One of my favorite money-related movies is the 1983 Eddie Murphy and Dan Aykroyd comedy Trading Places.
The second half of the film revolves around Murphy and Aykroyd’s interception of a critical USDA report about the orange crop forecast, and they use this inside information to profit from trades in frozen concentrated orange juice.
While much of the film is rather dated, the issue of information only being available to those at the top is one that continues to keep individual investors out of the market. (Although it’s important to point out that Murphy and Ackroyd were illegally using inside information.)
But unlike 1983, information has become a much more democratized commodity. Between social media, financial blogs and news sources, and Internet forums, anyone can access the information necessary to understand the movement of markets.
But even though financial information and trends are available to anyone, the sheer volume of information makes it impossible for any individual to make any sense of it. That’s where TickerTags comes in.
TickerTags describes itself as a social taxonomy that works to identify every product, brand, or cultural movement that could be meaningful to a company. The platform tracks the mentions of these meaningful “tags” across social channels in order to help users identify trends before the market reacts.
Here’s what you need to know about how TickerTags works and how you can incorporate its information into your investment decisions:
The TickerTags Origin Story
TickerTags co-founder Chris Camillo turned $20,000 into $2 million within two years by identifying market movers across various social channels, and then using the public sentiment and trends he found to make his investment decisions. It was an impressive achievement, even though the information he used was readily available to anyone with an Internet connection.
But most investors don’t often take advantage of this strategy because they don’t have the time to devote to monitoring social media. Camillo realized that there had to be a better way than manually reading through thousands of tweets each night, which was his onerous routine for making investment decisions. What he needed was a social platform that could do the monitoring automatically with the help of human curators. He asked software engineer Jordan McLain to become his co-founder and chief engineer in developing that platform, and TickerTags was born.
How TickerTags Works
The social platform tracks five content streams, including Twitter, news, financial news, blogs, and forums. Over those content streams, TickerTags identifies the meaningful “tags” that could affect a company, and it monitors those tags. There are currently more than 350,000 tags relating to 8,000 publicly traded companies.
Since the platform monitors its content streams in real time, investors can follow tag mentions and sentiment changes over time, helping them to discover and identify trends before the market moves on them. The tracking is displayed on a real-time graph that is plotted against the current stock price, giving users a visual understanding of the peaks and drops in online chatter, which can offer an early warning sign of change in a stock price.
Camillo gave the following example of how it works to the Dallas Business Journal:
So, for example, gluten-free is a cultural movement. We associate gluten-free with every company that could be affected by it. Anytime someone mentions it, we monitor it. TickerTags can track the acceleration of conversation to gluten-free. TickerTags users can also monitor the level of sentiment that also revolves around gluten-free.
In addition to the monitored public posts, TickerTags uses human Tag Curators who each have company-specific expertise. These Curators add tags based on suggestions from the TickerTag community, as well as tags generated by the platform’s learning engine. This is a form of crowdsourcing that ensures that the program gets smarter the more people who use it.
The platform is free to use, and is currently in beta. Once TickerTags is fully launched, it will still be free to use for tracking public tags. However, users will also be able to subscribe in order to create and track private tags. For example, a user may add “Disneyland” coupled with the word “crowd” to the already existing Disney tags, and keep that tag private.
Creating a private tag is the only way to track a tag that you have come up with on your own. In addition, creating a private tag also allows you to extract proprietary insight from the platform.
Subscription rates will start at $30 per month for 40 private tags. Beta users may add up to 40 private tags for free until the official launch.
Active vs. Passive Investing with TickerTags
While most investors signing up for TickerTags would expect to actively use their insights from the platform in order to increase their profits, this platform is also a great tool for more passive investors.
For instance, I will never be the sort of investor who monitors tags on a daily or even weekly basis—but I have signed up for the platform and plan to use it as a tool for separating market rumors from facts.
As Camillo told MediaPost, “Our taxonomy of tags serve as a bridge and filter to parse the world’s information streams for relevancy without human bias.” The fact that I know the information gleaned from my TickerTags platform is free of human bias and error, will help me feel much confident about my investments in the face of rumors or bad news.
Knowledge Is Power
Eddie Murphy and Dan Aykroyd humorously proved in Trading Places that information is not only powerful, but valuable. The information offered by TickerTags will help to level the investment playing field by making sure every investor has access to rational, real-time data.