This one’s from David Jackson, founder and CEO of leading investment community, Seeking Alpha (and my old boss )

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With the growth of Twitter, the introduction of updates by Facebook and the inclusion of real-time comments in search results, it’s clear that the real-time Web is having a profound impact on media. Which raises the question: Will the real-time Web transform financial content?

Financial media is naturally real-time because, in financial markets, faster delivery of information can mean real money. So it’s not surprising that a mature industry devoted to getting the most relevant financial news to people in real-time has already developed. Sophisticated real-time products are offered by providers of terminals, news wires, press releases and news organizations. They deliver news instantaneously, filtered according to users’ needs (for example by ticker symbol or industry). Real-time financial news has trickled down to free financial websites and portals, which themselves offer real-time financial news coverage.

But this still leaves three opportunities for real-time updates in finance. The first is technical (chart) commentary for day traders. The most active Twitter users who write about stocks, for example, are day traders. Day trading isn’t Seeking Alpha’s focus (most day traders lose money, and our mission is to help people invest well), so we’re happy to leave short-term, real-time technical analysis to others.

The second opportunity is real-time updates of fundamental analysis. Seeking Alpha’s contributors write in depth analysis of stocks. But their viewpoints can change as companies report quarterly financial results, competitors launch products, or the landscape changes in other ways. We think that short, real-time updates complement in-depth analysis, even for investors with a longer time horizon. We’re finding that an increasing number of our article authors use StockTalk, our “Twitter optimized for
stocks” product.

The third opportunity for the real time Web is mining Tweets and updates for information about companies’ businesses. Which products are gaining traction? Does a company have a PR catastrophe unfolding in real-time? It’s hard to do a good job of surfacing and filtering business information which is impactful enough to move stocks. If you know of anyone who does that, let me know.

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Miller’s book is something of a travel guide for the investor. It’s written exceedingly well, as one expects of a travel guide. It explains an investor’s options: he can go on a guided tour, join a self-directed group, or strike out on his own. And it provides resources that the investor can tap into depending on which option he chooses.

Jubin does a good job reviewing a prolific number of books with insight and depth of an actual investor/trader.  Check out her blog, Reading the Markets.

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The social web now offers companies and individuals unprecedented capabilities to access information, research and collaboration on a global scale.  As we move forward, I believe we will continue to see adoption across companies, investors and traders of all shapes and sizes. Here are my top 5 predictions for the future.

1.    The future is open, privacy is being redefined and the social graph of the web is going to continue to grow.  This won’t be in a straight line as there will be push back, however over time the world is becoming more and more open.

2.    Shareholders will use the social web to influence proxy votes. Moxyvote.com is just the start at enabling the retail shareholder vote. Companies will need to use the same channels and tools to influence their shareholders to vote how they want.  Obama’s use of social media in the 2008 US election is the model that all politicians must follow now – this same model is coming to proxy votes in the near future.

3.    Traders and Investors will create and use social networks for real-time research and investing. These trading/investing networks will become a key element that drives the market. Companies that accept this trend and work to become influencers inside of these channels will benefit the most.

4.    Companies will use the social web to influence the perception of their company in the market.  Early adopters are proving this theory today and their peers are beginning to follow. Companies will be required to use these channels in order to remain relevant and to effectively compete for capital.

5.    Real-time investor sentiment will replace traditional investor perception studies.  We can see this trend in non-financial markets now with online surveys and how sentiment is measured across social media.  As the majority of investors move online, companies will embrace that it is more efficient and meaningful to measure perceptions (aka investor sentiment) through social media channels rather than traditional methods.

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This week focuses on cigarette manufacturer Lorillard ($LO), which he thinks is inexpensive, defensive and has a nice dividend (> 5%).

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With the recent rise of social networks and the growth in internet use the landscape for Investment Management is changing rapidly. Today over forty million internet users in the US have access to much the same tools, research and transaction costs as the ‘professionals’. With the loss of trust in institutions engendered by the recent financial crisis, the ‘deinstitutionalization’ of money management has only accelerated.

Sites like Covestor offer access to a form on money management only previously available to those with millions of dollars available to invest. If you have enough money to open an account today with a wealth management firm, they will open a ”separately managed account” (SMA) or a “unified managed account” (UMA) in your name. These are accounts where professional investment managers trade on your behalf in your own account, so you get the benefit of paying for expert management with the safety and security of a managed account.  Covestor offers this to any personal investor. But instead of the $500,000 minimum required to open a unified managed account, with just $10,000 you can access a world of great investors.

Technology and particularly the internet, stands to transform the industry. Much as it has in publishing, the barriers to entry have significantly lowered and the big names of the next wave look unlikely to be those of the last.  Technology is allowing an explosion in choice, transparency and access. In an industry where the incumbents have become so large from holding on to exclusivity and opaqueness, they will doubtless fight to maintain their position but as always in the end the value will flow through to consumers.

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