By Dominic Jones
(Note: this post has been revised to add my views on stockpickr from an individual investor perspective.)
THE news release doesn’t do this new site justice. I spent about 30 minutes looking it over and near the end I was convinced that it was worth my while to go back when I have more time.
Stockpickr.com is a joint venture between online finance publisher TheStreet.com and A.R. Media, a company founded by hedge fund manager James Altucher, who is also a TheStreet.com writer.
Here’s the news release (ignore the “first Web site to combine social networking with stock investment ideas” claim because there are similar sites) and an article about the site by Altucher. However, it’s best to just test-drive the site yourself. Start by entering a company’s ticker symbol and take it from there.
In this review, I focus mostly on what this site may mean for public companies looking to attract new investors. I think it could offer some interesting opportunities in that regard (scroll down below the screenshot), but much less than the opportunities it offers for investors.
Stockpickr from an individual investor’s perspective
When I’m not advising companies how to leverage the web to attract and serve investors, I’m a semi-passive investor myself. And from that perspective, Stockpickr is one of the more interesting finance sites to come along in a long while.
Although the site says its focus is to help investors find new investment targets, it really is also a wonderfully mind-broadening resource because it exposes you to a huge array of investment thinking and stock ideas. It also has an addictive voyeuristic quality in that you’re able to look over the virtual shoulder of pro and amateur investors to see what they’re doing in their portfolios.
And, of course, with the social networking tools, it’s way to connect and share ideas with other investors, although I think the social aspect of these sites is yet to proved. Not being an investment pro myself, it’s somewhat intimidating to blog about or get into discussions with others about the relative merits, or lack thereof, of my stock picks. From experience, I know that most individual investors feel that way, so I’m skeptical that social networking is the real allure here.
The site is advertising supported, but I wonder if the site owners are using data they gather from users. Also, I found myself wondering why the site’s recommended stocks based on Warren Buffett’s portfolio included Google Inc. and Pfizer, two companies I can’t imagine Buffett buying. Not sure what that’s all about, but it does make me wonder. That’s not good because trust is critical on these types of sites.
Bottom line: I’ll be going back.
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| Stockpickr page showing the Warren Buffett portfolio holdings. |
From the public company’s perspective
From a public company investor relations perspective, there are lots of different angles to follow up on, but here are two questions that jumped out at me:
- Can this site be useful for cheap investor targeting? You can apparently find out which of the top 1000 mutual funds and hedge funds and super investors, as well as hundreds individual Stockpickr members, own or follow your or your peers’ stock. The pro portfolios are limited to their top holdings, so it’s not a replacement for a professional targeting service. This leads to big gaps in the data, as I discovered when I compared the Yahoo! Finance major holders page for Radyne Corporation (NYSE: RADN) with the Stockpickr page. According to Yahoo! Finance, 82% of RADN’s float is held by institutions or mutual funds, but Stockpickr didn’t list any of them, presumably because the stock doesn’t rank as a top holding in any of the portfolios.
- Could we see sites like Stockpickr give rise to a new industry of stock promoters offering to plug your company to members of Stockpickr and other social media finance sites? Stockpickr members can send each other messages. Members can also set up blogs, comment on particular stocks and rate portfolios. It’s easy to see how this could be used by IR people to promote their companies. What rules should there be in these circumstances?
These questions and others are bound to come up more often in the future and it is important for IR departments, site publishers and investors to think them through.
From an investor relations perspective, I tend to be conservative and say you should never be aggressive or overly promotional in targeting investors on these sites lest you want to come over as desperate or a scam.
Best to tread lightly here, but do take the time to see what’s going on.
Other coverage: Stockpickr in deal with The Street: More to Come? (TechCrunch) | Stock Picking 2.0? (Howard Lindzon, hedge fund guy/entrepreneur)
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Great lead in. You are exactly right. I spoke to james and the big mistake was that the press release was lamo. His name should have been all over it for the stoick bloggers to take it seriously.
Nice site. But isn’t that logo a bit too similar to MarketWatch.com!?