One important aspect of trading the markets is to understand how to feel it’s overall pulse. In the stock market, this is measured by measuring the movements of selected stocks across various sectors to let us know how the market is doing in general. A gentleman by the name of Dow came up with this concept and today we still use his Dow Index for the purpose of measuring the market’s pulse. There are also several others out there, but another popular index of mostly technical stocks is the NASDAQ.
Bull Market - This describes a market where the overall market is rising. Typically, this is measured by the NASDAQ and the Dow Indexes. Experts recommend that you only buy during Bull Markets because the odds are much more in your favor - this is true, but keep in mind there are plenty of stocks that plummet during Bull Markets too.
Bear Market - This describes a market where the overall market is dropping. As with Bull Markets, again we measured this by the NASDAQ and the Dow Indexes. Experts recommend that you only sell short during Bear Markets because the odds are much more in your favor - this is true, but keep in mind there are plenty of stocks that rise during Bear Markets too.
The important thing about using indexes to help your trading was mentioned earlier. During Bull Markets, you can expect 65% or more of all stocks to be rising - so if you look to buy during Bull Markets, the odds are very much in your favor. Of course, the opposite is true with the Bear Markets. Another characteristic of these two markets is that Bull Markets generally last 2-3 years, while Bear Markets last only 1-1 years. So it’s a very good idea for new traders to get in the habit following the indexes early in their learning. This will give you a tremendous advantage.
Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To investigate a new business idea, visit his website, http://www.earncashathometoday.com/trading-stocks.htm
Web videos are a tremendous instrument to expose your organisation’s services. For certain there are dozens & dozens of other sorts of marketing techniques available which include article writing to blogging, from PR to RSS. Although, nothing says “cool, connection, & creative” like a promotional video.
Each month more & more organisations of different sizes are generating short format videos about their services. They are not only adding them on their sites, but They’re posting them on their blogs. To gain universal 24/7 coverage, commercial videos are being published to a lot of video-sharing sites like YouTube & Metacafe. And why not ? it is very inexpensive, easy to undertake, & can have a significant difference, in many cases, on the traffic it generates to your firm’s website. Vidify offer unique video production and distribution solutions that help broadcast your business online to a global, regional or local audience.
There are countless reasons why Internet videos are an excellent way to publicise your organisation.
Video commercials benefit from an extensive distribution channel: Videos by their own nature are easy to “package” which means they are appropriate to go into a number of different distribution circulations. You can post them on your businesses site or blog, if you want you can put them onto your desktop machine and show them time and again at a selected business show. You can upload them to loads of World Wide Web video-sharing websites. You can burn them onto CDs & give them away or sell them. You can even dispatch them via email.
Online videos are a great way to communicate. As our sophistication with technology evolves, so do the techniques in which companies like to interact with others. Most people are visually oriented meaning that is how they best understand and interact with their world. This makes online videos the ideal company strategy to speak with today’s clients.
These are just a couple of the many reasons why Internet videos might be a successful way to advertise your organisation’s products and services. Learn more about this topic to see how you could use your time, capital, & energy to speak to your target marketplace in an innovative and appealing way.
Van & Man is a small family owned firm established in SW London that may help clients moving furniture within, to or from S London to villages all over the UK including Witham, Eastbourne, Tamworth, Cockermouth and Thame. We have a variety of vehicles and everything required to to make the move as comfortable as possible. As opposed to many of our rivals, we are a completely registered UK Company and hold all requisite staff, insurance and quality controls to ensure you will have no problems.
What you get from us is a trustworthy and friendly service - significantly for our clients this entails that you will not need to put up with the facelessness of the larger removal firms. Tell us what you need doing and we’ll try our best to assure that there are no more troubles. Some clients may just ask to move a few valuables across SW London on the other hand different businesses employ us practically day by day.
Eliminate the pain of the move by using Van and Man. We have no hidden tolls with the product. With removals in London town we only charge you from when we meet you till as we depart. For those of you wanting to move further such as Hingham, Aylsham, Aldershot, or Morley give us a ring and you will acquire a quotation based on your requirements.
1) Equities can be grouped into six “equity styles”
2) Returns of each equity style can vary significantly with trends persisting for months and years.
3) By dynamically altering a portfolio’s exposure to various equity styles, investors can attempt to add performance over a static allocation.
4) Relatively simple strategies can be employed to signal rotational decisions among various equity styles.
September, 2005
I view equity style strategies as one of the most powerful and profitable elements of our Absolute Return Portfolios.
