Capitalism 2 and Capitalism Lab Forum

If you are used to the game setting of high AI starting capital, you should be familiar with pesky AIs who liked to buy player's stock at the beginning of the game, and extremely irritated to get rid of. Normally, I would just ignore them at the beginning, then in the mid-game giving myself high salaries to drop down my earnings and stock price, after that issuing shares to dilute AI's shares, and move my person's cash back to the company. Strength the shareholdings without much lost, just check in from time to time to move cash back and forth.

However sometimes, due to AI's early purchasing, some AI could easily get a dangerously high percentage of shares like over 40%, so later on it would take quite a long time to get rid of it. Sometimes it's even better to invest your salary to stocks that can preserve its value (if you turned on inflation), artificially increase the stock price to a high point, issuing shares to gain cash, dilute their shares and exhaust AI's cash, then artificially tank your stock price later, to make them want to sell. If not, just buy from them at premium, when the price is really really low.

The second method is somewhat of an exploit, than legit game place, but probably very effective. I wonder if anyone knows a better way to get rid of these pesky AIs? How do you guys do it? And what's the more conveniently way of presenting your company's stock performance so AIs would sell your stocks willingly on their own? What's the trigger for them? (I've observe a lot of times that AI persons and AI corporations behave very differently, AI persons act really like stock brokers selling/buying quite often if they don't own a company, but AI corporations act like investors and hold on to your stock with their dear life with persistence, unless their are low on cash)

Whatever you do at the beginning of the game, AIs will buy your shares. That's just a fact of sim life. However, if it is control you are worried about, there is a simple and elegant solution. Immediately after loading the game, put it on pause, and have your CEO use his personal $1 million to buy shares at market price. That will usually bring you up to about 51%, and consequently immune from a hostile takeover. To be honest, if you are a decent player and avoid the recessionary dips, this may be the best price you will get your own shares at in the entire game.

As for mid-game to end game, I use the P/B (price to book) valuation to determine when to do a corporate buyback of shares. Anything above 1.0 means you are paying a premium to tangible book value. I almost always have a better use for my company's money than that. While you are profitable you'll probably see a P/B ratio of 1.2 to almost 4.0, depending on your profitability. However if you get hit hard during a recession, you may see your shares dip to between 0.6 and 0.9 P/B. If you have cash to spare, this will be a good time to buy back shares. By the time the AIs bargain with you, the price will be around 1.0 to 1.6 P/B, which isn't all that bad when the economy returns to recovery. If I hit the recession with zero debt, I'll usually borrow to complete a leveraged buyout of my company's shares.

Having 55% - 100% ownership is really handy. During the next boom, you can raise capital by offering shares to the public without risk of diluting below 50%. I target between 2.0 and 3.5 P/B when the economy is at a peak, and only to pay down debt when the Central Bank decides to raise interest rates very high.

infoscott wrote:Whatever you do at the beginning of the game, AIs will buy your shares. That's just a fact of sim life. However, if it is control you are worried about, there is a simple and elegant solution. Immediately after loading the game, put it on pause, and have your CEO use his personal $1 million to buy shares at market price. That will usually bring you up to about 51%, and consequently immune from a hostile takeover. To be honest, if you are a decent player and avoid the recessionary dips, this may be the best price you will get your own shares at in the entire game.

The initial buying extra 1% thing is what I used to do, back when I am not that confident about my ability to take control of the budget and expansion rate. But now with a lot more experience, I've come to the realization that you don't have to worry that much since AI's also obey the rule of 5%, and it rarely purchases 4 times in a role, because it will drive up the P/B ratio pass a unreasonable price, and initially your corporate doesn't have a positive earning, it will stop any further AI purchasing, until the P/B ratio drop down below 0.7 again. So for the most part your first 1 or 2 massive issuing share can't make you lose control if you are able to build up the infrastructure you needed using these funds. And I could stay around 20% to 25% of the shares, from early to mid-game without any problem, like I showed here in screen cap. Only those stock focused AI will be crazy enough to purchase twice with 4 times to get 40%, and not really that scary if you know what you are doing.

