Social Finance: The New Influential's (v 1.0)

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INTRODUCTION This research represents state-of-play analysis of the most influential conversations about investments on the social web.

The social network analysis was sponsored by MindfulMoney.co.uk as part of our ongoing initiative to help facilitate a more mindful and social conversation about investments by embracing new and unconventional voices, channels and views.

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TABLE OF CONTENTS

Background to the research .....................................................................................................................4

Methodology & Research Objectives.......................................................................................................5

Key findings...............................................................................................................................................6

Learning points for key audiences:IFAs, corporate, UK Govt and regulators, Media & Mindfulmoney.co.uk.................................................7

Future Phases of Research.......................................................................................................................8

Network Map & Profiles: The Top 20 ......................................................................................................9-50

How to read the map ................................................................................................................................10

About MindfulMoney..................................................................................................................................51-52

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The view from the UK

In the UK the reach and influence of socially networked conversation was found to be equally pervasive with 43 per cent of people having bought financial services as a result of a recommendation via social networking friends.

Furthermore, the UK-based study found that, amongst a range of other products and services recommended by friends on social networks, financial services were the most trusted referral, leading to the most frequent purchases with 43 per cent of referrals leading to financial services purchases compared with clothing (26%) and car hire (25 %).While the reports highlighted the centrality of the social web to investment-related influence and decision-making they focussed mainly on friend and family networks typically with no more than 150 members.

But commentators and researchers such as Malcolm Gladwelland Jakob Nielsen have argued that socially networked conversations are driven by the law of the few and all voices are not equal.

MindfulMoney set out to discover if their claims were valid. Could we identify super-connected influential's who influenced

friend and family-

Could Gladwellinvestment-related conversations on the social web?

Background to the research

During 2010 the findings of two influential reports demonstrated unequivocally the importance of the web

and the US.

The view from the US

In the US financial websites, blogs and friends on social networks were found to be the top influences on individual investors, especially amongst so-called

more heavily influenced by family, friends and work colleagues than are older investors. (Harris interactive 2010)

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Methodology & Research Objectives

The impetus for this research was provided by Josh Brown aka The Reformed Broker (recently dubbed by the NYT as the

snarkadvisors take on current market events, heavily laced with sarcasm and mordant irony.

His periodic table of top blogs and bloggers was the starting point

finance space.

clue to how he thinks but this set us thinking about how we might

preference, no matter how fascinating and insightful such preferences happen to be.

The purpose of this network map is to provide a visualization tool in order to better understand the relationships between financial bloggers and the mainstream media, and to allow readers to get a

players are and who links to whom.

The resulting cartographic landscape was created using co-link analysis software, which from a starting point of 25 bloggers generated a map which includes 84 separate sites.

In producing this network map we were not necessarily interested in establishing a hierarchy amongst blogs (although this was one output of the research) but more in understanding their relationships with each other, and specifically, how they relate to the mainstream media.

Research objectives

Do super-connecters really exist?

If so, what accounts for their extraordinary reach and influence? Who are they and where (geographically, professionally, psychologically) are they coming from?

Are the super-connectors themselves connected to one another?

Are they functioning as individuals or do they constitute an executive level social web all of their own?

The UK is a leading financial centre, is it a leader in the financial conversation?

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established media players (the Economist and FT)

mainstream media nor the city.

The collective intelligence displayed by the network has proven its anticipatory sense-making capacity and has demonstrated predictive capability in relations to the market in both the short and the long term

The network covers the issues in depth in a way that the mainstream

and picking apart complex cause-effect relationships.

The network has been credited with helping investors respond more mindfully to market developments than coverage by the mainstream media and trades.

Key Findings

The research confirms the existence of a network of investment super-connectors with extraordinary media influence and reachThese super-established voices in the media but individual bloggers who fiercely champion their independence.

However, these individuals operate as a connected network, influencing one another as they debate and discuss key topics, issues and themes.

The network has both influence (links to the mainstream media, government, thought leaders) and reach (38million) however the mainstream media is not at the heart of the network where the most influential super-connectors are located.

