I was thinking the other day about the similarities between the blogosphere and the stock market. Back in the 17th century, people were pretty excited about the radical new concept of stockmarkets – and rightly so. They are fascinating things and present all sorts of opportunity to everyone. (Read Niel Stephenson’s Quicksilver, if you’ve got the biceps). Right now, we’re all pretty excited about the democratisation of media that the blgosphere offers – and it’s for the same reasons.
But the stock market and the blogosphere are complicated and time-consuming places to hang out. So I’m interested in the various ways that the stock market has been made more user friendly. I want to see if we’re using them all to ease people’s experience of the blogosphere.
To find a good stock to invest in, you need to do research and rummage around. For the layman this can be too much like hard work, and a big drain on time. That’s why we often rely on others for help finding the right stocks.
Who helps us…?
- Newspapers and magazines that offer stock tips
- Financial advisors – some sophisticated, some not
- Fund managers, via the funds they create
- Indexes, like the FTSE100
- Algorithms. A lot of the trading that happens on the stock market today is actually done by computers.
- And the market itself – shares that regularly yield good dividends, get a higher value. That’s the whole point.
It looks like the blogosphere equivalent of an index is something like Nine Rules. The FTSE index is a selection of the biggest hitting corporations on the London Stock Exchange. Nine rules is a bit like that – the creme de la blogosphere get to be in the club.
Funds, and investment trusts in particular, are worth a look. An investment trust is a share in its own right – traded on the market just like any other. But it is a share in a company that does nothing else but buy and sell shares in other companies. The lazier or less expert investor can get the benefit of playing in the market, with much of the risk and effort taken out. They trust the fund manager, who has done well in the past, to continue to select the best stocks and deliver the best return. Interestingly, an investment trust share can trade at a discount or a premium. That means that the market can value a trust *more* (or less) than the total of the shares the trust actually owns. The trust itself can add value, by being well managed, I suppose.
The analogy works for me on the blogosphere. I am interested in investing (my attention) in shares (blogs) that are actively managed (edited) collections of the best shares (blogs) out there. I’m after someone who selects the best blogs in my sector on an active basis. And I want to rely on market ratings to make sure that the manager is doing a good job. If he’s losing readers and rankings on the open blog market, I might switch away from him to another, better managed blog instead.
Anything we can really learn from this? Well – there’s more than one way to navigate a complex market. And there’s probably plenty of opportunity left for organisations and individuals out there who want to help us.
And that begs the question: can people make money being blog fund managers? Or do they do it for love?