And there are ways to drive down your stock price, back to around $10 to $30 (both legit and exploits), even just stay at low price from early to mid-game if you keep the expansion going and make profit ratio relatively low. The key is to invest into something that will not show in the financial, but able to accumulate with potentials, like spending on R&D, spending on training, spending on brand buildings, spending on media firm content training, even spending on nature resource monopoly with low price, even lowest rent to accumulate residence rate quicker, and make city population grow. Anyway you can think of that can pay off in the future, but not now, aggressive expending and make sure they can pay off.

infoscott wrote:As for mid-game to end game, I use the P/B (price to book) valuation to determine when to do a corporate buyback of shares. Anything above 1.0 means you are paying a premium to tangible book value. I almost always have a better use for my company's money than that. While you are profitable you'll probably see a P/B ratio of 1.2 to almost 4.0, depending on your profitability. However if you get hit hard during a recession, you may see your shares dip to between 0.6 and 0.9 P/B. If you have cash to spare, this will be a good time to buy back shares. By the time the AIs bargain with you, the price will be around 1.0 to 1.6 P/B, which isn't all that bad when the economy returns to recovery. If I hit the recession with zero debt, I'll usually borrow to complete a leveraged buyout of my company's shares.

Having 55% - 100% ownership is really handy. During the next boom, you can raise capital by offering shares to the public without risk of diluting below 50%. I target between 2.0 and 3.5 P/B when the economy is at a peak, and only to pay down debt when the Central Bank decides to raise interest rates very high.

This is also what I used to do to wait for recession and buy back with premium when the price is low. However, with my ability to control cost and profit now, My profit won't even dip down to negative anyway just less profitable (like from 30% profit ratio to 10% at lowest when the potential is fully released), and P/B ratio stay above 1 all the time. And I used to borrow to buy back stocks, but I now find that it's just a waste of credit limit, just make other AIs get richer and easier to pass their recession with my money.

And honestly, there's not that much of a benefit to hold higher percentage even above 50%, if you don't plan on paying dividend anyway. The way I play it, I can muster a lot of small AI person shareholders, like I showed in the screen cap, majority of the shares are held by small shareholders less than 5%, usually just 1%. It will get even more impressive, after longer game, with almost all AI persons are my shareholders (I even find a bug related to this, you can see an old screen cap, in the this post http://www.capitalismlab.com/forum/view ... =13&t=2013). And sometime I treat them nice, by setting 10% dividend payout ratio, when I can make billions to 10s billions (and this usually is how normal companies in real world do). What I don't like is the AI corporation shareholders, because it will give them ammunition just being my shareholders, since it can be their cash reserves, when I try to hit them hard, and take longer to beat them down.

So the real question for me is how to get rid of the AI corporation shareholders (although others might need legit strategy to gain back its corporation shares), and I have ways to use exploits to do that, but I prefer not to use them. And I would prefer a way to predict when and why triggers an AI to sell its share, rather than forcing it to sell at premium. From what I have gathered so far, I think it has something to do with P/E and P/B, and annual return rate, some kind of index like PEG guiding the AIs, and AI persons react differently with AI corporations. And stock focused AI also react differently with other AIs (they tend to buy/sell a lot frequent and less likely to make mistake like AI persons or other AI corporations who would be triggered and sell lower than purchasing price, perhaps it has something to do with stock focused AIs have extra cash floating around, unlike others with limited reserve). Even AI with different personality act a little different (like AIs with different stock holding tendency).

I was doing experiments to see what actually make AI tick and decide to buy/sell, and the phenomena of instant buy/sell by AI persons kind of remind me of those bad technical analysis techniques in old investment magazine. One of the "good one" is to use like 10-days, 20-days, a month average price line and see if these lines intersect with current price, and often it would trigger short burst of buy/sell like the AI persons. And this happens quite often when the price is rising and a small bump in the price line triggers the buying, and instantly the price goes up hence crossing average again, triggers selling. The same after the price is falling and reach a new flat, and it would trigger buying when reaching the low flat line. This kinda make sense to me now, why so many AI persons stay in my corporation, due to my deliberate price manipulation, drive up the price up and down to normal level, the residual last buying would stay.