The top 20 network is international with a strong US>UK biasThe network is heavily weighted toward the US (10% UK/90%US) In the US, the network functions as the unofficial voice of Wall Street & the US federal bank with no mainstream media players at the centre of the network

"Financial blogs have covered the events leading up to the credit crisis much better than mainstream media. Thanks to them, I have made good money from the crisis!"

Björn A Jörgensen. Private investor

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Corporations

conversations on the social web can provide insights into how to frame communications in such a way that they resonate with the current

IFAs

opportunity to make new connections.

reverse the decreasing influence of financial advisors on the social web.

between friends on social networks can enable IFAs to become strategically important to investor relations professionals.

Learning points for key audiences

INVESTORS

Investors can usefully glean news and data from mainstream

-depth, consistent expert coverage as well as covering stories before they break in mainstream media.Some investors credit the social web with an anticipatory function which has offered them novel investment opportunities

Mainstream media

technical knowledge and offer an alternative source of non-mainstream viewpoints.

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Future phases of research

future releases we will be data-mining the map to shed light on single issues, creating alternative maps with different starting points and probing deeper into some of the questions and issues brought to light by

Questions we will be exploring in future research releases and news stories on the MindfulMoney.co.uk website include:

Why such a disparity between the UK and the US investment blogosphere?Is the blogosphere a better guide to investing than the mainstream media commentators?

Can the investment blogosphere help to alert us to early signals of another financial crisis?

How should established institutions, ordinary investors and IFAs relate to the unofficial voice of finance?

What is the appropriate role of regulators to the burgeoning blogosphere and what role could the network play in TCF initiatives?

What are the risks of increasing levels of correlation (or groupthink) and contagion across social networks as ordinary

Trust is migrating from established intermediaries, advisors and

maverick voices to be trusted?

Where are the controls, the rules, the norms in an era when everything is up for grabs?

If you would like to receive social finance research updates let us know.

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Network Map & Profiles: The Top 20 Financial Blogs 1. Naked capitalism2. Infectious Greed3. The Big Picture4.5. Zero Hedge6.7. Calculated Risk8.9. FT Alphaville10. Ludvig von Misses Institute

11. The Market Trader12. WSJ Blogs13. The Epicurean Dealmaker14. Credit Writedowns15. Dealbreaker16. China Financial Markets17. Max Keiser18. Angry Bear19. The Economist20. Jr. Deputy Accountant

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HOW TO READ THE MAP WHAT ARE THE NODES ON THE NETWORK?The map shows the top 20 blogs in the context of a wider network which comprises 50 sites in total.

WHAT DO THE COLOURS MEAN?Blue nodes are dot.coms, green nodes are dot.orgs and red nodes are dot.govs and the links between them show relationships between commercial, not for profit and governmental organisations.

HOW IS THE SIZE OF THE NODES IN THE NETWORK MEASURED? The size of the nodes is drawn by the in-degree count.

BY WHAT MEASURE ARE THE CLUSTER MAPS GENERATED? Maps are generated on the basis of in-degree centrality.

-DEGREE CENTRALITY?In-degree centrality: An actor who receives many ties are characterized as prominent. The basic idea is that many actors seek to direct ties to them and so this may be regarded as a measure of importance.

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Profile

-Naked

Capitalism is one of the most highly regarded and highly read financial blogs you can find. You should check out: her nonsense

be taken

1. NAKED CAPITALISM

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MINNYANVILLE

MAX KESIER

FT

FEDERAL RESERVE

BASELINE SCENARIO

CROSSINGWALLSTREET

ECONBROWSER

THE EPICUREAN DEALMAKER

ZERO HEDGE

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Who links to Naked Capitalism

1. NAKED CAPITALISM

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2. INFECTIOUS GREED

investor, speaker, writer, media guy, and entrepreneur. In his spare time he is a dangerous Twitterer, columnist/contributor for Bloomberg Media (formerly for CNBC), and the editor of Infectious Greed, one of the most