THE TWO AXES OF EQUITY STYLES
In Equity Style vernacular, stocks can be grouped along two axes: 1) Market Capitalization and 2) Fundamental Valuation.
MARKET CAPITALIZATION
Market capitalization is simply the outstanding number of shares multiplied by share price. That product represents the total value, or market capitalization, of a publicly traded company. If a firm had 1 million shares outstanding and traded at $50 per share, the market capitalization would be $50 million, for example.
FUNDAMENTAL VALUATION
The second axis on which a company can be compared is fundamental valuation. Stocks are characterized as either “growth” or “value” firms. This categorization is dynamic in that growth companies can become value companies and vice versa. The approaches used to characterize companies into one of these two categories are quite varied and can run from the utterly simplistic to esoteric multi-factor models.
All categorization techniques seek to use one or more fundamental variables to categorize a company as either a “growth stock” or “value stock”. Initial approaches were based on ranking companies of the basis of price-to-book value (P/B ratio). Those companies with the highest P/B ratio were categorized as “growth” while those with the lowest P/B ratio were considered “value stocks”. Since that time, models that use an assortment of fundamental ratios (Price/Earnings, Price/Sales, Gross Margin Percentages, EPS and Sales Growth etc.) have been developed to better categorize stocks into their respective camps.
THE EQUITY STYLE MATRIX
Really, the categorizations are nothing more than combining one group from each of the two axes that cover capitalization and fundamental valuation. Since we have three capitalization groups (small, mid, and large) and two fundamental valuation groups (growth and value) our matrix is comprised of the six equity styles below:
Small-Cap Growth
Mid-Cap Growth
Large-Cap Growth
Small-Cap Value
Mid-Cap Value
Large-Cap Value
RELATIVE PERFORMANCE - MARKET CAPITALIZATION
This exercise wouldn’t be very interesting if it weren’t for the fact that significant variability occurs among the returns of these six equity styles. Let’s start with just the Market Capitalization axis and review the performance of Small-Cap versus Large-Cap stocks over two recent periods. I will be using the S&P 500 as a proxy for large-cap stocks and the Russell 2000 as a proxy for small-cap stocks.
Period of Large-Cap dominance (March 30, 1994 - March 30, 1999)
Index Total Return & Annualized Return
S&P 500 (Large-Cap):220.66% & 26.20%
Russell 2000 (Small-Cap): 57.71% & 9.50%
Period of Small-Cap dominance (March 30, 1999 - June 30, 2005)
Index Total Return & Annualized Return
S&P 500 (Large-Cap): 1.70% & 0.27%
Russell 2000 (Small-Cap): 60.87% & 7.92%
This first period coincided with a powerful bull market. Large-cap stocks delivered incredible returns of over 26% annually! Even though the large-cap stocks trounced their small-cap brethren, the small-caps still had a respectable showing returning 9.50% annualized. Things get more interesting in the second period which encompassed a massive bear market decline. Over this past 6.25 year period large-cap stocks haven’t even provided money market rates of return. Small-cap stocks have provided a respectable result considering that many indexes suffered declines of over 50% within this time period.
RELATIVE PERFORMANCE - FUNDAMENTAL VALUATION
Let’s now turn our attention to the other axis of Fundamental Valuation and review performance trends among growth and value equity styles. In this case, I will use the Morningstar indices as proxies for the growth and value equity styles.
Period of Growth Style dominance (December 31, 1997 - March 31, 2000)
Index Total Return & Annualized Return
Growth: 127.98% & 44.23%
Value: 10.28% & 4.45%
Period of Value Style dominance (March 31, 2000- June 30, 2005)
Index Total Return & Annualized Return
Growth: -55.01% & -13.75%
Value: 54.16% & 8.34%
The difference in performance over both of these periods is staggering. During the first period ending March 2000, Growth stocks out-performed valued stocks by nearly 40% per annum. Their period of relative strength ended coincident with the top in Technology stocks and since then value stocks have taken the lead. Since March 2000, growth equities have depreciated by over half whilst Value equities have appreciated over 50%! That’s better than a 20% annual difference between growth and value.
COMBINING THE BEST EQUITY STYLES - Market Capitalization and Fundamental Valuation
As I’ve shown, recently small-cap stocks have been performing significantly better than large-cap stocks. Similarly, Value stocks have been doing relatively better than growth stocks. Initially, we looked at each of these factors in isolation but the real performance boost comes from combining the best of both worlds. In recent history, this has meant Small-Cap Value has been among the very best places to invest.
Using the Morningstar style boxes below, I have ranked them by performance since the Value outperformance cycle began in the spring of 2000.
