Check out this great presentation entitled Reinventing Financial Service from the LIFT conference last week produced by Anthemis
Reinventing financial services (presentation)
Top 5 predictions for social media’s impact on investing (Future of investing)
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it. This one’s from Darrell Heaps, co-founder, President and Chief Executive Officer of Q4 Web Systems, a leading-edge provider of online investor relations solutions.
************
The social web now offers companies and individuals unprecedented capabilities to access information, research and collaboration on a global scale. As we move forward, I believe we will continue to see adoption across companies, investors and traders of all shapes and sizes. Here are my top 5 predictions for the future.
1. The future is open, privacy is being redefined and the social graph of the web is going to continue to grow. This won’t be in a straight line as there will be push back, however over time the world is becoming more and more open.
2. Shareholders will use the social web to influence proxy votes. Moxyvote.com is just the start at enabling the retail shareholder vote. Companies will need to use the same channels and tools to influence their shareholders to vote how they want. Obama’s use of social media in the 2008 US election is the model that all politicians must follow now – this same model is coming to proxy votes in the near future.
3. Traders and Investors will create and use social networks for real-time research and investing. These trading/investing networks will become a key element that drives the market. Companies that accept this trend and work to become influencers inside of these channels will benefit the most.
4. Companies will use the social web to influence the perception of their company in the market. Early adopters are proving this theory today and their peers are beginning to follow. Companies will be required to use these channels in order to remain relevant and to effectively compete for capital.
5. Real-time investor sentiment will replace traditional investor perception studies. We can see this trend in non-financial markets now with online surveys and how sentiment is measured across social media. As the majority of investors move online, companies will embrace that it is more efficient and meaningful to measure perceptions (aka investor sentiment) through social media channels rather than traditional methods.
*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers
An experienced entrepreneur with a history of successfully starting, building and selling communication based companies, Darrell Heaps is a co-founder, President and Chief Executive Officer of Q4 Web Systems.Turning traditional money management on its head via tech (Future of investing)
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it.
*********
With the recent rise of social networks and the growth in internet use the landscape for Investment Management is changing rapidly. Today over forty million internet users in the US have access to much the same tools, research and transaction costs as the ‘professionals’. With the loss of trust in institutions engendered by the recent financial crisis, the ‘deinstitutionalization’ of money management has only accelerated.
Sites like Covestor offer access to a form on money management only previously available to those with millions of dollars available to invest. If you have enough money to open an account today with a wealth management firm, they will open a ”separately managed account” (SMA) or a “unified managed account” (UMA) in your name. These are accounts where professional investment managers trade on your behalf in your own account, so you get the benefit of paying for expert management with the safety and security of a managed account. Covestor offers this to any personal investor. But instead of the $500,000 minimum required to open a unified managed account, with just $10,000 you can access a world of great investors.
Technology and particularly the internet, stands to transform the industry. Much as it has in publishing, the barriers to entry have significantly lowered and the big names of the next wave look unlikely to be those of the last. Technology is allowing an explosion in choice, transparency and access. In an industry where the incumbents have become so large from holding on to exclusivity and opaqueness, they will doubtless fight to maintain their position but as always in the end the value will flow through to consumers.
*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers
Perry Blacher is Co-Founder of Covestor and has over 10 years of experience in Strategy and Online Services. He started his career at McKinsey & Co before heading up business development at Microsoft MSN in Europe and later as a principal with Cash Capital Partners.More technology, more information still requires guidance
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it. Mick Weinstein, ex-Editor in Chief of Seeking Alpha contributed this piece as part of the introduction to my new book.
