http://www.wrightthisway.com/Strategery/ en Copyright 2009 Sun, 04 Jan 2009 23:16:35 -0600 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss Haven't played much lately, just when I was wrapping up figuring out how everything was working, the math got 'tweaked', rendering most of my work obsolete. The basics were still the same, but learning where the break points were that made it all tick was more trouble than I had time for. Several months have passed, I may yet go back and see if I can work out the new numbers. http://www.wrightthisway.com/Strategery/2009/01/time_for_math_studies.html http://www.wrightthisway.com/Strategery/2009/01/time_for_math_studies.html Sun, 04 Jan 2009 23:16:35 -0600 Reindexing a blog in Blogshares will cause its total value to be recalculated, and will also cause ideas to be produced, based on industries the blog is voted into. Math 101 gave the basics of outgoing shares values, Math 102 covers reindexing as it relates to shares math. Reindexing is very straightforward, when this happens, the total values of all incoming links are added, and the blog's base value of B$ 1,000 is added, to give the blog's current valuation, which is then used to calculate the blog's outgoing valuation as outlined in the Math 101 article. The key point to understand here is when it is appropriate to reindex a blog. The most elementary concept is to only reindex a blog when this will result in an increase in the blog's value. The Stock Broker function in Blogshares is very handy for this, if you own any shares at all in the blogs you are interested in reindexing, as it will tell you exactly how much a blog may gain if reindexed at that particular moment. The second most common way to determine this would be to pull up a blog's page in Blogshares, and add up the incoming values yourself with a calculator. Ideally, the blog should gain at least 2% in value to be worthwhile to reindex, if a blog is worth B$ 500,000, and will gain B$ 10,000, then reindexing would be good, if it may only gain B$ 5,000, then reindexing may actually harm the blog. One new change in the shares math is the use of a multiplier that can cause a large boost to a blog's outgoing value, if it has roughly 3x the number of outgoing links as incoming (as detailed in Math 101). The multiplier varies on a daily basis, I hope to have more exact details on this posted soon. There are times in the cycle where a blog can actually lose a small amount of incoming value, but gain outgoing value, but there are other times where a blog may gain a small amount of incoming value, but lose outgoing value. The 2% rule above will generally guarantee that a blog will have more outgoing value, assuming all else stays the same. The things that are likely to change, of course, are the number of incoming and outgoing links. When reindexing a blog, either your own or someone else's, you should check the blog's page in Blogshares, and see what the current number of incoming links are, and compare that to the value from when the blog was last reindexed. If the outgoing total from the last reindex is still roughly 3x the incoming number, and the blog's value will be going up, then it should be safe to reindex. If the incoming link total is significantly different from the last reindex, reindexing may cause the blog's outgoing value to crash. If you are not the owner of that blog, contact the blog's owner, and advise them that they may need to add (or possibly remove) outgoing links to avoid their value crashing. http://www.wrightthisway.com/Strategery/2008/08/blogshares_math_102_reindexing.html http://www.wrightthisway.com/Strategery/2008/08/blogshares_math_102_reindexing.html Sun, 10 Aug 2008 23:39:02 -0600 What follows is a basic primer for shares math in Blogshares. Some concepts will be greatly simplified, for additional background, read elsewhere in this blog for more information, starting with the earlier entries and moving forward. Some months ago, the way that shares values were calculated changed, old caps on values were removed, and other tweaks to the math were added to keep things interesting. This has thrown much of the shares market for a loop, but as with any game change, if you understand the math involved, you can make a profit. For the purposes of this article, it is assumed that you have one or more claimed blogs in Blogshares. If