Laughing at Wall Street

John Livesay interviews Chris Camillo

Chris Camillo is the CEO and Co-Founder at TickerTags, a new company that helps monitor conversations to see current trends in real time. Chris wrote Laughing at Wall Street. In 2006, he was able to leverage social media analysis to invest $20,000 in the stock market and in just three years grew it to more than $2 million. He’s been featured in Forbes and Business Week, and he’s been involved with eCarList and TrueLinkswear. He‘s an expert in turning social conversations into market insights. Chris, welcome.

Thanks. I appreciate you having me on.

What inspired you even before you wrote the book to get involved with high-tech and your first startup?

You have to go way back, way, way back. I graduated from college, moved to LA, worked in the film business for a little while and that didn’t go as well as I had hoped. It was 1999 and all these people were starting dot com businesses, what we called them back then. I wanted to be part of that, so I said goodbye to my kind of aspirations to be a film producer, got involved in a startup at age 21, and never left. I got the bug.
My entire career has been in startups and with each startup I’ve had more accountability, responsibility, and a great equity piece, leading up to eCarList, my last startup, where my co-founders and I own the entire platform, and now TickerTag. It’s a new startup of mine where me and my co-founder started the platform. It was a 20+ year experience, but we’re finally there doing it for ourselves now instead of doing it for others.

How great. I love that your first pivot was before you were 21.

I’ve been like an entrepreneur since I was 11, so I feel way older than I am.

Tell us a little bit about this fantastic title Laughing at Wall Street. What were you able to do with data that allowed you to take $20,000 and grow it into $2 million?

When I was a kid, I read a book by Peter Lynch called One Up On Wall Street. He was one of the most famous mutual fund managers of all time who ran the Magellan Fund. A lot of his investing was based on hanging out at the mall with his wife and seeing which stores were crowded and which products were moving. I realized early on that Wall Street or investing in general is all about information.
So much in life is about information: capturing meaningful information early and doing something with it. That’s certainty the case on Wall Street. The best way for an ordinary person that’s not a financial analyst to do well in the market is if you are able to identify information that’s meaningful to a publicly traded company before the general public or Wall Street is able to identify that information. We can’t really compete in turns of fundamental analysis. There are thousands of intelligence analysts out there that crunch numbers everyday.
The one thing you can do better than people who have been doing it for 25 years like Harvard or Wharton graduates is learning how to see things in your life and then associate those things as investment opportunities. Wall Street spends a lot of time researching ordinary people and conducting market research. We’re living the research. They try to get inside our heads. With the research they conduct, there’s a lag in how long it takes them to understand if a product is trending or if there’s a cultural movement that can impact one or more stops.
I realized early on that I can do that myself. Where Peter Lynch had to actually see physical people walking in and out of stores, I have access to all the world’s conversations thanks to Instagram and Twitter. I can read into them in real time. It’s limitless as to what we can detect if we know what to look for, so I developed a methodology around that.
I called it “social arbitrage investing” and I find things that would be important, either positive or negative, to publicly traded companies that haven’t yet been digested by Wall Street. I read 15,000 tweets a night. People don’t really believe that, but for the past 3–4 years I read and scan 15,000 tweets a night just to get a sense of what’s happening that could impact companies.
I developed a great methodology around that. It’s actually very easy. It’s something anybody can do. In 2010, I became the world’s topped ranked self-directed investors for $20,000 to $2 million. It was audited and tracked by a portfolio monitoring service. That’s when I got some publicity and I had an opportunity to write a book about it. I did, and it’s called Laughing at Wall Street. It’s about how any ordinary person can overachieve and really do things that even Wall Street professionals can’t.

Can you give us an example of monitoring either the tweets or the trends, positive or negative, of a specific company and how you were able to buy that stock low before it went high or sell it when it was high?

