Stockezy, India’s first social investing community was reviewed by us few days back and we found it really interesting. UI appearance of Stockezy is quite familiar but it has got some tremendous features for the Indian investing community. If you have not checked the review, then you can have a look here.
Tushar Makhija, co-founder of Stockezy was quite keen to share his thoughts on Stockezy, the challenges and the road ahead. Please find the email interview that we did, shared below:
1. Stockezy, India’s first stock investing community sounds interesting Tushar! Do you want to share why there is a need of a social product in finance and investments?
The business of investing and stock market still largely remains a brick & mortar model, the common investor is not really motivated to research and put money in stock markets. SIP and Mutual Funds have gained a lot of popularity but largely due to the fact that someone is physically sitting in your home, filing out the paperwork and then may be perhaps following up with you about how your money is performing.
Largely the community has been lazy about understanding and investing in the markets. We still have a very small fraction of the population investing directly in the stock markets. The scams, too much regulation and lack of online infrastructure have also led to some level of dissatisfaction which turns the common investors away from the stock market. But this needs to be changed.
As we grow to be a larger economy we will not be able to seek refuge in fixed deposits, which are pseudo safe havens of investment. Already today with inflation at 15%, even if I earn an interest rate of 10% in a FD account, I am losing money. The people have to realize this. Mutual Funds sure are good investment vehicles for the long term, but not everyone is thinking only about retirement.
I like to think about smaller goals 1-2 years planning, may be even 2-3 years planning. Why not take advantage of the stock market. The best way I found to connect with the common investor to invigorate them and make them more active investors is to create a community. An online social community where like minded people can come and DO things. Not just read news, or follow advice from the numerous pundits on TV and Newspapers, but take action.
Stockezy started off as a google group and then spawned in to an online independent financial and investment community, to bring together people interested in the Indian Stock Markets. A social networking approach was the obvious choice; because it is associated with something fun. Something you want to do to relieve stress.
We followed this approach to allow users to find stock more interesting. Our goal is to bring to people actionable advice. Starting from the wisdom of the crowds, to what the top news media are saying, (through our media partnership with Zee Business), and targeted advice, research and analysis from Dorsey Wright & Associates, a 30 year financial and investment advisory firm which is based in the U.S. and is actively tracking the Indian markets since 2000.
Dorsey Wright & Associates has $3 Billion in assets under management are renowned for their clutter-free approach to stock market research. A simple paragraph which explains the reasons why a stock should be bought, held or sold. What levels to look out for and how to manage money. It is the most simplified approach I have come across so far. We wish to bring more education to the Indian investor using our social-networking approach, and bridge the gap which currently exists between the d-street elite and the retail investors.
2. I played around a bit but stocks scare me. So can we say that Stockezy is a product for people like me too?
If you take a closer look there is nothing to get scared in the stock market. Risk is an element which is part of everything we do in life. But what I have seen and heard from my conversations with a lot of investors is that they forget to manage risk in the stock market. Buy & Hold is not a strategy. You cannot buy a stock and keep holding on to it without a plan. Before you put money in any stock, an investor must think of at least 2 things. What is the minimum profit I want to make, second what is the loss I can handle. Without answering these 2 questions if you put money in stocks, you are creating trouble. Just like any other activity in life, the stock market requires you to manage risk and set goals. It is that simple. If you have a set goal then you are on the right track.
Now that you have learned to remember these 2 critical things, comes the next set of important questions.
What to BUY, When to BUY.
Here the investor must make a decision either to do their own stock research or follow someone else. That someone else should not be chosen, based on emotions or 3rd party recommendation. There must be a solid track record. Now a novice investor must ask how I do what performance is good. Say someone tries to subscribe to our Long Term Stock Recommendations, which is powered by our proprietary research, from our partners; Dorsey Wright & Associates of U.S.A. Dorsey-Wright is an independent research and investment advisory which uses Point & Figure Charting methodology of technical analysis for their equity research. First what we showcase is how over the last quarter our recommendations have performed v.s the broad market indexes.
