3 ways to crowdsource investment ideas now

Crowdsourcing, the collective wisdom of the crowds, has been show to have strong correlation to future results specifically in sporting events and election polling.  Here’s how Tradestreaming addresses crowdsourcing.

Given the fact that academia stuck to its guns for SO long with the Efficient Market Hypothesis (that all information is embedded currently into a stock prices, making it really hard to ‘beat’ the markets), we’re just seeing relatively new research that is open to crowdsourcing investment ideas and some that finds that there is MAJOR outperformance.

For example, check out the Harvard Kennedy School’s “The CAPS Prediction System and Stock Market Returns” paper that studied results of the Motley Fool’s crowdsourcing CAPS platform. Specifically, the paper looked at the difference in returns between the most highly rated stocks and the lowest rated stocks.  The paper found huge double-digit outperformance (18%).

3 ways to crowdsource investment ideas now

  1. Piqqem: This site allows users to rate stocks on a 5 factor scale.  More importantly, Piqqem has a portfolio tool that enables users to create and backtest strategies based on the changes in investor sentiment for individual stocks.  Check it out.
  2. Motley Fool CAPS: The subject of the paper above, CAPS has evolved into the Fool’s flagship product.  Check out the highest and lowest rated stocks in the CAPS community in the Top Ten Lists.
  3. Intrade: The mother of all prediction markets, Intrade does huge business in sports betting but also has contracts on financial outcomes.  Intrade wagerers buy and sell probability contracts on Dow Jones and S&P predictions.

Source:  “The CAPS Prediction System and Stock Market Returns” (Harvard Kennedy School)

What is Tradestreaming: Crowdsource your Portfolio

The wisdom of the crowds has been used to better predict world events, elections, and the outcomes of sporting events. It’s now being used for more accurate forecasting of stock prices. Instead of following experts, crowdsourcing investment ideas seeks to assess what the masses think about a specific stock. The crowd is frequently more accurate in its predictions than top analysts?.

Enter Social Media

But with the onslaught of investors publishing their thoughts on stocks and the market on Facebook and Twitter, it’s hard for investors to monitor all the noise. Determining what the crowd thinks about a specific investment is tricky. Therefore, we’ll also explore different ways that investors can effectively plumb the wisdom of the crowds to build a portfolio populated with stocks the crowd thinks are going up.

What if there was a way to leverage the collective knowledge of all investors out there and use it to make a profit? What if you could build a portfolio that took investment ideas from the throngs of day traders and couch-potato investors, firemen and police officers, lawyers and doctors—a population of millions of investors? Figure out where the herd mentality thinks profits are and damn the experts.

Tradestreaming is that way.

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