Importance of Ideas in Successful Investments | Stockal
August 2 2017 - Thoughts@Stockal
Much has been said about discovering the right investable security – in most cases, a “winning” stock – that ends up making lives of investor and careers of analysts/fund managers. But unfortunately, there’s still not quite enough in terms of products and platforms out there to help people discover potentially great ideas.
There are scores of stories around of an investor having made an investment in a Ford in the 1950s or a Pepsi in the 1970s or an Amazon in early 2000s. As they say, you have to be “right once in a row” to be a famous investor. While that’s obviously sarcastic, and many of us may not want to be famous, per se, being successful is often the result of being right once. Just once. That said, making the right investments at a smaller scale, on a day-to-day (or month-to-month) basis is often at the foundation becoming a successful investor over time. So how do you that!
For years, the newsletter industry has thrived, giving subscriptions by the dozen every day, with the promise of sending you one or two “great” stocks every week. But off-late, generation of ideas seems to be moving away from newsletter readings and sharing between friends. IPOs are more public (for instance, Snapchat IPO saw a lot of millennial investors participating), social media has started playing a role and new ways of investing – such as Motif – are gaining ground.
Here are a couple of quick things to consider and tools to use that might be helpful:
Stock Screeners form a big part of an investor’s life. If you’re on course to becoming a value investor, find a good screener. Stockal has a great one (the best, maybe? #ShamelessPlug), MorningStar also has a popular screener. Screeners are mainly for the times you’re not sure about the kind of stock you may be looking for, but do have a broad set of preferences. They allow you to slice-and-dice the universe of stocks and other securities based on pre-fixed criteria and show you the most relevant ones that you might like. The Stockal Screener is, obviously, a very special tool. And probably the most natural and friendly one out there. You can search for stocks by traditional parameters such as fundamental ratios, like other screeners, but you can also discover stocks based on alternative data such as investor sentiment, analyst recommendations and social media buzz. And not only can you see stocks by sectors and industries (as traditionally defined by exchanges and regulators), we’ve tagged stocks into over 5000 different “themes” so you can search for pretty much whatever comes to your mind and you might just find a few stocks by the criteria – try “Trump” or “basketball” or “beauty” or “cleantech” for instance.
A few years ago Motif Investing launched with a very clever way of helping people find stocks. They created stock themes that people could relate to and started selling 30-stock bundles as readymade portfolios (or a “Motif”). If you like themes then Motif is a nice way to look at stocks. The only downside is that it’s easier and cheaper to buy whole themes/motifs on Motif Investing than buying single stocks. You can, of course, buy individual stocks on Stockal.
Twitter has become immensely popular among investors all over the world in the last 5 years or so. So much so that StockTwits – “Twitter for traders” – has over a million users now and is a prominent platform for stock market discussions and discourse. Following influential investors is often a good way to discover interesting ideas. It can deemed akin to reading newsletters these days. There are also platforms like TickerTags that surface stocks based on Twitter chatter.
Stockal has a great feature in this space as well. ‘Trending Stocks’ automatically brings you stocks that have increasing social media chatter or changing analyst opinion or unusual price movement. We also send you alerts with trending stocks very now and then – so you can basically sit and receive ideas.
Right here on Stockal
Stockal also has a nifty discovery feature for investors who import their portfolios (from many brokerages) into Stockal. Looking at your portfolios and your watchlist, Stockal has the ability to automatically surface other stocks (and ETFs, very soon) that you might like.