Index Return 03/30/1999-08/31/2005:
Morningstar Small-Cap Value: 156.50%
Morningstar Mid-Cap Value: 113.70%
Morningstar Smal-lCap All Style: 110.63%
Morningstar Mid-Cap All Style: 75.21%
Morningstar US All-Cap Value: 51.36%
Morningstar Small-Cap Growth: 31.89%
Morningstar Large-Cap Value: 31.33%
Morningstar Mid-Cap Growth: 23.94%
S&P 500 Index: 3.34%
Morningstar Large-Cap All Style: -7.54%
NASDAQ Composite Index: -13.23%
Morningstar US All-Cap Growth -33.49%
Morningstar Large-Cap Growth -47.44%
The performance differences among the various equity styles are extraordinary. From the very best performance from Small-Cap Value to the very worst performance from Large-Cap Growth there is over a 200% difference over the 6+ year period evaluated! Annualized, that amounts to over 19% from Small-Cap Value as compared to over a -16% loss from Large-Cap Growth. That’s greater than a 35% difference in annual returns.
DRIVERS OF EQUITY STYLE PERFOMANCE
There are many drivers of relative performance among various equity styles. The factors effecting each of the Market Capitalization and Fundamental Valuation cycles have overlapping as well as unique drivers and catalysts both economic and political. The topic is complex and beyond the scope of this article. As a generalization, relative valuation drives the performance along the Market Capitalization axis (large-cap vs. small-cap). Macroeconomic factors drive performance along the Fundamental Valuation axis (growth vs. value).
TRACKING EQUITY STYLE RELATIVE PERFORMANCE TRENDS
A picture is worth a thousand words. I recommend using charting software or a service such as BigCharts.com or Stockcharts.com (with whom I have no affiliation) that will allow you to compare the performance of the various equity styles graphically. The type of analysis is referred as Relative Strength or Relative Performance. A Relative Performance line is calculated by simply divided the price one index by another for each period and then plotting those resulting ratios.
An upward trend in the Relative Performance line indicates that the index in the numerator of our comparison is performing better than the index in the denominator. Likewise, a downtrend in the Relative Performance line indicates that the index in the numerator is performing more poorly than the index in the denominator.
By tracking these Relative Performance trends, investors can determine which “equity style box” they should concentrate upon. This is true whether you buy individual stocks, mutual funds, variable annuities, or ETFs. Smaller investors have a tremendous advantage over billion dollar mutual funds and registered investment advisors that can pursue only one equity style.
EQUITY STYLE INVESTMENT VEHICLES
There are now a large number of ways to take advantage of equity style trends. For ETF-based strategies the Yahoo Finance site is an excellent resource for searching for ETFs. For mutual fund investors, Rydex and ProFunds both offer all of the various equity styles. The large mutual fund houses also offer many of the equity style funds but aren’t as friendly to mutual fund switchers as Rydex and ProFunds.
STAYING ON TOP OF EQUITY STYLE TRENDS
Our FREE managed account publication, The Absolute Return Strategist, covers equity style trends each week. Those that are not as technically proficient can get our regular updates on equity style trends and how we are positioning our Absolute Return Portfolios. Additionally, our site provides the unabridged version of this article complete with charts and tables.
DISCLAIMER
These reports express our opinions and suggestions, provided only as a supplement to your own further research and decisions. We take care to assure accuracy of contents but accuracy is not guaranteed. Past performance does not imply future results. The publisher shall have no liability of whatever nature in respect of any claim, damages, loss or expense arising out of or in connection with the reliance by you on the contents of our web site, any promotion, published material, alert or update.
©2005 Absolute Return Portfolio Management
ALL RIGHTS RESERVED
Matthew Xiarhos is Chief Investment Officer of Absolute Return Portfolio Management and editor of The Absolute Return Strategist. He has nearly 20 years of experience as a fee-based investment advisor to affluent clientele and is a CERTIFIED FINANCIAL PLANNER.
Absolute Return Strategies seek to provide a consistently positive low-volatility return regardless of up or down markets.
http://www.arportfolios.com
Up markets, down markets…Absolutely
Volatility of income can be as much a concern as volatility of growth, perhaps more so since income is an immediate need. Therefore, it makes sense to say that a strategy to stabilize income is a necessary component of portfolio management - and “bond laddering” can help get you there.
Let’s first understand that short-term interest rates are generally lower than long-term interest rates. In simple terms, the longer the maturity on a bond, the more risk you take and, therefore, the higher the interest reward for that risk.
