Greetings to all participants and observers! This is the forum thread where I will be conducting the first teaching/learning game of 18AL. The list of players that have responded wishing to play an introductory game of 18AL is:
Jeremiah Lee (texasjdl)
Matt Cobb (cobbz20)
Todd Jarvis (phaedrus)
Bill Abanito (roman1967)
Ken Rumsey (cromaa)
This is the order in which replies were received and I have arbitrarily decided that this will also serve as the seating order. The first thing everyone should do is visit John David Galt's website located at:
http://www.diogenes.sacramento.ca.us/18AL_18GA.html and grab the latest PDF version of the 18AL rules, map, and other sundry items. If you enjoy playing 18AL, I would highly encourage all of you to consider
purchasing a copy of the game from Mr. Galt. He does excellent work and it will be well worth the money you spend.
Take a couple of days to go over the rulebook and let me know if you have any questions that the rules do not seem clear about. I will be making explanations about what is happening and why they are happening as we go along, but reading the rulebook provides a good foundation for learning.
If you have (or are interested in learning about) VASSAL and are comfortable with using it, then I would also recommend that you visit the VASSAL website at
www.vassalengine.org and download the
v18xx_212.zip file (which contains the 18xx.mod module) and the
v18AL_21212.zip file (which contains the 18AL.mdx extension). This will help you better visualize the game (in addition to the screenshots that I will post of the game in progress).
SETTING YOUR GOALS
The goal of any 18XX game is to be the player with the highest personal net worth when the game comes to an end. Naturally, you might ask yourself “When does the game end?” In most 18XX games, the end of the game is triggered when one of two events occurs: either the Bank runs out of funds or a player goes bankrupt. These are the endgame conditions for
MOST 18XX games; however, 18AL has an additional endgame condition. In 18AL, the game also ends when the market value of a single share of stock in any publicly-held Corporation reaches $300. If a player goes bankrupt, the game ends immediately and players reckon their personal net worth. If the Bank runs dry or a Corporation reaches a market value of $300 per share, then the current set of Operating Rounds (which are game turns in which Private Companies and Corporations operate…you will understand this more thoroughly later) will be completed before the players reckon their personal net worth (unless a player manages to go bankrupt during this “playing out the Operating Rounds” procedure, in which case the game ends immediately…an extremely rare occurrence seeing as I have never encountered it in hundreds of 18XX game sessions over the past 20 years). This difference in end game conditions is important to remember.
The second question you might ask yourself is “How do I determine my personal net worth?” Personal net worth is a combination of three things: the amount of cash you have, the sum total value of all of the stock shares that you own in publicly-held Corporations, and the face value of any Private Companies that you own. The assets owned by publicly-held Corporations play no role in determining victory. The path to winning seems clear, have lots of cash and own numerous shares of high-valued stock when the end of the game occurs. Of course, getting there is another challenge. I should note that the value of Private Companies rarely comes into play when determining final net worth. Usually, they have either been purchased as assets (a “takeoever”) by publicly-held Corporations or have been rendered obsolete by the passing of time before an endgame condition is triggered (with the very rare exception of an early bankruptcy). All Private Companies fold at some point during an 18XX game…in 18AL (and numerous other 18XX games), it is when the first 5 train is purchased.
The Bank in 18AL starts with exactly $8000 in it. From this, each player is given seed money to start the game. This varies based upon the number of players in the game and each player starts with $400 in a five player game, leaving $6000 in the Bank. You will use your seed money to purchase Private Companies and shares of stock in publicly-held Corporations during game turns known as Stock Rounds.
THE FIRST STOCK ROUND
The game starts with a Stock Round and, initially, the only items available for purchase are Private Companies. Your purchasing decisions during this phase of the game will have far-reaching consequences. Generally, holding onto excess cash is not a very efficient way to increase your net worth. Money invested in stocks and Private Companies has this magical quality called ROI (return on investment). Every dollar invested in stocks and Private Companies has a chance to earn you dividends (fixed dividends in the case of Private Companies and variable dividends in the case of shares of stock in publicly-held Corporations). If you hold onto $100 it will be worth $100 at the end of the game; however, if you use that money to purchase a $100 stock certificate in a company that pays regular dividends, then it will probably generate closer to $300-$400 in income at the end of the game. Determining which Private Companies and public stock shares offer you the best ROI is the most important skill that you will develop as you gain experience with any 18XX game. And it is a rare occasion when two people agree on exactly what purchasing strategy is the best approach.
