Tuesday, July 22, 2008

Bloggers' Financial Return

We're conducting an interesting experiment at FinGad. We've taken popular bloggers in the financial realm and created portfolios of companies they were bullish on. This way, we can see what their actual return is based on their long positions taken on the blog.

Here are the bloggers:

Blogger,
Portfolio:
Howard Lindzon
http://www.fingad.com/portfolios/show/138

Jon Ogg
http://www.fingad.com/portfolios/show/141


Steven Mallas
http://www.fingad.com/portfolios/show/146

Dan Frommer
http://www.fingad.com/portfolios/show/145

Trey Theolcke
http://www.fingad.com/portfolios/show/143

Richard Driver
http://www.fingad.com/portfolios/show/143

Aaron Katsman
http://www.fingad.com/portfolios/show/142

Charles Kirk
http://www.fingad.com/portfolios/show/140

Will be interesting to see over time as to how well the winners and losers are picked by the bloggers. And we will have more bloggers soon!

FinGadmobile



Our VP of Business Development picked this up. I tell him I like the plate more then the car :)

Thursday, July 3, 2008

Bill Gates remarks at the World Economic Forum

Creative capitalism: "an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities."

Full Text

Saturday, June 21, 2008

J.K. Rowling address at Harvard's commencement

Brilliant: http://www.news.harvard.edu/gazette/2008/06.05/99-rowlingspeech.html

Wednesday, June 18, 2008

FinGad covered on Amazon AWS Blog!

I attended a meeting at Strateer (an interesting startup) which consisted of a group of developers as well as Jeff Bar, who is a "Web Services Evangelist at Amazon.com." FinGad uses Amazon Web Services for both front and back end functionality. This has proven very effective for us, and we can buy compute power as we grow, rapidly. Jeff wrote about FinGad on the Amazon Web Services Blog here:
http://aws.typepad.com/aws/2008/06/fingad---using.html.

Thanks Jeff :)

New functionality in FinGad

Everyone has been working diligently at FinGad to provide our users unique and interesting features. A lot of technology people I meet focus on building things that are cool. This is nice, however we aim at building things that are functional and add value. Sometimes they can be both!

We have been talking to a number of business schools and have come up with core offerings for business students. We also learned a few things in the process.

  • Ability to upload papers – We realized that a lot of work students do in school gets lost after they graduate. Hey, why not have a place to save it.


  • Public Profiles – Users now have an ability to create professional profiles in finance.
    • Example: http://www.fingad.com/profile/public_profile/lovephileo

    • This is similar to LinkedIn, however the profile is dynamic

    • A profile consists of the work of the user, their posts, portfolios, questions/answers, etc.

    • Key differences:

      • Reviews Chart – This is a graph that shows how accurate a user’s review is. So if I go on FinGad and post on Google and say it will increase In the next 3 months in price and it does, then my graph will point up and vice versa. Now we can see how accurate a post is before even opening it.

      • Portfolio Chart – This shows the % return of a user’s portfolio – Portfolios consist of stocks in the US at present.

      • Suggestions Chart – There is a feature to make a suggestion to another user’s portfolio, like buy 50 shares of Amazon. If Amazon increases in price, the user who made the suggestion will have that chart go higher and vice versa. This shows us how good users are at making suggestions.

  • Virtual Trading – Practice your strategies before committing.
  • Ability to Ask/Answer questions -

Then there are a number of interesting things that are being done under the hood. I will be updating this blog and sharing what these things are when they are ready to launch, and all of us love hearing from our users. Try out these features and tell us what you think!

Thursday, April 17, 2008

FinGad to Kick Butt

I'm excited to say that my focus on FinGad has been greater then ever. Our team is growing and the people we're recruiting are bar none, the best. We brainstormed on some ideas, and decided to build a contest system. Let me rephrase, it's launched :)

The contest works by rewarding our top user with $1,000 at the end of the month. The contest has been active from April 15th and will end on May 15th, 2008.

We added support for OpenID to use one username and password for multiple sites. We also launched new features that allow for virtual trading and asking questions.

With the presence internationally, it's a great opportunity to connect investors in many countries. That's why we believe the ask a question feature will become important. Soon to come, we will reveal more of our innovative technology in the space.

As we've built these features, we came up with a way to put them all together to build this contest. In essence, the contest is structured providing high quality information in finance as well as showing terrific trading positions.

