Capitalism 2 and Capitalism Lab Forum

Hello,

Thanks for so many updates since the release of 6.0.0

I just played 6.0.6 and things are getting better...
but I noticed my company's bond price fluctuated too much in a short amount of time.

I started out with $5 million, by just playing and investing in the stock market and bond market.
1st year I net profit $53 millions and the second year I net profit $4804 millions.
Too easy to make quick monies especially through the bond market.

Let me give you an example,
On November 1, 2001, I issued
27,700,000 @$100 on 9.45% for 2 years maturity
27,700,000 @$100 on 9.40% for 4 years maturity
27,700,000 @$100 on 9.35% for 5 years maturity

and 2 months later
my bond prices dropped so much without any particular reason (bond rating went from BBB to D)
27,700,000 @$60.17 on 17.57% for 2 years maturity
27,700,000 @$71.90 on 16.71% for 4 years maturity
27,700,000 @$90.08 on 14.84% for 5 years maturity

Based on the above information, I was able to net profit

27,700,000 (100-60.17) + 27,700,000 (100-71.90) + 27,700,000 (100-90.08) =
27,700,000 (39.83) + 27,700,000 (28.10) + 27,700,000 (9.92) = 27,700,000 (77.82) or
1,103,291,000 + 778,370,000 + 274,784,400 = 2,155,614,000 profits (excluding bond interest expense) in two months period
basically 77/300 = 25.66% return in two months by simply issue bonds and repurchase them.

Please see attachments
https://photos.app.goo.gl/gsg6vLSq4QeVvdHr6
https://photos.app.goo.gl/KUBAZX4xj9qfVvBH9
https://photos.app.goo.gl/oCTM7rhP35wc3XrQ7
https://photos.app.goo.gl/LbBqTWi6Jmau9T5R6

It is possible that your corporation has done something that led to a massive downgrade of its credit rating, thus causing a plunge in the bond price.

Here is my saved game for this problem

As you can see from my save game.

I have no stores, no productions, or anything in my first two years.
Nothing significant will impact my credit rating from the operation perspective.
My operating profit/lost was Zero.

Three things can go wrong to cause the bond price to drop so much in a short period of time:
1. Credit rating mechanism has a problem, and I don't have knowledge on how this is done, so I can't comment on this.
2. Credit ratings got updated on monthly basis instead on daily, this can cause major discrepancy and make credit rating to differ by a lot.
3. There is a discrepancy between the income statement and balance sheet to cause the credit rating to give wrong evaluation.

I will investigate further on part 2 and part 3.

More on part 2, Credit ratings got updated on monthly basis instead on daily, this can cause major discrepancy and make credit rating to differ by a lot.

From my attachments,

you can see on Dec 31 2001, my credit rating is D Coupon rate 17.70% for 5 years Term
and on Jan 1, 2002, my credit rating is BBB Coupon rate 9.85% for 5 years Term.

I done nothing to cause this issue, I only forward the game by 1 day.

https://photos.app.goo.gl/UTYYszMKTfkVuLDt8
https://photos.app.goo.gl/qxseQmMFbmTRv3KL8

Furthermore, the reverse is true to go against my company as I demonstrate here:

On Dec 31 2001, I issued a bond 81,200,000 @100 17.70% 5 years term and few days later
on Jan 4, 2002 this bond become 81,200,000 @139.20 9.85% 5 years term.

If I repurchase this bond back immediately it would cost me:

81,200,000 (100-139.20) = 81,200,000 (-39.20) = lost of 3,183,040,000, again I done NOTHING to cause this to occur.

It gets more interesting,

On Dec 31 2001 screen, the very first day I issued this bond
it showed:
Credit Rating at Issue was D
Current Credit Rating is now BBB, and I haven't even forward a day yet.

So there is definitely a discrepancy.


https://photos.app.goo.gl/Vi2Zozrxb8DAxSuX7
https://photos.app.goo.gl/hHKssGGbKmbvuRLf6

more on part 3, There is a discrepancy between the income statement and balance sheet to cause the credit rating to give wrong evaluation.

If we look at the Income Statement, you will see I profited
$53,317,530 in 2001 and $4804M in 2002

So the total profit in 2 years should be $53M+$4804M = $4857M (it is calculated wrong)
but this does NOT match with the balance sheet
which indicated I have total equity of $8124M (I know this is correct because it matched the cash I have in hand).

https://photos.app.goo.gl/kJiVFfTBUsdpJYLq5
https://photos.app.goo.gl/kRbLs1Mhx2NEqSkr7
https://photos.app.goo.gl/dfJwbD67UCGtTZyj8

We need to exam the column "Stock and Bond return" from the Income Statement,
there is a bug and it is calculated WRONG
It is better to separate them like:
Stock Return
Bond Return

Furthermore, I argued
my profit in 2001 is $53M (No bond trading in that year, so I know this is correct)
and net profit in 2002 is $8124M - $53M = $8071M (vs $4804M recorded, and here is the discrepancy).

We need to exam the column "Stock and Bond return" from the Income Statement,

The dev team is going to separate the "Stock and Bond return" account into 3 accounts, namely "Bond interests", "Bond return", and "Stock Return".

The related post:
https://www.enlight.com/forum/viewtopic.php?f=52&t=6905

After this improvement has been implemented, you may test it again and it will be easier to identify what goes wrong.

bond prices continued to drop dramatically on 6.0.9
version.

Please download the latest version v6.0.10 from https://www.enlight.com/forum/viewtopic.php?f=52&t=6904

I talked about this bug already in the past, I can't believe it still have not been resolved yet.

I loved this game so much but I stopped to play until a lot of bug gets corrected.