KaChing: A well-balanced site for stock enthusiasts

I have never been a big fan of fake stock markets. I don't play fantasy sports, either. I feel that if you're going to invest, nothing replaces skin in the game. A "market" with play money can't, I have always thought, provide real-world value.

But that's a superstitious conceit. Some stock games might be able to make you real money. Take KaChing, a new stock market community site officially launching Tuesday. Marc Andreessen just announced that's he's an investor in this company.

This fellow might be worth following.

In KaChing, as in other stock game sites, users can create fantasy portfolios, and other users can track them. If you're browsing users' portfolios and find one or more that you like, you can "follow" them to get notified whenever they make a trade.

What's interesting about KaChing is that the service just received SEC approval to be an investment adviser, which means that management fees for the advisers is likely not far behind.

Who are these managers? They could be anybody. KaChing makes sure they've been active on the service for at least a year so the performance you see is less likely to be a fluke. There are also tools to examine their portfolios so you can tell if a strong performer is due to a outlier lucky call or two, and if the holdings match the stated style of the manger.

Given the tragic performance of most Wall Street investment pros and advisers, I'd agree with KaChing founder Dan Carroll that it's time to open up this industry. And of the half-dozen or so stock sites I've experimented with, I found KaChing one of the easiest to comprehend for a person with some, but not a lot, of knowledge of the public markets. I like the clear filters for finding managers that let you quickly find people whose style you're comfortable with. For example, I quickly filtered out the short sellers.

It's an active community, too, thanks to a Facebook app.

I like this stock site more than most. It's clear and simple to use, and there are many portfolios on the service that are positive territory right now compared with the market in general. That's a nice ray of sunshine.

Finding fund "managers."

Related: Inner8 (review).

[bradfranchis]

Rafe, how can you say "the service just received SEC approval to be an investment adviser, which means that management fees for the advisers is likely not far behind"? This is both misleading and dangerous.

The company's press release states "managers could have the opportunity to earn a lucrative living from their outstanding performance" yet there is no mention of this whatsoever in their ADV. This means that the SEC has not approved anything beyond kaChing being one of 30,000+ registered investment advisors (RIA). This misleads any kaChing "manager" who thinks s/he can get paid (without forewarning what happens when the SEC shows up and investors name them personally in lawsuits) and it misleads any investor who think s/he can follow these managers in the prescribed fashion (what they are now putting forth as the premise for their existence ... they were fine as long as it was just social networking).

AND, no legitimate broker dealer will risk its license or the inevitable litigation which will arise from unhappy investors just so kaChing (or CoVestor) can pay Joe-The-Plumber types a few bucks for a hot hand (no matter what they call the payment). Nor will you find a clearing firm to clear the transactions. It is simply in violation of the 1940 Investment Advisors Act.

[bradfranchis]

Rafe, how can you say "the service just received SEC approval to be an investment adviser, which means that management fees for the advisers is likely not far behind"? This is both misleading and dangerous.

The company's press release states "managers could have the opportunity to earn a lucrative living from their outstanding performance" yet there is no mention of this whatsoever in their ADV. This means that the SEC has not approved anything beyond kaChing being one of 30,000+ registered investment advisors (RIA). This misleads any kaChing "manager" who thinks s/he can get paid (without forewarning what happens when the SEC shows up and investors name them personally in lawsuits) and it misleads any investor who think s/he can follow these managers in the prescribed fashion (what they are now putting forth as the premise for their existence ... they were fine as long as it was just social networking).

AND, no legitimate broker dealer will risk its license or the inevitable litigation which will arise from unhappy investors just so kaChing (or CoVestor) can pay Joe-The-Plumber types a few bucks for a hot hand (no matter what they call the payment). Nor will you find a clearing firm to clear the transactions. It is simply in violation of the 1940 Investment Advisors Act.

[nickadams]

Another great site for practicing investing in the real stock market is http://www.updown.com.

It's the Web's largest investing social community. Over 100,000 members use it to practice investing, compete with friends, and earn real money beating the S&P 500.