Industry Play for Profit #3: Fundamentals

Open the page in your Ideas portfolio where you keep the industries you're going to work. Look at the top industry on your page, and see this:

The column on the left indicates the name of the Industry.

The second column from the left indicates:

O: the # of ideas I own
A: the # of ideas on the market, available to purchase
E: the # of ideas that exist in the industry
D: drop ratio ...
B: the # of blogs in the industry

The important number from this column is E: # of existing ideas. More in a bit.

The third column from the left indicates the current price per idea, the average price you paid per idea, and the total value of your ideas holdings in the industry. We won't be paying any attention to these values.

The last column indicates:

U: Upward Pressure
D2: Downward Pressure
Avg10: Avg. # of ideas produced in last 10 drops
Last: percentage price change on last production of ideas
1Week: percentage price change since 1 week ago
2Week: percentage price change since 2 weeks ago

So ...

The relationship of Avg10 to E (existing) is the most important thing we'll pay attention to. This relationship is the primary determinant of whether your ideas are in the green ("last") or in the red. What you're aiming for is this -- the value of "avg10" should be less than or equal to [1/3 the value of "E"(minus its last three digits)].

Sometimes, avg10 will be quite a bit higher than 1/3 E minus its last three digits, and yet the industry will still be in the green. Why? Because the D2 is incredibly low. Ultimately, as you work an industry, D2 will move into the 40s (.41 to .45) before the industry peaks, and U will move into the 90s (.91 to .95). The higher the D2 climbs, the lower the avg10 needs to be in relationship to E.

One more thing about this last column of numbers. When there are ideas on the market, and more drop onto them from a reindex, the price per idea will drop, and some of the ideas already on the market will be consumed. So, it's important that you buy up your ideas at each drop, and even when you're not actively working them that you check them periodically and buy up what's there. Often you'll see that U=0 and last is 7.xx%. This means that the above happened. Usually, one managed drop will reverse both of those and put last back into the green.