Posted on

Tradestream Radio #2: hedge fund replication, insider trading, more

tradestream radio, discussing investing and technology

This week’s episode of Tradestreaming Radio is up and ready for listen. Let me know what you think and if you have ideas for future shows. You can listen below, find the transcript below or download directly to you iPod/iPhone via iTunes — search for Tradestream or go here.

This episode includes

  • the huge insider trading probe into many of the largest US hedge funds
  • research networks (expert networks) and how they play a role in the investing process
  • interview with hedge fund replication research provider, AlphaClone CEO and founder
  • Ivory Tower Report: Smart investors think like economists (is that a good thing?)
  • Trend Watch: Seeking Alpha continues to grow and introduces its own investing app store

Transcript Continue reading “Tradestream Radio #2: hedge fund replication, insider trading, more”

Posted on

Seeking Alpha ramping up

Financial opinion aggregator Seeing Alpha is ramping up its traffic and overall site activity according to a blog post by the company’s founder and CEO, David Jackson.

Jackson’s November Update included a variety of data points, all accentuating the site’s growth:

  • Seeking Alpha’s new App Store has scored over 20k installs
  • new section launched targeting income investing
  • launch of a mobile site
  • site traffic hits all-time high

According to SA’s Jackson

During the week starting the 7th of November, Seeking Alpha had the strongest traffic in the history of our site — 7% more traffic that the second strongest week in the history of the site and 40% more than we saw in the same week in 2009

Posted on

3 big opportunities for the real-time financial web (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 David Jackson, founder and CEO of leading investment community, Seeking Alpha (and my old boss :-))

*******************

With the growth of Twitter, the introduction of updates by Facebook and the inclusion of real-time comments in search results, it’s clear that the real-time Web is having a profound impact on media. Which raises the question: Will the real-time Web transform financial content?

Financial media is naturally real-time because, in financial markets, faster delivery of information can mean real money. So it’s not surprising that a mature industry devoted to getting the most relevant financial news to people in real-time has already developed. Sophisticated real-time products are offered by providers of terminals, news wires, press releases and news organizations. They deliver news instantaneously, filtered according to users’ needs (for example by ticker symbol or industry). Real-time financial news has trickled down to free financial websites and portals, which themselves offer real-time financial news coverage.

But this still leaves three opportunities for real-time updates in finance. The first is technical (chart) commentary for day traders. The most active Twitter users who write about stocks, for example, are day traders. Day trading isn’t Seeking Alpha’s focus (most day traders lose money, and our mission is to help people invest well), so we’re happy to leave short-term, real-time technical analysis to others.

The second opportunity is real-time updates of fundamental analysis. Seeking Alpha’s contributors write in depth analysis of stocks. But their viewpoints can change as companies report quarterly financial results, competitors launch products, or the landscape changes in other ways. We think that short, real-time updates complement in-depth analysis, even for investors with a longer time horizon. We’re finding that an increasing number of our article authors use StockTalk, our “Twitter optimized for
stocks” product.

The third opportunity for the real time Web is mining Tweets and updates for information about companies’ businesses. Which products are gaining traction? Does a company have a PR catastrophe unfolding in real-time? It’s hard to do a good job of surfacing and filtering business information which is impactful enough to move stocks. If you know of anyone who does that, let me know. 🙂

*—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers

David Jackson is the founder and CEO of Seeking Alpha. He started his career as a macro-economist at HM Treasury in London and The Bank of Israel, and later moved to Morgan Stanley in New York as a technology research analyst covering the communications equipment sector.
Posted on

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.
Posted on

Yahoo Finance getting in on the real-time game

who will buy Yahoo Finance?

Thanks to the ever-vigilant Felix Salmon (he’s a hawk, actually) who tweeted a job opening at Yahoo Finance.

From the job posting:

We’re looking for an experienced, versatile, high-motor blog editor specializing in business news targeted at both sophisticated and mass-market audiences. The successful candidate will write and report his or her own stories, as well as hire and manage a small team of professional bloggers to curate and create original content for the largest audience on the Web. This person will set the strategy for and oversee the publication of financial blog content for programming on Yahoo! Finance, the Yahoo! network and consumption on the Web at-large.

The move in context

So, like Forbes which recently announced its intentions and strategy to unload its Investopedia property and embark on a more real-time blogging/curating model, Yahoo Finance is moving towards its own real-time financial content aggregation model.  Whether you agree with Fobes’ decision or not (and Paul Carr most certainly doesn’t calling it the “death of a thousand hacks”), Yahoo Finance’s move is different.

Forbes and Forbes.com have always been about content.  Forbes has always employed professional editors in a mixed outside-inside model for content, blending its own staff reporters with content contributed from asset managers and thought-leaders in their field.  Never known for its ability to break stories, Forbes really was about highlighting interesting opinions from experts in their verticals.

But Yahoo is different than Forbes

Yahoo Finance is a different animal.  While Yahoo Finance hasn’t changed much in the past 10 years (much to my chagrin), this move changes its tack.  Remember, Yahoo Finance, as a giant financial portal, has always been about aggregation of both data and information, taking feeds from tens of information and content providers.  By the way, check out ValueCruncher’s CEO’s, Mark Clare, great breakdown of Yahoo Finance, its past, its business and potential to disrupt providers like Bloomberg in the future.

Yahoo Finance is still the 800-lb gorilla in online finance as evidenced by its majority of traffic in the online finance category (see graph to the right). What’s made Yahoo Finance so strong was an early-mover advantage and a site that just worked quickly and had enough information on it to act as a proxy for a research terminal (Why Google Finance still sucks at its news offering is beyond me).  With a deal it consummated with Seeking Alpha in 2007, Y! Finance dipped its big toe into the wild and woolly financial blogosphere.  Now, with the job posting mentioned above, it appears that Yahoo Finance is changing its strategy.

How this may play out

This is a risky strategy.  In essence, the financial portal is pitting itself opposite all its content partners — many of whom pay the portal for the firehose of traffic it throws off.   I’d be less willing to partner with a company that is introducing a product to compete directly with mine.  And this is a common problem with channel marketing for any platform — and Yahoo Finance is certainly a finance platform — in that the platform, given where it sits in the whole matrix of supply-demand, can always just mimic other offerings that are working.  This is the fear of developing any tools that work on Twitter of Facebook – that the social media platform can quickly just put you out of business.

Such is the life now for Yahoo Finance content partners.  If (and this is a big IF) the Yahoo Finance offering is a combination of serious, professional editorial oversight with smart curation with a good understanding of what’s important to Y! Finance readers (a-la Abnormal Returns) with thought-evoking and decision-supporting articles, Yahoo Finance can evolve itself from a financial resource to a must-see, must-read site for both individual and institutional investors.

What if it doesn’t work

If, however, Yahoo Finance doesn’t do this right and takes a half-assed, half-baked approach, the results could be pretty serious: both for the company/site and for content, in general.  As Steve Lubetkin argued with me yesterday in the comments on PRNewser’s article Is Steve Rubel the Future of Forbes, aggregation using free, contributed — outside content — risks turning everything into an “echo chamber” where the biggest voices (those voices appearing everywhere) drown out newer, more creative content by people who take content creation really seriously.  If Yahoo Finance’s own content offering isn’t managed well, it could cause other partners to leave the site, taking their money and their contribution to the estimated few hundred million dollars in annual revenue Yahoo Finance generated.

What this all  means for aggregation sites?  We’ll have to see how it plays out.   There’s most likely room for multiple aggregators if they end up focusing on slightly different readerships (a retirement investors reads different content than a day trader).