Contest Begins Tomorrow

ValueWiki.com’s $100 Contributor-of-the-Day Contest begins tomorrow. We are giving away $100 every weekday in February to the best wiki contributor.

Login to ValueWiki (it’s free), search for any stock in the US, Canada, or Australia, and start writing. It’s just like Wikipedia where anyone can edit. We will announce the first winner, here on the blog, tomorrow, Thursday, by 11:59 EST.

If a blogger wins, we will feature your blog in that post as well. So you will get site exposure and $100. Thank you to Micki at WorldChanging, TradingGoddess, and all the other blogs who have covered the ValueWiki contest. It is much appreciated.

Deep Market.com – Data Mining and Technical Analysis

So I once spent a whole month data mining the Dow. I learned that sunny days in Manhattan outperform cloudy days. Mondays outperform Fridays. The 3rd quarter is typically dismal, and the 4th quarter is historically the best. So if you conglomerate this data and leverage the Dow Diamonds, you can theoretically make money by buying Dow calls on a sunny Monday in November, right? I’m not sure if anyone’s ever had the guts to start a sunny-day-hedge-fund, but I would be very interested to hear the results!

Anyone interested in technical analysis and data mining should check out this fascinating site, DeepMarket.com. You can examine correlations between stocks – in tandem or apart. You can even study seasonal analysis – what historically is the best day of the year to buy Google? (Answer – August 20 averages 6.73%). I have no idea how Eric Cahoon has built these data mining tools – he must be some kind of genius. If you don’t know Deep Market, go check it out, play with the tools, and read Eric’s daily blog. Big thumbs up.

Bubbles are Not Inflationary

Rumors are afoot of a web 2.0 bubble, which raises a sore point for me. People believe that bubbles are inflationary. From 1999 to 2000, the much-lauded Alan Greenspan raised interest rates six times in an effort to tame “irrational exuberance” and stave off inflation. The sixth interest rate hike sparked the crash of April, 2000, ending the longest peace time economic expansion in US history. Greenspan’s subsequent interest rate reversals then fueled the housing bubble, a fact which the now retired Greenspan has admitted.

The point I want to make here is, academically, a stock market bubble is not inflationary. This is a difficult point to articulate, so follow me like a leopard…

Let’s say I take my company public, selling 10 shares for $1 each. Zach (the public) buys all 10 shares for $1. Zach spent $10 and Jon got $10. Net change in dollars in the economy = zero.

Now let’s say there’s some “irrational exuberance.” Bob buys 1 share of Zach’s stock for $10. Now Zach has $10 and Jon has his $10. And Bob spent $10 and Zach spent $10. Net change = zero.

Let’s say Bob goes ape, and buys all remaining shares for $100 bucks a pop. Zach now has $910 and Jon has $10. Zach spent $10 and Bob spent $910. Net change = zero. The amount of real money in the economy doesn’t change! Just because there are millionaires-on-paper does not mean there is any change in real dollars in the economy.

Yes, there was irrationality when the stock market soared in the 90’s. But there was certainly some irrationality when it crashed, too. Greenspan got a lot of praise for being fortunate enough to preside over a technology boom and an economic expansion. But for a guy famous for the “soft landing” philosophy, he sure created a hard bump in 2000, precipitated the recessession of 2001-2002, and helped to create the housing bubble. Is that fair to say?

Maybe I’m being a bit harsh on Greenspan. I certainly couldn’t have done a better job! But I’ve always been intrigued at the disconnect between the media’s high opinion of Greenspan’s Fed performance, and opinions of those of us in the finance world.

Is Wikipedia Becoming a Totalitarian State?

Seeing as I’m a co-founder of ValueWiki, it’s probably no shocker that I’m a Wikipedian. And say what you will, but I think Wikipedia is one of the greatest accomplishments of the internet. But is Wikipedia becoming totalitarian?