The simplest way to find out which research company or stock recommendations provider an investor can follow, is to check if the recommendations out-perform the Nifty 50 Index and by how much. They must also select a reasonable window to evaluate performance. Not too short, not too long. The Indian stock market is still in the growing stages and is prone to wilder swings than seen in more developed markets. Hence the investor must ensure to select the right length of time window to evaluate performance.
Today if an investor has to park cash in a fixed deposit, they would earn at least 10% annual returns. But with inflation hovering around 15%. The true rate of return is actually negative at – 5%. This is not something the investors usually think of. To make your real good return, the investors must look to the stock market, and follow recommendations from companies or individuals which can show an unbiased track record and have outperformed the Nifty over a minimum 90 day period.
You can check the past performance of our stock recommendations here. With each of our recommendations we provide users information about Stop Loss ( max loss ), Short Term Price Target (min profit), and Long Term Price Target (max profit). Armed with this information the investor is now able to enter the stock market with confidence, and thus better manage his or her investment.
3. The design is quite similar to other social networks. Can you tell me how the community Feed works, since it was showing me feeds from people who are not my friends. Don’t you think it should be user discretion?
The design is purposefully inspired from regular social networks. This is to make the site more accessible for the consumer. The concept of social networking is well established and also very popular. Unfortunately the concept of stock markets is not so popular among the youth in India.
In most developed countries take for example the U.S many students pay their way through college with making investments in the stock market. I too used the stock market to fund my living expenses while studying in the U.S. I remember buying my first apple laptop from the proceeds I earned by investing in the APPLE stock.
There is a lot of information available on many news portals. There was need to bring in some simplicity and allow individuals to experiment the stock market in a more accessible environment. The community feed is the live feed of all the new recommendations and ideas being posted on the platform by like-minded retail investors who are also members of the stockezy community. This is free information and a user does not need to log in or create an account with Stockezy.
To personalize their views, users can create an account with stockezy and send friend request to fellow users. Then they can easily get access to their own feed, and Friend-Feed. This answers your question for need of discretion.
4.Stock Picks and F&O Picks are exciting features but then if a stock is my bread and butter then I may get it from so many other sources. So do you want to share Stockezy’s USP?
We do not provide simple stock data. That can be accessed easily from other websites. Our USP is allowing you to self-evaluate and see for yourself how well you are at Stock Picking or F&O Trading.
The Stock Picks app is a virtual trading system which allows you to pick stocks, set targets and consistently evaluate your performance. It is as close to real trading as a virtual system can get. It teaches you to manage risk and set expectations. You start with picking a company, you decide what is the expected target you are looking for, you set the stop loss, and set the time frame. In how much time do you think, the company will reach the expected target. Once you submit this information, our system continually tracks your performance. The user gets valuable insights in to his or her stock picking skills and also teaches them how to set targets and stop loss. No other virtual platform provides the flexibility and capability better than stockezy-stock picks.
F&O trading is complex and unfortunately it cannot be practiced easily by opening an account and using small capital like 5000 or 10000 rupees. But once you understand the nuances it is an excellent tool for you to maximize gains and limit losses in the stock market. Stockezy provides the first Virtual Trading platform for investors to learn basics of futures, options and derivatives trading.
I believe to make any complex thing more interesting, we have to make it like a game. That’s what we do. Every month the top performing users, are crowned as community analysts and given cash prizes. This is good motivation for people to get excited about stocks and try their hand at stock market investing in a safe, free virtual environment.
5. Watchlist is a Subscription feature so can we assume that these various services that you are providing are a source for income with ads? My Insights is also a paid feature so as a user what kind of insights will I be getting?
Watchlist is a free feature. A user can log in to stockezy and start adding stocks. This watch list is better than what you find at other sites, because it helps you track how the stocks you are following are doing in the market.
