
Show HN: Replicate the world's best stock investments - bevenky
https://instavest.com/
======
chiaro
The voluntary gifts aspect is interesting. In the FAQ, there's mention of the
option to tip someone whose investments you've shadowed, if you've been
successful. If you capitalise on this social, community aspect, I'd be
interested in seeing what comes of this. Patreon-esque community involvement
is pretty novel for the space, and if you could pull it off it would go a good
way to humanizing what's seen as a cold hyper-competitive space.

Because these things need a standard disclaimer: If you have 1000 people
flipping a coin every six months or so, at the end of that 3 year slice,
you'll have ~15 people very proud of their coinflipping ability assuring
everyone else of their judgement on the next flip. After all, their results
speak for themselves.

~~~
skhatri11
There have been many studies on the voluntary gifts aspect. And thus far, our
voluntary gifts are approximately 12%.

Our lead investors have years of experience and we spend considerable time
with them before they are are allowed to take co-investment. This includes
reviewing their past performance - both good and bad, and understanding
investment decisions and rationale at a deep level.

Of course, Instavest is another marketplace in the largest marketplace in the
world - the stock market - people are free to buy, sell and copy at their
convenience.

------
gravypod
I can think of many ways to abuse this site[0], and that is just from an
initial standpoint. This could be the next big SEC case waiting to happen.

Are there measures in place to prevent from such easy abuse?

[0]
[http://en.wikipedia.org/wiki/Pump_and_dump](http://en.wikipedia.org/wiki/Pump_and_dump)
\- This could be perpetrated on an entirely different scale with people
seeking out the "guidance" of a few big players

~~~
skhatri11
Hi - I'm Saleem, the Co-Founder & CEO of Instavest.

We've been very careful to stay within the confines of SEC and FINRA law.

We have a number of safeguards in place to protect our customers, including
but not limited to: 1\. Customers can only trade on NYSE or NASDAQ only - no
OTC / Pink Sheets; 2\. There is a minimum 14 day hold (this is enforced by
Instavest, not our brokerage partner) 3\. An investor must disclose if the
asset they are purchasing is held on another platform 4\. Moderation and
review prior to an investment being shared with the community 5\. Lead
investors have to "put their money where their mouth is" before an investment
is shared

Trading in NYSE and NASDAQ securities that highly liquid and have a high
average daily trading volume makes it very difficult for any sort of market
manipulation, including the pump and dump scheme you referenced.

~~~
Enzolangellotti
Saleem, you need to fix the TOS text at the end of the page. Not only it's not
formatted but it calls for a link which isn't there (Desktop using the latest
version of firefox and windows, adblock disabled).

~~~
zallarak
Can you please post the specific line (or just email z@instavest.com)? I can't
see what you're talking about. Thanks for reporting it, once you let us know
we will fix it ASAP.

~~~
Enzolangellotti
Leveraged ETFs are inherently more volatile than their underlying benchmark or
index. For more information, CLICK HERE. Accounts are carried and cleared with
First Southwest Company ("FSC").

------
Avalaxy
This is exactly what Etoro does. Etoro has many problems though. To name a
few:

\- Many traders will keep losing trades open indefinitely and only close their
winning trades. This way they get a 100% success rate because all their
realized trades were profitable. This also leads to huge realized profit
percentages while the total value of their portfolio was just decreasing
because of the losing trades.

\- You start copying them later, so you won't get all their trades. This means
that your available balance percentage will be different than theirs,
resulting in strange behavior when they up their stop loss with additional
funds, whereas you don't have any additional funds left. This also happens
when they of you withdraw/deposit funds.

~~~
skhatri11
Etoro trades currencies and the company cannot operate in the United States
because it is not in compliance with SEC regulations.

Our investors invest their own money first, then you can replicate their
investment at your convenience.

When they sell, you have the OPTION to sell. You can close out your position
anytime.

------
arielweisberg
This is pretty interesting to me. Investing in strategies including automated
trading strategies on some of the hosted platforms that are out there.

But... I am a Boglehead. It's going to take a hello of a lot to pry me away
from VTSAX and many many decades of history (that may or may not repeat).

I would only ever be interested if I could invest in a low cost way across ALL
the strategies by market cap of assets held under each strategy.

Ideally I could invest across all the strategies not just at Instavest.

I'm the kind of guy who wants to buy a fund made up of every openly traded
asset by market cap.

~~~
skhatri11
This is our ultimate goal.

~~~
tvav
I'm also a Bogglehead and I would love to see it. Do you have a roadmap?

~~~
skhatri11
Nothing to release right now - we're focused on developing the core product!

------
gruez
Why is it that I can't see any details about the investors without logging in?
The only thing I can see are the returns of 6 select investors, which is less
than helpful. And I can't just create a fake account either - all accounts
need an initial transfer. From a site that gets paid based on the number
signups, this leaves a bad taste in my mouth.

