|Remember when Internet stocks were the way to go? Analysts would appear on CNBC and project stock prices of companies like Amazon.com, Yahoo!, America Online, and CMGI to double by year-end. Do you also remember how individual investors responded to these (seemingly obvious) forecasts? Many of them said, "Even I can do that." Well, here's a way to put yourself to the test. |
If you think you have what it takes to be an analyst, or even better, a mutual fund manager, then register with Marketocracy.com (Figure 1), where you get the opportunity to try your hand at fund management. Best of all, if you do well, you may find yourself actually managing a fund for Marketocracy.com. Not a bad deal!
It was this experience that led Kam to start Marketocracy.com. As president and CEO of Marketocracy, Inc., Kam's objective is to have a continuous pool of money managers. He feels that the criteria used to select portfolio fund managers are not effective, adding that a more effective method is to identify individuals who have excellent track records, which is the primary objective of Marketocracy.com. It's a site that lets people in on a virtual mutual fund in real time, where they can build funds and manage them as realistically as possible.
To see what the site is all about, I decided to give it a try. Registration is free and each member is provided with $1 million of fictitious money to manage per fund. Just like any game, there are rules, which are easily accessible from the website. Simply put, each member may create up to 10 funds with a limit of 200 stocks. When you create a fund, you have to classify it based on its investment objective -- value, growth, or blend -- and industry focus --general or sector-specific -- in order to qualify for ranking.
Kam's objective is simple and best described in the following steps, as stated on the home page:
Kam has created as much of a real-world simulation as possible. "We want people to operate the way they would in the real world. It's no use if someone calls and says they wanted to purchase a stock last week, but %C9," he adds. If it doesn't work in the real world, it doesn't work at Marketocracy.com. If you want to buy or sell a stock, you have to do it when you think the time is right. It's not a difficult process. Just go to the trading section and buy or sell a specific stock. The entry will be automatically accounted.
There are several performance measurement tools included at this website, based on what has worked well for Kam. Once you register as a member, you will receive a booklet explaining the various tools in detail.
The performance of your portfolio(s) is measured using net asset value (NAV) (Figure 2), which is how performance of all mutual funds is measured. Reports of your portfolios are updated on a quarterly basis. You can also view a performance stratification report that divides your top performers, mid-level performers, and bottom performers. This helps you identify your strengths and weaknesses, from which you can determine what you should exploit and what you should avoid.
Since its launch on July 17, 2000, Marketocracy.com has amassed close to 30,000 funds under its management. Kam is nothing but pleased about the response. "This is constant meritocracy. We have a good continuous pool of people managing money," he enthuses. Although it's too early to tell how many funds the company will end up managing, judging by the list of top performers listed on their home page, Kam certainly has something to look forward to.
|Company:||Technical Analysis, Inc.|
|Address:||4757 California Ave SW|
|Seattle, WA 98116|
|Phone # for sales:||206 938 0570|
|Fax:||206 938 1307|
Traders' Resource Links
|Charting the Stock Market: The Wyckoff Method -- Books|
|Working-Money.com -- Online Trading Services|
|Traders.com Advantage -- Online Trading Services|
|Technical Analysis of Stocks & Commodities -- Publications and Newsletters|
|Working Money, at Working-Money.com -- Publications and Newsletters|
|Traders.com Advantage -- Publications and Newsletters|
|Professional Traders Starter Kit -- Software|