November 1st, 2004

Polidex Bloggers league

Ripefig now has a stupendous lead with £42,566.42, Jamesw £28,597.60, Guido Fawkes, £15,326.14, jamesgraham £11,893.31, le_poulet_noir, £4,308.09.

Some advice to Polidex of you still struggling in single figures:-

1. You have to trade not invest. Rotate your portfolio.

2. Don’t have too many holdings – no more than 3 say.

3. Look at the most active – actively traded MPs move about.

4. MPs with few shareholders are more volatile.

Finally my tip of the day is David Heathcoat-Amory will (£1.22) surge over the next two days… Buy him. Why? Because he is going up!


  1. 1
    Anonymous says:

    Le_Poulet_Noir here. Fun though Polidex is, it is flawed. Unlike in a real market, price of a given share is driven purely by the transactions of a small number of people. There is no such thing as scarcity or supply vs demand. Prices shoot up when one or two people buy a stack of shares and plummet when those same people decide to sell them.

    Once you have a certain amount of money you can make a 30 per cent profit by selecting the cheapest MP and buying as much as you can afford. You only need wait 24 hours and you have a guaranteed profit.

    Markets don’t behave like this in real life because there has to be a demand for shares at the selling price. To take an example, I bought 9,999 shares of Claire Curtis-Thomas. Within 24 hours the price had increased 29 per cent. I then offloaded the whole lot at a profit despite the fact there were no buyers for the shares. To whom was I selling them? In the Polidex world you don’t need a buyer.

    A clever programmer should redesign Polidex so that players select an MP and declare that they will buy x amount of shares when it reaches a certain price. For any shares they own, players can set a price at which they are prepared to sell. This way, price is affected by genuine demand rather than a demand based on the owners’ past transactions.


  2. 2
    Guido Fawkes Esq. says:

    I agree Polidex is very flawed. The designer doesn’t seem to understand how markets really work.

    The inability to short an MP is another major flaw – why no day trading?

    The fundamental error is that there is unlimited supply of shares – a real market has a fixed quantity of the security – there are only so many shares of Vodafone, or there are balanced supply and demand such as in futures markets where every buyer has a seller to match. Polidex just creates MPs shares out of thin air and lets you sell them back to thin air.

    These flaws are bad. And make the game unplayable by rational market rules. One ends up exploiting the weaknesses you have pointed out.


  3. 3
    Anonymous says:

    Perhaps we should adopt a self-enforced code like the Society of Editors or the Dogme 95 filmmakers and resolve not to pump and dump cheap MPs, but stick only to the MPs in the top 20 group plus ministers and shadow ministers.
    I suspect it won’t catch on. I see James has passed a £250,000. Surely he should think about giving some of the money to the Third World.


  4. 4
    Guido Fawkes Esq. says:

    You are seeking a degree of honesty not found in winners of competitive trading games I think…


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