Make smart money decisions with Web 2.0 social networks

Everyone knows that you can't go wrong when you have the wisdom or "collective intelligence" of millions of people. This "collective intelligence" is what drives Web 2.
Written by Andy Chun, Contributor

Everyone knows that you can't go wrong when you have the wisdom or "collective intelligence" of millions of people. This "collective intelligence" is what drives Web 2.0.

Successful Web 2.0 applications are usually successful because of its ability to harness collective intelligence; the ability to provide very simple mechanisms to collect and aggregate data that can then be turned into something useful for its users, such as for decision making or to find information.

For example, collective intelligence makes Wikipedia the most popular online encyclopedia. Collective intelligence in the form of spam reporting helps GMail filter spam. Collective intelligence on what people like to read makes digg the most popular site to find blogs. Collective intelligence, in the form of social bookmarking, makes del.icio.us the most popular site to find tagged links.

Wouldn't it be great if we can also make use of collective intelligence to help us make smart investment decisions? Wouldn't it be great if we can pick the minds of hundreds of thousands of investors around the world? Well you can! A new breed of Web 2.0 financial investment applications just emerged last year.

One of the leaders in this exciting new arena is a Hong Kong Web 2.0 startup called bullpoo (so named because they believe that Bull markets are always followed by Poo markets). Bullpoo allows users from around the world to collaborate and share investing knowledge through blogs, discussion, and virtual trading. Bullpoo calls this "social finance" and considers itself as a type of social networking platform for the finance industry. What's particularly interesting for me is that each user gets US$1 million virtual money that he can use to create his own virtual portfolio. Performance of this portfolio is then tracked in real-time. Wall Street Journal calls this "a new way to rate stock tips"! According to the bullpoo's "Top Traders" listing, one user have already more than doubled his virtual portfolio value in the short few months that bullpoo was launched! Bullpoo currently focuses on major US markets such as the NASDAQ, NYSE, and AMEX stock exchanges.

Other sites providing related services include CAPS by the Motley Fool (caps.fool.com), Feelingbullish.com, and SocialPicks.com. According to bullpoo, all these sites were launched roughly the same time with similar themes and concepts, even though they were created independently of each other. The technology and market seem to be just right for this type of application. What differentiates bullpoo from others is that instead of focusing solely on stock-picking and performance tracking, they try to provide the "big picture" by allowing investors to create their own investment strategy and discipline. Bullpoo points out that what makes "good" investment for someone might not be good for another; different factors such as risk, diversification, goals, etc. affect one's investment strategy and decisions. Bullpoo provides a more holistic view of investment decisions by not only allowing members to trade and track but also to forecast, blog, and discuss with others.

Stay tuned to my next blog where I interview Simon Lee, a co-founder of bullpoo.

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