You should check out: Thought provoking articles like

Profile

MINNYANVILLE

DOLLAR COLLAPSE

CROSSINGWALLSTREET

THE EPICUREAN DEALMAKER

ZERO HEDGE

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2. INFECTIOUS GREED

Who links to Infectious Greed

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3. THE BIG PICTURE

When Nouriel Roubini

with a knack for seeing through the statistical fog of

You should check out: The entire site, but the Macro notes are great:

Profile

ECONBROWSER

MINYANVILLE

DOLLARCOLLAPSE

THE EPICUREAN DEALMAKER

CROSSING WALL STREET

MAX KEISER

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3. THE BIG PICTURE

Who links to The Big Picture

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A reflective take on market coverage, with quite a lot of charts and vintage posters. An antidote to the break neck real time financial news. Check out: His daily charts.

Profile

ZERO HEDGE

MAX KESIER

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5. ZERO HEDGE

economic  and  political  information  available  to  the  

Check  out:  Among  their  highly  critical  articles,  their  forum.  

Profile

MINNYANVILLE

MAX KESIER

FT

FEDUPUS

CROSSINGWALLSTREET

THE EPICUREAN DEALMAKER

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Who links to Zero Hedge

5. ZERO HEDGE

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With over a million visitors a month, this is one of the most widely read economic blogs on the web.

Profile

FEDUPUSA

URBANDIGS

MAX KEISER

MINYANVILLE

DOLLARCOLLAPSE

ECONBROWSER

ZERO HEDGE

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They built a cult following as an early predictor of the US Housing Bubble.

7. CALCULATED RISK

Profile

BASELINE SCENARIO

MINYANVILLE

MAX KEISER

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7. CALCULATED RISK

Who links to Calculated Risk

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Nobel Prize winning economist blogs at the New York

especially charts and tables, which are crucial to the way I Krugman)

Check out: His rows with other economists and newspapers gunna haul out the next guy who calls

8. KRUGMANS BLOG

Profile

ECONBROWSER

BASELINESCENARIO

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8. KRUGMANS BLOG

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An influential and widely read blog which has been touted

average, good news on FT Alphaville is associated with 1-week ahead outperformance. Conversely, on average, bad news for a company on FT Alphaville is associated with 1-week ahead under-performance. The same effect is not evident in our database as a whole, indicating that there is

Check out: Market Live, a daily real time discussion of the market.

9. FT ALPHAVILLE

Profile

THE EPICUREAN DEALMAKER

CROSSINGWALLSTREET

FT

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9. FT ALPHAVILLE

Who links to FT Alphaville

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The Ludwig von Mises Institute is the research and educational centre of classical liberalism and the Austrian School of economics. Its mission is to promote the tradition of thought represented by Ludwig von mises. The Wall Street Journal covered the institute in a piece

10. LUDWIG VON MISES INSTITUE

Profile

URBANDIGS

CONTRARY ADVISER

DOLLARCOLLAPSE

ZERO HEDGE

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10. LUDWIG VON MISES INSTITUE

Who links to Ludwig von Mises Institue

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The Market Ticker is written by Karl Denninger, who received the Reed Irvine Accuracy In Media Award for Grassroots Journalism for his coverage of the 2008 market meltdown. This is why one reader follows his blog:

and read an article.

11. THE MARKET TICKER

Profile

MAX KEISER

DOLLARCOLLAPSE

ZERO HEDGE

FEDUPUSA

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11. THE MARKET TICKER

Who links to The Market Ticker

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A wide ranging selection of blogs from Wall Street Journal editors and reporters who provide real-time news and analysis around the clock, with contributions from outside experts.

12. WSJ BLOGS

Profile

ECONBROWSER

DEALBREAKER

THE EPICURIAN DEALMAKER

URBAN DIGS

BASELINE SCENARIO

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12. WSJ BLOGS

Who links to WSJ Blogs

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Written by a New York investment banker who offers an

was recently referenced in the New Yorker.

13. THE EPICURIAN DEALMAKER

Profile

BASELINE SCENARIO

CROSSINGWALLSTREET

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13. THE EPICURIAN DEALMAKER

Who links to The Epicurean Dealmaker

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14. CREDIT WRITEDOWNS

A news and opinion site dedicated to bringing a well-informed view of finance, economics, markets, and foreign policy into the mainstream consciousness.Contributors include Marc Chandler, former chief currency strategist for HSBC and Marshall Auerback, economic consultant to PIMCO.

