With acquisition of SparkFin, StockTwits grows platform for younger active investors

Not everyone wants a roboadvisor.

StockTwits announced today that it is acquiring investment research and discovery platform, SparkFin. Active investors use SparkFin’s website and app to build, follow, and share all kinds of curated lists of stocks. The new acquisition gives StockTwits users more opportunities to engage with markets and investing, and new ways to think about their portfolios – or even figure out how to create one.

“We have seen tremendous growth since our launch,” said Jason Pang, CEO of SparkFin, which launched in 2015. “Would-be investors who use SparkFin lists to get a jumpstart on selecting a portfolio will have a wider community to interact with at StockTwits, and sophisticated investors can generate new ideas based on the data we create.”

Details of the transaction weren’t disclosed.

Passive investment products attract a big chunk of new assets. In 2016, passive investing accounted for approximately 40 percent of all institutional money in the U.S. stock market, according to Morningstar. That’s double the share passive products, like ETFs and index funds, had in 2005. The rising popularity of incumbent-owned roboadvisors, like Schwab and Vanguard offer, speak to passive investing’s growth.

But, there’s a growing number of investors who want to get more hands-on with their finances and investment activities. They’re joining communities like StockTwits to learn and interact with peers. StockTwits’ growth attests to this trend: its community shares over 200 messages and investment ideas every minute and 6000 charts each day. The company claims its userbase grew over 50 percent last year.

“Both experienced and novice investors alike are looking for ways to use technology and their peers to make the process easier or more effective, and to come up with new ideas or validate ideas they have,” said Ian Rosen, StockTwits’ CEO. He joined StockTwits in 2016 after co-founding EVEN Financial and senior roles at MarketWatch and Dow Jones.

Even if performance data isn’t on their side, today’s investors want more say in directing where their money is invested. One such investor is valuation guru, NYU professor of finance, Aswath Damodaran. He sees more disruption coming in the active money management space, as passive strategies trump more active ones and squeeze profits out of the industry. Damodaran is still an unabashed stock picker, though.

“I have often described investing as an act of faith, faith in my capacity to value companies and faith that market prices will adjust to that value,” he wrote in a recent blog post. “I would like to believe that I have that faith, though it is constantly tested by adverse market movements.”

millennial stock list from SparkFin
Most popular monthly list from SparkFin

SparkFin offers a variety of different watchlists for its users. Some are built by editors around a particular investment theme while others are driven by quantitative criteria. The most popular investing list this month is “Where Millennials Spend their Money,” catering to younger investors and giving new investors investment ideas based on consumer habits.

Like other verticals, the investment industry is becoming more social and crowd-aware, which plays right to StockTwits’ sweet spot. A new generation of investors is looking for more information about investing and they’re using digital tools to help them discover ideas and organize what they find.

“StockTwits is lucky enough to manage the largest standalone, curated community of investors and traders so we are well positioned to add specific tools and experiences to make that community more productive,” said Rosen. “SparkFin is one of those tools.”

Winning investment strategies from the frontlines of the blogosphere – with Tadas Viskanta

Tadas Viskanta has been at the forefront of the next generation of financial content for years.

His Abnormal Returns blog is the place investors —  ravenous for the day’s most impactful news and analysis — start every trading day.

Tadas is out with a new book that really is a culmination of 9 years of work, scouring the Internet for the best and most interesting trading strategies and technologies.

Tadas joins us for to talk about his work on this week’s episode of Tradestreaming Radio.

Listen to the FULL Episode


Continue reading “Winning investment strategies from the frontlines of the blogosphere – with Tadas Viskanta”

The real reason investing clubs are drying up (and what we should do about it)

Like radio stations that play the Flock of Seagulls and barbers who know — really know — how to cut the high fade, investing clubs are quickly disappearing.

But is that a bad thing?

According to a recent Reuters article, there are only about 5500 investment clubs in the U.S., down from 60,000 during the tech bubble.

“Oh, the numbers are definitely down,” says Adam Ritt, communications director for BetterInvesting, the Madison Heights, Michigan-based investors’ association whose members include clubs around the country. “It’s been a steady trend downward for a long time.”

The article hypothesizes about the reasons for the investment club’s demise, citing poor stock market returns, online investment research, and less money around to invest.

But these aren’t the real reasons investment clubs are disappearing.

