Economics of the Auction House, major world events (Legion)

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One would think that there is an easy pile of gold to be made during the time of a major world event like the opening of the Dark Portal, Cataclysm etc if you would have a hunch of the timings.
During a normal economic cycle in the auction houses in Azeroth there are some key states of demand.

1. Exploration

Whenever a new place is discovered or a major world event has turned things up-side down there is a rush to explore that area and to use whatever new resources that are found into making new things.
So all gatherers move to the new area and start to mine ore and gather herbs.
They then go to the auction house and sell it there. During this phase, there is a huge demand for the new material so it will fetch quite a price in gold. This is a small window of opportunity that has clear peak and then a fast fall to the next state.
At this point there are also a lot of people teaching themselves new skills and that requires quite a lot of materials from older areas. Someone with a stockpile of materials could make a fortune.

2. Stabilization

Where the materials from the new area or zone plane out in price. There will always be ups and downs but this part of the economic cycle is quite stable and long.

3. End of cycle

Whenever the rumors start that there is a new major earth shaking event in the horizon the economy has already reached a mature state and there are no real opportunities. Material prices are at a cycle low. Someone with a lot of gold lying around could speculate in materials by buying at this low price and then selling when the economy hits the Exploration phase again.

Reality check

So, how does this theory prove during this last world changing event this year? Let's see the track record of some resources during that timing. The graphs will show the End of last cycle, the new Exploration and start of stabilization. All information and graphs are from www.wowuction.com.

Saronite ore

Saronite ore, mostly mined up north showed a real drop in availability and an increase in price (from ~5 to ~7.5) the August 29th.

Titanium ore

Also farmed up north in Icecrown Valley together with Saronite ore. Here we also see an increase in price as and the drop in availability.

Ghost Iron Bar

Ghost Iron showed the biggest trend upward of the sampled materials. The drop on August 29th in availability is clear and at the same time a steady price growth that has grown over time. This would have given double the gold if you would have bought before the event and sold in portions afterwards.

Leystone Ore

Just to show the new Exploration area material for reference. The Leystone ore had a very significant and volatile start where the early birds were able to make a buck and a very steep downturn to a stable economy. I don't have the numbers from Outland or Pandaria, but it feels like this curve was faster to stabilize itself then during the earlier events. I think I have to dig through old data and see if I can find something relevant there. But for this report, nothing.

So. there is a chance to make a bucket of gold during a world event if you have the gold to speculate with.

Once again thanks for www.wowuction.com for collecting the auction house data and providing nice graphs..

Also if you are interested in investment in general. Go over to Dreamstate living for their nice articles on longterm investment.