However, I don't think AI corporation follow the same rules. It feels like they more of less remember their buying price in the past, and using it as a threshold, only when the price is above the original level, and also when the price being driven downward, and the annual profit drops closer to the average buying cost, then AI corporations would willingly sell their stocks (or when they run out of cash). However there seems to be a threshold related to P/B ratio. Especially when you deliberately make your company going negative in EPS, feels likes AIs would treat your stock like a random osculation line.

Still need more testings to confirm these theories though.

I seem to recall a time when many months in a row when I had a loss, the AI liked to unload my shares. It may have been when I was RE focused and a contraction was causing my properties to lose value, hitting my non-cash P&L pretty hard.

You might try this experiment. Wait until a contraction when this effect is in play. Then find excess inventory in a warehouse and start dumping it on the market at a financial loss for several months in a row. You'll improve your cash position anyway at an opportune time, but if the AIs are being technical wonks, you may catch them at a time when they think your corporation is growing weak.

infoscott wrote:I seem to recall a time when many months in a row when I had a loss, the AI liked to unload my shares. It may have been when I was RE focused and a contraction was causing my properties to lose value, hitting my non-cash P&L pretty hard.

You might try this experiment. Wait until a contraction when this effect is in play. Then find excess inventory in a warehouse and start dumping it on the market at a financial loss for several months in a row. You'll improve your cash position anyway at an opportune time, but if the AIs are being technical wonks, you may catch them at a time when they think your corporation is growing weak.

AI persons definitely will cut their loses using technical analysis, and if the price free fall doesn't stop they won't buy it back, and if you are able to buy back during this period, you can hold 100%. But this process take quite a while, different AIs buy/sell at different speed, it would waste precious time if you wait for all of them to upload. And if I was right about AI corporations keep track of their purchasing average, it would be a huge lost if you try to drop the price back down below their purchasing average. The thing about AI corporations is that although they do sell when free fall, but not all of the shares. A lot of times, it take like 1 or 2 yeas, just to sell 2 times 5% of the total 40% (it feels like waiting AI to buy your on-sales properties, never know when to expect an offer).

That's why in the original post, I prefer to squeeze the total percentages of their shares down, so later if I manipulate my stock price, a bunch of them below 10% would jump ship all tougher in one or two goes. This is especially efficient if you accumulate your person's wealth and squeeze their share when your price is low, the down side is that your person's wealth although act like a reserve, doesn't have too many options to invest, and if you turn inflation on, the cash is just shrinking over time, invest in stocks it would suffer during recession, buying mansions probably can maintain certain value over long period of time, but it would take a lot of space to sink hundreds of millions of assets.

About dropping your commodity price during recession to make your profit go south, although indeed storing hidden potentials, but it comes with a side effects, you could theoretically making more if you just sell it cheap during crisis, and the city average would rise up quite a bit, hence later it would take a hard hit in brand and market share when you rise up the price. Also if you drop the price too low, your production can't keep up, and the brand might suffer if you can't provide enough goods. Just too many unexpected issues might happens (even affects local rating, if you put your price too low over a long period of time, their rating seem to rise as well, hence you will be forcing to scale up after dropping the price too low). Personally I like two of quickest ways to drain profit - to horde techs by mass building R&D (later you can sell excessive units), or massive extensive training they effect immediately and last a year.

This happened to me in state moghul. I hired a chief operative and then, one day, i decided to check on my company shares for no reason, then i saw she had like 46% of all the shares while i had 49%

The bish was using the astronomic money i paid to her to take over my company.

I quickly bought shares from another investor to end that.

Funny thing is, i wwited until she asked for a salary raise to fire her, then i hired another guy... After a couple of years he was doing the same thing.

Lesson learned: beware of your staff. Sometimes the enemy lives with you.