

Ask HN: Does crowd-investing make sense?  - syedkarim

I'm interested in the idea of an exchange-traded fund that is directly controlled by its shareholders (ETF: http://en.wikipedia.org/wiki/Exchange-traded_fund). Existing ETFs are either passively managed and track a stock index (Dow, S&#38;P, etc) or are actively managed and generally don't beat the market. Does a publicly-traded investment fund that relies on its shareholders for all transactional decisions make sense?<p>For companies that are already listed on national and international stock exchanges, the wisdom of the crowds may be of real value. I think the crowd could be particularly effective at spotting high-growth public companies in the US and abroad. My hypothesis is that a large group of retail investors collaborating on company research and stock selection can outperform the market and most professional investment managers.<p>I'm curious about anyone's thoughts on this idea.
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gamechangr
People operate these..They are called hedge funds.

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syedkarim
Hedge funds employ professional investment managers who make all of the
decisions. What I am suggesting is that the shareholders make the investment
decisions. The two things are completely different.

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gamechangr
There would be no professional managers? How would that play out practically?

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syedkarim
On a weekly or monthly basis (frequency determined by shareholders), the
portfolio is re-allocated by votes. All discussion and research surrounding
individual stocks takes place in a forum. Prior to the re-allocation day, each
discussion thread (one thread per stock) posts a poll and the 30 stocks with
the highest votes are put in the portfolio.