~~~
3327
I closed the signup exactly at that same spot. Unfortunately this gives the
sign "snake oil". The intent and model is o.k but not enough credibility for
me to wire money without further backup. Sorry seemed worth a try.

~~~
skhatri11
Here's an example of a writeup. There are several more like this. This
position is up approximately 30%.

SunEdison is an attractive investment opportunity: by Jay Yoon March 11, 2015,
2:57 p.m.

Solar Is Cost Competitive Even Without Subsidies:

In general, I am very bullish on the overall solar sector. The cost of solar
has declined to the point where it is competitive on a non-subsidized basis in
many countries. Currently, solar is cheaper than retail electricity in
approximately 30 countries. This includes some of the largest solar markets
such as US, Japan and Germany. Other large countries, most notably China and
India, are very close to grid parity.

Adoption of Solar Is Still At the Beginning Stages.

The overall penetration of solar is very low today (approximately 0.3% of
global electricity generation). A small increase to 1% penetration will triple
the market size. Thus, the solar industry is still at the beginning stages of
a prolonged period of growth. The cost of solar will continue to decline going
forward which will lead to the increased penetration of solar in many
countries. For example, in the US, solar is currently cost competitive on a
non-subsidized basis in 14 states. By 2016, this number is expected to
increase to 47 states.

Leading Market Position.

SUNE is well-positioned to take advantage of the long-term growth in solar due
to its leading market position. SUNE is currently the largest renewable energy
provider in the world. In FY 2015, the Company expects to install between 2.1
– 2.3 GW of solar and wind projects. By comparison, SolarCity guided for
between 920MW – 1 GW of deployments in FY 2015. SUNE’s competitive moat is
significant. The Company’s scale and first-mover advantage provides them with
project development expertise, access to capital and a broad network of
relationships. SUNE also has a geographically diverse business which mitigates
country-specific risk.

Differentiated Business Model.

SUNE has a differentiated and diverse business model. The Company entered the
wind power market through their acquisition of First Wind. More recently, SUNE
entered the energy storage business through its January acquisition of Solar
Grid Storage. Thus, as a “one-stop-shop” provider of renewable energy
services, SUNE has been able to differentiate itself from competitors.

Terraform and Future Yieldcos To Unlock Significant Value.

The formation of the Terraform Yieldco has allowed SUNE to retain the majority
of its solar projects rather than selling them to a third party. The Company’s
ROI from a retained project is significantly higher than the ROI realized from
selling the project to a third party financial buyer. SUNE has announced its
plans to form additional Yieldcos in the future, including an emerging markets
Yieldco focused on projects in Africa and Asia. Terraform, along with the
formation of future Yieldcos, will allow SUNE to maximize the value received
from its solar and wind project developments.

Trading At A Large Discount to Fair Value.

SUNE shares are trading at a large discount to fair value. As I mentioned
previously, the Company expects to install 2.1 – 2.3 GW of solar and wind
projects in FY 2015. If SUNE sold these projects to a third party, I estimate
that the Company would report ~$1.10 of EPS from its project development
business. Comparable solar companies with a sizable project business trade at
an earnings multiple of 25x or higher. For example, Sunpower currently trades
at a multiple of near 30x FY 2015 earnings. Assuming a relatively conservative
multiple of 20x FY 2015 EPS, I estimate SUNE’s project development business to
be worth $22 per share. Thus, SUNE’s project development business by itself is
almost worth the current share price. I estimate the remaining components of
SUNE’s business (e.g. Terraform, Samsung JV, Semi business) to be worth an
additional ~$15.00 per share. Putting it all together, I estimate that SUNE is
worth $37 per share on a combined basis. This represents a 67% premium to the
current share price of $22.17 (as of March 10th). Thus, I would recommend
going long SUNE at the current price level.

------
mckoss
I would worry about lead investors front running their trades; its pretty easy
to make money in the market if you can get a large number of people copying
your trades AFTER you make your own.

~~~
zallarak
We don't allow stocks below a certain liquidity threshold, so this would be
pretty tough to achieve.

------
mpdehaan2
While it's an interesting idea, it seems like this is suggesting trying to
copy someone's short term stock wins. The current page shows someone (6 random
faces, where you can't click on details without signup) making some alledly
good gains over a couple of years with an unknown amount of money. (another
post says you can't signup without a money transfer? yikes!)

As I understand it, you want a predictable gain year to year over a long haul.
A three-year span where you gain a large percentage, offset by a large drop
(which is possible if investing -- aka 2000-era tech bubble crash), results in
you having significantly less money than a more subtle, even, diversified
rate. Over the long haul, you may lose a lot of money by having a lot of
volatility, or not gain as much. This is not to say you must choose very
conservative investments, but this is why diversity in investing is useful.

