January 19, 2007
Stock picking sites - the next frontier for Web 2.0?
The best Web 2.0 sites use the ‘wisdom of crowds’ to guide users to great content. Flickr uses its audience to guide users to great photos, while YouTube does the same for videos, and Digg does it for news. Stockpickr, the brainchild of James Altucher, a hedge fund manager (and FT columnist), hopes to do the same for stock picks.
New users are prompted to enter a few ticker symbols, and can compare their portfolios to those of other members of the site. Even more interesting, Stockpickr lets users compare their picks to those of the pros - including investment titans like Warren Buffet and George Soros, in addition to institutional investors. Private users who upload their portfolios are given an opportunity to say why they think their picks will rise or fall.
The financial markets are awash in the kinds of unstructured data (company filings, earnings releases, news reports, etc) that crowds are good at processing. The stock market itself does the same thing of course, but without the same visibility into other people’s motivations for picking individual stocks. Add the prospect for financial gain, and it’s little wonder people are excited about business opportunities at the nexus of Web2.0 and finance.
This writeup on TechCrunch gives a good overview of what Stockpickr is all about.
A new site that takes the idea of Wisdom of Crowds in a slightly different direction is the simExchange (www.thesimexchange.com). You guys should try it out. It’s a video game stock market simulation. It has all the basics of other prediction markets but is designed with particular applications in mind.
There is the usual forecast along the lines of how many copies an upcoming video game will sell. However, the site is also designed so that gamers, who are constantly bombarded with too many new video games to learn about, can quickly see which upcoming video games are attracting the most buzz from the stock price or trading volume. The site also features a wisdom of the crowds method of aggregating articles, images, and videos for upcoming games by having users bid on the value of user submitted content. This way that the user can quickly access and learn from the most valuable online resources on the game.
Posted by: PowerTrade1337 | January 20th, 2007 at 9:41 am | Report this comment