not, go to your favorite blogging site, and get with it! Now, on your claimed blog, you will have incoming links (folks that have links to your site on theirs), and outgoing links (links on your site to other folk's blogs). The value of your blog is the total of your incoming links, plus B$1,000 for the base value of your blog. The fun part is the outgoing value, under the old math, this would simply be the total value of your blog, divided by the number of outgoing links, with a cap of B$25,000. The more outgoing links you had, the less the outgoing links were valued. With the new math, this is now quite the reverse. Outgoing values now are variable, depending on the number of incoming links relative to the number of outgoing links. If your outgoing link totals are very similar to the incoming link totals, your outgoing value will be your blog's total value, divided by the number of outgoing links. So, say your blog had a total value of B$ 1,000,000, and you had 10 outgoing links, these would have an outgoing value of B$ 100,000 each. However, if you had, say, less than 5 outgoing links, these may only be worth about B$ 25,000 each or less, but if you had 30 outgoing links, they could have a value of around B$ 500,000 each. There are various thresholds in the new math, and I haven't collected enough information to know where all the danger spots are, but for this article we'll stick with the basics. The first point is to have 10 or more incoming links. This point shouldn't be hard, as many folks trade links all the time, sometimes just linking to another player's blog will turn up an incoming link back to you within a few days. The second point is slightly trickier... Ideally, you want to have about 3 times the number of outgoing links as incoming. If you have 10 incoming links, you want to have 30 outgoing. If you have 20 incoming, you want 60 outgoing. If you have 75 incoming, you want to have 225 outgoing, etc. Again, there are thresholds in place, so you can go slightly above or below these values, but too far out of range will see your outgoing values crash. For shares play, keeping your outgoing value high by maintaining a good link list is critical. Generally, you will want to link back to those that link to you, this will add value to their blogs, which will in turn potentially add value back to yours. For other links, those can go almost anywhere, as long as the sites are listed in Blogshares. http://www.wrightthisway.com/Strategery/2008/08/blogshares_math_101_outgoing_s.html http://www.wrightthisway.com/Strategery/2008/08/blogshares_math_101_outgoing_s.html Sun, 10 Aug 2008 23:38:53 -0600 So, the big question now is, how to use all of this information. The most pressing thought would be is it safe to reindex a given blog, even if the value is on the rise. I don't have data points to give exact numbers, but early analysis indicates that as the multiplier is about 7 days from reaching its peak, a blog's incoming value can actually drop about 3% in a day, and still see an increase in the outgoing value, after that a blog can lose less value each day to keep the same outgoing (obviously increasing values here would be very helpful), and on the other side of the curve, about 7 days after the multiplier peaks, a blog would have to increase in value almost 4% over the prior day to keep the same outgoing value. Going back to the 1st table from Part 1, we can determine that the blog only gained 2.14% from the 30th to the 31st. Had the blog instead increased about 2.37% (B$51,258,207.783), it would have been able to keep the same outgoing value. So, based on this info, if a blog will gain at least 4% in value, it should be safe to reindex, regardless. If the blog will gain less than 4%, it will be important to determine where in the multiplier cycle B$ is to avoid potentially costly mistakes. http://www.wrightthisway.com/Strategery/2008/07/cracking_the_math_pt_2.html http://www.wrightthisway.com/Strategery/2008/07/cracking_the_math_pt_2.html Thu, 31 Jul 2008 23:02:36 -0600 Inc. LinksOut. LinksValueOut. Link ValueMarket Share 12:51 31 Jul 20081135B$51,143,195.71B$5,581,796.100.000093766 % 10:48 30 Jul 20081135B$50,068,599.21B$5,594,348.580.000134516 % 15:21 28 Jul 20081135B$51,296,168.99B$6,075,437.080.000147697 % 14:56 27 Jul 20081135B$50,460,461.54B$6,181,589.980.000101717 % 11:17 26 Jul 