[nerdponx]

I assume you are leaning heavily on some kind of natural language processing to automatically extract this information from SEC filings and earnings reports. That's a great idea. I just hope that you're being very very careful about the generalizability of your models & their performance over time.

Obviously 99% of the work in buidling such a system is just getting access to all the data and setting up the ETL pipelines, and that alone is value worth paying for.

I'm also a bit confused by this part:

We wanted to build an experience without the hassle and complexity of charts and financial jargon.

Yes, there are some funny terms like EBITDA out there, but ultimately this is all just part of doing due diligence. If you want to make a medium-term or long-term investment (i.e. you're not gambling on short-term options), you gotta look at that stuff.

And if I don't want to do it myself, I can log onto Schwab, Ameritrade, Fidelity, etc. and get 5-10 analyst reports on pretty much any ticker, including an "in-house" grade (e.g. "this stock has an overall D rating") that, theoretically, is all I need to know for making that kind of investment. I'm curious (not doubtful, just curious) what you offer that's better than this.

[anamlakhani_]

Currently, we are seeing that retail investors aren't doing any research at all, especially young people are relying on social media and memes to make investment choices which can be dangerous. EBITDA is important and it's a hard concept to understand for those who aren't familiar with finance - that's why we offer digestible insights to make it accessible. Analyst reports are very long to sift through and most people don't want to spend the time. That's why we opted for swipable cards of information so users don't feel the hassle of "doing research."The other platforms aren't mobile first and do not offer this ease of use and accessibility to non-financially savvy individuals.

[sjwalter]

Is it possible you're training your users to become even more susceptible to other investment scams?

At the end of the day, the fact is that securities analysis and investing savvy is a sophisticated skill requiring many years of study before any kind of +ev outcome can be expected.

In a way, this is one of the biggest reasons I think the move from private pensions to 401ks and the like has been a gigantic disaster.

I mean, I remember working at Google and a dozen or so of us on my team would go through some fairly deep analyses and discussions regarding 401k allocations, mega-backdoor contributions, tax implications of same, HSAs, HD healthcare plans, etc.

My brother's a carpenter. My dad works in a factory.

They are both forced to make these same decisions, except with basically zero background whatsoever in any kind of financial education. They don't know the very basics about the fees their funds are taking, they aren't too interested in figuring the exact tax-efficient pathway to retirement.

And why the hell should they be?

Forcing commoners into market participation was a mistake.

Your app is well-intentioned. Seems pretty great, to be quite honest.

But you're training your users to become used to coyote-behaviour (that is, Hey Investing Can Be Quite Simple!), whereas we should train all regular existing "market-participants": Anybody who wants to get you to invest directly in markets, whether it's your RRSP organizer, your 401k, whatever, they in general are not operating with your best interests in mind.

401ks and the like were a huge boon to wallstreet and huge hit on the working class. WallStreet basically forced every Tom, Dick, and Harry into their arena. Guess who's gonna win?

[recursive4]

I share these curiosities and agree with the sentiment that something that requires skill to de-risk should not simply have its perception of risk lowered but actually educate. This is likely a contrarian view, but there is a benefit in novices losing non-trivial amounts of money so that they learn risk avoidance and develop a respect for expertise & experience. It's no different from how children learn from mistakes and the risk is proportional to the learning experience.

[allenu]

I think it depends ultimately on the target audience of tools like this. If the target audience are people with a steady income flow that can bounce back from losses, then mistakes along the way are useful long-term. On the other hand, if the target audience is made up mostly of people who don't have the luxury of bouncing back, then those mistakes will be devastating.

It's definitely a fine balance for a product like this. You want to make investing feel "easy" but not so easy that it seems like all it takes to make money is to read a few bite-sized tidbits about a company, thereby increasing the risk-taking behavior.

[donnythecroc]

Commoners!? Wow, just wow. You sound like exactly the kind of hedge fund snob wsb is taking down.

[sjwalter]

If you believe WSB is "taking down" hedgefunds instead of "being played like a fiddle" by them, you should probably take a second look.

[smabie]

Could you give an example?

Market making firms have done really well due to wsb and the increase of retail volumes but it's unclear to me that hedge funds have benefited in any material way.

[hong_kong]

Not the OP, but check out the below examples. Beneficiaries across the range, from fundamental equity funds, quant funds, and distressed funds. The retail guys weren't just buying shares from themselves and market makers.

https://www.wsj.com/articles/this-hedge-fund-made-700-millio...

https://www.washingtonpost.com/business/2021/02/08/gamestop-...

https://www.reuters.com/article/us-amc-ent-holdg-silver-lake...

[klmadfejno]

I don't see anything inaccurate or insulting about referring to people without financial education or experience as commoners in the context of finance.

[dominotw]

> we are seeing that retail investors aren't doing any research at all

> EBITDA is important and it's a hard concept to understand for those who aren't familiar with finance

Is there any proof that the later group has better outcomes ?

Even if you understand all the terms, aren't you ultimately just investing based on gut feeling since all the observable information has already been factored into the purchase price anyways.

[smabie]

Except, of course, not all observable information has been factored into the purchase price.

[dominotw]

> not all observable information has been factored into the purchase price.

Why wouldn't it already be priced into the current stock price?

[smabie]

Because someone needs to incorporate it into the price. People are dumb and inefficiencies in the markets abound.

[airstrike]

> EBITDA is important and it's a hard concept to understand for those who aren't familiar with finance

I disagree. The acronym is surely a mouthful, but you can summarize EBITDA as "approximately the same as cash flow generated by the company before paying any taxes, interest on loans or making capital investments like building a new plant or buying manufacturing equipment" which should be very intuitive for someone to think through

[klmadfejno]

I don't think that's intuitive at all. If you lack any financial experience, merely looking at cash flow is going to be intimidating.

[airstrike]

That's why you look at EBITDA and ignore the walk from Net Income to Cash Flow.

If you're not looking at statements, all I'm saying is "EBITDA is the cash generated (i.e. the profit) before taxes or interest on loans"

[klmadfejno]

Interest on loans varies wildly by industry though. EBITDA is certainly something on can reach a useful level of understanding on with a bit of effort, but it's hardly intuitive to someone who's never looked at financial statements before.

[marc__1]

> we are seeing that retail investors aren't doing any research at all

I don't necessarily agree. From Robinhood's most owned stocks by 02/25/21[0], you can 'maybe' argue that 2 out of them are 'meme' stocks. This is either an indications that investors know what they own or they follow the crowds (AAPL, AMZN, DIS, etc). It is easy to make conclusions based on media articles, but overall Robinhood investor is definitely not a meme investors

1. Apple 2. Tesla 3. AMC 4. Sundial Growers 5. Ford 6. General Electric 7. NIO 8. Microsoft 9. Walt Disney 10. Amazon

[0] https://www.nasdaq.com/articles/the-top-50-robinhood-stocks-...