One of my favorite examples I think anyone can relate to isn’t necessarily just tweets but monitoring the web, blogs, and what people are talking about. In 2011, the top selling Christmas toy of the year was called the LeapPad. It was like an iPad for kids and it was made by a company called LeapFrog, an educational toy company that really hadn’t produced a hit product in 10 or 15 years. In the fall of that year, I think it was late September or October, a lot of the Wall Street analysts and journalists discovered this was going to be the hot selling product of the year. They all wrote articles and analyst reports talking about how it was going to be huge for the publicly traded company LeapFrog that made this product.
Over the course of about a month, the stock doubled. What’s interesting is a full month before anyone on Wall Street started talking about this investment thesis, there were a couple hundred mommy bloggers who were the first people in the world to actually receive the product. Those mommy bloggers were the people that started the conversation of “LeapFrog is going to be the hot selling Christmas toy of the year.”
If you were able to come across that information when mommy bloggers were talking about it, three to four weeks before anyone on Wall Street had even knew what a LeapPad was, you could have purchased that stock well in advanced of that 100% move when the street started talking about it. It’s all about figuring out when the kids, mommy bloggers or ordinary people are starting to talk about something before the financial analysts, journalists and researchers catch wind of it. That’s one of my favorites.

That really goes back to what you said earlier about compiling meaningful information before anybody else gets it. That’s what gives you the leg up.

I like to say that all change is detectable. You just have to learn to see things that are happening and you have to know where to look. Now we’re working on the most exciting project of my life. We’ve been working on it for two years and we literally launched it this week. It’s called TickerTags and we have built a database of what we call the taxonomy of 350,000 tags. A tag could be a product, a brand, a person, a place, a cultural movement. For example, gluten-free is a tag for every company that either makes gluten-free products or makes products that could be harmed by the acceleration of the gluten-free movement. The gluten-free tag is one of 350,000 tags that we track on Twitter. We allow investors to monitor social conversations around that tag.
You can monitor if there are more people talking about that tag today than a month ago, three months ago or six months ago. Are the level of conversations accelerating or decelerating? Are people talking about this thing more positively or more negatively than they were in the past? That’s what TickerTags is. It essentially allows you to do what I’ve been doing manually for ten years and what Peter Lynch did 25 years ago manually. It allows you to automate it and see more rather than doing one here or there.
You can look at hundreds of thousands of products, brands and people. Kevin Spacey is a tag for Netflix. He’s the lead actor of House of Cards. God forbid if Kevin Spacey were to get hit by a bus tomorrow, how are we going to find out about that as investors because that’s certainty a negative thing for Netflix. We could also wait until CNBC announces that and then Netflix stocks start to drop. In our world at TickerTags, since we monitor Kevin Spacey, we know what the normal level of tweets is every minute for the phrase “Kevin Spacey.”
The phrase Kevin Spacey starts to accelerate within 60 seconds of people tweeting he got hit by a bus, I just saw it, here’s a picture of it, and people are going crazy on Twitter. We will actually capture that acceleration and social chatter and within a minute, investors of Netflix can see something just happened to Kevin Spacey. I don’t know if it’s good or bad, but let me look into it since something is happening here. We don’t have to wait for humans — journalists in this case — to connect dots, curate that into a journalistic story, blog, news report on CNBC, which takes as we know 10-20 minutes for that to happen

Sure, because they have to make sure that he is in fact hurt or dead before they go online. They need confirmation and in the world of stock investing, seconds, let alone minutes, are huge, because stocks go up and down based on rumors and all kinds of stuff. If you have that information even 30 seconds before it hits the main stream media, you can adjust your investments accordingly. Is that accurate?

That’s right. Sometimes it’s a few minutes and sometimes you have weeks in the case LeapPad. The mommy bloggers were talking about it for weeks and weeks before the first financial journalist saw and was smart enough to connect the dots and write a story for the investment community saying that this was going to be a big deal for LeapFrog.
We try to build those associations in advance so when things happen, you’re able to see it in real time. When the Cuba embargo was lifted, we had the word Cuba in the tag library for a South American airline called Copa Airlines. In real time, you saw the world Cuba accelerating on Twitter and we showed you the companies that would be positively or negatively impacted by Cuba. It’s such a fun time to be an investor because for the first time, we’re really democratizing information for ordinary people. It’s no longer, you know, Wall Street that has this information. I have to wait for them to give it to me after they’ve already traded on it. Now, ordinary people like us can see things on Twitter and Facebook and Instagram in real-time and in many cases beat the professionals to trading on it.