We also know that, over time, interest rates will change. Sometimes they’re going up, sometimes they’re going down, but they’re always doing something.
Finally, no investment objective lasts forever - and opening “windows” of liquidity can help meet our changing needs.
Building a bond ladder can be a simple way to accomplish the above.
We’ll start with the length of the ladder. If our income need is long term, we can go out as long as 15 years. If our income need is shorter, we can adjust accordingly.
The rungs of the ladder are the bonds themselves and, to keep our ladder from falling apart, the bonds should have equal weighting.
Next, we’ll need to know how far apart to space our rungs. One year maturity spacing gives more liquidity “windows”, less income volatility, and greater bond diversity - but, in some cases, this may be impractical. Two year rungs are not going to work for short term ladders, but may have some application for the longer term.
When a rung (i.e., bond) does mature, you can either put the proceeds in your pocket, or you can reinvest the proceeds into another type investment, or you can buy another bond to extend the ladder.
That was pretty easy, huh?
Ok, one more ingredient before you actually start buying bonds.
Most bonds pay interest semiannually. Most investors like income somewhat more frequently. If that’s the case with you, pay attention to when the payments are made.
I like to set up a spreadsheet that covers both the dates of maturity and the dates of payment. If I buy a bond with a three-year maturity that pays in March and September, I’ll avoid those payment dates when I purchase other bonds with other maturity dates.
Naturally, you can stagger payment dates to suit your lifestyle. Property tax payments, quarterly income tax payments, even holiday spending might create a situation where you overweight your monthly payments.
Now our ladder is complete, and we can take a look at the results.
Income is being paid on a regular basis and the composite interest rate is near the middle of the yield curve.
When a bond matures, you have the flexibility to rethink your investment options.
If buying another bond is necessary, you’ll find that there is little disruption in absolute income because most of your portfolio weighting is still intact.
Sometimes it is the simple stuff that works best.
Glenn (”Chip”) Dahlke, a senior contributor to the Living Trust Network, has 28 years in the investment business. He is a Registered Representative of Linsco/Private Ledger and a principal with Dahlke Financial Group. He is licensed to transact securities with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY.
If you have any questions or comments, Chip would love to hear from you. You may contact him by email at dahlkefinancial@sbcglobal.net. You may also contact him by going directly to the Living Trust Network’s web site located at http://www.livingtrustnetwork.com
Copyright 2005. LivingTrustNetwork, LLC. All rights reserved.[EZ8]
When you watch live action on movie screens, you get excited. Combined with sound effects the action can be a real thrill. Some actions that we watch takes the breath away. How about Action games on computers?
Some of the makers of action games make great animations and may include a story line. Stories always attract us. Tell a story and everybody will listen. The action games on computers use this very well to produce games that can take your breath away thinking of the imagination and artistry applied by the maker.
Adventures, space fights, planes colliding in mid air, think of any action and you will find it used in a game. Most of these games are free online. Action games give great thrill and despite called for teenagers they are for the family to enjoy them together. Action games test the response of the player and sharpen the judgment. Such games are not pure fun. They can help as training tools if used properly.
Other free online games that are currently becoming very popular are- Arcade Games, Board Games, Card Games, Casino Games, Strategy Games, Sports Games, Shooting Games and, Puzzle Games. Most of the online games are free. Look for a good website and play the games. They are a fabulous way of enjoyment. As I said in the heading these games can become addictive. Take small doses and life will be a joy.
The author, C.D.Mohatta writes for screensavers and desktop wallpapers on topics like nature, spirituality, motivation, love, holidays, animals, etc. He also writes fun quizzes and fun tests on topics like love, personality, dating, relationships, friendship, movies, tv, music, business, etc. The third site associated with the author has free flash games which anyone can play online.
The Light Crude Continuous Contract closed at $66.13 a barrel Friday, after hitting an all-time high at $67.95 a barrel earlier in the day. A week from Monday is Labor Day, which marks the end of the summer driving season. Consequently, I believe, oil hit a short-term top Friday or will top next week.
Recent economic data show persistently high oil prices, along with higher interest rates, are slowing U.S. economic growth. Durable Goods Orders fell about 5% last month, and Walmart announced sales will be lower than expected. However, business inventories are lean. A slower economy will lower demand for oil.
The SPX daily chart below shows an orderly pullback in August. Currently, SPX is oversold enough to bounce into the Labor Day holiday. Major support is around 1,200, i.e. the 200 day MA, and Price-by-Volume bar. There are several major resistance levels working together to create strong resistance, i.e. the 10, 20, and 50 day MAs, the Parabolic SAR sell signal (red dots), and the Price-by-Volume bar, all between 1,220 and 1,225.
