Stock Market Goes Web 2.0 – Social Networking, Stock Ratings and More! - Motley Fool CAPS
Late last night The Motley Fool released its beta version of “CAPS”; a free community based stock rating service. It seems as though every industry has been jumping on the “Web 2.0” band wagon; where there is a niche there is a way (so seems the slogan). The Fool on the other hand has done a notable job of creating a service based on its core competency – delivering, sharing and evoking community supported financial and investment information. CAPS proclaims itself as a “revolutionary new service [that] pools the resources of the Motley Fool Community to help you identify the best stocks at the best times to buy them — and which stocks to avoid, too!”
Are we in need of more “Web 2.0” services proclaiming to revolutionize our way of life? Flickr has changed the way we archive, view and share photos. Cork’d has altered the way in which we review and share wines. del.icio.us on the other hand has completely reworked our concept of bookmarking, saving and sharing our links of interest. Could CAPS truly revolutionize the way in which we research, share and discover stock information? I may adjust my wine purchasing decisions based on my interaction with Cork’d – am I though ready to adjust my portfolio and stock investments based on a “Web 2.0” app.? Are we now on a personal level ready to invest in “Web 2.0”?
What is CAPS? I’ve heard it described as fantasy football for the stock market – I think that is a little misleading. While there is no real monetary exchange at play, this is far from a game — I get the impression this is the sort of application that could actually influence and move business. The Motley Fool has described one of its key objectives as “… going to put [a] one to five-star ratings on every stock in America.” That is a bold request, and ridiculously powerful in numbers – scary even. Imagine being able to rate a stock and your rating either positively or negatively influencing the investing community. With any good “Web 2.0” app., there seems to be the need for a complex algorithm to follow. CAPS is no exception; your rating influences a stocks over-all rating based on two primary influencers (so it seems): how you’ve rated the stock and how your past ratings compared to that stocks actual performance. The short and dirty being, if your rating history is in sync with the market then your rating is weighted higher and vice-versa. Just imagine for a second taking all of the collective knowledge of the stock market and being able to determine whose input is more or less accurate and putting it against one another to capture a median point that almost perfectly predicts a stocks future performance. It is a powerful and scary utility to think that by applying a large social networking environment around the stock market you might actually be able to predict the future of a stocks performance.
I am not proclaiming that this is the next big thing for the stock market or even the internet – just an extremely interesting concept and application of recent and popular technology. This is how social networking was meant to be!
Check out The Motley Fool CAPS for yourself: http://caps.fool.com
Disclaimer: This is a personal blog. The views and opinions expressed here represent my own and not those of the people, institutions or organizations that I may or may not be related with unless stated explicitly.
- September 13th, 2006
- 16comments
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I think that The Motley Fool’s Caps is an amazing tool! It’s allowed me to discover an appreciation for long term investing and the benefits of diversifying a portfolio. I could see how both a stock and a player’s Caps rating could become a household thing; just like a Morningstar rating is too mutual funds.
Spoken like a true Motley Fool employee. HA HA –> Just kidding Nick; I think you are correct though! An amazing tool for all to use in a variety of ways.
Stop it with the Web2.0 already.
98 percent of web people who browse the Internet have no idea what Web2.0 means. If you were to ask them they would look at you with a blank stare and ask you if it is an updated version of the Internet.
Web2.0 is a played out term for a nice looking and well developed site where the owners actually took the time and invested in making a good layout for the site along with the coding needed to make it tick.
Kevin, I wont go into a big thing about how to and not to use the word “Web 2.0″, but I agree that the term “Web 2.0” has been overused and has unfortunately oversaturated conversations to the point of being synonymous with industry ignorance.
I wrote about this very topic! You might find this interesting:
Web 2.0 redefined with one word — responsibility
Kevin, you are right!
…but only to a certain extent
Sure, “Web 2.0″ describes the aesthetic layout design and code structure of a site… it also can define the user-centric model that most 2.0 sites include. This model allows the common everyday, non-technical user to participate in a community and generate intelligent and sometimes not-so intelligent content — like your last comment.
Whoa! Lets not get personal — comments get to out of control. I think Kevin had a valid point (perhaps the wording was a little heated).
I do believe there is a lot of confusion around the term, but that is because it isnt real, it doesnt exist. The foundation for design and development has been laid and whether we like it or not, the masses have termed that foundation “Web 2.0”.
It means different things to different people — but it helps put into context the over-all idea of the emerging technology we are working with at this moment in time.
Interesting. One thing I find especially cool is users like this- a pseudo-user created to track all the buy/sell actions of “Mad Money” host Jim Cramer.
The Fool is generally ahead of the cure, and I think they may have hit a goldmine with this one.
Yeah … this (like many Web 2.0 apps.) seems to be one of those things that either becomes nothing and shares the market with 20 others like it — or it truely becomes unique and forever changes its industry.
Look out Jim Cramer, there’s a new stock market fluctuation tool in town.
Boo-ya!
If any of you sign-up for CAPS, look for me at “TMFCreative” (not doing so hot right now).
Really great idea by Motley. I wish I would of thought of it first.
Nice article on CAPS today in the Wall Street Journal: Motley fool site to evaluate gamut of stock-pickers
Getting a little more exposure, The Motley Fool CAPS was featured on Techcrunch this morning! Check it out: CAPS Takes “Wisdom of the Few” To Stock Picking
I actually don’t agree with you guys regarding the Motley Fools prediction ability, i believe that they will end as all the other free money prediction markets, from my point of view when the predictors are not staking real money on their prediction (like they need to do in real life) they kind on not mimic the real life action of buying and selling a stock.
But see, you are looking at it incorrectly….
The Motley Fool isn’t trying to predict buying behavior – they are trying to predict user accuracy (in my opinion). It doesn’t matter why you do or don’t buy a stock – if you are just watching it, actually invested in or playing with real or non-real money. What is important is your accuracy in the market.
The Motley Fool CAPS is trying to predict the market based on nothing more than evaluating past performance. If you traditionally are 96% accurate, that is an important thing for all of us to know – whether you actually invested money or not. Picture someone who always picks the right stocks but never invests themselves – their input to me is more valuable to me than someone who invests every day but always picks the wrong stocks. I don’t care if you are really playing the market – I just care how well you know the market.
The closer you can get to achieving market accuracy, the better your chances will always have – that is why performance is such a valuable commodity.
Sorry for me taking time to reply,
Martin,
I totaly understood what you meant, but what i am trying to say is that for one, who don’t actualy place a stake under his choise of prediction is much easier to predict.
i.e
you might tell me to listen to my old body , which is a great free poker player (plays for virtual money) and asking him to seat near of me while i am playing for real, i wouldn’t listen to him, i believe that he can aford him self to be much riski while playing with virtual money than when some thing is under some stake.