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[mainiac]

Use the bank as a holding company, so the stock in the consumer products company isn't in your name, but in the bank's name.

What you want to do in your name is buy corporate bonds off the market at a reduced price, but they'll become more valuable if you can turn the company around.

[Goron]

Ah yes, I'm getting it now.
Risky... very risky.
Turning a company around is not my strong suit:-) As such, I'd love to give this plan a whirl. You can be the plan mastermind.
As I mentioned before, I'll try and dig up some banking industry info for you tonight- I can also look into the consumer goods industry. From there we can start focusing on individual banks/companies for deeper research.

BUT, for now I'd like to focus on the slightly less ambitious project initiated by Spartan; the one focused on buying into the auto industry, possibly Toyota.
Assuming we walk away from the initiative with wealth beyond our dreams (or at least not broke), then we can follow through with your (what I'll call) 'Bank, Dummy, Bond' plan.
A Bank for personal financial security, to keep possible losses away from Urist Dorf.
A Dummy consumer goods company to buy into with the bank, and buy Bonds of personally.
Quick future planning question, I assume we would have the bank sell the consumer goods company once we turn it around and profit with our personal self? Then we can repeat the process?

Also, I'd suggest we establish an actual holdings company to buy the bonds with, rather than doing them with our personal portfolio. This will further protect us from losses (should be get too adventurous). We can be sure to own 100% of the holdings co- but I think the holding company would be useful as it will keep taxes down when we sell the bonds. In the long run, the decreased taxes paid by the holding company will be easier on our starter wallet. Sure, we will face a big personal gains tax should we try to sell the holding company or otherwise liquidate it or make an extraordinary dividend, but, that may not be something we ever do anyways.
Along this same idea, I am also hesitant to buy into the bank personally- I'd feel much more comfortable cutting the bank out completely, or buying the bank stock through another holding company.
It may just be me, but I hate having a personal portfolio of anything that I don't own 100%.
Edit: But, also, as I say: You can be the master mind. I'll do as you say once we get around to it.

[Spartan 117]

If we're looking for a holding company, we should stick with something like a toy manufacturing company.

Why? It seems like a good idea to me, it won't cost insane amounts of money, and toys are usually in good demand, hey?

[Goron]

If we're looking for a holding company, we should stick with something like a toy manufacturing company.

Why? It seems like a good idea to me, it won't cost insane amounts of money, and toys are usually in good demand, hey?

Hehe, there is actually an industry of 'Holding Companies'. They are trading companies, investment companies, and the like. Like these:

They have no capital goods or sales or whatever, they just have portfolios:-)

[Goron]

Info on Toyota:

Spoiler (click to show/hide)

Looks good, huh?
Problem is... Toyota's market cap is 121 billion. We can't even afford 1% of the company.
The problem comes from their portfolio:

I never really thought about it but it makes sense: Toyota owns Toyota America and Toyota Europe. Thats nearly 100 billion in subsidiary stock value right there...

[Volatar]

This looks really cool. I have got to start following this!

[Goron]

Banking Industry:

Spoiler (click to show/hide)

[Spartan 117]

What about Avtovaz Motors in Europe?

AA, analyst says to buy, and sure it's owned by another corp, but we need something stable to start making money.

[Goron]

Details on Avtovaz Motors (they are actually in Russia, which I guess the game classifies as Europe)

Spoiler (click to show/hide)

The market cap is 7.3 billion. So we can buy ~1.3% per 100m we spend. Thats ~6% for 500m (all our cash) and a max of 12% for 1000m (all our cash and credit, which I highly advise against doing)

Getting involved in this company would be a buy-sell relationship. Buy now, wait for stock increase, sell when its high, rejoice with profits. This is because we have no way of getting control, and even if we could afford the minimum 15% needed for control, we'd still be minority holders compared to General Motors (they own 42% of the company).

[Spartan 117]

We still need the cash, though.

[Goron]

We still need the cash, though.

I agree-
You tell me what to do.
I just want to give the facts and advise.
You know how much we can afford and to what cost.

Keep in mind my advise about starting a holding company first... I suggest we found a Holding company with 100m, then invest and additional 400m cash into it. Then use the holding company to do whatever trading we please...
(The reason I to start with only 100m rather than the full 500m is cuz the company setup costs are something like 25% of the investment cash, so by starting with 100m the company will only use 25m in setup costs and have 75m in cash, then we deposit the additional 400m cash as a capital contribution from our personal accounts to the company, bringing the company cash to 475m)
For the record- when we start companies we need a Name, Stock symbol (up to 4 characters long), place of incorporation(country), ...and... money:-)

[mainiac]

I don't think it's a good idea to start a holding company until we can get into banking or insurance, which means we need more money then we have now.  The tax liability isn't all that bad.

BTW, does anyone know how you exercise stock options?

[Goron]

I don't think it's a good idea to start a holding company until we can get into banking or insurance, which means we need more money then we have now.  The tax liability isn't all that bad.

Noted.

BTW, does anyone know how you exercise stock options?

Ermmmmm.... not really. Admittedly I only played a bit of 4.9 (I think) which was the first version I had with stock options (and the version I played before this one), and I just kind of ignored them- or randomly screwed with them.
This is my first game in 5.3, so even now I have not messed with them much (obviously).

EDIT: I've read the strategy guide and have an idea of how they work. Mainiac, check your PMs


EDIT2: Much time has gone by in real life, and I've yet to even start the ticker in game. But I am enjoying this, hopefully some of you are too. Even so, I hope that once we get a starting point I will be able to runt he game a quarter at a time before coming back for more input from you all. But as I say, even what we have going now is amusing to me.

[mainiac]

I was more wondering about where the button was to cash in on stock options.  I didn't realize that you have to wait for the stock options to mature first.

I would like to say that my experimentation with starting banks has been disastrous.  The start up costs are absolutely killer.  Instead of starting a bank when the tax burden get's high, I'm going to experiment with creating a shell holding corporation, possibly out of an existing corporation.

[Spartan 117]

Let's do some buying and selling with Avtovaz.