In addition to recent battles with Microsoft, Wikipedia is in the final rounds of stamping out Esperanza. Esperanza is a Wikipedia subculture that evolved to inspire a sense of community among Wikipedians. The group created “coffee lounge” chat pages, mentored new members, compiled birthday calendars, and awarded “Barnstars” to recognize user accomplishments. In a wiki world of vandals and link spammers, Esperanza supported projects like the Kindness Campaign, WikiLove, and the Barnstar awards. They created “Trading Spaces,” where html-savvy users would pimp each other’s bio pages. Through colorful userpages and sig’s, Wikipedia was finally shedding it’s drab communist grey for a more fun and user-friendly feel. And the sense of community and support Esperanza created certainly helped to fuel Wikipedia’s explosive growth.

Unfortunately, Wikipedia admins have decided that Esperanza is non-encyclopedic, and set about snuffing it out the best way they know how – Byzantine beaurocracy! You really have to read this page to believe it. I’m not sure people outside of Wikipedia are aware this is going on. It reminds me of the Chinese government stamping out Falun Gong. What’s the harm in a bunch of people who want to do calisthenics? Or setup birthday calendars on a wiki talkpage?

Alright, I’m a wiki-geek. But it’s a little sad to see neat Wikipedia projects like Wikifun and WikiGames fizzle out. I know of many upset and exhausted Wikipedians who have left. Now users post in the community portal, Is Wikipedia Beginning to Decelerate?

Zach and I are watching and listening. For any Wikipedians who migrate to ValueWiki, we encourage you to start groups, pimp your bio pages, and build a community. Ultimately, we believe a healthy sense of community will build a better wiki.

I Think I Might be a Robot

…Does anyone else have a really hard time answering Captchas? I don’t think I’ve ever gotten a captcha right on the first try…

Top 60 Finance Blogs (and counting…)

In a particularly obsessive compulsive post last week, I decided to rank all the finance blogs I read, by Alexa and Technorati rank. To my surprise, several thousand of you came to read the list. Many of you offered good suggestions for corrections and inclusions. In one week, the list has grown from 40 blogs to 60. I wish I could somehow have invested in this.

Accuracy and Fairness
Alright, alright. So what is the point of this popularity contest? What does Alexa really measure? Is this high school all over again?

A lesson I learned while compiling these numbers is that many of my favorite bloggers are often toiling in obscurity. To this end, I took ten impressive blogs with Alexas over 1 million and blogged Ten Great Finance Blogs Flying Under the Radar. I encourage you to check out any new blogs you haven’t heard of. I wish I could provide similar reviews for all 60 blogs listed below, but what am I your butler? Go check ’em out yourselves!

Including Your Blog
I invite you all to list your finance blog on the ValueWiki Blogroll. It’s a wiki, so anyone can edit. Soon I will post this Alexa list on the ValueWiki website as well, so you can update your stats yourself. In the meantime, you are welcome to post your blog in the comments (including your TR and A ranking is helpful for my updates).

