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VIDEO: App Wants to Replace Your Broker

Startup is using Big Data, crowdsourcing to enhance returns


If you take a look at Apple’s (NASDAQ:AAPL) App Store, you won’t see too many highly ranked apps for investing. Of course, those that are from banks like JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC) — financial institutions with huge customer bases (and thus marketing dollars) that can be leveraged to get high rankings.

But a Silicon Valley startup, Robinhood, wants to change things up, and has just launched a cool app that helps you make better investment decisions.

Robinhood tracks all the stock picks of its users, then uses a Big Data system to discover the top investors.

The co-founders of the company, Vlad Tenev and Baiju Bhatt, are Stanford math whizzes with master’s degrees in the subject, and they also have spent time building technologies for top Wall Street investment banks and hedge funds.

Says Tenev: “Robinhood is a modern interpretation of the investment advisor. Rather than paying to get the opinion of one person, you get the opinions of thousands of community members, in easily digestible/actionable messages, delivered right to your iPhone for free.”

The app has a slick design that doesn’t get in the way of speed, and includes helpful features such as a personal newsfeed and suggested companies based on current location.  As legendary investor Peter Lynch set forth in his book, One Up on Wall Street, an investor can often get better insights from a local company, especially those that are in the earlier stages.  This could be through visiting the headquarters, perhaps getting to know some of the employees and getting a sense of the impact on the community.  Hey, is the parking lot full?  Or do the workers always seem to leave early?

Naturally, Robinhood is not a charity, and the company plans to roll out premium services. It’s also in the process of getting a broker-dealer license so it can carry out stock transactions.

To learn more, I recently had a chance to talk to both Vlad and Baiju. Take a look:

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Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities, and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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