Watch List Insights is a paid feature. A user can first take a 2 week trial, and only once they are satisfied with the services, pay to continue. The subscription is also very reasonably priced at Rs. 500 for 1 year. That is around a little more than a rupee a day.
What we aim to provide in insights is actionable information about the stocks an investor is following.
For each stock we track Stop Loss and Target Levels. We recommend to users when is the right time to buy a stock, or which stocks from their list, should be avoided. It serves as an excellent guideline which investors can follow and track the markets better.
We also provides email and sms updates about upcoming corporate actions and any significant change in the stock levels is reported to the user on the same day.
Say a stock lost favour in the market and fell, below its normal trading levels. We will push an alert to the investor on SMS or EMAIL, and inform him or her about this activity. Take a moment to think how revolutionary this is. I am an engineer or blue collar worker, I am living my life, going to work, helping out at home with the kids, I don’t really have the time to follow the day to day market activity. So does that mean I am not allowed to invest. We solve this problem by pushing the most relevant information to the investor, so he can read just that, and take appropriate action. No need to follow every detail of market, read 20 newspapers or watch 10 channels. Live your life, and it takes only 30 minutes a week to manage a reasonable portfolio of 15-20 stocks with the insights wfy;”>For each stock we track Stop Loss and Target Levels. We recommend to users when is the right time to buy a stock, or which stocks from their list, should be avoided. It serves as an excellent guideline which investors can follow and track the markets better.
We also provides email and sms updates about upcoming corporate actions and any significant change in the stock levels is reported to the user on the same day.
Say a stock lost favour in the market and fell, below its normal trading levels. We will push an alert to the investor on SMS or EMAIL, and inform him or her about this activity. Take a moment to think how revolutionary this is. I am an engineer or blue collar worker, I am living my life, going to work, helping out at home with the kids, I don’t really have the time to follow the day to day market activity. So does that mean I am not allowed to invest. We solve this problem by pushing the most relevant information to the investor, so he can read just that, and take appropriate action. No need to follow every detail of market, read 20 newspapers or watch 10 channels. Live your life, and it takes only 30 minutes a week to manage a reasonable portfolio of 15-20 stocks with the insights we provide.
A must watch is our up coming new Portfolio Feature, which will allow users to do an instant health-check up of their existing stock portfolio; and get more perspective in to their stock holdings. Which stocks are good to hold, which must be avoided. and best part would be we will be able to instantly suggest alternate stocks which the users can evaluate and invest in. The feature will be available in November.
6. Q&A is quite a cool service but are you taking care of the answers that are being shared here since being governed by regulatory body?
The Q&A is a community feature. The community is largely the guardian of the content. However we do monitor unusual activity on the site, and remove users which may try to use the forum for propaganda or advertising. It is important to remember that the community information is to be used as a guideline. The platform enables you to interact and get more updated views. It allows you to connect with people largely in the same economic situation. It brings more accessibility and hence the information provided is one of the things to consider before making an investment. The final decision to buy or sell solely lies with the individual.
7. Follow Top Community Analysts is really great way of rewarding people and keep them motivated to stick with the community. Do you think cash rewards would be enough and any plans for enhancement of this feature?
The cash rewards is a very big motivator. We plan to include more spot competitions, where users can make their own little leagues and groups and compete instantly. As the community grows, there will be more opportunities to bring in sponsors and companies who would provide better incentives to push our people to get excited about the stock markets.
The Long Term trend will show that those who choose a balance of fixed deposits, bonds and stock investments will have a high probability of making more money via way of investments. It will take more than incentives too. Prize money is a good start to entice users. But our plan is to provide the tools for research, and education which will help investors get more interested and lean towards money managements and stock investments.
Thanks Tushar for giving such elaborate answers, we really appreciate that! Personally, I would love to see how Stockezy shapes up as it looks to be an exciting beginning.
So does that excite you enough to give Stockezy a try even if you are scared to play with stocks like me?