I also worry that the site showcases people who made, say, 100%, by a limited
number of investments over a short term. There's nothing saying these
investments will hold over the long term, which means that following them is
essentially random. There's also a bit of danger in investing in just what you
know about, for instance, say you really follow donuts.

Various mutual funds seem unexciting because they don't offer "quintuple your
money" in N months, but you'll end up with a lot of money in the end if you
make regular investments.

This doesn't just have to be your 401k, it could be an IRA (if you
qualify/etc), a combination or both, or some investment on top.

Obviously, a lot of people have made a lot of money investing in very specific
stocks, but there's nothing to say the past history in investing in those
stocks foreshadows future history, and I think the site owes people a bit of
education about that, especially younger folks.

You may also wish to speak to a financial advisor.

~~~
skhatri11
To emphasize, Instavest is not a replacement for a financial advisor nor is it
a replacement for a portfolio of index funds.

Rather, Instavest is a supplement to your portfolio and helps you access
previously overlooked / out of favor investment opportunities.

Searching for high-returns on a small part of your portfolio is something
people do already.

All we are doing is bringing this phenomenon online and aggregating ideas so
people can invest easily.

-Saleem

------
kirpekar
In the active v/s passive debate it has now become widely clear that passive
wins ALL the time when controlled for risk.

I wonder what the market for such a product is compared to main stream
actively managed funds. Why should I choose some unknown "expert" off the
Internet instead of say Bill Gross, Peter Lynch or John Neff?

~~~
zallarak
You aren't choosing an unknown expert. You can examine their track record and
investment rationale, and copy them on a trade-by-trade basis.

Think of this as an idea surfacing website, not a place to just blindly copy
people (although some people may choose to do so).

Our thesis is that our platform will surface interesting small-cap investments
that would otherwise be undiscovered by the average retail investor. There is
a huge advantage to managing under $1M.

    
    
      “If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”
    

\- Warren Buffett

Finally, I agree passive management is an important part of someone's
portfolio. I'd argue it should be the majority of most peoples' portfolio, but
I would never say its a silver bullet. In my personal Instavest account, I
search for higher returns in small cap, less efficiently traded companies.

~~~
peteretep

        > You can examine their track record
    

If they were choosing randomly, you would still see a population with a great
track record ... but no reason to think it would continue. Given that active
investors as a whole are shown again and again to be unable to beat the
market, I'm not sure why this time is meant to be different.

------
bdkoepke
How are you controlling for survivor bias?

Unless these investors are highly leveraged, have insider information, or are
simply 'lucky' (or a combination of all three) I would assume survivor bias...
The best proprietary firms in the world don't make 50% per year...

~~~
skhatri11
Investment ideas are shared in a Twitter-like feed so regardless of
performance all ideas get the same visibility on Instavest. Whether or not
people decide to follow the idea is up to them. At the end of the day,
Instavest is a market and funds will flow to quality.

------
shakil
The "world's best investments"? From what I can tell you can only replicate
what others are doing on your site right?

~~~
skhatri11
You can make your own investments as well.

The "replication" part of it is just to give you an opportunity to see what
other people are doing in case you're interested.

What's really compelling is that you get to see investment opportunities that
you wouldn't normally consider. Most people are investing in Apple and Google,
which is fine. But there are inefficient parts of the market and for the
retail investor, that's an interesting place to spend time researching.

~~~
biot
It seems like the only automated replication that you can elect to use is upon
sell. Are there plans to replicate buying as well? No doubt you're familiar
with how other sites work: decide to "follow" an investor and your funds are
effectively pooled into theirs and executed automatically on your behalf... at
the cost of some percentage as management fee. I'm curious as to why you've
chosen the model you have.

~~~
skhatri11
Many sites have gotten it wrong my doing auto buy. We built Instavest for
ourselves. I don't want to give someone else a pile of my hard earned money
and let them make investments without my approval. Additionally, I want the
option to find investment "gems". That is, one off opportunities that I
resonate with for any number of reasons. By sifting through a list of curated
investments and choosing whether or not to buy in, I preserve my right to
manage my money and do what I think is right for my risk / reward profile. M

------
bcaine
How is this different from Covester
([http://covestor.com/](http://covestor.com/)), which has been around (and
seemingly struggling) for awhile?

~~~
skhatri11
Covestor was / is a FA replacement; they take 12 months to onboard an Lead
leader and charge management fees (make money regardless; +2% of AUM)
Additionally, Covestor has a completely different customer who wants a
passively managed account The Covestor account typically has $50,000 -
$100,000 minimums.

Instavest is transactional and you get to invest in curated investments. No
management fees, no upfront fees, and tips are optional. People want to retain
control of their assets. If they didn't they would just rather give it to a FA
at Morgan Stanley. .