PURCHASING PRIVATE COMPANIES
When considering which Private Companies to purchase or place a bid on, you must take several factors into account.
1. The simplest and (usually) least decisive factor is the P/E (Price-to-Earnings) Ratio. This is simply a value that is determined by dividing the purchase price by the fixed dividend amount that the Private Company pays each Operating Round. The lower the P/E Ratio, the better return you get on your investment. For example, at face value the Tuscumbia Railway has a P/E Ratio of 4 ($20 purchase price divided by $5 dividend value). This means that you must invest $4 in order to earn $1 and it will take you four Operating Rounds to recoup your initial investment. In comparison, at face value the New Decatur Yards has a P/E Ratio of 6 ($120 purchase price divided by $20 dividend value). This means that you must invest $6 in order to earn $1 and it will take you six Operating Rounds to recoup your initial investment. P/E Ratio is a short term look at the potential ROI of Private Companies. On the basis of pure P/E Ratio, the Tuscumbia Railway is a much better value. However, this leads directly to the second factor…
2. Most of the Private Companies have a special power that may be triggered when they are purchased as an asset by a publicly-held Corporation. The nature of these special powers make these Companies attractive “targets” for “takeovers” depending upon the power and the Corporation involved. Since Corporations in 18AL will pay up to 1.5 times the face value to purchase Private Companies from the players, this makes higher priced Companies more attractive. Using the companies mentioned above, you could sell the Tuscumbia Railway (which has no special power and is not an attractive “takeover target”) to a Corporation for up to $30 and you could sell the New Decatur Yards (which also has a very attractive special power) for up to $180. A Private Company with an attractive special power and higher face value can be a great purchase. The general “attractiveness” of Private Companies for purposes of “takeover” is a more long-term look at potential ROI. The income generated from such a sale can also help you in floating your first or second Presidency at a higher IPO value (since you will likely have started the game as a minority stock holder in Corporations, having spent your money on Private Companies).
3. The special powers of the Private Companies are more attractive to some Corporations and less attractive to others. For instance, the South & North Alabama RR Private Company has the Warrior Coalfield token power. Because of the limitations of where this power can be activated on the map, the S&NRR is more attractive to Corporations with stations located near the Coalfield area on the map (such as the Atlanta, Birmingham, & Coast RR and the Tennessee, Alabama, & Georgia RR) and less attractive to Corporations located far away from the Coalfield area (such as the Mobile & Ohio RR and the Louisville & Nashville RR). Taking this into consideration, you might want to purchase the S&NRR if you are planning on running the ABC or TAG Corporation and you would probably not want to purchase it if you were planning on running the M&O or L&N Corporations. This factor is really more applicable to the potential ROI of the Corporation that you intend to preside over rather than that of the Private Company. It is a way to use your Private Company purchase to boost your future Corporation’s profitability.
4. How much cash do you wish to set aside for purchasing stock in publicly-held Corporations? The minimum amount of cash you will need to “float” a Corporation (without assistance from other players) in 18AL is $360 (60% of stock purchased at an IPO value of $60 per share). Since you start with only $400 in a 5 player game, this only leaves you with $40 to purchase Private Companies. If you want to guarantee floating a Corporation on your own, then you will pretty much be stuck with the Tuscumbia Railway as your only viable Private Company purchase. Normally, you would never expect anyone to assist you in floating a Corporation; although with 5 players in the game it is likely that an attractive Corporation will have minority investors (since the other players will not have enough cash to float their own Corporation and will be reluctant to just sit on their cash reserves).