**********
My father was a young attorney with a few bucks to invest when he stepped in a local brokerage house in Wilmington, Delaware. It was the summer of 1970. “You’d open the door to smoke wafting through the air and the aroma of strong-brewed coffee, and ?nd 20 or so retired altacockers sitting around a sort of minitheater, peering up at the electronic quotes rolling by on the wall, plotting their next moves,” he recalls. On a nearby table, a few loose-leaf binders issued by Standard & Poor’s held one-pagers on the most commonly traded stocks: management bios, basic ?nancials, price history. “Oftentimes you’d go to research a stock from the S&P binder and its page would be missing,” my dad recalls. “Some of these guys didn’t read so fast, so they’d sneak a few sheets home in their jacket pocket to peruse after watching Cronkite.”
Behind the altacockers were the brokers, including my father’s broker-to-be, Jack. For this generation of stock market investors, the brokers had all the real information—and clout. Upon receiving fresh research from his ?rm’s Wall Street analysts (who enjoyed privileged access to company executives and industry data and trends), Jack would dial up his clients selectively to suggest buys and sells that drove his own, entirely commission-based income. On the golf course and at dinner parties, the young professionals bragged to one other about the stocks that their broker “put them into,” and Jack was held in high esteem by my father and his community peers.
For my father’s generation, stock market investing was de?ned by information scarcity and personal trust in your broker. Fast forward to 2010. Today’s Internet has almost completely wiped out this scene from just 30 years ago. Today’s individual investors confront a market characterized by information overload and a need for personal decision making. The good news: No missing pages on that loose-leaf binder—you can get massive amounts of information and opinion on any given stock with the click of a mouse. The bad news: There’s no Jack. You’re on your own to make sense of it all and, unless you have the means to hire an asset manager, to build your portfolio yourself.
So where to begin? Most individual investors today are familiar with the large portals like Yahoo Finance and MSN Money that allow you to enter your portfolio or watchlist and receive mounds of data, breaking news and traditional journalism on stocks you own or follow. The portals also offer some powerful stock screens that can help an investor with speci?c strategic goals to access stocks, ETFs or other products that meet those objectives. Seeking Alpha augments this content with informed, well-researched opinion and analysis from market professionals and sector experts, plus free conference call transcripts to read what industry leaders are saying about their business and sectors. Instant access to regulatory ?lings (coupled with Regulation FD) grants everyone immediate access to company reports, important developments, top investors’ moves, and corporate insider stock sales/buys. And new players in the market like Covestor and other “crowdsourcing” sites aim to bubble up the best individual investors and stock pickers, so individual investors can lock onto their ideas or even copy their trades.
So where’s today’s Jack in all this? Or, given the fact that investment goals differ so greatly, perhaps the question is better phrased: Where’s your Jack in all this? The bottom line is that you need to build your own Jack today. That means you need to do more homework, but once you’ve found the tools that work well for you, the process of portfolio building is much more rewarding and, likely, lucrative than it was a generation ago.
*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers
Mick Weinstein was Editor in Chief of market and investment analysis website Seeking Alpha until April, 2010. A graduate of the University of Michigan, he now lives in Israel with his family.Welcome to a wired world, investors and financial advisors (Future of Investing)
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it.
**********
Welcome to a world where the traditional ways in which we gather information, develop relationships, and make important decisions have changed dramatically. Welcome to a wired world! Our influences have changed with the explosive growth of the internet and the proliferation of blogs, social networks, online ratings and reviews, and micro-blogging
services that allow us to share, connect, engage and advance our knowledge. Our networks are accessible from anywhere and everywhere, in real time, through our mobile devices and constant wired connections. Whether we realize it or not, these online information channels and networks are significantly changing the way we think and behave.
The financial services industry is no exception to the wired world revolution with the emergence of new media investment platforms, social investing sites, and even financial advisors and professionals delivering their insight and guidance through blogs, social media and social networking. At the same time, consumer access to financial information and guidance, low cost investment vehicles and platforms, increased transparency and choice, and new media tools are empowering individual investors to take control of their
wealth. We have a paradigm shift happening that will forever change the future of investing like never before.
