TipRanks CEO Uri Gruenbaum says his company uses “alternative data” to help everyday investors make decisions.
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00:00So tell us, what does TipRank do and how do you help everyday investors?
00:07So we like to think of ourselves as a Bloomberg for the average Joe.
00:12And basically what we do is we collect a lot of data, alternative data, which I can soon explain a bit more,
00:18and we allow the average investor to make a data-driven investment decision.
00:23When we started the company 12 years ago, our main goal was to bring transparency
00:28by measuring the performance of anyone giving investment advice.
00:31So up until 12 years ago, you'd see all these analysts' recommendations, you know, Finfluencers, all that,
00:38bloggers recommending others what to buy or sell.
00:41We would collect that data and start measuring who knows what they're talking about and who doesn't.
00:45It is called the financial accountability engine, and that was extremely successful.
00:49And we leveraged that success to add more and more and more unique data sets, news, research, and tools for investors.
00:57So tell me about this alternative data and how the data help investors make decisions.
01:06Great. So what is alternative data?
01:10So let's start with what is not alternative data.
01:13Anything that a company discloses, their earnings, company announcements, all of that, all of that information,
01:21that is basically fundamental data that public companies provide.
01:24However, in the last 20 years, there has been a growing trend of alternative data.
01:28And so what is that?
01:30If you're an investor, and let's say you're considering to invest in Netflix,
01:36one thing you can do is you can read the Netflix earning reports and say,
01:39okay, you know what, they just grew their subscriptions by 15%.
01:43This is a strong conviction, and I'm going to buy the stock.
01:46But a smart investor or an institutional investor, they wouldn't necessarily wait for the investment reports.
01:52They would look for clues from the outside that would already tell them what Netflix report.
01:58Now, one example would be, for instance, to see how many visitors did Netflix.com receive in the last month.
02:04If you can track how many visitors came to Netflix or how many people installed their app,
02:08you can guess how many new subscribers have joined.
02:12And so there are a lot of different signals.
02:14It can be satellite images. It can be user trends. It can be geolocation tracking.
02:19It can be credit card processing, for instance.
02:22If you buy data from, let's say, a credit card company of how many people have paid for Netflix,
02:28you can guesstimate what their earnings would look like.
02:31So there is a long list of alternative data that institutional investors are able to monetize very well,
02:37but that are not accessible to retail investors.
02:40We feel that our mission at TipRanks is to empower the retail investor to level the playing field,
02:46and so that's what we're doing.
02:48We're bringing all these unique data sets on top of the standard ones
02:52and making them available for free for the average owner.