Bill,
I’m glad you were able to lay out this strategy with such an easy to follow example.
This will become a must read article for future players in the Empire Avenue game.
Cheers.

This is the second reason why my shareholders = my portfolio.  The first being that I want to build relationships, and you can’t build a bridge out of sand. 

Excellent article!

Bill,
This really helps alot – after the first 1 or so _ I have rebalanced and doing this when other’s went a different route – my stock and dividends keeps rising with help from my shareholders – now that reminds me – I need to invest more into YOU! Thanks for all you share

Very fascinating post and demonstration, Bill — thank you so much for providing a clear, concise understanding of how dividends should not be the driving force in one’s decision to purchase a stock.

I’m intrigued by the micropurchase concept . . . buying 25, 50, 100 shares at a time in a person, over a period of a day or two . . . I always fast forward to buying 200 shares of a newbie, or 250 – 500 in a great long-term investment . . . 

So — while we each have our own strategy — do you personally recommend making a series of smaller purchases in a particular stock throughout the day, always leaving a shout-out each time, rather than buying all shares in one fell swoop?

What is the “weight” of a blog endorsement versus a single, or series, of shout-outs? Each transaction, itself, does not count as an activity, right?

Thanks as always, Bill!
Rob Nielsen (e)HOST / @rob_a_nielsen:twitter

Thanks for rejiggering my focus from divs Bill. I am at 57/share and 1.06% divs because I was getting carried away with divs. I actually worked up the buy-back ladder with one guy. It was great. Lots of activity, share price went up for both of us. We built trust with each transaction, despite having never met before.

I too want to focus on the people, but I felt like many of the people required a high dividend and a continually rising share price, which I have sustained for a few weeks anyway. I miss the chat, although they were getting pretty bad near the end. Thanks for the article.

Genius.

Thanks for blowing the lid off of my strategy BILL!!!!

<3

Thank Bill, great post. This also speaks to those of us in eAve who are here to meet, learn from, and engage with others.  I find that if those that don’t buy back in some small way, generally are not interested in engaging either within or outside of eAve.

Thank Bill, great post. This also speaks to those of us in eAve who are here to meet, learn from, and engage with others.  I find that if those that don’t buy back in some small way, generally are not interested in engaging either within or outside of eAve.

I think that if it takes you spending eaves on someone in order for them to want to engage with you, then those are not the type of people you would want to engage with right?

When I buy shares in someone, I also follow all their listed networks.  My goal is to expand my network and make as many connections as possible.  I find that when I reach out to people on Twitter/Facebook etc that they are much more likely to engage, and whether we own shares in each other is irrelevant.

Buying shares is one of many ways to initiate a contact in Empire Avenue.  But I don’t think it should be the only way.  My 2 cents…

Very thought provoking, certainly changes my wrongly put together strategy!

Hi Rob,

Hi Rob,

I am not advocating small purchases over large purchases. I was saying you can use a small purchase to find someone that buys back. You can also use a large purchase if you want, especially if you have a good feeling that they are someone that likes to invest back in shareholders. As for my declining buys example of first 100 then 50 then 25 et cetera, I was simply using an example of what happens if you reinvest the money you get from buy backs. It doesn’t even have to be in the same person.

I should also mention that the ideal is the person that buys back AND has great dividends

Now, as for the value of multiple purchases, the Empire Avenue folks have said that you do not getting any benefit from the trading itself. However, many people leave you a shoutout when they buy, or thank you for your buy or both. These shoutouts count as activity and audience engagement. Really, the only reason I have such a high Empire Avenue social network score is because of these shoutouts. So, small purchases are more work, but they do tend to generate more activity.

We don’t know the scoop for sure on endorsements for sure. Empire Avenue can change such details at anytime and usually won’t tell us. The endorsement system was set up to have us help make sure someone wasn’t simply linking to say the Mashable site to generate a ton of connected activity. So, it wasn’t given credit and doing so could have created an incentive to ignore really checking and just doing it blindly to help someone. I take endorsements seriously and always check. Sometimes people have gotten a number of endorsements and the link to blog has a typo in it and doesn’t even work. Clearly, people are just giving them as a reward now anyway. Fairly recently, Empire Avenue added the auto-shoutout for endorsements. This very probably generates the activity and engagement of a regular shoutout. I and a number of other real studiers of the game mechanics believe that endorsements do not add any value beyond the shoutout. So, you are probably better to say hi and possibly strikeup a conversation than a hit and run endorsement. To me an endorsement is similar to a like whereas a shoutout is a comment and comments are much more useful than likes.

There was a time where adding someone to your Watch List was all the rage and endorsements were not that common. However, there is a huge tendency on Empire Avenue for ‘others are doing it so it must be good’ (see my posts on the pitfalls of momentum based trading decisions). Anyway, most people just blindly endorse blogs because they see other people doing it. Many don’t even know what Lists are. Adding someone to your watch list may or not be worth more than a shoutout, but you are only allowed a finite number (large but still specific) meaning it probably is worth more. Recommendations (using the Recommend button) most probably count for significantly more than a shoutout because you only have 2000 of them. I know that I would much rather have a recommend than an endorsement.

By the way, Dups and other members of the Development team have made comments that are consistent with my conclusions about endorsements, but that don’t explicitly confirm them.

I hope that helps.

Cheers, Bill.
I hope that helps. 

Cheers, Bill.

