Let me first start by posting some of your awesome reactions to the name change:
After a name change like this, the gov’t might have to bailout the company who created this abomination.
I like the old name better. It was fsxier.
I’m sorry but what kind of retarded name is KaChing? Did you get that from a four year old?
did you know that - ka ching … sounds very much like buttocks in a chinese dialect!
KaChing? Seriously KaChing? Can I now invest in bling and hoes?
kaChing? still too early for April Fools, hello?
Sounds like my little sister’s barbie cash register!
Who came up with KaChing? Sounds like Barney the Dinosaur is playing the stock market.
I think my favorite is “Can I now invest in bling and hoes?” Anyways, I thought now more than ever was a perfect time to tell you guys what’s up and where we are going.
- Why did we change the name? Using the word “fantasy” does not make sense with our new business model. In addition, now with kaChing, you can play on whichever sandbox you please : on Facebook, MySpace or the standalone site.
- What does it mean that you are a Registered Investment Advisor with the SEC now? It means the best managers on kaChing can now make some serious “bling”, REAL MONEY managing a virtual portfolio on kaChing. How? By earning high risk-adjusted returns and attracting a large following, we will soon (second half of ’09) allow your followers to link their brokerage account to your behavior. You will be paid a convenience fee (our term for mgmt fee) and a percentage of the commissions generated by your follower’s broker. Just as Ebay powersellers have bustling businesses on Ebay, you can have your own investment business on kaChing. To give you an example of how much money a successful manager on kaChing can make: Let’s say you have the following:
- 2,000 followers
- Your followers have an average account size of $10,000
- Assume 1% convenience fee (our term for mgmt fee)
- Assuming you make a few trades a month (you earn a percentage of commissions)
- Total = $350,000 revenue split between YOU and kaChing (not sure of percentage yet). Not too shabby, eh?
- Does this mean I have to pay to follow a kaChing manager? Hell no! You will only pay for the convenience to hook up your real brokerage account to the manager’s behavior.
- Does this mean the application won’t be free anymore? Hell no! You won’t ever have to pay to use kaChing
- Is kaChing going to become all corporate and serious now? Absolutely not. In fact, we are going to make a conscious effort to make the site more fun.
That is why we chose a name we thought would be fun J Get it…like Yahoo! kaChing will always be a great place to practice investing, learn the stock market and get hedge fund grade tools for free! P.S. Speaking of free, I am offering a free t-shirt to the user who comes up with the best new idea that would make the site more fun! - Dan
Visit kaChing
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December 3rd, 2008 at 8:24 pm
Like i said before.. i think it would make it more fun to change the amount that you start out with. I know you want people to feel as though they are managers, but why not make them feel like individuals as well. Have the option of starting people out with $100, or $1000 dollars instead. Make it more of a “real life scenario”
December 3rd, 2008 at 9:00 pm
Shane, we plan on adding a withdrawal function allowing you to have any starting amount you please some time in first quarter of next year…
thanks for the comment
December 3rd, 2008 at 9:03 pm
add the hoes!
December 3rd, 2008 at 10:41 pm
i like adding the hoes one, we can sure come up with some mechanism for computing the appropriate number for elite managers, something like incentive pay just that they cant be taxed…atleast not under current tax rules…
December 3rd, 2008 at 10:42 pm
forgot to add…awesome job guys, wish u all the best
December 4th, 2008 at 5:56 am
i took a peep at the form u guys filled up with SEC.. was curious as to how you guys will be compensated for your investment advisory services by advertising?
December 4th, 2008 at 6:44 am
The name doesnt sound very professional. It sounds more like an arcade game than anything else.
December 4th, 2008 at 8:01 am
how about adding a whiteboard function?
December 4th, 2008 at 9:51 am
“We will soon allow your followers to link their brokerage account to your behavior.”
The word “behavior” is used when describing the “brokerage linking” and though it isn’t as specific as saying “actions” it isn’t as less specific as saying “ideas”.