20081135B$53,450,325.98B$6,787,356.810.000107811 % Note that in each case, the incoming and outgoing link totals are the same. From the 26th to the 27th, incoming value dropped, and we saw a drop in outgoing value. On the 28th incoming value rose, but outgoing dropped again. On the 30th, incoming dropped, and outgoing dropped even more than before. On the 31st, incoming rose to a similar level as the 28th, but outgoing fell again by a small amount. Does outgoing depend on a trend of past outgoing values, or is there some other factor at work? Let's take a look at the data again, this time with the multiplier in the table instead of Market Share (which isn't a terribly useful value anyway). Multiplier calculated as follows: (Outgoing Value * Outgoing Links) / Incoming Value

	Inc. Links	Out. Links	Value	Out. Link Value	Multiplier
12:51 31 Jul 2008	11	35	B$51,143,195.71	B$5,581,796.10	3.8199189704
10:48 30 Jul 2008	11	35	B$50,068,599.21	B$5,594,348.58	3.9106786167
15:21 28 Jul 2008	11	35	B$51,296,168.99	B$6,075,437.08	4.1453446132
14:56 27 Jul 2008	11	35	B$50,460,461.54	B$6,181,589.98	4.2876272372
11:17 26 Jul 2008	11	35	B$53,450,325.98	B$6,787,356.81	4.4444534995

Now, let's take a look at a different blog, with very different numbers, picking reindex values for those same dates:

	Inc. Links	Out. Links	Value	Out. Link Value	Multiplier
17:43 31 Jul 2008	53	144	B$211,393,946.77	B$5,607,684.38	3.8199133091
15:16 30 Jul 2008	53	143	B$193,656,051.20	B$5,295,982.22	3.9106728283
10:21 28 Jul 2008	48	136	B$168,688,822.41	B$5,141,708.47	4.1453389853
10:20 27 Jul 2008	47	106	B$158,365,825.61	B$1,494,018.17	1.000000634
10:18 26 Jul 2008	45	107	B$138,897,093.41	B$5,769,354.79	4.4444483853

Here we can definitely see a pattern, the multiplier vales are identical to several decimal places, and there may be extra precision (more than two decimal places) being tracked by B$ that isn't displayed here which would result in rounding errors, so for our purposes this is close enough to being exact. Some last values I was able to pull from B$ for several others, with a few more prior dates:

	Inc. Links	Out. Links	Value	Out. Link Value	Multiplier
09:50 25 Jul 2008	74	213	B$209,360,891.00	B$4,534,365.42	4.6131817163
14:51 24 Jul 2008	18	125	B$61,231,437.13	B$2,346,429.32	4.7900829827
13:59 23 Jul 2008	19	125	B$53,939,375.58	B$2,144,683.07	4.9701239747
23:05 23 Jul 2008	98	1191	B$19,236,094.28	B$80,273.8	4.9701239747
22:51 21 Jul 2008	19	125	B$43,392,824.41	B$1,844,410.10	5.3131195223
16:03 19 Jul 2008	340	931	B$24,044,713.57	B$144,114.04	5.5800278448
11:11 15 Jul 2008	100	347	B$11,395,325.89	B$186,029.82	5.6648092528
02:41 07 Jul 2008	97	1202	B$4,206,465.44	B$15,553.95	4.4445504585
22:10 02 Jul 2008	97	1212	B$3,129,347.06	B$9,675.74	3.819979751
13:11 24 Jun 2008	99	1211	B$5,474,202.35	B$17,267.83	3.74742611
23:16 23 Jun 2008	95	346	B$5,894,777.90	B$65,080.67	3.8199762912
22:52 14 Jun 2008	85	1052	B$5,512,945.09	B$26,972.85	5.147056199
219:02 04 Jun 2008	99	349	B$8,823,377.67	B$134,326.85	5.3131660463

Note that I have two entries for July 23, the very large number of outgoing compared to incoming (12x!) seemed very interesting, but since it fit the multiplier pattern I added the entry for that date mainly as a proof, reindex values for that blog appear later in the chart for June. Going back a month, we can see the values for the multiplier increase, then start falling going back to July 7, bottoming out on June 24. We have multipliers of 3.8199 on June 23, July 2, and July 31. Since values were lower between June 23 and July 2, the June 23 value was on the downward slope, as is the value on July 31, this puts the cycle of the multiplier at about 38 days. We also see a multiplier of 5.313 on both June 4 and July 21, but I believe that the June 4 value was still on the rise, but may have been close to peaking. We know that the cycle bottomed out between June 23 and July 2, a period of 9 days, so going back to the topmost table, outgoing values will continue to have a lesser multiplier for the next 4-5 days before the cycle hits an upswing again. ]]> http://www.wrightthisway.com/Strategery/2008/07/cracking_the_math_pt_1.html http://www.wrightthisway.com/Strategery/2008/07/cracking_the_math_pt_1.html Thu, 31 Jul 2008 19:52:49 -0600 Had to open my mouth and post... Had a minor problem two days ago, had some new incoming links and