So without further ado…

Top Finance Blogs Ranked by Alexa

1 Seekingalpha.com TR: 2,734 (3,859 links from 683 blogs) A: 5,161
2 bigpicture.typepad.com/ TR: Unk A: 18,500
3 BloggingStocks.com TR: 595 (55,276 links from 1,558 blogs) A: 18,588
4 TheKirkReport.com TR: 114,529 (99 links from 32 blogs) A: 72,680
5 www.fatpitchfinancials.com/ TR: 18,407 (838 links from 177 blogs) A: 86,000
6 TraderMike.net TR: 6,891 (2,542 links from 377 blogs) A: 88,325
7 www.theessentialsoftrading.com/Blog TR: Unk A: 92,487
8 247wallst.blogspot.com TR: 19,067 (3,381 links from 170 blogs) A: 100,000
9 22dollars.com TR: 227,372 (82 links from 17 blogs) A: 123260
10 www.howardlindzon.com/ TR: Unk A: 151,800
11 valueinvestingnews.com/ TR: 114,529 (352 links from 32 blogs) A: 190,351
12 www.brettsteenbarger.com/weblog.htm TR:97,528 (328 lnks fm 37 blgs)A:193,425
13 investorgeeks.com/ TR: 27,742 (411 links from 118 blogs) A: 210,000
14 tickersense.typepad.com/ TR: 45,277 (563 links from 74 blogs) A: 223,322
15 BillCara.com TR: 15,637 (840 links from 201 blogs) A: 226,231
16 antandsons.com/wordonthestreet.html TR: 703,564 (10 links from 5 blogs)A:249,040
17 www.informationarbitrage.com. TR: 22,429 (452 links from 148 blogs) A: 249,136
18 Footnoted.org TR: 12,952 (792 links from 243 blogs) A: 250,000
19 jeffmatthewsisnotmakingthisup.blogspot.com/ TR: Unk A: 253,941
20 www.maddmoney.blogspot.com/ TR: 100,673 (62 links from 36 blogs) A: 254,062
21 blog.fallondpicks.com/ TR: 103,872 (147 links from 35 blogs) A: 258,565
22 Gannononinvesting.com TR: Unk A: 258,880
23 randomroger.blogspot.com/ TR: 24,590 (891 links from 133 blogs) A: 281,838
24 stockmarketbeat.com/blog1/ TR: 41,307 (2,342 links from 81 blogs) A: 283,368
25 www.nyquistcapital.com/ TR: 59,891 (224 links from 58 blogs) A: 294,395
26 Maoxian.com TR: 29,668 (442 links from 109 blogs) A: 295,000
27 equityinvestmentideas.blogspot.com/ TR:34,494 (839 links from 98 blogs)A:328324
28 www.alphatrends.blogspot.com/ TR: 27,202 (1,801 links from 122 blogs) A: 356,374
29 www.crossingwallstreet.com/links.html TR: Unk A: 358,805
30 www.uglychart.com/ TR: 30,559 (592 links from 109 blogs) A: 444,643
31 www.philstockworld.com TR: 122,861 (86 links from 30 blogs) A: 451,763
32 www.controlledgreed.com/ TR: 44,136 (499 links from 76 blogs) A: 477,099
33 valuediscipline.blogspot.com TR: 63,239 (134 links from 52 blogs) A: 551,821
34 www.underthecounter.net/ TR: 82,809 (153 links from 43 blogs) A: 565,367
35 billakanodoodahs.com TR: 54,399, (272 links from 63 blogs) A: 574,283
36 accountingobserver.com/blog/ TR: 53,230 (87 links from 61 blogs) A: 698,000
37 www.thestalwart.com/the_stalwart/ TR:52,070 (127 links from 64 blogs) A:698,107
38 peridotcapital.blogspot.com TR: 137,966 (75 links from 27 blogs) A: 878370
39 www.sinletter.com/ablog.aspx TR: 914,044 (5 links from 4 blogs) A: 910,657
40 moderngraham.com TR: 119,719 (1,166 links from 30 blogs) A: 1,061,000
41 theaveragejoeinvestor.blogspot.com/ TR: Unk A: 1,147,942
42 The Ponderings of Woodrow TR:28,703 (345 lnks fm 116 bgs) A:1,227,227
43 www.31contracts.com/ TR: 436,634 (11 links from 9 blogs) A: 1,340,103
44 10qdetective.blogspot.com/ TR: Unk A: 1,389,000
45 valuestockplus.blogspot.com/ TR: Unk A: 1,435,000
46 StockCoach.Blogspot.com TR: 134,163 (200 links from 27 blogs) A: 1,500,000
47 pink-sheets.blogspot.com TR: 240,984 (50 links from 15 blogs) A: 1,700,000
48 ValueBlogReview.blogspot.com TR: 94,177 (142 links from 37 blogs) A: 1,755,680
49 mikesnewsletterinvesting.blogspot.com/ TR:101,288(109 lks fm 35 bgs)A:1,829,000
50 financeandinvestments.blogspot.com/ TR: Unk A: 1,831,507
51 www.financialnirvana.com/ TR: 234,098 (667 links from 16 blogs) A: 1,941,724
52 themicrocapspeculator.blogspot.com/ TR: Unk A: 2,100,000
53 theflyonthewallblog.blogspot.com/ TR:158,343 (77 links from 23 blogs)A:3,187,800
54 tradinggoddess.com/ TR: Unk A: 3,522,472
55 internetoutsider.typepad.com/ TR: Unk A: 4,359,555
56 filteringwallstreet.blogspot.com/ TR: 201,778 (62 links from 19 blogs) A: 4,364,470
57 paulstocks.blogspot.com/ TR: 936,918 (34 links from 4 blogs) A: 4613812
58 oneguysinvestments.com/ TR: 382,132 (12 links from 10 blogs) A: 4,880,000
59 Davidneubert.com TR: Unk A: 5,476,207
60 thetrendtrader.blogspot.com/ TR: Unk A: 6,000,000