The linking sounds like a fun idea, but allowing real money to be traded by a rogue manager is unethical to begin with and too dangerous. Our free markets have little regulation on a philosophical principle allowing the people to make their own choices, including the choice to take risks and self-educate. The brokerage linking option should never take the execution of trades out of the hands of users nor to any degree automate trading.
The linking concept would increase talent (by incentive) to the site. Creating an incentive for talent towards helping me in my role as a self-educator learning how to evaluate information (and its reliability towards decisions) would be more valuable. Avoiding a cut and paste stock choice mentality between talent and clients needs to be adhered to. How does a talented individual protect his/her incentive interests from an individual that can copy stock behaviors for the same incentives?
From what I have deduced, the best vantage point would be to reward the best educators.
And “kaChing” doesn’t work. Why not revert to the old “Hedge Stop” title?
December 4th, 2008 at 9:55 am
Cathy, we have thought about adding a scratchpad of sorts…still figuring out priorities and best case usage
December 4th, 2008 at 10:45 am
So creating a “social hedge fund” is what you have in mind?
Fascinating. You might soon want to post more educational/informative things about investment/brokerages, cos I’ve never invested $$$ — but think that a hedge fund based on Chris Lau or Jimmy Jim Cramer’s offers better chances of having me cruise down the boardwalk in a Ferrari than any other scheme I know (hard work included).
December 4th, 2008 at 10:58 am
Dave - you make very good points, and I can especially relate to your comments about education and evaluating information. All the tools we’re providing for free are there for a reason!
It is our mission to give users the ability to make highly informed investment decisions - whether that is on their own or by selecting an appropriate manager. To this end we’re building complete transparency - you should only consider managers who have at least a year’s track record of good risk-adjusted returns (hence risk metrics and benchmarking), have made those returns consistent with their stated strategy (hence attribution analysis and skill score) and have provided compelling research to explain why they make specific investments (that’s why we encourage managers to post research and have built a behavior based algorithm to rate them).
You should know that being a registered investment advisor, we would never facilitate emulation of managers that we don’t believe adhere to the principals of proper management.
Finally, If you are more interested in learning and leveraging ideas, you can always follow for free via email notifications (and this will ALWAYS be free) and use that information as you may.
December 4th, 2008 at 7:48 pm
Okay, I think it’s good that explanation finally came out. A few comments:
This all sounds like a good idea, very interesting. I can see KaChing’s point of view on it on how tying in real money into both sides (managers and investors) gives a good incentive to have better research, investments, etc….
BUT, there’s a huge flaw in my opinion…
First, I don’t think people should be investing money with people that they have no knowledge about. I’m guessing there will be some sort of Prospectus, etc, but it gets very complicated and there are a lot of potential legal issues.
Second, I just don’t think people should be piggybacking other people’s returns. I think on average, many (forgive me for saying this) “less-educated” investors may just follow managers that have had large returns (or even risk-adjusted ones) in the past when “past performance is not indicative of future results” is just a small disclaimer on the bottom of a page with no explanation.
Third, and probably most importantly, having a manager having complete control over someone’s portfolio, when he/she is not a RIA themselves poses many ethical issues. I could totally see someone that has a great “track record” right now after shorting the market or just getting lucky on a ton of Apple stock, just saying, “forget it, let’s mess up these investors’ lives and make stupid investments/trades.” Just the potential for a manager who has even a few “followers” to be able to do something totally irrational, and probably without their investors’ consent, is very scary. There’s no regulation on them and they can do whatever they want, and a lot of people can lose a lot of money.
Let me know all your thoughts and keep up the innovative thinking. There are probably some work-arounds, but it may be complicated and I’m not sure on the now “company’s” expertise.
December 4th, 2008 at 9:11 pm
Jon - we’ve been considering the excellent points you’ve raised for a long time so it’s great that we can discuss them with the community.
Yes indeed - people should select managers in an informed manner. But consider the plight of the average investor today - the vast majority of Americans invest in the stock market through Mutual Funds. Sadly, these investment vehicles are a TERRIBLE product: they release a report once per quarter, they only disclose a small portion of their holdings (and those are the quarter-end’s holdings - so they may have been window dressed before the report was due), there’s no way to know how the returns were made, managers do not share their research so an investor cannot evaluate the quality of their thinking and finally, its impossible to communicate with the funds’ managers to learn more about them and about their strategies. To add insult to injury - mutual funds charge fees to cover their marketing expenses, back office costs, etc.
I’m sure you’ll agree that the right way to pick a portfolio manager is to seek someone with at least a year’s worth of a track record, who has acheived market-beating RISK-ADJUSTED returns in a manner CONSISTENT WITH IS OR HER STATED STRATEGY and backed by COMPELLING INVESTMENT RESEARCH.
This is what we’re building - look at the above list of mutual fund flaws and now consider the kaChing alternative: full disclosure of current and past holdings 24×7, continuous risk analysis, attribution of gains since inception, the manager’s research is fully available, a proprietary skill score that we’ve developed, and the ability to communicate with the portfolio manager directly, at any time. And all this is free (and always will be).
While the availability of all these great tools might not educate the “less educated” investors overnight, it will make it far easier to select a managed investment product correctly and do so in a more informed way. We view education as a core part of our mission.
As part of our responsibility to help people make more informed investment decisions, you can rest assured that we will NEVER facilitate emulation of a portfolio that does not exhibit the kind of professional-caliber management qualities that we seek. A lucky one-off investment just won’t to cut it. Remember that we’re registered with the SEC: why would we do ever anything that would jeopardize our status? In fact, emulated portfolio managers will be subject to our oversight and they will of course have a financial incentive to continue managing investments in a professional manner.
Finally, regarding our expertise - we are backed (both financially and professionally) by a group of highly educated, experienced and successful Silicon Valley investors.
I hope this helps shed light on how we’re going to acheive our mission.
Your comments are fantastic, and I’m grateful that you took the time to share them. Keep ‘em coming!
December 5th, 2008 at 5:14 am
What happened to giving some basic iknowledge on the companies activities (business) like you did when fsx first started?
December 5th, 2008 at 6:30 am
For fun how about a seperate tab for groups wer investors can come together to pool money in certain groups of shares like a kind of unit trust/guild, with charts etc to compare groups. This will add some more competition between these groups and also help some rookie investors.
December 7th, 2008 at 8:03 pm
Another problem: There is an inconsistency with the manager’s portfolio and the managed portfolio. In other words, the manager is managing a fantasy portfolio of $10M+, with very low trading costs, while a normal investor would be managing much less, and would thus probably have much higher trading fees. If a manager has very high turnover, they could total erode an average investor’s portfolio just with costs since they aren’t the same.
December 8th, 2008 at 12:11 am
How about a flash app that compares multiple charts for their performance at any given time on real time. Also it would be cool to have more regularly updated numbers.
December 8th, 2008 at 7:04 am
Julian, we used to have company profiles in the quote page didn’t we? Maybe we should think about adding that back
Andrew, we plan on releasing groups in first quarter of next year that will have some of this functionality you are referring too
December 8th, 2008 at 7:06 am
Jon,
An investor with a relatively small portfolio should NEVER employ a high turnover strategy. We actually view it as part of our responsibility and mission to educate people on this and we don’t intend on allowing small portfolios to emulate high turnover portfolios.
Also in cases of high turnover, some brokerages are already offering very low commissions.
December 8th, 2008 at 7:25 pm
Right I agree, but to what extent are you letting investors choose for themselves and to what extent are you limiting their selection of managers on KC?
In regards to the brokerages, I guess it depends on the brokerage. Perhaps someone with your potential scale is using IBKR?
A few noteworthy additions:
-Multiple portfolios: fund managers have several strategies, and this allows managers to differentiate between different strategies for different people.
-One real business idea I think would be good (since I still have doubts about KC’s current path) is the ability to invest in an index that KC would be able to manage that is the aggregate of everyone’s portfolio. I’m guessing there’s already a database of everyone’s positions via “Insight,” so maybe people should be allowed to invest in that. It’s probably a little safer than an individual managers, but I’m thinking there’s a ton of turnover due to the short-term nature of most people. May want to limit to “Top” managers (top 100, elite, etc.).
December 8th, 2008 at 9:54 pm
Jon -
As far as selection of brokerages, we will be building a selection that focuses on what will serve users best.
As far as limiting the selection of managers - you should know that managers will enter an agreement with kaChing that will allow us the kind of oversight that you’d expect from a Registered Investment Advisor, and we won’t enter such an agreement with individuals who don’t meet our threshold of professionalism (for example we won’t facilitate emulation of a manager with less than a year’s worth of data, etc).
btw - if you’d like to contact me with more questions, feel free to email me at jgalore@kaChing.com
December 9th, 2008 at 7:26 pm
Okay, I guess we’ll all just have to wait and see what comes out.
Feature request:
Sortable portfolios (by categories e.g., % gain, % weight, name, etc)
December 9th, 2008 at 9:15 pm
Jon - you can already sort by gain, research rating, skill score.
We just launched preset filters (as well as more advanced filters a few weeks ago) so you can filter down by investment style, industry, etc).
I expect more sorting capabilities will be out soon.
December 9th, 2008 at 11:33 pm
I think this is a very interesting idea, and hopefully a profitable business model.
For adding fun, how about a BlackBerry app for kC? I hate having to log in to Facebook on my computer to check my portfolio.
Another idea I had that would be fun (but might not jive with your business model) would be micro-wagering. Say every day you would have a question, and people could wager money on what is going to happen. For an example, “Will GM get a bailout today? Yes or No?” and people could put kC dollars on the outcome.
You guys are obviously smarter than I am on this, but to alleviate some concerns regarding putting money in other people’s portfolios, why not have an e-mail alert system? So say if the manager suddenly sells a lot of stock, those who opt for the alerts will get an email saying what is going on and whether or not they want to follow.
I just want to say, this is the only 3rd party app I have on Facebook, and it’s great. Thanks for the effort put into it and I wish you best of luck with the new ideas!
December 11th, 2008 at 9:20 am
I meant on individual portfolios.
Also, isn’t there a privacy issue with having everyone’s name on KaChing (itself) versus on Facebook? Maybe everyone’s name and picture should be made anonymous (FSX Player 9183745932498) unless they let it out.
Also, how do we login to KaChing site if we had a FB account?
December 11th, 2008 at 4:11 pm
who the fuck cares what the name is?
it’s a great site.
keep up the amazing job.
rb.
December 11th, 2008 at 7:18 pm
Jon - no privacy issue, we’re well within FB’s privacy policy. If you google someone’s name, you’ll often find their facebook record. People who aren’t exposed on public searches don’t have their name shown on kaChing either - so anyone can control how they are displayed.
Visit the FAQ to see how you can link your kaChing.com account to your facebook app account.
December 12th, 2008 at 6:57 am
The skill score, elite/premium/basic, and other stats seem to be getting to be a bit much. Actual stats (Sortino, sharpe, stdev, returns, etc) are fine, but too many proprietary stats make it a little confusing.
On skill score, the research requirement probably shouldn’t be 70% of POSITIONS, but instead 70% of the PORTFOLIO. Otherwise, you’re punishing people for diversification.
Thanks and keep up the good work! I still want sortable columns for individual portfolios and thus their positions!
December 12th, 2008 at 1:38 pm
Jon - risk metrics are very helpful, but we don’t feel its enough to truly evaluate a portfolio manager’s skill. We’re developing additional insightful metrics, by SuperCrunching the massive amounts of data that we have, in order to better gauge the quality of returns.
Case in point: a portfolio may exhibit good risk adjusted returns (as expressed by traditional risk metrics) but if the returns were due to luck, that won’t be reflected unless you also measure the source of those returns against a stated strategy. That’s why we’ve introduce the Skill Score.
I hear you on the confusing though, and we’ll be making it easier to understand and use. I expect we’ll also add sortable columns early next year.
December 13th, 2008 at 1:26 pm
Should we be able to write research about holdings we don’t have? I mean, what if I’m a long-only manager and I want to recommend not buying things instead of shorting them? This should prop up the amount of research. There should also be incentives for reading other people’s research and rating them so that higher quality stuff can float to the top.
Also, the blog site needs to be merged into the same KaChing site and look better. It looks thrown together still.
Thanks!
December 14th, 2008 at 9:03 pm
Jon - we believe research is essential in order to evaluate a manager’s rationale for taking a position, so we’re not pursuing research for research’s sake, but only associated with actual positions.
However, many users have expressed interest in a blog-like function where they could also write about companies that they are not investing in. We hope to on offer this sometime next year.
December 15th, 2008 at 7:49 pm
Okay, the blog thing sounds good. Managers should be able to tell their investors what they are thinking and perhaps preparing to buy/sell/short.
For the risk metrics, why should the benchmark be S&P500? Especially when some people want to chart against Russell 3000? Personally, I’d prefer MSCI All-Country World + Frontier Markets Total Return for a truly global market index to benchmark against.
Perhaps a more real-time listing of recently posted research would be better than users constantly posting on the wall that their new research has been written? There’s a crowd effect when some managers constantly market their own research.
And maybe a suggestion box rather than people typing on the blog? Hahah.
December 17th, 2008 at 12:24 am
ps. dan.
say hello to the boys at kpcb for me. merry xmas, you bunch of greedy pricks. don’t screw this one up, it rocks. i’d work for it for free if dan offered me a job as a gopher, this is such a cool idea.
kpcb…”ah, yes, i remember them well.”
they seem to always know what the best net startups to invest in early, amazing that.
rb.
December 17th, 2008 at 12:31 am
ooooh!
i want a tshirt!
my idea:
free tshirt a week to the top gainer and biggest loser, with LOSER and WINNER stamped across the logo.
i bet you’d see jim cramer wearing that on cnbc inside of a month.
booya!
the loser gets a reward because, seriously, it’s equally as hard to lose the most money as it to make it. try it. i bet you can’t do it.
you’ll probably end up making money instead out of pure dumb luck.
personally, i use my two-headed coin.
heads, i win.
tails, i win.
works in the reverse too:
tails, i lose.
heads, i throw the damn coin out the window.
better yet: get a monkey to pick stocks every day and post his picks on the web site to compete against the top managers.
i’d buy that for a dollar.
er, a euro, i mean.
can i get that tshirt now?
cheers.
rb.
December 17th, 2008 at 12:32 am
OR
i think you should have a little sound byte that goes off whenever you log in to the site, the kaching sound a cash register makes.
just to be extra cheesy.
stay in the spirit of when yahoo! picked it’s name back in the day…
cheers.
rb.
December 17th, 2008 at 12:34 am
here’s a great way to promote the site:
get cramer to sponsor a kaChing! stock pick of the day on his cnbc show, with him hitting that button board with a kaChing! soundbyte.
he’d love hitting that button for you, promoting trading to the little guys.
booya!
rb.
December 17th, 2008 at 12:13 pm
RB, our investors from are affiliated partners of Kleiner Perkins and now run Radar partners
great and funny ideas! send me an email to dan at kaching.com, and I will put you on our list to get a free tshirt!
got any ins to cramer?
December 17th, 2008 at 7:32 pm
if i got cramer to contact you, or set up a call to him, what would i get?
after all, this is about capitalism, is it not?
it’s no coincidence i know kpcb so well…
cheers.
rb.
May 17th, 2009 at 3:53 pm
This business model won’t work. No one is going to put their money in the hand of kids wearing boxers in the basement.