There’s typically a bullish bias the week before a holiday, and over the first few days of a new month. However, the market has been selling into weekends (and into rallies last week), which is bear market behavior, it’s a seasonally weak period, and SPX has open gaps at 1,174, 1,143, and 1,138. Oil prices and economic data will continue to move the market.
There are many important economic reports next week, which should generate a great deal of volatility, in the seasonally low volume market: Mon: None, Tue: Factory Orders, Consumer Confidence, and FOMC Minutes, Wed: Revised Q2 GDP & GDP Chain Price Deflator, and Chicago PMI. Thu: Personal Income, Personal Spending, Unemployment Claims, Construction Spending, ISM Index, and Auto Sales. Fri: Non-Farm Payrolls, Unemployment Rate, and Hourly Earnings.
The Dow Industrials were hit hard by high oil prices recently, and closed below 10,400 Friday, while Nasdaq held up relatively well. If oil prices top next week, DIA calls (and puts on some oil stocks) may be buys on pullbacks. Also, there are several Dow components that were hit particularly hard recently.
Charts available at PeakTrader.com Forum Index Market Overview section.
Arthur Albert Eckart is the founder and owner of PeakTrader. Arthur has worked for commercial banks, e.g. Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds from 1999-00. Arthur Eckart has a BA & MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.
Mr Eckart has developed a comprehensive trading methodology using economics, portfolio optimization, and technical analysis to maximize return and minimize risk at the same time. This methodology has resulted in excellent returns with low risk over the past four years.
If you are looking for a safe investment and you have between $100 -$1,000 to invest, you should consider a certificate of deposit or CD. When purchased through a bank, CD’s are federally insured up to $100,000.
When you invest in a certificate of deposit, you are lending your money to the bank for a set period of time at a fixed rate of interest. At the end of that time period, the bank pays you back your investment with the interest you’ve earned. The annual interest earned is reflected by the annual percentage yield or APY.
There are several details to consider before investing in a CD. First, find out when the CD will mature? Banks offer certificates of deposit with maturities ranging from 3-months to 10-years or more. Figure out how much to safely invest and how long you feel you can leave that money alone so that it earns interest. Also, make sure you get the maturity date in writing.
Second, you’ll want to know the annual percentage rate (APR) you’ll earn on your investment. Investing larger sums for longer terms usually earns the best interest. However, even a small investment can earn you higher interest than a traditional passbook savings account.
Next, find out how the interest is compounded - daily, monthly, or annually? Daily compounding is best because it earns you more interest. You can shop for the best CD rates at www.bankrate.com or check with your personal banker.
Shopping on the internet, I found rates for a $1,000 1-year CD in my local area ranging from 2.96 to 3.97 APR and a 3.00 to 4.05 APY respectively. So if I invested $1,000 at 2.96 APR, at the end of 12 months I’d get paid $1,030.00 by the bank (figures computed with interest compounded monthly). That same $1,000 invested at a rate of 3.97 APR would return $1040.43.
Interest rates are usually locked in for the term of the CD, although some banks allow you to take advantage of higher interest rates by converting your CD. This type of CD is called a “step up” CD. Generally, banks will only let you “step up” once during the term of the CD.
What happens if you withdraw your money before the certificate of deposit matures? Your bank will impose an early withdrawal penalty, which can vary depending upon the maturity date and the amount invested. It’s important to invest only money you can truly afford to leave alone for the term of the CD.
As with any investment, make sure you understand all the terms, fees, and any penalties before you purchase.
Copyright 2005, http://www.yourfreecreditreportnow.com
Author: James H. Dimmitt
James is editor of “TO YOUR CREDIT”, a free weekly newsletter with tips to help you manage your personal finances. Subscribe today and receive his e-book “IDENTITY THEFT- How To Avoid Becoming the Next Victim!” and other money-saving bonuses by visiting http://www.yourfreecreditreportnow.com
For most of the 20th century, life used to be rather simple for most people. There was school, college, work, retirement. Along with that you had hobbies like cars, bowling, or gardening. The former was more or a less of a chore, the latter the fun stuff you did in your free time, usually together with local friends from the same neighborhood. This was basically the same as a thousand years ago. For a few lucky people the two areas overlapped and they could do the stuff that they liked as their main job.
