From the wreckage of Lehman Bros., a young, pedigreed banker has a new take on using the wisdom of the crowds to help users make wise investment decisions.
By Mina Kimes, writer
As Lehman Brothers slid towards its demise in the summer of 2008, many of the investment bank's younger staffers found themselves with time on their hands. One banker, Lowell Putnam, says his team passed the hours by working on their personal portfolios and sharing investment theses. The collaborative experience, he says, was a blast -- and he wondered if he could expand it beyond the trading floor.
When Putnam was laid off a few months later, he decided to pursue that inkling of an idea. The result is a website called Quovo, whose name combines the words "quote" -- as in stock quote -- and "vote." The site, which is currently only open to users on a selective basis, is a registered investment advisor that picks securities for separately managed accounts by polling its user base. Every week, the team puts new stock and market trend ideas up to a vote, and then makes purchases for the accounts based on the results.
Putnam, now 28, created Quovo with the help of a former Harvard classmate, Niko Karvounis, and Michael Del Monte, a programmer. They've financed the site by friends and family, and they plan to fully open it to the public by the beginning of next year.
Quovo is built on the idea that wisdom of the crowds can generate better investing ideas -- but it isn't a democracy. Some people's votes count more than others, depending on how they've actually performed on real world investments (and, to a lesser degree, by their responses to polls about investment choices). Like the personal finance site Mint.com, Quovo can access its users' brokerage accounts on a read-only basis to give them "IQs," which also weigh the users' response to polls.
|Boost for trade as global deal struck|
|Someone bought a $100,000 Tesla with Bitcoins|
|2 million Facebook, Gmail and Twitter passwords stolen in massive hack|
|Economy is improving but why doesn't it feel that way?|
|Ron Paul: Bitcoin could 'destroy the dollar'|