Here are the rules (also available on fingad.com)

A single FinGad user will win $1,000 USD no risk or personal investment required. Payment will be made via PayPal.

Why are we doing this?

We want to increase the content generation of our site with great value to the investment community. Our contest is structured around delivering high quality output in finance. The participation of our users in this contest will provide lots of information and insight in trading/investments and help us form an interesting community. It will also be fun!

How does it work?

The person who wins the contest is the one with the most virtual money at the end of the month.

In other words, participating often and contributing high quality content - in your area of expertise, will earn you the most virtual money to invest. You have an option to invest that in virtual portfolios to earn even more.

Performing activities on the site earns you virtual money. Here are the details:

How do I earn virtual money?

  • Signup - Each user that joins starts with $50,000 in virtual money balance.
  • Invite - Inviting others to FinGad - when your invites join, you get $5,000 in virtual money.
  • Posting - Posting a review - earns $50 in virtual money
  • Other FinGad users voting on your post - Each vote by other FinGad users on your post earns $1,000 in virtual money.
  • Other FinGad users voting on your comments - Every time your comment gets a positive vote, you earn $1,000 in virtual money.
  • Help edit other FinGad user's post - If the original author approves - you the editor earns virtual money - $5,000 in virtual money per successful edit.

How do I earn virtual money faster?

  • Virtual Trading - Take your virtual money that you earn and trade it - Invest your virtual earnings to Win/Lose money in virtual portfolios.
  • Recommending Stocks to other FinGad user's portfolio - If other FinGad user buy/sell your recommended stock, you'll get $5,000 in virtual money.
  • Answering Questions - If you answer a question that has a bounty/reward value and it's voted the best, you get to collect that person's bounty/reward virtual money.
We will closely monitor this contest. Any attempt to game the system by spamming, signing up with multiple user accounts, or the like, will be closely watched. Shall we identify that your virtual money earning is unfair, you will forfeit the monetary award.

Sunday, February 3, 2008

Our next president? Tapping into the "wisdom of the crowds"

I have been reading with great interest “The Wisdom of the Crowds” by James Surowiecki. Although there have been many intellectual works in opposition, such as “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay (1841) and other popular works, there is one thing that poked my interest.

Founded in 1988 and run by the College of Business at the University of Iowa, the IEM features trading markets to predict the outcomes of elections. The trades executed set the prices, much like stocks, and work this way as Surowiecki describes: If a candidate’s contract costs 50 cents, it means roughly that the market thinks he/she has 50 percent chance of winning. An 80 cent contract equates to 80 percent and so on.

What’s more interesting is a study of IEM’s performance in 49 different elections between 1998 – 2000 found that the election-eve prices on the IEM were on average, just 1.37 percent off in presidential elections.

So, obviously this is not election eve, the data as of Feb 3 shows Clinton getting ~ 60% vs Obama ~ 40% Democrat and McCain ~ 87% Republican in the Convention Market. Further, the Democrat Party has ~ 51.8% vs 48.8% Republican in the Vote Share Market.

Check this for the latest Convention Market Data.

And this is latest Vote Share Market Data.

Surowiecki explains that this data is compiled of a small sample of traders - 800 or so.

An error of 1.37% would bring the Republican side to 50.17% - still not enough to win! True that I have not seen the data after 2000 in the accuracy of IEM & also this logic can be challenged if the Democratic side shifts 1.37% down.

Nonetheless, it would be interesting to return to these figures on election eve!

Tuesday, December 18, 2007

Great lecture on Economics with a non-conventional view

I have always been a fan of the notion that experience teaches better then school. I think from an entrepreneur perspective, though I myself have yet to build a successful company, I'm a fan of the idea of trying things in the world and seeing what will happen as opposed to learning business topics in a classroom. Even if these things fail in the real world, it's possible to see why it failed, what sorts of things should of been paid attention to and executed, and business lessons are learned first hand. Of course it's good to be knowledgeable in business topics from academia, however it doesn't mean that understanding these subjects will convert into business success. As a hiring manager of a technology team, I have always looked for a history of execution and of building things from the candidates as opposed to strict schooling results. Much smarter people then I have written on this subject here:

Marc Andreessen take for one.

To take this notion further, Charlie Munger as most of you know is Warren Buffet's partner. He gave a compelling and intuitive lecture on Economics at the University of California in 2003.