Now, in the last 10 years of the 20th century, as well as in the first few years of the 21st, this has been changing rather dramatically. The reason is the rapid technical progress, both in the wide area network and computing power areas. Contemporary hardware can animate very detailed and realistic graphics fluently, and transfer data on the movements and actions of hundreds of objects and characters around the world in milliseconds (although, unfortunately, the speed of light still remains a limiting factor). This has led to an explosion in the availability and quality of online games, with the newest generation like Counter-Strike and World of Warcraft becoming a phenomenon no longer limited to any particular social class, but rather an all-encompassing cultural element in the industrial countries.
Increasingly, parents find that their children spend a lot of time playing some of those games, and more and more people come in contact with them. This leads to people wanting objective information, which is in practice not easy to obtain. Most articles about these games are either written by rather clueless journalists who have never or hardly played the games in question and therefore mainly focus on scandalous negative side effects, or by enthusiastic fans who dive deep into the technicalities and don’t mention the real world consequences much. This article tries to bridge the gap - it describes the currently most important types of online games and looks in detail at the social relationships behind them. The authors have been longterm players for years and therefore hope that they can address the issue in considerably greater depth and detail than most journalists (however, you won’t find detailed technical facts here since it is not in scope of this article).
There are basically three main types of multiplayer online games:
First-person shooters (FPS) where the player sees everything through a (usually temporary, just for the online session or less) character’s eyes and his gun’s barrel. This category still remains predominant in total worldwide player numbers (according to Valve, Counterstrike is currently still the most popular online multiplayer game). Some of the other examples include Quake, Unreal Tournament, and Doom3.
Strategy games are the the second main category. Usually similar to FPS games in the round/session-based style of play, in these games the player usually does not have any single entity, but rather commands a number of troops of some kind against other human opponents. There are also various options where one can both play with other humans against the computer etc. Games of this kind include Starcraft, Warcraft III, Age of Empires and many others.
The last group, the MMORPG (Massively Multiplayer Online Role Playing Games), is the area which popularity has really exploded in the last few years. Here, the player obtains a permanent character (or entity) or several which can evolve and be equipped with various gear, and undertakes adventures in a large world full with other players. This is probably the most promising group since it resembles the real world most, and it has also been the fastest developing recently. The currently most prominent games in this category are World of Warcraft, Final Fantasy XI, Guild Wars, Everquest II and Lineage II.
FPS
In first-person shooter games, the basic principle is simple. Shoot or be shot, kill or be killed. Starting with the original Castle of Wolfenstein and Doom, these games have developed to a level of frightening realism mainly for men living out their ancient predatory and fighting instincts (according to some surveys, there are about 10 times as many male as female players in average FPS games). One of the recent milestones in this category, Doom 3 is a game which is psychologically scary even to adult men with the highly detailed and realistic monsters suddenly attacking from dark corners. However, once these games take to the online multiplayer stage, their focus shifts a little. The goal is no longer to scare the pants off the lone player in his dark room, but rather to provide a fun platform for competition between many players of different skill. The most popular online game in this category is still without doubt Counter-Strike - a game which has received much negative fame because of various school shootings done by Counter-Strike players, yet still remains a highly captivating pastime for millions worldwide. It is a fan modification of Half-Life, a Valve game, and a team game in its core: one team is the “terrorists”, the other the “counter-terrorists”, and the play is round-based: at the start of a round, each team member receives an identical (except for clothing) avatar, picks some weapons, and the the two teams clash in combat until either a bomb is placed or everyone of one team is dead (there are also variations like “capture the flag” etc).
There are numerous reasons for the massive popularity of Counter-Strike. The game rounds are short-term in nature and don’t require much time. It is comparatively realistic - weapons existing in reality like the M-16 or AK-47 are used in the game, and even one shot may be enough to kill. Also, it is easily accessible - almost everyone can install and run a Counter-Strike server, and there are many thousands of them in the world online at any given time. Although the basic game does not lead to social interaction deeper than a quick chat, the grouping of people around some specific favorite servers and the wish to play better, which inevitably requires solid teamplay, has led to the phenomenon of so-called “clans”, or dedicated player groups, which usually have their own server where they train. A competitive clan will usually have requirements for people wanting to join - a certain skill level, or some minimum playtime - and most serious clan players play at least several hours a day. Dedicated clans will also sometimes meet in real life to discuss strategies and generally have fun, which is not much different from most other groups of people with similar hobbies, like e.g. stamp collectors or RC model builders. Since many servers are regional, mostly there are same-country and often even same-neighborhood people on the same server, which of course makes meeting in real life easier as well.