Investors who can sift through all of the financial content and find the “quality” insights will have the best opportunity for success. The key will be discovering relevant resources and strategies that they can implement with discipline and consistency. Financial advisors and professionals who provide high quality, differentiated content in their niche markets and focus on their areas of expertise will be most successful in the race to win relationships with investors. Blogging, search, and social media will all be part of the strategy equation for attracting the right investors into a suitable model based on their goals and objectives. Ultimately, investors AND financial advisors who understand and embrace the merging of social relationships and technology can truly become partners in achieving their respective goals.
*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers
WIRED ADVISOR was founded by Stephanie Sammons (LinkedIn). Stephanie spent a total of 15 years in the financial services industry at two of the largest global wirehouse firms and served as a Financial Advisor, Branch Manager, and Regional Sales Manager.Bringing to life history’s best investing strategies via technology (Future of Investing)
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it. 
**********
At Validea, our belief is that investors can produce market outperformance by following the quantitative strategies of Wall Street greats, like Warren Buffett, Peter Lynch, John Neff, Joel Greenblatt, Ben Graham and others. Rather than creating new strategies, Validea takes the publicly disclosed stock selection methods outlined by these successful long term investors in their writings and lectures and captures their methodologies in a systematic investment approach that allows for bottom-up stock analysis, stock screening and model portfolio creation. While advancements in technology and fundamental stock data availability have been crucial in the development of the next generation of stock screening tools, Validea’s algorithms are proprietary and incorporate aspects of artificial intelligence so that certain criteria are measured in the same way a human would measure them.
Simple screens, like screening on the Price-to-Earnings ratio or Relative Strength, are useful as a starting point for building a portfolio, but the sophistication and uniqueness of guru-models like Validea’s allow for the selection of top rated stocks according to each proven fundamentally-based investment strategy. By vetting over 6,000 securities for over 7 years through these models, which have anywhere from five to fifteen distinct criteria, we have demonstrated the value of these approaches through our model portfolio tool. By holding baskets of stocks that pass through a guru filter, investors are able to statistically put the odds in their favor and over time, this results in 55-60% of portfolio positions winning. Applying these strategies through a disciplined framework allows for excellent potential for long term market beating returns.
*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers
Justin Carbonneau is a partner at Validea Capital and manages the firm’s Private Client Group. He also acts as the principal business development officer for the company and is responsible for managing growth efforts and strategic initiatives. Prior to joining Validea Capital, Justin was a controller for a Fortune 500 healthcare company where he was a member of the firm’s leadership development program.Using technology to mimic guru investors (Future of Investing)
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it. 🙂
*************
Piggyback investing is about following the “right” people. In a lot of ways following overall sentiment of an online community is exactly what you want to avoid. The simple premise is that “crowd sourcing” is only valuable when you are able to accurately define and isolate the right crowd. Accepting this as essential first, then any application that then can overlay real-time information about the “right crowd’s” moves is valuable. Here are just a few applications that can benefit from real-time information gathering:
- Manager selection: The AlphaClone platform allows you to tap the collective intelligence of groups of managers that are either predefined by us or defined by the use. Some of our groups are dynamic in that the list of managers that make up the group change ever quarter based on some criteria. Take our High Concentration fund group: it selects the 25 managers each quarter that have the highest disclosed market value spread over fifty positions or less. I could see a dynamic group that is constructed of the 25 managers that have garnered the highest votes for inclusion amongst the AlphaClone user community or the 25 managers whose fund page has had the highest visitor traffic over the past 30/60/90 days.
- Stock selection: our platform uses quarterly public filings to select the holdings that make up clone portfolios. A real-time overlay that precipitates intra quarter changes in portfolio weightings for securities in the clone would be really interesting. Real-time sources could be intra quarter public filings from the manager or managers in a clone (13G/13D filings), real-time analyst consensus recommendations (especially upside and downside “surprises”), or real-time events (bankruptcy, M&A).
- Strategy selection: our platform allows investors to create and backtest clones based on different “clone strategies” (Top Holdings, Best Ideas, Popularity in top 20) and customize clones by employing hedging options and rebalance options. We consider that simply a starting point. I can see our community providing feedback on new clone strategies they’d like to see as well as tips on implementing clones.
