Needles and haystacks
The FT this morning reports on a new search/news aggregation service aimed at the financial trading community aka ‘hedge funds’ (is it just me or are pretty soon are we going to be referring to any business involved in trading assets as a hedge fund?…) I won’t bother to link to the FT (too bad for them, change your paywall policy folks) but basically it is touted as a revolution in information gathering, digging out the nuggets that exist below the radar screen of the conventional or mainstream press.
Sounds like they have some smart people and decent technology so I’m sure it will be useful however I suspect the really smart money traders who have known how to search blogs and use RSS readers and tagging and social-bookmarking services etc. will be a bit annoyed that any old dinosaur trader will be (in theory) able to find the same gems of information buy paying up for Monitor110’s services. And to be absolutely frank, the ground Monitor110 is breaking isn’t completely virgin; firms like Clearforest and Relegence have been offering similar services for some time now and digital generation traders can mash-up their own intellingent news filters either from scratch or using tools like Netvibes.
Edward Hadas over at breakingviews.com (another paywall, but really good analysis site founded by Hugo Dixon) likens it to using the ‘wisdom of crowds’ to trade. I’m sorry Edward but actually I think you’ve got this one wrong. ‘Wisdom of crowd’ - mining would be things like Marketocracy and SocialPicks. Monitor110 in my opinion is all about finding the needle in the haystack; finding the individual voice or nugget that escapes crowd amplification. Finding the kernel before it becomes a snowball. Where I do agree with him however is the paradox of diminishing returns: the more people find the needle the more difficult it will be to monetise. Or paraphrasing Dash - ‘if everybody is special, it really just means that nobody is…’
I don’t want to sound too negative however; if it does what it says on the tin, I think it could be a very useful tool and if they have smart technologists and market savvy management which definitely seems to be the case on the face of it, they should be able to continue to innovate incrementally and stay ahead of the obsolescence curve at least for a few more years. One to follow for sure.
