Blog "Index" Investing Challenge

I have a number of links on the right hand side of my page, one of the most interesting (to me anyway) is one that estimates a value for any particular blog. It does this based on a blog that was purchased for a purported value between $25 to $40 million, and calculating a value per incoming link to that blog.

In other words, if one site has 1,000 links from elsewhere on the web, while another only has 10, presumably, the one that's linked to 1,000 times is much more valuable. One of the links I have on the right is entitled What's your blog's value. From this site, you can enter the web address of a site, and get an estimated value, based on the aforementioned rationale.

This site tells me that my blog, with only three incoming links to date, "is worth $0.00". ;-) I guess that's to be expected - I just started it a couple of weeks ago.

Anyway, you'll see several links of what I call, "Blogs: Some Good Ones", over to the right as well. I think they're interesting and useful and highly recommend you visit them. Here's what the reportedly value of each blog is:

• Abnormal Returns - $14,678
• Random Roger - $44,034
• The Big Picture - $478,165
• Peridot Capital - $9,032
• Value Discipline - $4,516
• Fat Pitch Financial - $14,678

So here's the challenge: you've just been given $600 to invest by your old auntie, who just loves the internet. However, she's specified that you have to invest as a "private equity investor" in any, or all, of these six blogs, with the intention of maximizing that $600 - in other words, just like the stock market! We'll call all six the "Blog Index" and it will be equally weighted.

Each of the sites has much to recommend them, and each offers their particular advantages and disadvantages. Abnormal Returns offers a synopsis comment on many other sites, and is thus useful in that way, Random Roger updates frequently with a sort of "stream of market consciousness", and so on. So you may think that some things are going to offer more desirability and that they will ultimately attract more links. And thus be worth more.

Remember that if the value of a particular blog moves up by say 10% and you have some holdings in that, then the value of your holdings increases by that same 10%. So you are looking to find the site, or combination of sites, that you feel will move up by the highest percentage.

I'm going to invest in just two of them, dividing my money equally between The Big Picture and Value Discipline. We'll check in at a later date to see how I'm doing, compared to the "Blog Index", and to other competitors that will (hopefully) enter.

Anyone can join in late, if however, you do so, you will be given the same amount of funds that the lowest competitors "portfolio" is then worth. So, please feel free to join in by adding a comment on how you'd spread that cash around. We'll check in occasionally to see how everyone's "portfolio" is doing.


JW

The Confused Capitalist