ValueWiki Contributor of the Day Contest

February 1 – March 1
$100 Every Week Day to the Best Contributor
$500 Grand Prize to the Best Overall Contributor

Zach and I are pleased to announce ValueWiki’s $100 daily contest for the month of February. To participate, login to ValueWiki and write about any stock or fund. ValueWiki currently has article stubs for 56,518 stocks and funds in the US, Canada, and Australia, so hopefully there’s plenty to write about.

ValueWiki’s goal is to provide user-written research and coverage of every stock and fund. Sites like Wikipedia have demonstrated the great collaborative power of wiki. Imagine if users could share investment research up-to-the-minute, all around the world. The purpose of this contest is to encourage users to login to ValueWiki and begin writing.

Zach and I will announce each day’s $100 winner by 11:59pm EST here on the blog. If we are not impressed with the quality of contributions on a given day, we will donate that day’s $100 cash to The WikiMedia Foundation. (For more specifics on winner criteria, visit the contest details on ValueWiki).

After giving away $100 every weekday in February, we will announce the $500 grand prize for best ValueWiki Contribitor on March 1st. Winners can win more than once. All money is paid through PayPal. For all contest details, visit the ValueWiki Contest page.

10 Great Finance Blogs Flying Under the Radar

Yesterday I posted my list of 40 Finance Blogs ranked by popularity. I compiled the list by running the 40 finance blogs I follow through Alexa and Technorati to determine their “popularity.”

I was surprised to discover which finance blogs were “popular” and “unpopular.” Many of the blogs I admire have Alexa’s over 2 million. While many of the blogs I find less-than-inspiring command extremely high readerships.

I decided to compile this list of diamonds-in-the-rough. All of the finance blogs listed below have an Alexa over 1,000,000. And I have no affiliation with any of them. There are some gems here, so check ’em out!

Ten Great Finance Blogs Flying Under the Radar

10 Internetoutsider.typepad.com/
Henry Blodget was banned from securities industry following an industry-wide regulatory complaint over conflicts of interest. His candid blog reflects how he is unable to give up his passion for Wall Street. Frank analysis on popular stocks like Yahoo and Google from a guy who was once the shining star of Merrill Lynch.

9 ValueBlogReview.blogspot.com
Steven Rosales gears his blog towards helping new investors discover useful blogs and resources. Steven was good enough to be the first blogger to cover ValueWiki, here.

8 StockCoach.Blogspot.com
Stock Coach is a value investor who has outperformed the S&P 500, the Nasdaq, and the benchmark Russell 2000 index for 10 consequetive quarters. His daily blog is candid and humorous.

7 10qdetective.blogspot.com/
David Philips is an equity analyst whose research has been quoted everywhere from the WSJ to IBD. For anyone who loves the detective work of rolling up one’s sleeves and burrowing into financial statements, this blog uncovers the dirty secrets companies hide in their balance sheets. I hope someday David contributes to ValueWiki.

