A while back you may recall I published some free equity research on a new web site called KaChing. I have been working with the site’s creators for a couple of years now and they recently launched a service that I am a participating in.
KaChing started as a Facebook application that allowed anyone to manage a virtual portfolio online, post the research behind their investment ideas, and subscribe to other users’ portfolios through a watch list (which would email you anytime that person made a virtual trade or posted new research).
Last week KaChing officially launched trade mirroring, which is the final step in their vision for the site. Now investors can not only follow others and their trades, but they can open a real brokerage account and automatically mirror the virtual portfolio of any manager on the site.
KaChing has developed a proprietary rating system for managers called “Investing IQ” which scores each eligible manager from 0 to 200. Anyone with a track record on the site of at least 1 year and an IQ of 140 or more can apply to be a featured manager on the site (they are called “geniuses” even though that is a strong characterization).
I have been managing a virtual portfolio on KaChing since mid-2008 and wanted to let you all know that you can follow my virtual trades, read my research, and even mirror my trades in your own account if you want to. Everything is free except for the trade mirroring service, for which there is an annual management fee (2% to mirror me) and a 2-cent per share commission rate.
If you are interested in reading some more of my content on specific companies, simply head over to the following web site and follow my virtual portfolio on KaChing. I have even invested my own money in an account that mirrors myself, so you can be sure I will be taking this venture seriously. All in all, I think this is a very innovative site.
Follow me on Kaching at: http://www.kaching.com/portfolio/10578/holdings
The biggest selling point from an investor’s standpoint is the 2 cent per share commission that KaChing has negotiated with their brokerage partner, Interactive Brokers. Normally it is difficult for me to adequately diversify a client’s account with only a few thousand dollars due to the impact of trading costs. Even the low $7 per trade commission that Peridot Capital’s clients pay has a large impact on say, a $5,000 account. Buying 20 stocks in a portfolio of that size would cost nearly 3% of its value, so transaction costs really eat into returns with small dollar accounts.
With Kaching, however, the minimum investment for a mirroring account is only $3,000. That same $5,000 account could purchase 20 stock on KaChing and only pay $4 in total commissions (assuming a$25 per share average stock price, and thus 200 total shares). That kind of price is simply not something I can currently offer my firm’s clients, so KaChing has a unique value-added component for smaller clients.
Obviously I am plugging a site that I am involved with, but I genuinely think it is a very innovative and valuable site, whether you simply want to read some research and follow some trades for free, or actually mirror one of the featured managers such as myself in your own brokerage account.