Continue reading “The real reason investing clubs are drying up (and what we should do about it)”

Stock Twits, Estimize, and the future of social investing – with Leigh Drogen

Leigh Drogen played an integral role in StockTwits‘ success. Now, he’s on to his own startup, Estimize, which takes aim at improving financial estimates with a decidedly social approach.

Drogen shares his own experience and history as an investor and now entrepreneur as he’s one of the most vocal proponents of using a mix of social media communications to enhance the investing process.

He’ll share his vision of social investing and how Estimize should help investors become more accurate.
Continue reading “Stock Twits, Estimize, and the future of social investing – with Leigh Drogen”

Investing: Being in it to win it

We’re looking at new schools for my soon-to-be high schooler son.

As parents, we’ve made so many mistakes, learning and futzing things up as we go.

I’m not the same parent as I was 13 years ago.

Investing as learning process

investors get better by learning

Investing isn’t an activity — it’s a process.

Tradestreaming is all about learning from  — and sharing — what we’ve experienced.

From my interview earlier this week with Jonathan Clements (author of The Little Book of Main Street Money and previously the personal finance columnist for the Wall Street Journal)):

A lot of what it takes to become a good investor and a good manager of your money is just time.  Think about people’s learning curve — in some sense we don’t really get an opportunity to become experts in money management unless we really put our minds to it.  Most of us will only buy 2 or 3 or 4 homes during the course of our lives — we never really get the chance to become experts at that.  So, there’s a good chance that we’re going to mess up.

Similarly, we only get to claim Social Security once, so in terms of when to claim Social Security, there’s a good chance, we’re going to mess up royally.

And similarly when it comes to investing, yeah, we’re going to get the chance to see a lot more bull and bear markets than we would opportunities to buy homes.  Nonetheless, the chance to mess up is enormous in part because people have to cope with all this noise.

4 ways to accelerate your investment experience

  1. Nothing beats experience like experience: you just have to be in it to win it.  That means ensuring your take adequate precautions to maintain your ability to stay invested.  The research shows it’s not about age, it’s about experience and time in the market.
  2. Log your experiences: Keep a trading diary.  Better yet, blog about what you’re doing, sharing your activities with others on Seeking Alpha or on  StockTwits. You’ll get feedback from others — helping to expedite your learning and climbing the learning curve.
  3. Plug into the tradestream: Use the Internet, the blogosphere, and twitter to identify top performers interested in sharing their knowledge.  If you’re interested in making sure results are what they claim to be, follow top performers on Covestor who have agreed to have their performance audited.
  4. Listen/watch the best investing podcasts: I’ve compiled a list of what I think are the best investing podcasts on iTunes.  But there are many more great ones.  I interview a lot of these experts on Tradestreaming Radio, too.  StockTwits TV in general and Abnormal Returns TV (from Abnormal Returns) are also great for access to true experts in their domains.

I’m sending my kid to high school.  Like James Altucher, I don’t know if I’ll send him to college.  There is so much information readily available to investors, you can get a degree in hard knocks if your’re diligent and interested.

You just have to plug into the Tradestream.

StockTwits growing, hiring, and portalizing

Realtime platform for stock traders to share info, StockTwits has just hired David Putnam, previously head of 800lb gorilla that is Yahoo Finance.  Howard Lindzon’s firm continues to just chug along, growing traffic, rolling out products and now, recruiting seriously for growth.

According to TechCrunch:

According to Quantcast, 465,000 people are now visiting the site per month, which means the company has more than doubled its visitors since early December, when less than 200,000 were checking in to share and trade. This seems largely due to the service’s continuing evolution beyond its TweetDeck roots and creation of its own true investor ecosystem chalk full of video, news and charts — all enabled by an AIR app.

StockTwits has been pushing on a couple of fronts which should interest investors:

  1. investor relations: The firm is serious about attracting IR business, announcing the hiring of Chris Bullock as VP of Corporate Services.
  2. monetization engine: Watching the evolution of Seeking Alpha’s App Store closely, ST has rolled out its own marketplace for data products.
  3. portalize: This is something Putnam knows well from Yahoo but Yahoo made a massive site on curating essential information investors need.  ST is growing traffic by syndicating its own content.  Look for ST to become more of a destination site investor head to for more of the investment/research process.