didn't notice, outgoing links fell too low and outgoing value crashed. Managed to recover the next day, but was then hit by a few blogs unlinking from the roll, also some lesser blogs delisted, meaning slow going for a spell while things rebuild. More blogs linking in today, caught this early and was able to link back before reindexing, but the roll is very unstable now, too many changes happening at once, not enough value being looped back in. The new blogs are going to have to stabilize and start putting out more value before we can keep building. I can temporarily hold some of this back by keeping my blogs from being indexed with local firewall controls, to keep anything from losing value, but I can't control the other blogs in the roll. http://www.wrightthisway.com/Strategery/2008/07/argh.html http://www.wrightthisway.com/Strategery/2008/07/argh.html Wed, 30 Jul 2008 00:40:25 -0600 Project Bootstrap, but a small upward spike can now be seen on these graphs. I'm taking this as a promising sign.]]> http://www.wrightthisway.com/Strategery/2008/07/turning_back_the_clock.html http://www.wrightthisway.com/Strategery/2008/07/turning_back_the_clock.html Mon, 28 Jul 2008 22:29:10 -0600 Values rising again... I was able to build a small blogroll up after repeated reindexing, and eventually got values up so that I could reindex other blogs feeding mine to get the values rolling again. Took some time, but it's paying off now again. Saw a few blogs drop out of the blogroll, can't tell which ones at this point, but it only created a minor hiccup. Worst problem I'm dealing with now are new links coming in, and balancing outgoing links to match. Had two blogs crash outgoing value because the outgoing count fell too low, had to add more outgoing links and reindex before anything else happened to get those values back up. http://www.wrightthisway.com/Strategery/2008/07/rising_values_again.html http://www.wrightthisway.com/Strategery/2008/07/rising_values_again.html Mon, 21 Jul 2008 22:46:12 -0600 Inc. LinksOut. LinksValueOut. Link ValueMarket Share 20:55 06 Jul 200810116B$10,039,966.89B$371,103.150.000136539 % 06:17 05 Jul 20086116B$6,255,320.07B$223,541.500.000082900 % 23:44 03 Jul 20085116B$4,209,856.18B$442,978.130.000083503 % 20:53 02 Jul 20085116B$4,042,608.79B$428,558.130.000062285 % 20:37 01 Jul 20085109B$3,590,355.28B$407,601.270.000071000 % 20:21 30 Jun 2008485B$2,470,504.71B$107,338.080.000077287 % 16:30 29 Jun 2008179B$560,683.14B$88,562.140.000016722 % ]]> http://www.wrightthisway.com/Strategery/2008/07/an_interesting_downturn.html http://www.wrightthisway.com/Strategery/2008/07/an_interesting_downturn.html Mon, 07 Jul 2008 00:06:21 -0600 We were finally seeing some rising values again recently, but have again hit a decline cycle. Some badly timed reindexing and issues with the spiders being down has caused a downward spiral, as the declining values caused blogs that would have received gains to lose value. A change in the reindex order may have resulted in gains all around... This is one important reason why it is important to use the Stock Broker feature for blogs you own shares in, or do some quick calculations for blogs you don't own shares in. One quick way that I do this to see if a blog will gain or lose is to just add up the millions and hundred-thousands with a calculator and see if this comes out as higher than the current blog value. To get a bit more accuracy for small increases, I may round down to the thousands place (ex, an incoming blog with a value of B$ 1,218,168.92 I'd enter into the calculator as 1218). A small gain would be enough to warrant a reindex. Blogs that feed into each other should have the blog with the highest increase indexed first for maximum benefit, buy if you aren't using the Stock Broker, that's hard to determine, but any positive trend is a good thing. Don't reindex blogs that are to be losers, let them keep the higher value until other incoming blogs catch up. http://www.wrightthisway.com/Strategery/2008/06/rises_and_falls.html http://www.wrightthisway.com/Strategery/2008/06/rises_and_falls.html Sat, 28 Jun 2008 23:31:07 -0600 A popular blog that was putting out some nice values to others that link to me recently died, and was promptly removed from the game. As this was one that was pumping out extra value because of the number of outgoing links, the trickle