Profile

ZEROHEDGE

CROSSINGWALLSTREET

ECONBROWSER

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14. CREDIT WRITEDOWNS

Who links to Credit Writedowns

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15. DEALBREAKER

DealBreaker is an online business tabloid and Wall Street gossip site that covers the personalities and culture that shape the financial industry, offering original commentary, news and entertainment.

Profile

ZEROHEDGE

CROSSINGWALLSTREET

THE EPICURIAN DEALMAKER

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15. DEALBREAKER

Who links to Dealbreaker

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16. CHINA FINANCIAL MARKETS

Written by Michael Pettis, a finance professor at Peking Guanghua School of Management.

Profile

ZEROHEDGE

FT

ECONBROWSER

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16. CHINA FINANCIAL MARKETS

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17. MAX KEISER

Max Keiser is a film-maker, broadcaster and former broker and options trader. His site is heavily critical of the finance industry, with articles published in the Guardian entitled

Profile

ZEROHEDGE

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17. MAX KEISER

Who links to Max Keiser

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18. ANGRY BEAR

One of a dozen professionals, including a tax law expert, a historian, PhDs in economics, consultants and financial professionals provide perspectives on the financial world. Despite their expansive coverage of economic issues, their articles are as deep as their coverage is extensive. Topics include world trade, industrial production, U.S. Government programs, and major regulatory

Profile

ZEROHEDGE

BASELINESCENARIO

ECONBROWSER

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18. ANGRY BEAR

Who links to Angry Bear

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19. THE ECONOMIST

newspapers weekly coverage , offering regular updates on politics, culture and business.

Profile

FT

BASELINESCENARIO

ECONBROWSER

EPICURIAN DEALMAKER

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19. THE ECONOMIST

Who links to The Economist

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20. JR. DEPUTY ACCOUNTANT

Cited by blogs from FT Alphaville to The Reformed Broker, JDA writes predominantly about the FED. This is how she describes herself and gives you a flavour of what to expect.

accidental Fed savant hiding out somewhere in San Francisco since 1999. I can't tell you why I understand what the Fed is saying 97% of the time, nor why I nerd out on Fed banks (except this one) but I do and you get to

Profile

BASELINESCENARIO

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20. JR. DEPUTY ACCOUNTANT

Who links to Jr. Deputy Accountant

What's a knowledge network?Knowledge about investing - why, how, where and when to invest - is currently the privilege of a few. Mindful Money's knowledge network is about sharing the knowledge and information of those in the know with those who aren't - yet

We will be calling on some of the smartest minds, both inside and outside the industry, to help clarify, decode and demystify the investment scene.

So, in a nutshell, we're about knowledge, we're about news, we're about community and we're a bridge between the professionals and every other type of investor.

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We're taking a stand against fads, groupthink, short-termism, scape-goating, media bias and FS jargon. A final thing about Mindful Money - we're not about advice - there's enough of that to go around.

Welcome to Mindful Money. www.mindfulmoney.co.uk

About Mindful MoneyMindful Money is a social news and knowledge network for the investment community and it's published by the Social Business Group.

What is social news?Mindful Money's social news is editorial content that mirrors the viewpoints, interests and conversations of the online investment community. It's editorial that's focused more on you and your interests and the things that matter to you. And less on the comings and goings of fund managers, irrelevant product launches, banal industry awards and so on - unless of course we know they are important to you.

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So, as well as adding value to the stories and issues you're discussing wherever we can we'll provide you with resources (step-by-step guides, videos, background stories) and links to others who are covering the same topics.

Mindful Money is sponsored by the following Asset Managers

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Contact Details:

Stewart Conway Managing Director, The Social Business Group, Centro 3, 19 Mandela Street, London NW1 0DU

Email: Stewart.conway@socialbusinessgroup.com

All Work in this document remains the copyright of the Social Business Group as of 2011, publishers of MindfulMoney.co.uk

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