6 FinancialNirvana.com/
Himanshu Pandya writes this extremely thorough daily blog focussing on three areas I invest in: India, Alternative Energy, and Technology. This blog is a diamond in the rough.

5 Theflyonthewallblog.blogspot.com/
TheFlyontheWall is a paid newsletter that offers free articles on its daily blog. They offer solid, consistent coverage on the investment issues making the headlines.

4 Mikesnewsletterinvesting.blogspot.com/
Mike is only 16 years old, and already considering opening a Roth IRA! He has been investing money for himself and his family members since he was 13. I wish he would post more frequently, this is a fun blog.

3 Valuestockplus.blogspot.com/
Toughiee’s blog provides extremely thorough daily coverage of Indian markets and investing. This is a one-stop-shop for links to good India due diligence.

2 Financeandinvestments.blogspot.com/
Jim provides accessible coverage of Indices, ETF’s, and World Markets that helps me see the big picture. This is just good blogging.

1 Bobsadviceforstocks.tripod.com/bobsadviceforstocks/
Bob Freedland does what every stock blog should do: thorough analysis of companies. Complete reports, week in and week out, since 2003. So many top-ranked Seeking Alpha contributors write pithy one paragraph blurbs about the iPhone, and so few take the time to do the kind of serious fundamental analysis Bob consistently churns out on new companies every single week. This is an impressive blog.

How Much Did MySpace Cost?

Many of my favorite blogs always note that NewsCorp bought MySpace for $580M. Given MySpace’s 27 million users (at that time), bloggers calculate 1 user=$21. This metric is used to justify other websites’ valuations.

But it’s not true!

I was a shareholder, and the fact is NewsCorp bought InterMix for $580M. InterMix had many highly profitable divisions, from gift card sites to office supplies, and had a public marketcap of $300M long before they ever created MySpace. Accounting for the goodwill on NewsCorp’s balance sheet, one can estimate NewsCorp really paid about $200M for MySpace. That translates to about $7.40 per MySpace user. You have to hand it to Rupert Murdoch, he got the deal of the century.

$7 is a bit less than $21

The point is, bloggers cannot use the $21/user metric to calculate the value of websites. $7 is much more accurate math on the MySpace deal. All of my favorite Web 2.0 blogs seem to make this valuation error. See examples at: GigaOm, VentureBeat, TechCrunch, and ReadWriteWeb. If enough people repeat this false $21/user statistic, perhaps companies will really begin paying this much for websites. And we wonder how bubbles start!

A Blog I Read Every Day – JohnChow.com

I’ve read JohnChow.com every day since October, so now it’s time to give back with a special shoutout post for anyone who isn’t up-to-speed on everything JohnChow.com.

John Chow is the “Dot Com Mogul” behind TheTechZone.com. In his personal blog, John covers everything from sports cars to fine dining, while candidly explaining exactly how he monetizes his blog, and built The Tech Zone into a success.

For anyone interested in learning SEO, SMO, Adsense, and the general business of the internet, here are my favorite John Chow posts to help you get started on digging through the nuggets on his site.

Top John Chow SEO Links

1. So You Want to be a Google Whore – The famous post
2. The Art of Link Baiting Links are currency
3. The Art of Link Development Links, links, links
4. How Much is a Link Worth? Ditto
5. How to Start a Tech Site Some great tips

To further help you get wise to JohnChow.com, you can check out his top posts or his investing category. For blogging his site, I may get a linkback. I hope this doesn’t undermine my credibility, because regardless of this bribe, JohnChow is a site I read religiously, just ask Zach.

Update: John Chow mentions ValueWiki as an example in his recent post, Better Anchor Text, Better Search Results. I blogged about ValueWiki’s High SERP here. Very interesting how much traffic we get to our two JohnChow.com posts, when I swear our blog has lots of other good content too!