StockTwits Legitimizing Online Financial Talk

When watching the financial news channels, you better believe that the guest are talking their books. Dr. Doom is not only saying he believes the next move is down – his portfolio is positioned that way. The portfolio manager talking about increased iPhone sales and the upcoming release of the iPad is long Apple. The networks often have their guest disclose their positions. Mostly to cover their butts, but also to signal to the viewer that the guests are vested in their calls.

Talking your book is not limited to TV. It’s everywhere. If you own a stock – you are going to talk about. It is what we do. It is fun, of course, until someone loses an eye or a few thousand bucks.

Online message boards have taken talking your book to new and often dark levels. With literally tens of thousands of people, often new investors, reading these boards each day – it is fertile ground for shenanigans. Paid pumpers and bashers roam the boards with no policing intentionally providing misinformation for their own benefit. When I first started investing, I got caught up in a scheme. Before I knew it, I was out of a few thousand bucks.

One of the primary problems with message boards is that there is little or no association between a person’s real name and their online identity. Games are minimized when your reputation is on the line. Social networks like Facebook and Twitter are the best attempt yet at addressing this problem and are playing a major roll in legitimizing online financial communities.

StockTwits is one of the first financial communities to benefit from the Facebook/Twitter era. I have been hanging out there for almost a year. Each and every day there are thousands of people online talking their book. Yes, there are some bozos playing games. However, as you spend time on the site – you learn who are the trusted sources.

StockTwits continues to add layers to legitimize its contributors. It has paid premium services. Obviously, if a service does not perform it won’t be around long. They have added bloggers on various topics from personal finance to macro economics and now there is StockTwits TV.

Shows run daily on StockTwits TV and vary from market updates to a sit down with a shrink. Yes, they have their very own Dr. Phil. One of their newer shows is called “Talk Your Book” where community members send in videos of their picks. It differs from traditional TV in that these picks are very recent. Most were acted on in the last few days. So, you are getting fresh stuff – that can be acted on if their case is convincing enough.

I have submitted 3 videos. My first pick was a bust. I rattled off all the catalyst that would take the sugar ETF, SGG, higher. I was stopped out the very next day for a loss. Fortunately, my next two picks have fared much better. In the video below, I give an update of my second pick Helca Mining and discuss an exciting play in Impax Laboratories. Fast forward to around 4:00 to see me “Talk My Book.”