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More technology, more information still requires guidance

Posted on August 12, 2010 at 12:50 pm

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.

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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.

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  • Tradestream book review (Reading the Markets)

    Posted on August 17, 2010 at 3:23 pm UTC

    Thanks to Brenda Jubin PhD on a very flattering review for Tradestreaming.

    Miller’s book is something of a travel guide for the investor. It’s written exceedingly well, as one expects of a travel guide. It explains an investor’s options: he can go on a guided tour, join a self-directed group, or strike out on his own. And it provides resources that the investor can tap into depending on which option he chooses.

    Jubin does a good job reviewing a prolific number of books with insight and depth of an actual investor/trader.  Check out her blog, Reading the Markets.

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  • Top 5 predictions for social media’s impact on investing (Future of investing)

    Posted on August 17, 2010 at 12:12 pm UTC

    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.

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    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.

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  • Hedge fund pick of the week (CNBC): Lorrilard (LO)

    Posted on August 16, 2010 at 5:26 pm UTC


    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%).

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  • Turning traditional money management on its head via tech (Future of investing)

    Posted on August 16, 2010 at 1:30 pm UTC

    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.

    *—> 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.

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  • Letter.ly: perfect tool for financial bloggers to begin monetizing ideas

    Posted on August 13, 2010 at 1:21 pm UTC

    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:

    1. sign up
    2. letter.ly provides you with a URL to send subscribers to
    3. publishers also receive a unique email address — this is how you publish.  Create the newsletter in word/email client and just send off.

    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.

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About Tradestreaming

Tradestreaming is a community of investors learning directly from experts. I’m Zack Miller, investor, entrepreneur, and founder of Tradestreaming.com and I literally wrote the book on how to invest in the age of Facebook and Twitter. Tradestreaming is the resource I’ve created to help me become a better investor.  I believe it will help you … Continue Reading