Accomodating the specialist; innovating caps
1. I see Caps (as many others, including its founding fathers do) as an experiment in collective intelligence, as a way to produce information and insight.
2. I am therefore not bothered by a lack of "realism" of certain aspects of the game, certain styles of play, certain strategies and tactics used. The question to ask is what kind of infosight is produced by them.
3. When thinking about innovating CAPS i am therefore not thinking about making it more realistic or more "fair", i am primarily concerned with way's to produce more and better infosight -and of course with the pleasure of playing.
4. In earlier blogposts i have made suggestions about the way both "stockpickers" and "macroplayers" could be better accomodated and datamined. In this post i will concentrate on the accomodation and datamining of the "specialists."
5."Stockpickers", that is people who are very good in picking long term winners on the level of individual stocks-companies, cannot win in Caps. (They will always lose against "redthumbers" and "macroplayers") However the infosight value of their picks is very high. It is certain that we do not mine effectively for that value at the moment. Even more damaging would be to lose those players completely because they leave Caps out of frustration. That risk is real.
6.As a solution I suggested to create an extra competition-ranking.In that extra competition/ranking people should at all times have at least 10 and no more then 25 greenthumbs. Redthumbs are not allowed. You will only be ranked from the moment 10 or more of those stocks have been held for 6 months or longer. If the amount of stocks held longer then six months at any time drops under 10 you drop from the rating. The scoring should be the same as in the existing competition/ranking.
6a. Participants should be able to enter into the stockpickers competition in two way's. They could create a specific "pickers" list, or they could within their existing list designate the greenthumbs they want to enter in the "pickers" competition. All lists could then be simply entered in both competitions-rankings and their scores displayed on the same page.
6b. I think that the choice of a certain stock by the best players within the stockpickers competition should of course get a greater weight in determinating the star-rating of individual stocks.
7. My suggestions for the macroplayers have followed the same lines. Macroplayers in effect make sectorplays, based on macro-ecomic reasoning and/or technical analysis. While they can win in Caps, the way Caps works (try red- or greenthumbing 50 stocks late at night) can be very frustrating for them. (That is getting better, by the way) More importantly we do not mine the infosight of their strategic choices at all. I suggested as a solution a competition/ranking based on etf's. At all times between 10 and 25 etf's should be held. Only "single" etf's are allowed. Both red- and greenthumbing is allowed. The scoring is the same as in the existing competition/ranking.Again it should be possible to enter into the competition with a specific "etf" list, or by designating etf's within the existing overall list. And again all lists could be entered in all competitions-rankings at once. On the basis of all etf picks in Caps a star rating of sectors should be aggregated. The choices of the best players in the etf competition of course should weigh more heavily.
A new suggestion.
8. There is a third group of players, a third style that could be better accomodated. I call them the specialists. The archetype of course is floridabuilder. But other good examples are for example ZZlangerhans, or BuyingRetail. Those participants bring a deep knowledge about a certain industry to the table and are willing to translate that knowledge into redthumbing/and or greenthumbing the stocks of companies within that industry. The infosight value of their picks is extremely high. However Caps frustrates their style the most. Floridabuilder's early succes masked that fact. His industry was leading the stockmarket down. Therefore his redthumbing of builders could be translated in a high Caps score. Usually that is not possible. And of course we dont mine the value of their choices at all. In their case the solution would be of course to measure their picks not against the S&P, but to measure them against a specific index. ZZlangerhans should be measured against a biotech index, BuyingRetail against a retail index, floridabuilder against a housing index.. Again it should be possible to enter with a specific list or by designating stocks within the overall list. Minimum of ten at all times, no limit on the amount of stocks. Red and greenthumbing allowed. The competition/rating should pitch all specialist against each other. To prohibit a proliferation of indexes to measure against, and the "gaming" that would make possible, we should build this feature out slowly. It should be possible for all Caps participants to vote on the indexes specialist could measure themselves against. That would make it possible to gauge the desire for certain specialist info. Of course specialist could plead their case in their blogs. If however after a certain amount of time not enough people would compete against that index, the possibility of doing so would end. In that way i think we would create a handfull (maybe more) of specialist area's where industry-specific info would make all the difference. (Of course the stockpicking of the best specialist should once again weigh more in the rating of individual stocks.)