Okay, I am legitamately head over heels OBSESSED with this site. How obsessed? I partnered up with a mysterious benefactor to deposit another $500 into my account. Of course, as soon as I do this the market decides to hit a downturn. The first few days I viewed the site, everything was green going up 50% or more. My Kevin Garnett stock that I bought at 18 ended up splitting twice, tripling in value. Since I added money? Not as good.
I started off buying some Brian Westbrook. The reasoning behind it was that he had less shares outstanding and a lower price than Marion Barber and anyone who has ever watched football or played fantasy football knows that Brian Westbrook is a lot better than Barber. Right? Well, I guess not because after buying some at $15 it IMMEDIATELY (and I mean IMMEDIATELY) dropped down around 10. It’s fluctuated between 10 and 12 since then, but hasn’t come close to $15 since. I’m going to hold onto it for awhile though because I am certain I am right about this and barring a reverse split I can handle the risk.
My next purchase followed a similiar approach. I realized that football was the highest traded sport on the site and most popular sport in America, so I went with that again. This time buying some LT. I liked him because he was trading even lower than Westbrook and he’s the best back in the league. He hasn’t been that great this year, but he’s still one of the best and should rebound to make this a solid buy. I made two purchases of this one actually. A few shares at 11.07 and then added onto that when it dropped down to 10.50. It got up to $12 and I sold half for a small profit and then decided to hold onto the rest. I am willing to risk this on the belief that I am right in the long term, but don’t want to bury myself in risk at the same time.
What did I learn from all this? It’s simple really. Think about basketball and how basketball is marketed. Are you a fan of Lebron James or of the Cleveland Cavaliers? Miami Heat or Dwayne Wade? The NBA is a superstar oriented league. The NFL on the other hand is a team oriented league. Players change teams in the NFL so much that you hardly even notice, but the uniforms stay the same. At first I didn’t fully grasp that aspect, even though it’s something that is clear as day. NBA players have more power than NFL players of the same popularity. The Bradys and Mannings of the world will have tremendous value, but the mid tier guys won’t. TO and Moss are useless compared to a Kevin Garnett. So what do I do going forward?
I have half of my bankroll ($300) tied up in the Greg Oden IPO. IPO shares are dished out according to trading volume and first come first serve basis, but I’m hoping the amount of trading I’ve done based on the amount of time I’ve signed up will be enough. IPOs open at $5 and they plan to issue between 6k-12k shares. Trying to find a comparable NBA player we’ll go with Yao Ming and Dwight Howard (both have produced results, but the hype surrounding Oden would have him being as good or better than both (Remember the first rule of trading, buy the rumor sell the fact). Yao has 33344 shares @ $12. Howard has 34688 shares @ 11.75. Do the math. This could be huge.
And I can’t stop biting my nails.