Charlie himself never took a course in Economics. Yet he's invited to conduct this lecture. So his lecture speaks significantly from economics and business experience learned on the job - and I'm a fan.

The lecture is here.

Here are some great excerpts:

Berkshire has never believed in the academic concept in Economics called the Efficient Market Theory.

"One of the worst examples of what physics envy did to economics was cause adaptation and hard-form efficient market theory. And then when you logically derived consequences from this wrong theory, you would get conclusions such as: it can never be correct for any corporation to buy its own stock. Because the price by definition is totally efficient, there could never be any advantage. QED. And they taught this theory to some partner at McKinsey when he was at some school of business that had adopted this crazy line of reasoning from economics, and the partner became a paid consultant for the Washington Post. And Washington Post stock was selling at a fifth of what an orangutan could figure was the plain value per share by just counting up the values and dividing. But he so believed what he’d been taught in graduate school that he told the Washington Post they shouldn’t buy their own stock. Well, fortunately, they put Warren Buffett on the Board, and he convinced them to buy back more than half of the outstanding stock, which enriched the remaining shareholders by much more than a billion dollars. So, there was at least one instance of a place that quickly killed a wrong academic theory."

Some simple micro-economic thinking can lead to powerful understanding of macro-economic forces:

"Case study: Nebraska Furniture Mart’s new store in Kansas City

Let me demonstrate the power of microeconomics by solving two microeconomic problems. One simple and one a little harder. The first problem is this: Berkshire Hathaway just opened a furniture and appliance store in Kansas City [www.nfm.com/store_kansascity.asp]. At the time Berkshire opened it, the largest selling furniture and appliance store in the world was another Berkshire Hathaway store, selling $350 million worth of goods per year. The new store in a strange city opened up selling at the rate of more than $500 million a year. From the day it opened, the 3,200 spaces in the parking lot were full. The women had to wait outside the ladies restroom because the architects didn’t understand biology. (Laughter). It’s hugely successful.
Well, I’ve given you the problem. Now, tell me what explains the runaway success of this new furniture and appliance store, which is outselling everything else in the world? (Pause).

Well, let me do it for you. Is this a low-priced store or a high-priced store? (Laughter). It’s not going to have a runaway success in a strange city as a high-priced store. That would take time. Number two, if it’s moving $500 million worth of furniture through it, it’s one hell of a big store,
furniture being as bulky as it is. And what does a big store do? It provides a big selection. So what could this possibly be except a low-priced store with a big selection?

But, you may wonder, why wasn’t it done before, preventing its being done first now? Again, the answer just pops into your head: it costs a fortune to open a store this big. So, nobody’s done it before. So, you quickly know the answer. With a few basic concepts, these microeconomic problems that seem hard can be solved much as you put a hot knife through butter. I like such easy ways of thought that are very remunerative. And I suggest that you people should also learn to do microeconomics better."

Another favorite part of mine on financial projections:

"Usually, I don’t use formal projections. I don’t let people do them for me because I don’t like throwing up on the desk (laughter), but I see them made in a very foolish way all the time, and many people believe in them, no matter how foolish they are. It’s an effective sales technique in America to put a foolish projection on a desk.

And if you’re an investment banker, it’s an art form. I don’t read their projections either. Once Warren and I bought a company and the seller had a big study done by an investment banker, it was about this thick. We just turned it over as if it were a diseased carcass. He said, “We paid $2 million for that.” I said, “We don’t use them. Never look at them.”

Another favorite part is the discussion on synthesis. He uses an example of Ricardo’s principle of comparative advantage in trade, and the other is Adam Smith’s pin factory. And while these are two very different systems Charlie shows how they work together:

"Berkshire had this former savings and loan company, and it had made this loan on a hotel right opposite the Hollywood Park Racetrack. In due time the neighborhood changed and it was full of gangs, pimps, and dope dealers. They tore copper pipe out of the wall for dope fixes, and there were people hanging around the hotel with guns, and nobody would come. We foreclosed on it two or three times, and the loan value went down to nothing. We seemed to have an insolvable economic problem -- a microeconomic problem.