You gotta love that. One of the things that’s interesting to me listening to you talk about TickerTags and this whole phenomenon is it’s very similar metaphor, because angel investors and VCs are trying to anticipate the next big trend on how they decide which startup to fund or invest in. They want to find that little needle in the haystack of I think this is going to be big and this founder has figured out something and if they have it based on any kind of research that validates their premise, then I want to jump on that, whether it’s something disruptive like Uber or just tweaking something to make it better. It’s…

You just talked about TickerTags 2.0. It can monitor cultural trends and the startups that are positioned to benefit from those cultural trends or trending topics or whatever it is that people are talking about that’s happening in our world. They can see the companies that can benefit or be harmed by those things that are private, not necessarily public, but that’s until next year.

When is 2.0 come out? I’m so excited for you.

In the fall. We’re going to be announcing that probably right around the September time range. We’re working on it. We’re working on it.

I’m sure. It’s fascinating to me that just was organic analysis and then you’re working on it. See, there’s a great example of something making sense when you do product extensions.

Absolutely.

Who is your ideal target for TickerTags now? Is it the investment community that wants to or is it other people, individuals? What, I see you’re solving your own problem of having to analyze 15,000 tags a night, is that who you’re solving the problem for? The investment community?

Yeah. I’m a self-directed investors. I built TickerTags for myself. So, self-investors, we certainty can benefit from using TickerTags. At the same time, we’re talking to large investment bank institutions, quant funds, hedge funds, professionals, anyone that, any investor of publicly traded securities and in the future private companies as well will have to live on TickerTags. I mean, you can’t ignore the social data that’s impacting these companies, so one thing that’s interesting about TickerTags is we’re building it as an open public free taxonomy and it’s crowd sourced, so anyone can contribute to the taxonomy. So, if you’re on our platform and you’re like, this is great, but you guys should really add this tag for this company. You can suggest tag additions and we’re curate them into the tag libraries, but it’s completely free for the world to use. The only thing we charge for are private tags.
So, we have a tag library for Disney and one of the things I’m trying to figure out this summer, because I’m a Disney investor, is theme park traffic up or down at Disneyland, Disney World, Epcot. So, I’m tracking those conversations around those words. Disneyland, Epcot, Disney World, but those are public tags.
Anybody can see that and anybody can monitor that through our platform for free, but there are some private tags that I thought of that are more intricate than public tags that I’ve added like Disneyland in association with the world crowd or line. That would be Disneyland + crowd would be the tag and that’s proprietary to me. I guess no more because I’m talking about it, but proprietary to me and anytime somebody tweets, “God, the lines are so long today at Disneyland.” Or “Wow, Disneyland is really crowded this morning.” We could see those conversations with those words are happening more often this summer than last summer or less often, right, which is a great social signal to help us try to figure out is Disneyland having a good summer, is it more, are they selling more tickets?
So, we charge for private tags, but the public taxonomy, which is huge, is completely free. The more people that use it, the more people that contribute to it, like Wikipedia, the smarter it gets and the better it is for everyone. The cool thing is we’re in beta all year. So, anyone that signs up for our beta actually gets private tags for free too this year. So, really, the whole thing is free this year.

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About
As a funding strategist, John Livesay helps CEOs craft a compelling pitch which engages investors in a way that inspires them to join a startup’s team.

After a successful 20-year career in media sales with Conde Nast where he worked across all 22 brands in their corporate division [GQ, Vanity Fair, Wired, W and Vogue] and created integrated programs for clients such as Lexus, Hyundai and Guess, John won salesperson of the year in 2012 across the entire company.

Follow John on Twitter at @john_livesay. We welcome your comments.

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