The picture is roughly comparable in the other FPS multiplayer games like Quake 4 and Unreal Tournament, with the main difference between that the latter are less realistic and include sci-fi weapons like laser guns and such. They are also typically much faster, with frantic movement (means, being hard to target) being highly important to survival, which is a concept rather different to Counter-Strike where sometimes the top scorers just sit in one place with a sniper rifle. However, a thing common to all FPS, mouse control is highly essential. Skilled FPS players develop extremely good mouse control (conventional mice no longer being good enough for them led to the development of a whole new segment of gaming mice) and have reaction times below 0.1 seconds. The numerous stress peaks and drops, lack of time between rounds, and the frantic gameplay often leads to additional addictions, though - many of the hardcore FPS players are chain smokers, fast-food eaters, coffee addicts, or all of it combined. There are worldwide tournaments held for most of the established FPS, and the current champions are mostly from Europe or the US.
Strategy games
The picture is a bit different with strategy games. Usually they are less frantic and leave much more room for logical thinking (of course, the classic board games like chess or Go also have major online playing facilities nowadays, but they cannot really be called multiplayer games since there is little to none team aspect, it’s just one-on-one most of the time). A typical example is Warcraft III, which is the most recent in the Warcraft realtime strategy game series by Blizzard. It is played on the so-called Battlenet, a major online gaming hub by Blizzard, which also serves other strategy games like StarCraft. In Warcraft III it is possible to play both random opponents matched to you approximately by skill, either one on one or in teams of up to 4 on 4, or play others in pre-arranged teams. As in FPS games, there are also clans in Warcraft, which in this case are even explicitly supported by Battlenet. This and the very immediate visibility of someone’s skill level (basically, his win/loss ratio) gives rise to much competition between dedicated players for the top ladder (ranking) spots. Unlike geographically uniform games like Counter-Strike with tens of thousands of servers, Warcraft has just a handful of large servers, each for a certain area of the world (e.g. Americas, Europe, Asia). Interestingly enough, most strategy games are dominated by Asian, especially South Korean, players, where online multiplayer games have been a very major part of the culture for years already. The professional South Korean Starcraft and Warcraft tournaments are major events with hundreds of thousands of live spectators, played on an extremely competitive level, and broadcasted on TV, and the top players have practically celebrity status and incomes in the six-figure range and higher.
Since the popular strategy games are usually also just round-based, there is not very much room for social interaction apart from an occasional chat. Strategy players are probably a bit older than FPS players on average, mostly between 16 and 35 in the Western societies.
Massively Multiplayer Online Role Playing Games
MMORPGs are the final and by far the most complex group in our classification. They are something like little worlds within themselves, often resembling scaled-down copies of the real world, yet different as well. The two leading MMORPGs as of the time of writing are probably World of Warcraft (WoW) and Final Fantasy XI (FFXI) , each with millions of active players worldwide. The distinctive difference between MMORPGs and the other kinds of online multiplayer games is that RPGs are not round-based, and do not have a time limit or any specific goal to achieve. They are just there to be explored along (or sometimes against) other players. The key concept is that each player chooses a single virtual avatar which is at first rather weak (low-level) and starts in some safe basic area of his choice. The current MMORPGs all offer a rich palette of races and locations to start with. Usually, to be able to explore the world, the character must be made stronger, which is typically achieved by killing some kind of virtual monsters repeatedly, at low levels usually alone, later in a group. You can also do “quests” - tasks given to you by an in-game character - for various rewards and with various degrees of difficulty.
Current MMORPGs are very large and highly complex. Even fully exploring their worlds can take years, and trying out all the playstyles and options is almost impossible. There are lots of different strategies for doing quests and winning difficult battles, and organizational and managemental skills become essential in major conflicts where sometimes hundreds of people are involved at once. Those large-scale groups already resemble something like real-world armies, with a defined command structure and squads with some special tasks each. This is something entirely new - nothing of comparable scale and complexity has been there until just several years ago - and the scale is likely to become ever greater.
An impressive fact is the extreme internationality of MMORPGs. A little less obvious with WoW, since it is also Battlenet-based and uses the regional server concept, it is highly apparent with Final Fantasy XI, which does not distinguish any regions - each of its servers has people from the entire Earth. Most players come from Japan (where the game originates from), many from the US and Europe, but it is possible to meet people from too many countries to list here, almost every corner of the world being represented. An interesting side effect is that one comes in contact with numerous cultures and customs and many different languages. Some anecdotal stories from the authors’ own experience include a maid coming in to clean an Egyptian player’s room at the wrong time, relaxed Moroccan players sipping on a water pipe in an Internet cafe while playing, and a Canadian PhD student surveying the attitudes of gamers for her thesis work.
