kaChing.com Unites the Investment Community, One Stock at a Time

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In another sign that social networking is wiggling its way into every industry, stock traders were given their own community playground in the form of kaChing.com, which launched in October 2009 and last month announced another injection of venture capital to the tune of $7.5 million from DAG Ventures.

Conceived by veteran investors, kaChing allows users to create and manage a virtual stock portfolio with virtual money to see how it would perform in the actual stock market. Based on the portfolio’s earnings, risk-to-reward ratio, turnover and other factors, investors are assigned an investing IQ that measures their prowess, with the highest performers given Genius status. For a small fee, these Geniuses can have their stock trades automatically “mirrored” in real-time by other kaChing investors who can invest their own money into the portfolio.

The Good
Transparency: Who wouldn’t be interested in knowing the secrets of successful investors? kaChing takes it a step further by disclosing how much of their own net worth the Geniuses have invested in the portfolios they’re managing — a thoughtful way to foster trust in both the Genius and the company.
Engagement: All investors have message boards where they can answer questions, discuss stocks and wax poetic on market trends with other investors, further connecting the community.
Innovation: kaChing is really the first website of its kind to marry social networking with finance in a way that’s potentially profitable for both the users and the company, a rare combination.

The Could Be Better
Centralization: kaChing could use a community message board, an area devoted to stock research, a live news feed of Genius trades and a feed of the day’s top business stories. Hopefully a few of these will be added in the coming year.
Product Placement: Admittedly, kaChing is not a place to sell products, unless that product is one’s own investment expertise, but the financial world extends well beyond individual stocks and kaChing would do well to explore these parts.
Social Media: Where are the Twitter followers? As of this review, kaChing’s last tweet was in December 2009. And what about a Facebook fan page? There is a group page, though no one from kaChing seems to be monitoring it. For a site that’s built on the principles of social media marketing, kaChing could be maximizing its reach more.

With nearly $5 million invested in its portfolios — after less than a year in existence — kaChing is proving that peer reviews, even for something like stocks, can drive purchasing decisions. And in this climate of financial meltdowns, bank takeovers and shady accounting practices, kaChing’s allows investors the freedom to abandon the professional firms and put their money where their mouse is.

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Showing 5 comments
  • Allen Taylor

    Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

    • mdorman

      Glad you like!

  • joshmall

    kaChing seems to offer an ideal means to put the Surowieckian ideal into action if the company can develop a way to aggregate the investment decisions of the kaChing “crowd” into a single portfolio. This would seem to take their open-source philosophy to the next level but may undermine the underlying premise (that professional managers can consistently out-perform “the market” or, in this case, the “Wisdom of Crowds”). At any rate, I think the exercise would be fascinating.

  • chris

    Well-written. I’ve taken the initiative to simply tweet my thoughts to get the company’s name, and like-minded individuals- ‘out there’

    • mdorman

      Great thanks!

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