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Destroying Wall Street by Democratizing Financial Analysis
By: Chris Tell at http://capitalistexploits.at/
Nearly 4 years ago I penned an article entitled Open source world. In it I described a variety of changes taking place globally and how the status quo was being broken by open sourcing, led predominantly by technological innovation freeing up information.
I discussed the legal industry and how increasingly lawyers have to provide real value to business people, and not rely solely on information which today is easy and free to obtain. In other words, they can't just push boiler plate solutions.
I spoke about the music industry which has been turned upside down by file sharing.
I discussed how traditional education is increasingly coming under threat from open source education. Its was just a trickle a few years ago and today its a stream. Khan Academy, UnCollege and others are making us re-think how we teach our children.
Today though I wanted to take a look at the financial analysis industry. I was recently on the phone with Justin Zhen, founder of Thinknum a start-up which is open-sourcing data previously held as "proprietary" information at Wall Street banks. Justin reached out to Mark and I because he liked what we were doing and thought there were ways we could work together. We were and are both sufficiently intrigued. Justin is a sharp young man.
The below is a direct quote from Justin, as I asked him to put pen to paper and give us a concise summary:
“My co-founder Greg and I initially started Thinknum after witnessing analysts at major Wall Street firms emailing spreadsheets back and forth and updating data by hand. We thought that these processes were highly cumbersome, inspiring us to build Thinknum, an open platform that brings their current workflows to the web. Instead of thinking about how to value an asset and doing that work from scratch, an investor can see how someone else has solved the exact same problem. He can change his assumptions or even build off his analysis.
"A major advantage of an open platform is providing these tools to all types of investors, not just professional analysts. We’ll collect a deeper pool of insights, allowing the best ideas to bubble to the top. Going global plays a big role in accomplishing this goal: Thinknum is a channel for a local domain expert to share her expertise with potential investors. Our vision is to index all the financial information in the world.”
Thinknum has just been accepted into a prestigious accelerator, so he's likely going to learn a lot and take some abuse. We wish him luck and will be in regular contact and keeping an eye on the Company ourselves for future investment opportunities.
When I think of what Github did for developers I can easily see the scalability of this business. Done correctly, and we'll do what we can to help Justin, this has the potential to transform Wall street in a good way, and level the playing field just that little bit more for the "rest" of us.
Personally, when I think of the ability to provide data to the market and quantitative analysis without the need for a Bloomberg terminal or Thomson Reuters feeds I immediately understand the potential.
Michael B might want to look over his shoulder to make sure he's not being followed... oh, too late.
- Chris
“Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” – Peter Lynch
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Also, I was speaking with a buddy who's working as mining analyst in a small fund. One of his comments were interesting is that ibanks come to them and say 'you should buy this, here's our reasoning' and he sends them away as it doesn't provide value. What he says provides value is actually talking with the companies directly. That you cannot just get by using some simple calculator two kids threw together. It still requires many hours of manual work,etc.
Nothing special.
It feels like a more polished version of yahoo finance with the ability to make simple models. Excel spreadsheets will still be passed around because you can do more complex things in there. Case closed.
There should be an open source form of money that can be used worldwide without any single entity controlling it and without artificial borders containing it. Instead of central banks a mathematic algoritm will regulate the issuance of money so the system can't be corrupted. Alas this will probably remain a pipedream for a long time.
There should be some Wikianalysis... free of all vetted interests of brokers, banks and other peddlers...
pretty much anything with the 'democractizing is better' meme is a give away that you're about to read some nonsense.
I remember when people talked about facebook 'democratizing' the world when the 2005ish iranian 'green' revolution was touted in the american media as being a good thing.
'democratizing'. right. because that's the root of how our system works. more democracy is better demokracy.
I think like the soviet union's ideology of 'communism' , the united states ideology of 'democracy' will soon meet the ideology of mass starving populace . we will see how ideology deal with reality soon enough. i'm sure the bullets and pepper spray will be very democratically alloted to all those who show up to cast their riot or vote or whatever.
That's only if you trust what the companies are reporting.
We live in a world where Goldman Sachs' "sell side" pushes what many claim are skewed reports for their "muppets" while the firm is reported to take the other side of the trade. And we're supposed to shed a tear for creative destruction? (h/t RaceToTheBottom)
F*ck it! Here's to creative destruction.
--
Eric Dubin, Managing Editor, TheNewsDoctors.com
Creative Destruction is always painful, even more so for industries like the WS Financial industry and the Medical industry with industries that have succesfully fought off openess.
The only thing more painful than Creative Destruction is not doing Creative Destruction.
You have to blow up your industry on a regular basis to save it.
The ironic thing is that the TBTF banks are part of a system that is blowing itself up not by design, but out of hubris, averise and blind greed (or, imploding itself, as the case may prove to be given a deflation bust)
I call it Socialocracy
I say destroy Wall Street by not giving them any of your money to gamble with.
As long as they have your money they will find a way to steal it.
Employees are forced to give the scum their hard earned money through pension funds.
And gobmints portray it as being a very good thing... providing for your old age etc.. They will then steal even more through inflation tax and capital gain tax and should you be so 'lucky' to have anything left to pass on, inheritance tax on the inflation... tax
slimeballs the lot of them
There you go, when fraud is the status quo, possession is the law.
That which cannot be sustained, won't be, period. Now consider that truth in the context of a "debt-is-money" system wherein all that matters is your "full faith and credit".
Once there is no more faith, no more credit motherfuckers...
Still plenty of faith now, but exponential equations are a bitch..
Interesting article....but the title is WAY overhyped. Nothing in this suggested approach that will "destroy" Wall Street. Using ther term "Wall Street" as an avatar for 'big money'....big money nearly always survives quite nicely. Making financial analysis of the sort the author describes, more easily available, can most certainly help a segment of the business world, but that will hardly disrupt "big money" in any significant way.
Here's the truth, kept out of sight as much as possible
The Public Be Suckered
http://patrick.net/forum/?p=1230886
I penned a me, me, me. Oh, and, pontificatore' maximoto.
Now if i could just get ETRADE to accept my ebt card.....
They might, if you open a MyRA account that invests in "can't lose" War Bonds.