Source:

StockTwits continues to expand, steals VP David Putnam from Yahoo Finance (TechCrunch)

Realtime trading data in the collective tradestream is HUGE

Softly launched a month ago, Yahoo Finance’s Market Pulse is actually a huge f’in deal.  Clearly, the press — and investors — hasn’t really understood what’s going on here.  And I’m not talking about StockTwits’ inclusion in the real-time stream (there are only two sources of data right now).  What’s really huge here is the Covestor feed that’s showing up on stocks.

Market Pulse is a real-time feed — much like Twitter is — on specific stocks.  So, whenever a trader or investor tweets or writes about a stock, it shows up here.  So, everytime someone blabs about $AAPL on StockTwits, investors can follow that stream alongside the other data provided on Yahoo Finance.  Is that interesting?  Maybe.  It is part of the real time conversation and important for hyperactive traders, I guess.

But the big deal here is what Covestor is supplying to Yahoo Finance users.  As a marketplace for investment services, Covestor actually validates/verifies trading activity of its managers.  In turn, Covestor supplies Yahoo’s Market Pulse with a real-time stream of trading activity — real live trades with real money behind them.  Users get a feel for how large a portfolio position is (in percentage basis) and whether the investor is building or liquidating a position.  Where else can you find this in real time? Nowhere.

This is all about the power of the collective tradestream.  This takes everything to a whole new level.

This is a BIG deal.

Buffett, Algorithms, and Technical Analysis: The Evolution of the Investment Newsletter

The evolution of investment newsletters

Investment newsletters have been around as long as investments have. Never mind that they used to be delivered snail mail. Then fax. Then email. Given the lag time between publishing and delivery, these old-school newsletters, like the Motley Fool’s Hidden Gems or Al Frank’s Prudent Speculator, mostly gave paid subscribers a pick or two or provided them with a list of stocks — typically, the output of a stock screen.

From static to real-time

But that’s the old model. Given the real-time nature of the web, investment newsletters are morphing into full-blown investment systems. The difference between the old model and new comes in both shape and form:

  • Amount of information: With short-form Twitter content and the 24/7 model of financial news, subscription services have to stay relevant. So, instead of delivering a static recommendation, new subscription services have to continue delivering a lot of commentary and analysis to help their subs decipher the news that envelops them and their portfolios.
  • Frequency of publication: Publishing 1x/month no longer suffices. Newsletters have become quasi-trading desks of info, providing ongoing analysis of markets and their stock picks.
  • Quality of analysis: With high quality analyst-bloggers producing real-time content, I believe we’ve seen the bar raised in terms of the quality of content being produced. There is certainly more of it — I believe it’s getting better as well.
  • Diversity of content products: We’re no longer looking at a two dimensional financial content market made up of the bloods (fundamental analysis) and crips (technical analysis) — new subscription products are becoming really valuable, like the portfolio cloning tools at AlphaClone and the ability to bring history’s best investors back to life via algorithms like Validea has done. Come to think of it — expert networks like Covestor and kaChing are also investing systems as investors subscribe to track and mimic newly-found gurus.

Couple o’ examples

Given their strategies, technical traders and day traders have had systems at their disposal. But it’s only recent that fundamental investors have. We know what investment newsletters look like but what about investing systems? Here are a couple that stand out as interesting examples:

  • StockTwits premium blog network is a good showcase of the types of services available to subscribers. They’re expensive but in return, subscribers get ongoing, daily commentary from the publisher as well as a variety of different types of media (I’m thinking about TV here) to consume.
  • Validea: I’ve written about John Reese’s firm before but I like the way their proprietary stock screener that recreates the investment strategies of history’s top investors is evolving. The Validea Pro product pings subscribers when a certain trigger has fired. Combined with graded reports on numerous stocks, Validea has become a trading system by combining the real-time aspects of trading alerts (buy and sell) as well as the fundamental rigor exemplified by its screening algorithm.
  • Davian Letter: Emerged from seemingly nowhere to provide a variety of real-time trading services — from black box type algorithms to more detailed analysis on tech stocks to earnings recaps.

Of course, some newsletters get it. Others are still playing by yesterday’s rules. What are you using? Let me know if the comments.

**Also, if you manage/contribute/publish an investment newsletter, make sure to download my free ebook, How to Build a Profitable Investment Newsletter.