Now we could have gone to McKinsey, or maybe a bunch of professors from Harvard, and we would have gotten a report about 10 inches thick about the ways we could approach this failing hotel in this terrible neighborhood. But instead, we put a sign on the property that said: “For sale or rent.” And in came, in response to that sign, a man who said, “I’ll spend $200,000 fixing up your hotel, and buy it at a high price on credit, if you can get zoning so I can turn the parking lot into a putting green.” “You’ve got to have a parking lot in a hotel,” we said. “What do you have in mind?” He said. “No, my business is flying seniors in from Florida, putting them near the airport, and then letting them go out to Disneyland and various places by bus and coming back. And I don’t care how bad the neighborhood is going to be because my people are self-contained behind walls. All they have to do is get on the bus in the morning and come home in the evening, and they don’t need a parking lot; they need a putting green.” So we made the deal with the guy. The whole thing worked beautifully, and the loan got paid off, and it all worked out.

Obviously that’s an interaction of Ricardo and the pin factory examples. The odd system that this guy had designed to amuse seniors was pure pin factory, and finding the guy with this system was pure Ricardo. So these things are interacting."

Then there is a great part about reaching to other sciences and fields and learning subjects there, then applying them to whatever problem you're tackling. Charlie mentions it's like having a bigger toolbox to deal with a problem - and I think it's a brilliant way of looking at it.

Go Charlie!

Monday, December 17, 2007

Alan Greenspan on the subprime crisis

http://opinionjournal.com/editorial/feature.html?id=110010981

Also, Lawrence Summers predicts a recession:
http://www.ksg.harvard.edu/ksgnews/Features/opeds/112607_summers.htm

Sunday, December 16, 2007

AMD CEO Talks about AMD's vision for next generation processors

Hector Ruiz used an interesting term that I haven't encountered before: heterogeneous cores. Currently as we know the dual and quad core processors today have multiple identical cores. This produces more chips per density and increases computing power. However, this basically means getting a bunch of chips in one. The distinction of heterogeneous cores is an ability to bundle cores that do different things in one processor. Hector uses an example of placing a GPU (Graphic Processing Unit) core along with a CPU core. Makes me wonder if CPUs will still have the same acronym :)

Here is the interview:

Thursday, December 13, 2007

Tim Berners-Lee gives an amazing talk on the future of the Web

It's interesting to see how someone creates something on the Internet and then (if you're lucky and good) some "magic" happens. How and why it happens according to Tim we don't understand, but it's interesting to see it happen.

Wednesday, December 12, 2007

Fun Read

My former boss, Dave Nocera at ITVerify started a blog. Formerly he was the chief infrastructure architect of AT&T and built software companies for kicks. I loved his stories on the days at AT&T where he was one of the developers of the unix kernel SVR4. His blog is a lot of fun. Enjoy

http://noceradave.blogspot.com

Monday, November 5, 2007

Some big investors staying away from tech

It's very interesting to see how the Internet is quickly evolving and changing at a rapid pace. Not long ago, Facebook came out with the open platform that's based on the proprietary Facebook Query Language (FQL) and Facebook Markup Language (FBML). As this was praised by some of the biggest names in the industry (no need for name calling) a short while later Google came out with Open Social, which provides a common set of APIs for social applications for many sites. Open Social does not rely on proprietary technology - but rather endorses the standards that are used on the web today - HTML, Javascript, etc. Open Social has managed to strategically place itself into a powerful position, by announcing partnerships with leading social sites such as MySpace, Friendster, hi5, Hyves, imeem, LinkedIn, Ning, orkut, Plaxo, Oracle, Salesforce.com, Six Apart, Tianji, Viadeo, and XING. And the interesting part is the big names in the industry quickly abandoned ship of the Facebook platform and are now endorsing the standards technology from Google. Then there is Oracle in this mix. Does Oracle have a social website? Interesting. What will Oracle do here strategically?

Then there are investors like Warren Buffet who stay away from technology investments. One of the reasons, as Warren explains, is he'd like to know where a company will be in 10 years. Is this possible with Internet companies? It's interesting to note, we don't see radical shifts like this in businesses like Coca-Cola. Your thoughts?

Sunday, November 4, 2007

Fingad Beta going live

I'm very excited to say that Fingad will be releasing the second beta. We have been working with great excitement on the prototype and aim to offer the financial community a new avenue of resources for information. Stay tuned to see the new site and we are actively collecting feedback. The model we adhere to is users collectively set the strategy for our direction. Hence the users are the most critical and valuable asset to what we're building.

The site is here: www.fingad.com and the new release will be available shortly.

Thanks to all for your feedback :)