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Think Big. Move Fast.

The WSJ (subscription) has a good article this morning on a new set of networking sites for investors. Techcrunch separetly has a review of stockpickr.

We’ve seen a few of these stockpicking sites over the last little while. I think that there is a risk of a conflict of interest in touting stock picks, although if people are truly your “friends” and not just people you met on the site, this might get mitigated. Otherwise, it seems like a happy hunting ground for stock tip spammers.

The best remedy for this to my mind is to use real data. Stockpickr lets you see Warren Buffet’s actual portfolio – not much opportunity for “gaming” that system!

If there were a way to verify people’s “stock picks” – say by tying into brokerage accounts with permission to verify that they really do hold those stocks or really did make that trade, then you’d have some very interesting data. As Seth and Fred have said in the past, implicit data is much more interesting (as well as painless to collect if given permission) and truthful than explicit data.

Imagine being able to see other users’ actual accounts and trading history, and being able to tell the real trading superstars from the ones who weren’t willing to put their money where their mouth was. Would active traders be willing to pay to get real time access to the transaction flow of the top traders? People already do this for Jim Cramer. A subscription model like this would potentially generate enough money to incent top traders to open up access to their real time trading and their portfolios. They would be able to earn a nice secondary income stream and it actually HELPs their positions if others follow them. But if these active traders start gaming the syste,, people will stop following them and they run the risk of losing their own money.

I’d like to see someone take a shot at this!