would bring down our stock price
so maybe I should say yes and then
immediately sell the stock
what do you think Gordon
we'd is right reid works alright we'll
go in and suppress the findings and we
will then sell genzyme is he will almost
certainly be found out we're just going
to hope for its stock price to get up to
16 and then sell it was alright so I'm
gonna go and sell my stock and we made
that's right I forgot this is level
three let's let's have him do the IPO
first and then we'll sell it when you
own a hundred percent of a stock levels
3 and four it doesn't allow you to just
sell off the stock like it does in the
lower difficulty levels you have to find
a private buyer in the terms are always
terrible so we're gonna do is we're
gonna do a public stock offering
introducer holdings to eighty percent of
the stock and then sell it and
way we don't have to take a huge hit
ok we gave 57% on the sale and we have
1.5 billion in cash
hundred and two in tax which I will go
ahead and prepay ok and it's only
January 3rd 21st so let's go back and
find another one and looks like HGSI is
the best one we wouldn't be able to buy
a hundred percent of him as he's too big
three times the size of Genzyme
you a lot of money is management's
mediocre
gotta be critter eating alright let's
let's buy him in turn around tomorrow
forty million to buy em 100% now
right let's set the R&D 211 believe the
growth rate of 8% for right now is good
too much debt and he doesn't have a
dividend so we don't need to worry about
eliminating that right so did was we
need to just even these up so was so you
need to get down to we need to give them
like to earn thirty billion worth
millions of me so I'm gonna borrow 20 or
30 million advance it to him
that down
ok so now we have more equities and that
should give us a BB credit instead of
the beach credit rating and a real or
just if we have to we will lower our
growth rate but it depends on what the
situation is here is still deteriorating
but everybody has a lot of debt so we'll
go with that lowered if we have to but
otherwise we'll leave it alone so what I
want to do is I'm going to fast forward
until February the first and then we'll
take a look at these bodies and see
about buying some so we write back
ok
is kinda high so we're kind of low and
our policy is still easy I think I think
what I'm gonna do is to buy silver and
gold and hope that they go up 1.3
billion so we're just gonna split it in
half and by F&F gold and silver can do
1500 contracts to make it 730 select a
silver by your could afford 567 make it
430 want those two to go up
till April the 10th or until something
else happens like if we go broke again
or if we end up making a bunch of money
and we get down to zero debt that I will
come back and we'll figure out what else
to buy
ok so there
bottom both and they really have a move
that much so I don't know why I have
that much of a margin call 673 million
let's take a look right this this one is
worth notional value of 886
three so basically we'll get 5% of that
back and maybe that'll be enough I guess
we have to cancel this into had to sell
one percent of HGSI where's this going
negative so much cash so negative
stock price should be going up it's
going down instead
whereas earning massive she's in fraud
suit whatever that is vs DSi serious
accounting discrepancies today by this
with its have some sort of things going
against Italy bought it
what in the world is going on I don't
see anything up here just a second ago
this is positive and negative but I
don't see anything in here that says why
that would happen if we were down to
three million over here at our net worth
it if we sell the stock we're gonna lose
more than three million
negative 149 so are broken in
what happened there with HGSI but it
didn't work out well for us so let's
restart as part of the reason why what I
like to do this early on so we don't
have this happen later right up in the
quarter
ok so we're gonna buy Genzyme
will give him six entered
got a 94
leftover are projected to make a profit
let's go ahead and buy there's no offers
yet
ok so I guess we just have to wait for
the earnings to come out let's see what
we need to make his management again
10 percent growth rate of 22
he's already up to
so we're going to fast forward to
January the 10th
so instead of a negative point to one
he's got a little bit of a project and
let's see what he's doing on the next
twenty cents a share
industries deteriorating is reasonably
competent we have more money now by
about a billion million let's go see if
there's assets for sale and there are so
it's by a hundred million
ok just fast forward to February the
first
ok here we are
so now you can buy and sell commodities
none of which were in a situation that I
want to buy or so the only one I would
be willing to do is the index but it's
not really doing much
all right let's sell short some corn and
say see if we can't make it big but
there will put it all in corn we will go
on court and see if we can make a big
buck so let's do two thousand contracts
and look at that and we're always up to
990 as a result of that trade in 31 will
usually bankrupt again broke three times
in a row in the game
cold in supplying ok wow that has not
worked out three times in a row that
I've never had a happy that way sorry
times in a row so I really want to end
the episode without a net worth but
kinda getting up there now so come back
next time and I will restart this game
and we will get it going for real
alright so this is Reagan saying thank
you for joining me hope you enjoyed it I
know we didn't get anywhere but you know
sometimes that's what happens and I'm
sure you've experienced it yourself so
I'm not gonna feel bad about it you feel
better seeing me go broke three times in
a row but anyway come back next time we
will restart the game will see if we
can't run our network that from
one billion up to about 20 and get this
game started so come back trip so to the
19th of February and until then this is
Rick I'm saying have a good one