Another positive thing about MMORPGs is that they encourage making friends and teamplay very much. It may be possible to do a lot alone (although not in all RPGs), but a well-matched group can do much more. Therefore, social skills like making contacts and keeping them are substantial in MMORPGs. Since the player is hidden behind his avatar, the threshold to approach someone you don’t know is a lot lower than in real life, which makes them a good playground for shy people. The authors know of several real-life relationships that initially started with the players liking each other in the game and then finding out they liked each other in real life as well. Of course, the chance for a mess-up is much higher here as well - after all in real life it’s unlikely you date someone who looks cute for a while, only to find out he’s a chain smoking guy in his 30s. However, still, interestingly enough, MMORPGs are relatively much more popular with women when compared to FPS or strategy games. That is probably because there’s a lot of social interaction within them - you make friends who you see and adventure together a lot, and there’s a lot of talking and personal information being exchanged - something almost entirely missing from most other multiplayer games.
The clan idea from FPS and strategy games is even much more emphasized in MMORPGs. Guilds in WoW and linkshells in FFXI are major social entities, with their members meeting each other daily for years. The real-life meetings of large guilds or linkshells are worldwide events, with people coming together from many different places. Linkshell friendships sometimes last for years. On the downside, this means that one can get hurt as well in the game - a fact that many people unfamiliar with the whole phenomenon often fail to understand. “It’s just a game”, they say. On the one hand, they’re right. Yet on the other hand, if it is possible to make new friends through these games, who become real-life friends as well, one should realize that it is quite possible to get friendships broken by them as well, for instance when being disappointed by people one had trusted. This is also something almost unique to MMORPGs - there has never been so much reality in a virtual world before. Talking of that, one should mention another peculiar aspect of those games - the equipment hunting. As the avatars are the same (or similar) for everyone, the gear or equipment that a player has basically measures his social status, much like a car or money in real life. Players with very rare, “godly” gear, are admired and envied by many people with regular equipment. Since that is something most people like, and, as mentioned, the thresholds for doing things are so much lower than in real life, many nasty things have been done in order to obtain gear. Again, here the RPGs are almost like a mirror of real life, condensing down the more hidden similar issues there to a more compact and visible form. In a way, it is a pretty interesting experience and can teach one a lot about people. It just becomes clear much faster who is worth what. A related trait of these games is the emerging RMT (Real Money Trade) industry, which basically thrives on selling virtual game money and items for real money, and for some games has reached revenues comparable to the per capita gross national products of European countries. Here one can see the blurring of the distinction between work and playing - many people don’t play for fun anymore. They earn money by “camping” (sitting at the same spot all day) special monsters and selling the dropped items. It turns out it is possible to earn sizable amounts with that - more than a regular hard job in some countries would pay.
To summarize, online multiplayer games are a very large and ever increasing phenomenon. Very addictive, and easily able to occupy a player for years, they are perhaps becoming the major modern escape-from-reality tool of the next generation. Certainly, they have their drawbacks, and not too few. However, if seen as an alternative to TV, MMORPGs are definitely more worthwhile, in the authors’ humble opinion.
The authors are experienced gamers and alongside with their work as co-founders of a web design and development company (http://www.s-kaze.com) still enjoy an occasional round of play.
We used to play Solitaire or Hearts to relax and spend a couple of hours zoning out to recharge our mental batteries. I found a new way to waste a couple or hours - Need For Speed. It’s a PC or X-Box game. You trick up your compact boy racer with big tires, turbochargers and radical paint schemes and race against up to four other racing fools. Race choices range from the drag strip to drifting and point to point racing through an imaginary city at night.
Most fun is the tournament in which you graduate through different and more difficult street venues as you improve your racing skills. Winning garners points that you can spend on even more horsepower and bigger tires. Your opposition has no mercy if you get in their way and have no compunctions against bumping your rear end at 150 miles per hour as you screech around corners and fly though the air over bridges.
The scenery is completely believable, smoke comes out of your tail pipe and water splashes as you tear around the course. One variation causes the last man around the course to drop out, leaving the others to go around again until there is one winner. I don’t have a joy stick so I have to make do with my keyboard for navigating the courses.
The latest variation is called Need For Speed Underground II and is an updated version of the original NFS Underground (which I prefer). The main attraction to me is the challenge to my computer racing skills and the infinity of variations of games. Like Solitaire, there are no two games alike so I never get bored.
My real life Honda Civic HX never had it so good.
Retired portrait photographer with too much time on his hands.
