Okay, payouts went out this morning to my three new linkers (well, two new and one old). I gave each of you shares in 3 different blogs (and you each got different stocks than the others, so I gave out shares in 9 different blogs, altogether). I tried to diversify the stocks — high-priced, middle-priced, and low-priced. You’ll have to determine for yourselves whether the stocks are worth hanging onto, or whether you should immediately turn around and sell them.
I’ve only given away about BS$225,000 worth of stock so far. And I currently have BS$39,000,000 in my portfolio. I’m not trying to give it all away, but hey — come get some!
Do you want a very generic strategy that will pretty much guarantee that your Total Worth will grow? Buy and sell. That’s it. Well, okay, there’s a little more to it than that. Try to buy stocks with a low ‘p/e’ (Price/Earnings) ratio. “Low” in this case generally means “less than 200”. And the lower, the better! I usually try to only buy stocks that have a p/e < 150, and almost anything with a p/e < 75 is a great buy. When you buy the stocks, the price will almost certainly rise. Boom — you’ve already made a profit just buy buying it. Just wait six hours, and you can sell that same stock off, if you want.
Basically, every day you should buy a few stocks and sell a few stocks (to make sure that you have cash for buying more stocks later). Which ones should you sell off? The ones with a high p/e. When the stock gets above a p/e of, say, 300, it’s probably in danger of crashing (and the per-share price has probably topped out and begun fluctuating up and down as people buy and sell shares). The system will eventually re-value the stock, and its value will plummet. So, the old saying “buy low, sell high” doesn’t just refer to the price of the stock — you should apply that rule to the p/e value.
- Use BlogShares’ search functions to find available shares. Try searching for blogs with low p/e, moderate-to-high valuations.
- Watch out for blogs with zillions of total shares. If there are more than 100,000 total shares, then the price/share isn’t going to be going up very much, and you’ll have to own a significant number of the shares yourself to earn anything decent.
- Look at the “Incoming Links” number in the Statistics section near the top of a blog description. Then check the “Top 100 Incoming Links” at the bottom of the page. If there are more links in the “Top 100” (or more specifically, if the sum value of the links listed is higher than the current Valuation) then the value of the blog is going to go up when the blog is reindexed. Buy now! Then force a reindex. This makes the Valuation rise, and the p/e fall.
- Use my Service Pinger to get BlogShares to reindex a blog.
- Use Technorati to search for incoming links to blogs that BlogShares hasn’t seen yet.
- Keep your eye out for Sell Orders. Sometimes they don’t seem like good bargains. Use a little bit of math to be sure. I’ll leave that as an exercise for the reader 🙂
- If all of the shares of a stock are owned, and the p/e is still below about 225, sell a few shares (maybe 100 or so). When somebody else (or maybe even yourself) comes along later and buys them, the stock price will rise a little, which bumps up the value of your remaining shares.
Those tips are all pretty much things I thought of on my own as I played BlogShares and began to understand how things worked. There are other good tips in the BlogShares Strategy Weblog.