Updown.com Fantasy Stock Market ((Pure Speculation II))

caps.fool.com was the first ((international)) online fantasy stock market I was familiar with. It has been around for years and it's great, also has a great community. But it has three flaws if you want to use it as a trading simulation ...

- You have unlimited funds. You can buy/add new stocks at any time. This results in most players adding hundreds of stocks to their active portfolios.

- The transaction costs are simulated with a simplified 0-5% ((neutral)) and 5%+ ((positive)) percentage rating when you beat the index. 

- You can get rid ((sell)) stocks easily by ending them without having a substantial loss, other than your ranking. Since  funds are unlimited, you can ((at least try to)) make up your losses by adding new picks.

Enter Updown.com which was been around for almost 12 months now. You have a virtual ((one)) million dollar fund and there are several restrictions ie. you can

- only sink 20% of your portfolio into a single stocks and there are additional restrictions for stocks with smaller trading volumes ((only about 5% of the daily trading maximum if I remember correctly))

- there are transaction costs (("virtual" $100 for each buy and sell)) and you can set trading orders and limits up to 60 days into the future.

Most importantly, you have that limited amount of money and can't just add buy/sell recommendations. In short, it's a great simulation of the stock market. I have been on Updown.com for one month now ((since April 16, 2008)) and I am up 29,7% so far...

http://www.updown.com/displayProfile.do?id=64740

((I think it's not too bad considering there no options and you can't pick a single stock and just sit back because of the limitations. Currently, I have about 15 stocks in the portfolio ))

I have taken an optimistic view ((buys only)), so I don't think I can uphold that momentum this calendar year because I think valuations are ((too)) high if you take into account that consumers will spend much less in the coming months and company earnings and therefore P/E and PEG ratios may look worse...

The only issue with Updown ((not a flaw since it's targeted at the US market for now, I guess)): You can't pick many European stocks ((unless they are traded as ADRs on the NASDAQ or NSE)) so it's harder to play along for people like me compared to US players.