At alexadex.com you can play a game of trading stock that is based on the amount of traffice that sites are getting (at least from the people who are using alexa.com’s toolbar). They use these traffic stats and a tree trunk times punpkin pi formula to determine share count and the price that it is going for . Beyond that it works pretty much like the stock market, you try to buy stocks from a site while they are cheap and then sell them when they are more expensive (when the site is getting more hits). This is a really cool idea! I am not going to spend the time to start playing, but I did buy a few shares of hypexr.org stock.

Over at internetstockblog.com they ask a interesting question: Is AlexaDex a Useful Stock-Picking Tool Or Just A Fun Game? and conclude with:

But there’s one glitch. Prices are set by current traffic data, not by supply and demand. So, unlike the stock market, prices don’t reflect future expectations.

The key factor that any hedge fund analyst will ask about a stock — What future expectations are priced in? — is missing.

I have to agree with this. Plus I haven’t heard any big news report about the best alexadex.com players getting filthy rich from their knowlege of the game.

Jeff has some interesting comments on the game at Jeff Hestler . net:

My portfolio is edging up. It’s not a perfect measure, because it relies heavily on traffic measured by the Alexa toolbar (which most people don’t install).

I also think their formula for computing share price is too sensitive. I’m sure they tuned it so that you’d see price movement even on low ranked sites (like this one), but in doing so, the high ranked sites (like Google) end up in the stratosphere.

They claim that they plan to reset the values around the end of the year, so we’ll all get a level playing field. That would be interesting…

When I was checking out hypexr.org’s stock I noticed a trade happened when UnderPaidLoveMonki’s article HowTo: Install Ruby, RubyonRails, and RubyGems on Ubuntu 5.10 (Breezy) got dugg, you can see a user bought all of hypexr.org’s stock (144) for $7 probably when he noticed the site beginning to get digg and sold it the next day (after the post hit digg’s front page) for $45. This made a quick $5,472 and the digg/slashdot method is good for new players to get rolling with some real money.

Check out what alexadex’s faq says under “secrets from some of their best players”:

Here are tips from some of the best players. These are applicable once you have accumulated more than $500k. Dynamoo says: “…monitoring places like Digg and Slashdot are good for small cap stocks that grow really quickly. HOWEVER they are limited in quantity. Once you’ve built up some money, you need to move into bigger stocks with some movement. Some of these are called “cyclicals” - sites that go up and down throughout the week (like movie times). Other sites are what I call “topicals” that go up and down according to one-off events (like Christmas). So the *real* money is made from identifying a big stock that you can invest 100% of funds in. For example, Mozilla.com launched a new version of the Thunderbird email client - stocks went up from about $1700 to $2450 overnight (market capitilisation is $1.6m). Apple was another one - they had a raft of new products and stocks went up from about $12,000 to $20,000 with a market cap of around $17m. These are the sorts of things you can follow in major news outlets rather than fishing around Slashdot and Digg.” Another great player monkeychilde says: “don’t bother too much with 114s (ie. $1 stocks); look for cyclicals few people know about, even if their cycle is at +-10% of their value - with the common cyclicals, you end up buying them so early that you get a similar return anyway; look for 2-week cyclicals that you can ride for more days; look for mid-week cyclicals - there are some but I’m not going to give away the ones I know of; look for any anniversary, special day, event (cinema festival, prize awards, etc) that is taking place in the next month and buy anything relater - you have money, even if few of the things pay off, you’ll be better off; go and invest in high-price sites that you think have a long term trend for them. I suppose if you spend all your remainder cash into digg.com, at the end of the season it will have made a decent profit.”

This entry was posted on Sunday, January 22nd, 2006 at 8:12 pm and is filed under Fat Penguin Blog, Gaming, Scott, Technology, Web. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.