------
btian
> Our team includes alumni from the U.S. Department of the Treasury, Goldman
> Sachs, Braintree, and Oaktree Capital Management.

Where is the team page with their names and bio?

~~~
skhatri11
Thanks, we're adding this.

------
jlatibonite
Sounds awefully familiar to DittoTrade
([http://www.dittotrade.com](http://www.dittotrade.com))

------
brentis
FYI. Your site is missing some key credibility elements that is hurting your
adoption rate. You are asking people to blindly commit money to something
without passing the critical trust measures. This site could be a phishing
site at worst.

You tried the simple Robinhood approach, but you need to give much more detail
than them IMO.

You can email me if you want more feedback. Brent at Mometic.com

------
biot
I've seen a few platforms like this and they're US only. Anyone aware of one
that supports Canadian investors?

~~~
skhatri11
We hope to be working in Canada soon! Until then, all you need is a US SSN and
a place of residence in the US.

~~~
ctphipps
Not according to your signup. It requires me to affirm that "I am a US citizen
or permanent resident."

I'm a legal long-term US resident but not a _permanent_ resident (i.e. green
card holder). I have a SSN, working permission, credit history, bank accounts
but not a green card holder. Sounds like the word "permanent" should be
removed or replaced with "legal".

~~~
skhatri11
We're fixing this now. Thanks for the clarification.

------
ravenkat
Also, Why does it require me to be an US citizen?

~~~
skhatri11
This is a requirement of our brokerage partner. We are working as fast as
possible to open it up the service in other countries. What country are you
from / in?

------
the_gastropod
Shame on you guys. Perpetuating the notion that "experts" can consistently
beat the market is criminal. Instavest appears to be a typical sleazy
financial business capitalizing on misinformed customers.

~~~
skhatri11
To emphasize, Instavest is not a replacement for a financial advisor nor is it
a replacement for a portfolio of index funds.

Rather, Instavest is a supplement to your portfolio and helps you access
previously overlooked / out of favor investment opportunities.

Searching for high-returns on a small part of your portfolio is something
people do already.

All we are doing is bringing this phenomenon online and aggregating ideas so
people can invest easily.

------
inthewoods
Interesting - but I'm more interested in tracking investors with a longer
track record/AUM ala [http://www.alphaclone.com](http://www.alphaclone.com)

------
esusatyo
I hate it when sign up forms are very US-centric. Not allowing me to input 4
digit ZIP codes, entering birth date in US format, and more.

It's 2015. Everyone should be designing websites with other countries in mind.

~~~
CoachRufus87
Internationalization isn't easy.

------
tuxetuxe
Cool!

But i would like to have it integrated with other brokers (robinhood!).

BTW: this is very similar to [https://zercatto.com](https://zercatto.com) ,
no?

~~~
skhatri11
Thanks for the feedback! Integrating with other brokers is definitely an
option.

There are similarities between Instavest and other platforms. One thing I
notice that's different is that you don't pay any fixed fees on Instavest. We
also don't allow FX trading currently.

------
BjoernKW
Stock investments depend on the right timing a lot. Something that was a
successful strategy in the past might not be so for the future.

~~~
skhatri11
Right, and that's why its up to you to decide what to do after you read the
Instavest research.

------
codingdave
A lot of the criticisms and concerns in the comments seem completely valid...
but in my mind, this is just one extreme of the risk/reward decision. This is
high risk, high reward. Much higher risk than I want to partake in, to be
sure, but I can see playing this game if they can afford that much risk.

------
facepalm
"Earn profits by syncing your trades to the lead investor."

So they always make profits? That's very impressive.

------
theaccordance
The whole taking part in trades by a lead trader is nothing new. I previously
worked for a FINRA licensed broker who's business model was exactly this.

Word of advice: Double check that you're not infringing on any patents.

------
grdvnl
I was referred to a similar website, when I share this with my co-worker.

[https://www.motifinvesting.com/motifs#catalog=our](https://www.motifinvesting.com/motifs#catalog=our)

------
nilsjuenemann
Investing directly in the market (via EFT) is always a good idea. Look at this
chart, percentage change of S&P 600 SPY EFT in the last 3y. 60% increase.

[https://www.tradingview.com/x/r6ahpcAy/](https://www.tradingview.com/x/r6ahpcAy/)

If your timeframe is long, buy & hold is alaways a good strategy.

------
bottled_poe
Ideas like this one smell of ponzi schemes. If this method were really a
profitable idea they would not share it.

~~~
skhatri11
This is not a ponzi scheme. You are not giving your money to an individual.
You're investing in a publicly traded company. Think of Instavest as an
aggregation of research. You read the research and decide what to buy. If you
do well, you have the option to donate to the author of that research. Hope
that helps.

