Social, Trends & Social Trends

Last week, a friend of mine told me he was thinking about beginning to invest in the stock market with a particular eye on Tesla Motors and wondered if I had any thoughts to share. I do. Not as much about $TSLA as about part-time stock pickers and the emerging resources available to them.

More and more people are getting involved in managing their investments. And, when they do, a simple low-cost, robo-advised, target-date fund built out of ETFs isn’t always the best answer for everyone. For investors who have a good grasp of their overall financial situation, investing in particular companies can both fun and profitable – particularly if done with the right guides.

One guide I’d recommend, especially for those with less experience and only a few hours each week to spare, is Chris Camillo’s “Laughing at Wall Street.” Chris does a great job of describing how to use social data to generate and vet ideas, encouraging investors to use their personal experiences and observations but then filter and manage those possibilities in a disciplined manner before making the investment.

Another investor guru to turn to is Howard Lindzon, whose book “The Wallstrip Edge” is an easy-to-read introduction to the idea of “trend” or momentum investing. Howard articulates a more structured approach to identifying potential investments and then encourages investors to use social networks to learn as they go along. (He is such a believer in using a financial social network that he created one: StockTwits. We’re regular participants there as @wealthofinfo.)

Whether you use social networks to generate ideas for yourself or to trade ideas with others, it’s clear these sources will only get more numerous and be connected to even more aspects of our financial lives, as Jeff Jarvis makes clear in his thoughtful book “Public Parts.” Jarvis writes about the opportunity the internet creates for everyone to prove their expertise – and how those opportunities are growing all the time.

We’re at an interesting point in the evolution of social data. It started largely as data derived from communities built online (Facebook, Twitter). But as our social norms for data sharing shift and the lines between our online and offline existences get blurred (Jarvis covers this well), social data will begin to automatically encompass “real world” activities we never would have shared just a few years ago. Like driving. And eating. And trading stocks. Personally, I think soon we’ll find more and more experts who don’t even know they’re experts. It's one of the things we do at Array.

That’s the part of social data that has attracted us for years: when it isn’t just about online communities but is about society as a whole. That data is fun (and, yes, profitable) for us to work with, and more is coming all the time.

I have the good fortune to be on a panel at SXSW Interactive this year with Chris and Howard, as well as Leigh Drogen of Estimize (another online investment community with a big following). I look forward to talking about this with them – and many other interested people, from part-time stock pickers to full-time hedge fund managers – down in Austin. See you there.