MARKETS AND COLLECTIVE WISDOM



Udit Garg

Published on 13/01/2017 12:00 AM

Share


In a previous post we talked about our handmade(!) financial models. But just because we have put in the effort to create these models, doesn’t mean we stop there. To our mind the models are only the starting point. We are building a large set of tools that will help users to make better sense of the data by

  1. Comparing it across dimensions such as companies, users, time, industries, geographies and more,
  2. Valuing it better using not only standard benchmarks, but also custom made ones,
  3. Estimates of market expectations at overall as well as granular level (think – volume growth expectations).
  4. Better trend analysis of expectations and actual performance – both markets and own
  5. … and as our product matures, there will be a lot more.

collective wisdom of market is better than any single individual’s

Besides these tools, about which we will talk about in more details in our later posts, a key value addition that we hope to enable is sharing of information and ideas to arrive at better investment outcomes. We encourage users to share as much as possible. One of the key aspects of the markets is the concept that the collective wisdom is better than any single individual’s. This is because it is the one place where millions of people interact with each other via the mechanism of giving their inputs in the form of a single number – the value of a stock. And it is the sum total of these human interactions that create the most efficient outcome at any time.

The sum total of human interactions create the most efficient outcomes

Further we have seen that the investor community is a chatty one. They love to discuss and that too very passionately between themselves of the future possibilities of prices, trends etc. So we thought, how can we enrich these conversations. Well! what if they are able to share their models and analysis with friends or the community at large.This is where the concept of a social network comes in for us. So how does it help in our case?

  • Improves the quality of our discussions,
  • Helps with better decision making.
  • Break the information barriers, by getting inputs from multiple people.
  • Allows us to question the very people who are advising us on the so called investment calls.
  • Overall, it empowers us to make the decision we want

In a nut shell the more the interactions, the better the ideas that can arise.

We believe the incentives are completely misaligned in the current investment advisory market. Brokers, advisors etc are rewarded on the number of trades that they get, but never on the quality of their advice. There is little accountability in this respect. While at DistrictD, we do not venture out and give any such advice, we aim to atleast help the investors make a better decision by being able to question any advice that they receive. We aim to help break some of these information barriers that have been erected by empowering analysis and enabling collaboration.

Related Blogs


Leave a Comment
Refresh Captcha