down effect resulted in crashing values all around. There still aren't enough blogs hitting the target spot to keep values up, losing just that one was a major blow, but if any others can hit the right spot, we'll see a nice increase again. If we can get two more, I think we'll have stable growth, three or more would see a major long term upward movement in values. http://www.wrightthisway.com/Strategery/2008/05/falling_values_again.html http://www.wrightthisway.com/Strategery/2008/05/falling_values_again.html Sat, 17 May 2008 20:52:12 -0600 Project Bootstrap is well under way. This is the code name I've given to my effort to get the values of my blogs back up to where they had been a few weeks back, before the market slid into the toilet. I had made some early headway, but was foiled when some other blogs that link here changed their links, and crashed their incoming values to me, and it's been a slow slide ever since, despite my best efforts. At long last, things have stabilized, and we're now on the upswing again. A few other blogs that link here have taken my advise on linking, and increased their outgoing links to about 3x the incoming, and have further linked to those that link to blogs that link to them, seeding things further, and this is now paying off by a nice upward swing. At this point, just having one more blog increasing their links this way would result in an even greater boost, I'm sure... http://www.wrightthisway.com/Strategery/2008/04/project_bootstrap.html http://www.wrightthisway.com/Strategery/2008/04/project_bootstrap.html Wed, 30 Apr 2008 23:58:11 -0600 Regarding my last entry, having more than 3x outgoing as incoming is OK, you still get the boost, but obviously the outgoing value is split among all of your outgoing links. One blog I know has over 8x as many outgoing as incoming, and is still seeing the boost. A rough formula: Outgoing Value * # of Outgoing Links / Blog Value. If you're not hitting the sweet spot, this value will be close to 1. If you're hitting it, it will be something around 5-8, depending on the exact ratio of links. http://www.wrightthisway.com/Strategery/2008/04/sweet_spot_part_2.html http://www.wrightthisway.com/Strategery/2008/04/sweet_spot_part_2.html Mon, 07 Apr 2008 14:24:40 -0600 I don't have an exact formula, and probably never will, but the sweet spot for maximizing outgoing link value seems to be to have about 3x as many outgoing links as incoming ones, give or take a few percentage points either way. If you have 10 incoming links, having 30 outgoing will gain you a boost. 20 incoming means 60 outgoing, etc. Obviously, linking to those linking to you should help. An idea I've been playing with is to also link to blogs that link to blogs linking to me. As long as I have extra links to spread around, seems like a sound strategy. Problem is many blogs linking to me are in a freefall at the moment, and many have the wrong number of outgoing links to stabilize things at the moment. Might have to ride the fall before the upswing can begin. http://www.wrightthisway.com/Strategery/2008/04/sweet_spot.html http://www.wrightthisway.com/Strategery/2008/04/sweet_spot.html Wed, 02 Apr 2008 23:42:53 -0600 That is the question... The game has a great tool called 'Ask your stock broker', which will let you see at a glance what blogs you hold shares in will benefit from reindexing. Unfortunately, if you're looking to reindex, say, a blog that links to you, there is no easy way to tell if it will go up or down in value. Do not assume that if your blog is on the rise, that reindexing anything coming in or going out is a good idea. I've found it handy to whip out the old calculator and punch in the numbers manually to see if it's worth it. I usually just enter up to the hundred thousand place (B$25,485,434.10 becomes 254, etc, no rounding), and total up everything over 100k in value. If this is greater than the blog's current value, reindex. If it's very close, then I'll redo the numbers going down to the thousands place (B$25,485,434.10 becomes 25485), and see what happens there. If you're reindexing something that links to you, never reindex if the value is going to drop. http://www.wrightthisway.com/Strategery/2008/03/to_reindex_or_not_to_reindex.html http://www.wrightthisway.com/Strategery/2008/03/to_reindex_or_not_to_reindex.html Thu, 27 Mar 2008 21:16:41 -0600