If you like social networking and you are a Wall Street junkie like me, check out www.updown.com.  This website, whose byline is “the social network for virtual investing,” is like a Facebook or Linkedin for stock investors.  However, instead of merely swapping details of your life with your friends and professional colleagues, you can actually make money off of sharing stock information or managing a hypothetical stock portfolio.  I saw the CEO, Michael Reich, being interviewed on CNBC a few days ago.  Apparently, it works like this:  anybody can join for free.  When they register, they will have a hypothetical cash fund to invest in stocks.  Along the way, they provide comments, stock tips, or analysis about the stock market.  People who make the most money with their investing ideas are eligible to win real money from Updown. 

After seeing Reich’s pitch, I went to the website.  Apparently, there are three ways to make money on Updown.com:

• Manage a hypothetical stock portfolio of $1 million.  If you beat the S&P 500 index in any given month, Updown says that it will pay you real cash.  The website doesn’t say how much, or if it does, it wasn’t obvious to me.
• Write your own analysis of why a stock is a “buy” or a “sell.”  Other members of Updown will rate your analysis and provide feedback.  You’ll earn actual cash if your analysis is highly rated by the Updown investor community.
• Refer other people to the Updown website.  When I read this, I thought, “this will be easy.  I’ll just put down a bunch of email addresses of friends and see who bites.”  But, upon further reading, I discovered that it is not as easy as waiting to see who signs up.  Not only do your referrals have to sign up, they have to make money doing the investing You will then make 10% of your referrals’ earnings on Updown.  Sounds a little like Amway, eh? 

The million dollar question posed by CNBC anchor Bill Griffith to Reich: ”[H]ow does updown.com make money?”  I found this part fascinating.  Reich explained that Updown is also starting a hedge fund.  The most compelling stock tips and analysis submitted by members will be used to invest money in the hedge fund.  Very interesting concept.  I just joined as “Financialgal.”  Will let you know how I do.