Capitalism Lab S03E09: In it to Win it
Read Time:3 Minute, 3 Second

Capitalism Lab S03E09: In it to Win it

0 0
In it to Win it

As always, we play games because we are in it to win it! This one was going in the right direction from the start of the game. I think diverting into Cars was very useful as it gave me stable incomes that did not require building mines every 2 years. Remember, mines have the cost of the land and the mine which you almost never get back after they finish. If you are lucky you might just be able to recover that loss in the profit you made in the mine. Otherwise, your mine is pretty much an investment you don’t make a profit from directly. At the same time, I found that the Cars industry was very much open, had opportunities as the quality of products were low and I was able to, without any R&D, create Cars with the best quality or right along with the best quality available in the market. Because cars are big revenue products, the profits also become big because you sell a car from $20k each and even at a 15% profit margin you make a lot. So, I found that having big margin products also helped with dealing with advertising costs at the start. But let’s be fair before I got into Cars I was already at $100m+ annual profit. If you ask me, I still do not know how the Stock Price aspect happened but I have a small clue thanks to input on the forums.

Please note, the P/E Ratio is Price/Earning Ratio and not the Profit/Equity Ratio as I may have referred to it.

Lessons learned in this episode as I was in it to win it!

1. Give out Dividends

Dividends help cover the annual returns and in turn add more to the Shareholder Lifetime Return percentage. Make sure to not end the year at a loss as you will affect your return negatively. If you are making crazy money, simply give out a good percentage so you can win the game.

2. Maintain a P/E Ration of 10 or above

Make sure your Price-earnings ratio remains at 10 or above so your Stock Price can rise. This was the tip I was given which seemed to be solid. In other words, the more dividend you give, the more earnings they make per share hence the better the ratio.

3. Sit back and scan your existing products to make sure you keep on building on them

You may have seen, I had forgotten about Golden Rings, but between time and time, I always went back to check to make sure things are going alright. One of the reasons for that is that Golden Rings are my bread and I can’t lose money there. The second reason is that I was competing for market share and not really making profits, now I was could increase my prices as my branding was better and I had captured the market. At the same time, I kept on building on my automobile stores as the market share was there and I had cars sitting in the warehouse so that was begging me to build more stores to sell. In other words, business is a dynamic world. Don’t forget about your things and expect them to run as usual! If Golden Rings have a necessity index of 10%, when a Recession arrives, my profits will dip along and that itself is something you should be very careful about.

What do you think? Leave a comment below 🙂

Also See: Real Estate Mogul Scenario

About Post Author

Capitalism Lab Story

Playing Capitalism Lab in my free time for fun.
Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %

Average Rating

5 Star
0%
4 Star
0%
3 Star
0%
2 Star
0%
1 Star
0%

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous post Capitalism Lab S03E08: Keep it Fresh
Next post Understanding Supply and Demand in your Supply Chain
%d bloggers like this: