Destroying Wall Street by Democratizing Financial Analysis

By: Chris Tell at http://capitalistexploits.at/

Nearly 4 years ago I penned an article entitled Open source world. In it I described a variety of changes taking place globally and how the status quo was being broken by open sourcing, led predominantly by technological innovation freeing up information.

I discussed the legal industry and how increasingly lawyers have to provide real value to business people, and not rely solely on information which today is easy and free to obtain. In other words, they can’t just push boiler plate solutions.

I spoke about the music industry which has been turned upside down by file sharing.

I discussed how traditional education is increasingly coming under threat from open source education. Its was just a trickle a few years ago and today its a stream. Khan Academy, UnCollege and others are making us re-think how we teach our children.

Today though I wanted to take a look at the financial analysis industry. I was recently on the phone with Justin Zhen, founder of Thinknum a start-up which is open-sourcing data previously held as “proprietary” information at Wall Street banks. Justin reached out to Mark and I because he liked what we were doing and thought there were ways we could work together. We were and are both sufficiently intrigued. Justin is a sharp young man.

The below is a direct quote from Justin, as I asked him to put pen to paper and give us a concise summary:

“My co-founder Greg and I initially started Thinknum after witnessing analysts at major Wall Street firms emailing spreadsheets back and forth and updating data by hand. We thought that these processes were highly cumbersome, inspiring us to build Thinknum, an open platform that brings their current workflows to the web. Instead of thinking about how to value an asset and doing that work from scratch, an investor can see how someone else has solved the exact same problem. He can change his assumptions or even build off his analysis.

“A major advantage of an open platform is providing these tools to all types of investors, not just professional analysts. We’ll collect a deeper pool of insights, allowing the best ideas to bubble to the top. Going global plays a big role in accomplishing this goal: Thinknum is a channel for a local domain expert to share her expertise with potential investors. Our vision is to index all the financial information in the world.”

Thinknum has just been accepted into a prestigious accelerator, so he’s likely going to learn a lot and take some abuse. We wish him luck and will be in regular contact and keeping an eye on the Company ourselves for future investment opportunities.

When I think of what Github did for developers I can easily see the scalability of this business. Done correctly, and we’ll do what we can to help Justin, this has the potential to transform Wall street in a good way, and level the playing field just that little bit more for the “rest” of us.

Personally, when I think of the ability to provide data to the market and quantitative analysis without the need for a Bloomberg terminal or Thomson Reuters feeds I immediately understand the potential.

Michael B might want to look over his shoulder to make sure he’s not being followed… oh, too late.

– Chris

“Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” – Peter Lynch

    



Leave a Reply

Your email address will not be published. Required fields are marked *

46 − = 36