6 Million Dollar Fintech Opportunities

Over two years ago I did a post called “Five Million Dollar Investing Ideas”, though you could now replace “Investing” with “Fintech”.  I update the status of all of the ideas at the bottom of the post, and it is great to see many companies tackling the opportunities there.  Lots of innovation going on in our space, even if some of the ideas and valuations are getting a little into Sillytown.

Two of the five ideas are still not being addressed so I will include them again as 1/2 below as well.

1.  Liquid Alts Newsletter – Most investors, retail and pro alike, have a hard time making heads or tails of all of the new funds coming to market.  There are about 10,000 mutual funds (though the number peaked in the early 2000s) and about 2,000 ETFs.  How in the world is an investor supposed to stay abreast of all that is going on, what is reasonable and what is crap (a lot)?  I would love to see a paid product that each month tackled a topic (say managed futures funds), new launches, and maintained a portfolio or two that targeted this space.

Sam Lee was closest here at ETFInvestor at Morningstar, but he is now setting up his own RIA (believe me, I tried to hired him) so I hope they pick a great replacement.   Brian Haskin does a good job at Daily Alts, I just wish I could talk him into doing a premium product.

2.  Private Research Boutique Newsletter – Most of my ideas in this post fall into the category of “I would pay someone to do this since no one is doing it”.  There are a few sites that are targeting the notoriously low information private company space, but none comprehensively and most importantly, none ACTIONABLY.  I would love to see an in-depth letter each month with alerts that focused on making invest/pass recs for these angel or secondary private investments.  A value added research shop would be huge here.  Is the Tim Ferriss syndicate a good idea?  What about that recent EquityZen offering?  You could cobble together a team of six former motivated VC/consultant/MBAs and let them loose.  Some companies sort of tackling the space, but more from an information/database standpoint, are Triton ResearchDisruption, DataFox, CB Insights, and Mattermark.

Again, if you want to get started here, lemme know!

3.  Syndicate Podcast and Newsletter – Along the same lines as above, but would love to see a podcast and/or newsletter where the host interviewed the syndicate heads on Angelist with current offerings and simply asked them why they are leading a round for their investment.  This sort of dovetails with the #5 idea from the old list below where the interviewer asks just one question, “What is your best idea RIGHT NOW?”  Both would be fun, and as long as you got the disclosures right, not too hard to do.

4. NewsletterSampler:  There isn’t a directory of investment newsletters anywhere.  Why?  I dunno.  Hulbert tracks a lot (index here and list of some outperformers here).  This opaque world needs some more sunlight (and maybe disinfectant!).

5.  HedgeFundLetters: Someone please come take over my old site and run with it.  It is shameful that there is no place to go and read all the great letters of Soros, Robertson, etc.

6.  Tactical Roboadvisor:  Almost all of the roboadvisors do the same thing (buy and hold tax optimized MPT).  That is a good thing in general, and it has driven down costs and made it a wonderful time to be an investor.  I’ve commented a lot here in the archives so I’ll be brief.  While I still think the best roboadvisor is an ETF, not a separate account,  however, many people prefer separate accounts, at least the ones where you have someone to talk to.   (A no fee ETF could eventually get to a negative expense ratio with short lending, think about that for a second.)

The sponsors/custodians will be impossible to beat here (firms that have their own funds) since they have a built in price advantage.  So I expect Vanguard at 0.3% if you want a planner, and Schwab at 0% if you want a pure robot to win out.  Vanguard is already about 10X anyone else, and Schwab is already #2 at around $3B.  Eventually I think you will see the big wirehouses buy/build a roboadvisor and an ETF shop.  That way they have the distribution, the ETFs, and the software.  Tough combo to beat.  I also expect firms like WisdomTree, First Trust, and PowerShares to enter the game eventually.

That doesn’t mean there will not be other successful models, but they will have to differentiate.  Hedgewise is doing risk parity for example.  I would love to see a robo do a simple trendfollowing model(s), or perhaps some very basic stock screens (AAII, etc.).  Again, I think an ETF is a better mousetrap, but still room for many billions of AUM to share.  I posted on Twitter that the 50 odd asset allocation mutual funds that charge over 2%! a year manage over $50B.  Easy pickings….

Also, what’s up with none of the robos tracking their performance with the industry GIPS?

What other ideas am I missing?

If you want to come work on some at the beach in LA shoot me and email and we can get started…

Old list from 2013 below with my comments and links to companies tackling the problems.  I will update with anything I missed if you email me:

1 – Public Alts newsletter

2 – Quant Backtester

3 – Tax Harvesting

4 –  Investment research boutique focused on private crowdfunded companies

5 – Investment newsletter focused on Best Ideas

6.  Rukeyser Reborn Originally I wrote that Barry Ritholtz is in the lead here with an excellent Bloomberg podcast.  Well, Saramucci went and relaunched Wall St Week (have yet to check it out) – I love the renewed focus on long form content.

7.  TheStreet.com 2.0 – Yahoo Finance/Tumblr, BusinessInsider, and TalkMarkets seem to be the leaders here.  Frankly I think a group of writers should come together and form their own site instead of letting the other sites appropriate their content.  After all, they own all the value…