Well, unless you have been short the S&P Index since January 1, 2008 (down 40.3%) or my favorite shoe company, CROCS, (down 95%) chances are you haven't done that well trading in the stock market this year. Despite Jim Cramer's incessant attempts to call the bottom, you have likely seen your portfolio dwindle to 60% of the value you started with right after receiving that shiny new X-Box for Christmas '07. Well, I feel your pain, and although I will not be giving you advice on stocks today, I do want to provide some perspective on how you may (very important MAY) be able to make some money on OneSeason. Aside from making money through SOI day trading, I believe there is money to be made simply due to the rising tide of penetration. Let me explain - bear with me on this math and try not to yawn. As of this afternoon, OneSeason had a Market Value (Total Shares Outstanding x Price Per Share) of approximately 8,529,000. I try to back into the number of users by saying that all you jokers, on average, originally put $900 into your account and have $810 actively invested (a 10% cash reserve). This gets you to 10,530 active investors (8,529,000 Market Value / $810 invested capital). So, think about market value growth as a function of A) Number of Users and B) Average Invested Capital. Therefore, by making some assumptions on both of these two variables, we can back into a longer term market value. [Now chug a RedBull so you don't fall asleep - almost done]. Lets assume that over the next 4 months (around the first of March), the number of users using OneSeason can grow 15% a month (an average of 66 new users per day). Seems reasonable right? Now lets say that because everyone starts to make a little money and dream about those new pair of Ferregamo loafers they can buy off BlueFly.com, everyone begins to invest a little more. Assume that each month we all add about 5% to our total account value (approximately $44 bucks per month for the next 4 months). If that takes place, the total market value will have grown to $18,132,040 by the end the fourth month. This means that an average portfolio invested throughout those 4 months would have made 112.6% - more than 2X your money. To quote that old guy on Entourage (that old goofy agent Ari hates) "Is that something you might be interested in"? Two words: Daddy Like.
So - this is what I am talking about when I say "penetration" (please get your head out of the gutter...I mean seriously). As both user penetration and invested capital increase, all things held equal your Sportfolio will be the beneficiary. So you ask yourself - Self: what could I possible do to increase both of these very important metrics. Well - for starters it requires that you stop hitting the Refresh button on your OneSeason account for 2 seconds (Painful. I know). Next go find every man, woman, child, step cousin, brother, used car salesman, aunt, uncle, that one guy you picked on in the third grade (also the same guy who stuffed you in a locker in 4th grade because he hit puberty one year before you did), every unborn child, firefighter, and good lookin' dame you can find, and get them to sign up for OneSeason (you get my point). The increase in average invested capital will take care of itself. Now go spread the word. Your sportfolio will like it.
Written by UncleRico
1 comment:
i like your take on the oneseason market... but i think you're missing a couple things in your calculations. Right now the market is at 11million (has grown since your 8million), but either way... you have to think that a lot of that 'Market Value' is not actual money that has been invested. It is the total value of stocks being held by users - one of whom has an account that's showing an 85,000% return! I would go as far as to say that maybe even a majority of the market value is not actual money. Take me for instance - my account is at 900% right now and i'm only an 18 day veteran in the market. Many got in much earlier. I would also imagine that the average user has invested far less than $900 (as you assumed) in these economic times.
So, my assumption is that there has been far less actual money put into the market, and that there are far more users than you have laid out. My guess would be that the market consists of maybe $5,000,000 ('market value' showing 11mil) and that there are over 20,000 users at this point.
If I am right on these numbers, how does that effect your projections for the market?
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