I see the real time web as a new communications medium that definitely has relevance for investors and investment services but just like any new communications medium, how useful it will be will largely depend on how it is applied and by whom (i.e. yahoo stock message boards vs. twitter feed from “pro investor here”).
*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers
Mazin founded AlphaClone in 2008 with the simple purpose to empower the average investor by giving him intelligent, instant and transparent access to the world’s best fund managers. Mazin was a 12-year veteran of technology-driven media businesses including roles at Time Warner and OpenTV.Investing at the intersection of technology and social media (The Future of Investing)
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it . This is a great one from thought-leader and investor, Roger Ehrenberg about the opportunities for new tech and startups at the crossroads of technology, social media and finance.
***********
The real-time Internet is providing investors with actionable insights and information previously unimaginable. Technological innovation – distributed processing and massive storage through cloud computing – has played a significant role in this transformation. However, it is at the intersection of technology and social media where the greatest innovation has taken place. Thought-leaders across all domains, including finance, investing, economics and trading, have increasingly been sharing their views on the Internet. And a new class of companies have emerged to harvest, index, curate and disseminate these valuable insights. But more importantly, these companies have facilitated conversations between thought-leaders and members of the community. And it is in this dialogue where the greatest value is created. These changes impact not only investors, but producers and consumers of media everywhere. Trusted perspectives are being turned into actionable insights in real-time, with the judge of quality being crowd-sourced. Is this story important or merely noise? Is this unusual options activity truly predictive of earnings out-performance or simply a statistical artifact? Is this analysts’ off-consensus iPad shipment estimates based upon better insights or a flawed understanding? Innovative companies have helped to identify high-value individuals to serve as catalysts for discussion, but trust, reputation and status must be earned by community leaders and members alike every day. And it is the judgment of community that will ultimately determine a person’s influence within the community. And this can only happen through today’s cutting-edge technology, innovations in how social media and online communities are built and curated and the increasing volume of high-quality content. When it comes to investing and the impact of technology and social media, what seemed like the future is accessible today.
*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers
Roger Ehrenberg (LinkedIn) is Managing Partner of IA Ventures, a seed-stage technology fund focused on “big data” tools and technologies. Mr. Ehrenberg has an array of investments across financial technology and social media including Stocktwits, Covestor, Selerity, bit.ly, Buddy Media, TweetDeck and TLISTS.
The real-time web and its impact on investing (Future of Investing)
This post was originally included as part of an ebook that I published alongside the launch of my book, Tradestream, entitled “Tradestreaming and the Future of Investing”. The content was so good I wanted everyone to have access to it :-).
***********
The rise of independent publishers through blogging tools such as WordPress has been profound for the investor community. With the integration of RSSCloud, PuSH, Twitter, and Facebook — blogs are now part of the real-time stream and are playing an ever large role in the day-to-day of the investors. I’ve seen firsthand two major trends that were previously unthinkable and nearly impossible to pull off. The first is the micro specialist blogger who focuses on a very niche topic — perhaps a single stock or a single bucket of previously uncovered equities. The exposure and insight from these publishers has provided a key data point to investors, and provides content on topics that are not covered by analysts and the MSM financial publications.
The second major trend has been the inclusion of bloggers covering seemingly non-financial content, but who are in fact informing investors with their coverage. This trend includes fashion bloggers who impact investors covering retail, and local political bloggers who cover topics which impact energy markets, currency trading, and the like.
Raanan Bar-Cohen has over 15 years experience as an entrepreneur and innovator in the digital media space. Raanan currently serves as Vice President of Media Services at Automattic, which leads the WordPress Open Source publishing project and runs a number of online services including WordPress.com, Akismet, Gravatar, IntenseDebate, and PollDaddy. Raanan blogs often @ https://raanan.com and can be followed @ https://twitter.com/raanan*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers.