Stockpickr

I’ve been playing around with Stockpickr for a few weeks after reading about it on TechCrunch.  I like it so far although I’m not sure if I really trust it.

While I like that it gives me an alternate source for info and that it gives me the opportunity to glimpse into the portfolios of others, I’m not sure if it can last. I’m sure there are going to be some regulatory issues that will come up eventually. The problem is that there is no real accountability and nothing forcing me to list real info.

The typical discusssion capability exists in Yahoo finance (although sometimes hijacked by spammers). In generall though, I’m able to get some good info or links to good info from Yahoo if I need it. Stockpickr is trying to expand on this, by bring social networking to mix. The idea is that not only can you see what others are purchasing and selling, but you can get a better idea of how many people in the network share a particular view. If you plan on using this as a primary source when buying stocks – get out of buying stocks NOW! While having this info could be valuable (if it can be validated to be accurate), the problems that plague Yahoo’s finance boards, will only be compounded on Stockpickr.
In its present state, I just can’t see how Stockpickr will skirt regulatatory issues. Surely stockpickr is more prone to market manipulations. One of my favourite movies was Wall Street – the part that has really stuck with me about that movie was the part where Charlie Sheen uses his fellow employees to pump and dump stocks. The social communication nature of Stock pickr seems to unintentionally exploit this illegal side of stock trading. How hard would it be to undertake a concerted effort to generate a bunch of pseudo users and portfolios and create hype about a particular stock with the hope that other users will jump on board? There is nothing regulating the site or the users so it would be difficult to prosecute someone for that.
Furthermore, I don’t really trust the algorithms. I took a look at the ‘Warren Buffet’ portfolio (btw, I really like that I can find … although i’m not sure how they validate that these). On the right side of the screen is a panel that lists ‘Top 5 Recommendations based on Warren Buffett’s portfolio’ with GOOG :: PFE :: MSFT :: BIEMX :: CEF listed.

not a single one of these stocks is within Warren Buffet’s portfolio (according to Stockprickr), and most of them are not even listed in portfolios for people who own one or more of the same stocks as Warren Buffet.

similarly for George Soros’s portfolio, I was given GOOG :: GS :: AAPL :: ALKS :: JEF as recommendations and similarly Soros does not (again according to Stockpickr) hold a single one of these stocks.

So what is the recommendation based on? simply because a bunch of people own a stock that Buffet or Soros also owns, Stockpickr is implying that the other stocks that those people own are validated in someway?

While I like the ability to see into the portfolios of some of the best minds out there, to research holdings within funds, and to see basic trends – I won’t be using Stockpickr with too much faith until I have more certainty of the quality of the info on there. This the basic issue facing all social networking sites right now…

btw – be aware of the moronic signup process. They send you an email with your password written in plain english within it… goes against almost every security recommendation out there. Considering the site is about financial information, they should be a bit more concerned with privacy and security…

have you used Stockpickr?  what’s your view?

*Disclaimer: At the time of writing this, I owned Yahoo Stock.  My full portfolio on Stockpickr is here.