Nonstarter of a Startup
Hello everybody my name is Charles Mirango and I’m online as Pesaplay. In this post I’ll share some of my struggles in my effort to build a product for stock market investors. I have a simple ask at the end and hopefully you can provide some feedback.
For a number of years I have been on a long winding journey in my quest to create what I believe to be a better resource for regular folks interested in investing in the stock markets. My interests are borne of a lifelong love affair with stocks which started as a young boy. I attended college in upstate NY where I majored in Accounting but cared more about my investment classes.
In the late 90s I started investing small amounts of money when it became feasible due to cheaper online brokers. Even though I made some money, I also lost some but more important I learned a lot. One major lesson was that I desperately tried to chase headlines without any success. What do I mean by headlines? It is common for people interested in business, and stock markets in particular, to see headlines like “Vertex Pharma shares hit life high as cystic fibrosis data wows” Reuters.
On seeing such headlines I would put some money on the said stock knowing very well that I missed an opportunity but desperate to maybe get something.
At some point it dawned on me that the “data” was not a surprise and should not be such a surprise if I was aware of what “Vertex” or any other company was doing.
I set out to identify the data I needed, the sources of such data, how to get that data, and how to make that data available to the general investing public in the hope that I could make it easier for such people to be better investors.
I identified the data I needed as 1) data from the company and 2) data from outside players like government agencies. This data includes:
a) Insider Information. This is the information that company management and Directors have to disclose about their stock ownership in a company they are involved with. It includes shares and options they are awarded and what they do with them (buy, sell or hold)
b) Financials . This is data showing financial statements of the company and how different metrics perform over time.
c) Institutional Investors. These are large investors and money managers who have an interest in a company. These would include activist investors, passive investors and Hedge Funds.
d) Bio-pharmaceutical Sector. The pharma industry is unique in many ways and the peculiarities of this sector are many and complex. To initiate a product drug companies have to invest in research and discovery. This process can take many years and cost a lot of money. This process includes patents, clinical trials, regulators like the FDA, and licensing deals. To track all these involves multiple data sources, defining milestones and major cliffhangers.
e) Legal cases. Eventually we all end up suing someone and nowhere else is this more common than among big businesses. Patent and other IP wars are always ongoing and being informed about them is crucial.
f) Patent grant and expiration. Patents afford companies exclusivity for a period of time and upon expiration other companies can exalt competitive pressure. In the pharma sector cheaper generics can erode profits and threaten the stock price.
From such data come headlines:
07/19/2017 cnbc
Activist investor Jana cashes out of Whole Foods in wake of Amazon deal
(They got in at about $30 in April 2017 and got out at about $40 in July 2017 for a cool $300M profit)
04/10/17 Forbes
Whole Foods Shares Spike As Activist Jana Partners Takes 9% Stake
06/20/17 Zacks
(Activism can affect stock price)
Clovis Up Nearly 50% on Solid Data from Ovarian Cancer Study
01/21/17 cnbc
(Clinical data can affect stock prices)
Apple sues Qualcomm for roughly $1 billion over royalties
02/06/17
Jamie Dimon’s holdings have surged by $229 million since his 2016 ‘bottom’ buy
02/12/16 cnnmoney
Jamie Dimon buys $26.6 million in JPMorgan Chase stock
I hoped to provide a way for the general investing public to stay ahead of the headlines.
As an engaged investor one should act rather than react to such headlines.
The data and insights to be derived from such sources are crucial and specific and can affect a stock price in a positive or negative way. Such data is dynamic and being informed about it is crucial.
The whole endeavor is to make investors better based on: LEARN, RESEARCH, INVEST.
Tidbits of information and data are no guarantee but put together an investor can have a clearer picture.
Such data is available in disparate places (structured and unstructured and several APIs) and I hoped to provide a comprehensive resource under one platform.
I set out
1) Create a community, a gathering spot to learn or share on all things stocks.
2) Provide real actionable research.
In my quest to create a community I wanted to create a platform where
a) Anyone could create a wishlist, a portfolio of stocks with paper money (virtual $)
b) Viewable and Sharable among friends
c) Track performance over time
In this way I could learn from friends and strangers and maybe they could learn from me. The platform would have other social tools for engaging and staying connected.
On the Research data, Technology has made it easy to access capital markets but research data is still scattered all over and we can use technology to make it cheaper and easily accessible. Currently much of this data is either locked in some government database or in some proprietary silo where you have to pay too much to access it. There is a better way.
Many in tech would see opportunity or challenges in such data from different perspectives be it visualization, big data, or predictive analysis while I see opportunities in insights and a window to inform more investors.
For Instance, though filed quarterly and only reporting long positions, data filed by Hedge Funds, ($3T sector) one can analyze data to see what managers bought more of or sold out of compared to the last quarter, what sectors could be falling in/out of favor with managers, is there seasonality to some buying or selling. Is it possible to predict what some managers will buy or sell based on their past transactions?
Why should such data be made available? Why should we be better investors? I believe most people should be investors in the stock markets (US markets: what I well versed with). If you have a job with a 401(K) or other retirement benefit, you are an investor (we can do better with planning better for a financially secure retirement) . Investing is a cheaper way to start accumulating wealth. Investing also offers most people a chance to own a part of the success being built by exceptional entrepreneurs.
I often hear from people who want to invest or are already investing and two things stand out: where do I start or its too complicated. Doing research over here and over there. Lets put it all together in one place.
There is some debate on whether Individuals belong in the markets. To me this is a nonissue. Investing is not rocket science. We have cheaper access to markets, data and we are better informed than even say 20 years ago (as a population). I believe most people should invest in Funds (ETF) but these funds are “baskets” and if you can’t tell the content of a basket how can you choose between so many baskets? I believe most of our collective investments should be in such funds but I also believe in some people investing in individual stocks as part of a diversified and informed investing strategy.
I have a post here on the 5 strategies I advocate for in investing (Growth stocks, Value stocks, Momentum stocks, Dividend yield stocks and Event driven stocks). The data I mentioned above helps identify the strategy.
I have dedicated many man hours, sweat and treasure to this project but I have come short. I, like many non-tech co founders out there struggle to find a product/developer fit. Though many success stories are told and written about, some are never told and the dreams never see the light of day. I’m in no way giving up on bringing this forward but I need help in doing so. Many who have tried or even done projects know that it is a lonely and tough slog but when it is something borne of genuine love for what you do, worth every effort.
Over the years I have worked with several developers and sought help from many others but so far nothing has worked out. It is a complex project with lots of data from different sources. Through one developer, a member of the team, we have Bio-pharmaceutical data and some insider transaction data but have technical problems loading the data.
My best shot so far came in February when we did a startup weekend in Irvine, CA. We partnered with a Phd candidate (computer science) and he was gonna be a co founder but the demands on his time from his program made it hard for him to continue with the project. He just informed me that he can not continue to be part of the team. (I had gotten so excited we started on some marketing material (work in progress) like this and that
I don’t know how long I can go on with this project but I also feel some moral obligation to try and make this data and insights easily accessible. The data is important to investors and those who would like to be investors but it is fragmented, unstructured and where available locked in some proprietary silo available to just a few.
We have greatly benefited from open source software and an open community and I’m debating if pursuing this as an “open source project” like a “Mozilla project,” a common good, is an alternative.
My ask is for a community of tech, biz dev, stock investors: a brain trust of interested partners to come together around an open community, a` la Mozilla project, planned and managed by the community to innovate around the data and the space and expand access to stock market data research.
Please share this with your friends and give some feedback. You can reach me at pesaplay@gmail.com or here