5. Placing a bid on a Private Company ties up some of your cash until the auction of that Company is resolved (the cash is set aside as if you had already made the purchase…you will get the cash back if you do not win the auction for the Company). It only takes one bid to get invited to the auction party. Do not waste money upping a bid until the auction of that Company commences. Be wary of purchasing the lowest valued available Company unless you are satisfied with all of your bids on higher valued Companies (this is sometimes referred to as “pulling the pin” as it usually sets off an explosion of auctions).
6. Determine your pain level before you bid on a Private Company. Just how much over face value are you willing to pay for a Private Company? When does the ROI diminish beyond attractiveness? This is something that time and experience will help you learn.
CORPORATE STOCK PURCHASES
After the dust has settled from the Private Company sales, the IPO (Initial Public Offering) shares of the Corporations are available for purchase. Just like purchasing Private Companies, there are several factors to consider when purchasing Corporation stock shares. Some of these points remain valid throughout the game.
1. Check the other player’s cash reserves (and your own) and determine if you are more likely to start off as a President or as a minority share holder. Private Company purchases will consume between $350 and $500 of the $2000 in seed capital that the players start the game with. With only around $1600 available for use in stock purchases, it is not likely that more than two or three players will end up as Corporate Presidents during the first Stock Round. Remember, if you are going to be a minority share holder, you do not control the operation of the Corporation. You will end up being a “coat tailer” riding a stock and trying to earn enough money to float your own corporation in a later Stock Round. Remember that there are only six Corporations in the game, so the chance of your being President of more than one Corporation (in a 5 player game) is pretty slim. As President, be aware that “coat tailers” will be selling off stock in your Corporation later to fund their own bids for Presidency in another Corporation. This will have a minor impact on the Market Value of your stock holdings.
2. Consider the potential P/E Ratio of the Corporations. Some Corporations start the game in a more advantageous position and are better able to capitalize on the landscape near their home station. If the IPO cost per share of ABC is low ($60 or $70 per share), then it is a sound investment (P/E-wise) as it is not unreasonable to expect that it will be able to return dividends of $11 per share early in the game (a P/E Ratio of around 6). If the IPO of L&N is high ($90 or $105 per share), then it is a weak investment (P/E-wise) as it will only return dividends of around $6 per share early in the game (a P/E Ratio of around 16).
3. Unlike many other 18XX games, the small towns (whistle stops) in 18AL do not count against the travel distance of a train. This makes Corporations with numerous nearby towns a bit more attractive.
4. Consider your holding limits. Every 18XX game limits the number of stock certificates and Private Companies that a player may own. In a 5 player game of 18AL, your limit is 10 certificates. This makes that 20% President’s stock certificate that much more attractive.
5. Beware of owning more than 10% of a Corporation that is in danger of being forced to make a costly “enforced purchase”. You may end up holding the President’s certificate and having to pay for a train out of your own funds. Holding 20% or more is not as dangerous if: the current President does not have a second Corporation that can be used to raid, OR the President sits to your immediate left and does not hold the Priority Deal, OR the President has more than one Corporation under his control AND permanent trains are in play AND the Corporation you hold stock in is his lowest-valued Corporation (it cannot be raided since it operates later in the Operating Round).
6. When setting the “Par Value” or IPO price (or when purchasing stock in other player’s Corporations), be aware of how closely your cash in hand matches a multiple of the chosen price. With $120 in your hand, perhaps buying two shares at $60 is a better deal than buying one share at $90 and having $30 languish until the next Stock Round. Money invested in stock shares usually appreciates; money in hand is stagnant. Of course, if a Corporation is facing a cash shortage and is likely to NOT appreciate, then perhaps it is not a good idea to invest in it until the current cash crisis is passed (cash in hand also cannot ever depreciate, unlike an investment in a weak stock).
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OK, I know that this is a ton of information to digest. If anyone has any questions about the Initial Stock Round, please let me know ASAP. If nobody objects, we can begin the purchasing of Private Companies starting with Jeremiah (he holds the Priority Deal card). Jeremiah may either purchase the Tuscumbia Railway for $20, place a bid on another Private Company, or pass. Feel free to post questions or comments (especially if it is your turn in the Stock Round) and I will do my best to offer a fair and unbiased answer.
Posted Fri Mar 3,2006 04:02 pm
