Here’s CNBC’s weekly hedge fund pick of the week and another window into piggyback investing for our readers. Every week. Anthony Scaramucci aka ‘The Hedge’, offers insight at the names getting the most buzz across the hedge fund community. Scaramucci runs SkyBridge Capital, a leading alternative asset manager with more than $7 billion under management.
This week focuses on cigarette manufacturer Lorillard ($LO), which he thinks is inexpensive, defensive and has a nice dividend (> 5%).
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.
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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.
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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.Letter.ly is a newcomer on the newsletter scene launched a couple of months ago by drop.io founder, Sam Lessin. An industry blogger, Lessin had grown tired of the free newsletter scene citing a variety of concerns that lead him to take his newsletter offline and begin charging for it.
I am done with blogging personally. A little over two years later, It no longer serves the purposes outlined above, and even beyond that I find writing for an open audience is actually exceedingly disingenuous if not straight hypocritical given my strong belief in the value of “information”.
a. Understanding the medium: ‘blogging’ as a medium is quickly being out-moted by passive and active data-streams. I understood what I needed to understand, I don’t need to understand more about it. I am not turning off facebook in the least (though I will not be putting ‘high value’ content through it specifically because the value of information is inversely related to how public it is), but the highest value thoughts need not be public for the sake of exploration anymore.
b. An audit-able trail on the web for defense and offense: I have what I feel I need for now. I will occasionally need a mouthpiece, but I believe I can generate that when needed through other channels
c. Personal intellectual rigor: Still critical, but sharing ideas at a high velocity with a set of people I respect through other written means will serve the purpose just as well… I do think that forcing yourself to write down and refine is critical
d. Communicative margin: It is gone. There is no margin left in blogging (nor is there margin left in twitter/fb status potentially)… the flight pattern is too full, you don’t get any prizes anymore for showing up, and the people I really respect/want to share ideas with have mostly stopped reading blogs.
Financial bloggers looking to begin charging for all or some of their content will find that letter.ly is absolutely the easiest way to build a premium newsletter product.
Here’s how it works:
There are some basic tools to manage your list or to comp some free subscriptions. By clicking on ‘cash out’, you can get paid.
Yeah, this gets into the whole openness/closed discussion surrounding the web and for that, check out Is it time to stop blogging (GigaOM) and Let’s take this online (Joel Spolsky on Inc.).
Clearly, some newsletter publishers are going to want a lot more functionality in their subscription product. That’s fine and letter.ly is probably not for them. But if you’ve already built an audience and you’re looking to upsell them to an more intimate, more in-depth product, letter.ly is perfect.
Let me know what you think.
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.
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Social media is a shock to the way investment management marketers are accustomed to communicating. It’s conversational, transparent, improvisational, experimental—all of which challenges the status quo. Investment marketers who want their firms to continue to be relevant recognize that changes must be made in how firms interact online. For them, social media can serve as a platform to advance strategic change.
The goal of a conversation is to understand, and we see marketers working to better align the value of their firms’ content/thought leadership, how it’s packaged and where it’s delivered with what their distribution partners and investors want and increasingly expect. Slowly, they are introducing a new organizational discipline—listening—and they’re beginning to adjust and refine based on what’s heard. Some social media devices—all functionality that represents endorsements, for example—are not available to marketers for regulatory reasons. But other means can be put to use and we believe that firms’ authentic efforts will be well received. Success? It will be enjoyed by those who prevail, through trial, failure and a new rigor for measurement and analysis.
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Pat Allen, principal of the digital marketing consulting firm Rock The Boat Marketing andThis 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.
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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.
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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.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. 
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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.
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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.Asif Suria has done great work over the past couple of years. Check out what he does at SINLetter.com.
He publishes an Insider Weekend which runs down insider buying/selling trends (a Tradestreaming hallmark) and highlights specific names that are seeing significant insider activity. Here’s the current installment.
Insider buying increased once again last week with insiders purchasing $21.82 million of their stock when compared to $13.42 million in the week prior. Selling also increased with insiders selling $821.45 million worth of stock when compared to $498.22 million in the week prior.
Suria compares buy/sell ratios to previous weeks’ activity:
The adjusted ratio for last week dropped once again to 21.82. In other words, insiders sold almost 22 times as much stock as they purchased.
On the notable buy/sell side, Suria calls out activity in Akamai (AKAM), Ford Motor (F), and Herbalife (HLF) among others. Check it out.
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I’m a pretty easy going guy. I never wanted to use this platform to vent or say anything hurtful about anyone or anything. It’s just not my style — Tradestreaming is a resource to help investors, journalists, and industry professionals make better informed decisions.
So, it’s got me a little ticked off that the venerable Barron’s has been taking some of my ideas and repurposing them — without referencing this site. I’m all for using my ideas and expanding on them. I don’t have a monopoly on ideas. Just tell your readers the source of your thoughts. I do it. C’mon.
This week’s Electronic Investor article entitled “Here Come the Third-Party Apps” is a direct reference to my July 6th piece, “Inching towards an investing app store“.
For most of us, this “open” collection of obscure programming utensils and standards—including, for example, a programmers’ tool kit with the memorable name SDK, or files tagged with the extension .XML—will be close to meaningless. But you may already be using some kind of trading app or plug-in that customizes your connection to E*Trade, and there’s no question that, with the proliferation of gadgets and third-party Websites, more such customizing and control programs are on the way. Like other online investment outfits, E*Trade doesn’t want to restrict its customers’ interface and functionality options to its in-house offerings.
The theme of brokerage platforms morphing into exchanges where 3rd party application developers can reach investors has been a common there here and on my other blog, New Rules of Investing.
Starting in July 2008 (on New Rules of Investing) and continuing a year later (with E*Trade further blurs the line between full-service and DIY investing), I’ve been writing about this trend– no one else really has. I’ve even included a section on it in the last chapter, Future of Finance, in my new book, Tradestream your Way to Profits.
Again, I have no problem riffing off my ideas. That’s why I write: to engender some thinking and discussion. Just link back. Listening, Barron’s?
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. 🙂
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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:
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”).
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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.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.
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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.
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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.