Hey Ryan, as I just wrote to Rob – of course the best strategy is buying someone that buys back AND has great dividends. Divs are still cool  Cheers, Bill.

good strategy tips.  I do similar things.  the Fitness community is so much fun where the topic is not on eav and I go and invest in those peeps that I have conversations with.  

good strategy tips.  I do similar things.  the Fitness community is so much fun where the topic is not on eav and I go and invest in those peeps that I have conversations with.  

Hi Chris, 

Thanks for the message. Glad you enjoyed the read.I agree that there’s no list of people that will buy back or easy way to track that. That’s why I was suggesting the small buy to test the waters strategy.  The title of the article is meant to get people’s attention. Obviously, you can’t take a loss on dividends, but you can lose out over what you would make from another strategy. That said, I more clearly define my point in the first paragraph.  

I believe you can be successful with a dividends only strategy, but I also believe that if you haven’t at least considered other options, you could be missing real opportunities. As I said to Rob, the best return comes from people that buy back AND have high dividends AND engage with you.  

Did your stock price first dip because of the daily market maker corrections or because of someone selling you? If is was the daily share price adjustment, that is controlled by a combination of your activity and the level of audience interaction you have, so it’s unlikely a change in investing strategy would create a quick change in share price. The market makers keep getting harder and harder on you. So, we are all bound to dip at some point.

As for the time a strategy takes, that is a very real consideration. No one answer is right. Clearly, people have to find the approach that works for them. All, I really want to do is point out that there is more than one approach.

Good luck and have fun however you proceed.

Cheers, Bill.

Hey Ryan, I’ll try that again because the comment I left below didn’t thread to yours as I intended. I think your strategy clearly works just fine and nothing I say can blow the lid off that at all

Cheers, Bill.

Thanks for the response.  Don’t get me wrong, I don’t mind the dip.  It’s all virtual currency, and the stock price is the “game” part of it anyway.  Just pointing out that I decided to try out the strategy after much debate on the subject, and two things happened.  First it took much longer on EAv in order to get my share buying/selling done.  Second, that increased time took away the time that I use to connect and engage with people on the site.

If I could figure out how to achieve this strategy in a short amount of each time per day, effectively, then I would be much more up for it.

When someone buys 200 shares in me, I get 10% of those eaves to invest back in that person.  So a higher div stock will give me more eaves to buy people back then a lower div stock.  Because of this ratio we are limited to the amount of people we can buy back each day, which limits who we can connect with.

The strategy I had been using before was to Max Out on the Weekly Earners Leaderboard, and then every day I would fresh eaves to buy back people that were reaching out and engaging with me and showing support (buying back).  I think I may have stepped away from that strategy too early because I am Maxed Out with 500 shares in 75% of that leaderboard.  But then again it is always changing

I get around 100,000 new eaves each morning from dividends.  If there was a way to make this strategy work better, I think I am in a good position for it.  Just very limited on time.  Perhaps someone could make a blog post with a list of ALL tickers of people who AGREE to buy back all investments?  I would consider Maxing Out on that list…

This strategy actually works for newbies, who receive 50% of the proceeds of sales of shares up to 20,000 – and, both newbies have to be at same 50% to equally trade back and forth. However, it will only benefit up to 70 days – when the higher DIV example will overtake the lower DIV buy-back strategy in overall net worth. If you do the calculation once again, if at 10% rate of receipt of proceeds it actually takes 7 days to overtake with the higher ROI strategy and in 55 days double your net worth over the first strategy.

Hello Hartley,

Thanks for your comment. 

But I said, I did a number of things to simplify the example while still trying to be fair. Remember, that in the example you now own almost twice as many shares of Joe as Sally so the overall dividends received per day are almost the same. If you and Joe had exchanged a couple more shares, they would be identical. I didn’t talk about reinvesting the dividends you earn. If you you use them to buy even more shares in Joe, the advantage becomes even greater.  Furthermore,as I said, had I used a more reasonable dividend gap for two 50e priced shares the advantage would have been even more to Joe.

As for being at less than 50% payout, I am at only 10% myself, but I buy back far more than that because I use cash from the daily dividends I earn. This method may be less advantageous for me, but it is still good for the new member investing in people like me. 

Back to the example, if after the 30 days, you sold half the shares invested in Joe, both you and Joe  are still better off than if you picked Sally. You are ahead in cash, plus you have had a share price bump. Joe still has a net share sale plus the cash he got from the sale.

All that aside though, as I said, my point is not to ignore dividends, but not to treat them like the only metric and ignore the power of the buy back.  Still, at the end of the day, invest how ever you like. As I said, I don’t mind people using a dividends only strategy as I have decent dividends and even if I didn’t that’s fine too as I am not worried about people buying me.  I share the blog post and this message to you without rancor and I wish folks well whatever strategy they use.  Hopefully, though, I have just given folks more context for that strategy.

Cheers, Bill.

It also works the reverse.  If you focus on the short term – whether price or divs and sell at the slightest dip, what happens to you?  You sell your stock in me, I sell my stock in you.  Obviously, you’re not interested in me, so if I’m trying to connect with people, you’re not one I should concentrate on. 

Really liked this, William!

Ok.. I don’t have time to look at it right now, but If Chris Pirillo & Rob Nielsen liked it, I am bookmarking this page.
And considered yourself subscribed too!

Great post with strong use cases Bill.  Rob

buy back is still a good way to go up… Buying high yield shares (with no return investments) is like just putting your money on TD. But actively “trading” yields bigger revenue. Cheers!

Gone up several points in the past couple of days following this strategy! win win for all involved.

Awesome example, and great chart to boot!  I’m going to add a link to this post from http://blog.zorts.net/2011/07/valuation-in-empire-avenue-or-how-to.html
Great stuff!

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