Social Finance: The New Influential's (v 1.0)
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INTRODUCTION
This research represents MindfulMoney.co.uk‟s 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
The Whole Network Map ..........................................................................................................................9
How to read the map ................................................................................................................................10
The Whole Network Map: Insights............................................................................................................11
Profiles.......................................................................................................................................................13
About MindfulMoney..................................................................................................................................54
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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 Gladwell
and 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
the ‗local influencers‘ on the many hundreds of thousands
friend and family-based networks that constitute the ―small
pieces loosely joined‖ of the social web?
Could Gladwell and Nielsen‘s claims be validated for
investment-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
in shaping investors‘ investment decisions in the UK
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
―Generation Y investors‖ with ―those under age 40
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
‗merchant of snark‘) whose blog offers a practicing financial
advisors take on current market events, heavily laced with
sarcasm and mordant irony.
His periodic table of top blogs and bloggers was the starting point
for our attempt to begin mapping the new influential‘s in the online
finance space.
Josh‘s Periodic Table is witty and fascinating because it gives a
clue to how he thinks but this set us thinking about how we might
set out to create a visual map which wasn‘t based on personal
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
sense of the online financial conversational space. Who it‘s key
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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In the UK the situation is reversed with UK bloggers ‗hanging off‘
established media players (the Economist and FT)
UK the new influential‘s not connected to government nor to the
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
can‘t by drawing historical parallels and analogies to current events
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 reach
These super-connected new influential‘s are, for the most part, not
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 bias
The 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
For corporate providers of financial services following new influential‘s
conversations on the social web can provide insights into how to frame
communications in such a way that they resonate with the current
preoccupations and informal style of influential‘s and those that follow them
IFAs
For IFAs the new influential‘s offer a source of expert knowledge and an
opportunity to make new connections.
IFAs could usefully follow the new influential‘s to tap into the social web and
reverse the decreasing influence of financial advisors on the social web.
Understanding the role of new influential‘s and how information is shared
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
media coverage but following new influential‘s on the social web
can offer ‗the story behind the story‘ with more in-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
For mainstream media following the new influential‘s can help to
supplement commentator‘s technical knowledge and offer an
alternative source of non-mainstream viewpoints.
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Future phases of research
In New Influential‘s release 1.0 we are offering a map of the territory. In
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
New Influential‘s 1.0
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
investors mirror the new influential‘s?
Trust is migrating from established intermediaries, advisors and
institutions to New influential‘s on social networks but are
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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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.
WHAT’S IN-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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THE WHOLE MAP: INSIGHTS
The shape of the map: central and peripheral patterns
At the centre of the network map are the financial blogs with the
mainstream media on the periphery.
Key insight: individuals are the New Influential’s
It‘s notable that the core of the network are neither established
media players nor established financial institutions but individuals
or clusters of individuals.
The map shows the top 84 sites.
Profiles of the top 20 blogs with visual connectivity maps follows.
Key insights: mainstream media voices
• Huffington Post
• New York Times
• Bloomberg
• FT
• CNBC
• Colbert Nation
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The whole map: a complex, adaptive system
Although the sites on the map can be divided into mainstream
media and blogosphere with ‗rankings‘ for each the map itself is
best approached holistically as an interconnected online social
system with diverse players where the whole is greater than the
sum of its parts.
Network functions: the role of the mainstream media
Mainstream media draw on network for source material and
include some surprises including radical voices such as the
Huffington Post and Colbert Nation.
Network functions: the role of the blogosphere
The mainstream media provide breaking news and fact-based
reportage whereas the blogosphere provide the context and
background which is necessary to make sense of the news and of
the facts.
The relationship between the two is symbiotic and generative and
not oppositional and hostile as is often supposed.
THE WHOLE MAP: INSIGHTS
A whole-systems view: no boundaries
Viewing the system-as-a-whole we can see information,
knowledge, links and traffic moving across boundaries which are
often impassable in the offline world.
Information crosses institutional, professional and political
boundaries as well as disciplinary boundaries and boundaries of
geography and political affiliation.
A carnival of genres
In so doing the network hosts a carnivalesque conversation which
mashes up genres such as news and reportage, blogs, satire,
polemic, academic research, data visualisation and complex
information processing.
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A place where dotcoms, dotorgs, dotgovs and the people converge
The network is remarkable for its pluralism, welding together and
embracing not only A-list bloggers, and individuals-as-their-audience but
corporations (.coms), government (.gov), not-for-profits (.org) and the
mainstream media in one dynamic, expansive and inclusive wide area
conversation about economics, finance, politics and investing.
The place of the UK on the network
The above observation holds for the US and the network as a whole but
not for the UK where the conversation is limited to established media
voices and where government agencies, mainstream media,
corporations, radical media and not-for-profits are absent and
disconnected from the conversation.
Lessons for the offline world?
The pluralism and openness of the whole network constitutes a model of
participative democratic dialogue which embraces civil society
institutions, the media, corporations, government and the public.
Profiles: The Top 20 Financial Blogs
1. Naked capitalism
2. Infectious Greed
3. The Big Picture
4. Jesse‘s Cross Roads Cafe
5. Zero Hedge
6. Mish‘s Global Economic Analysis
7. Calculated Risk
8. Paul Krugman‘s Blog
9. FT Alphaville
10. Ludvig von Misses Institute
11. The Market Trader
12. WSJ Blogs
13. The Epicurean Dealmaker
14. Credit Writedowns
15. Dealbreaker
16. China Financial Markets
17. Max Keiser
18. Angry Bear
19. The Economist
20. Jr. Deputy Accountant
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Profile
Described by the New York Observer as „a razor-
tongued chronicler‟ Yves Smith‟s blog Naked
Capitalism is one of the most highly regarded and
highly read financial blogs you can find.
You should check out: her nonsense
commentary in articles like „Why MERS need to
be taken out and shot‟
1. NAKED CAPITALISM
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MINNYANVILLE
MAX KESIER
FT
FEDERAL RESERVE
BASELINE SCENARIO
CROSSINGWALLSTREET
ECONBROWSER
THE EPICUREAN
DEALMAKER
MISH‘S
ZERO HEDGE
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Who links to Naked Capitalism
1. NAKED CAPITALISM
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2. INFECTIOUS GREED
Written by Paul Kedrosky, who describes himself as „an
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
popular financial blogs available over the Interweb.‟
You should check out: Thought provoking articles like
‘Everything I know about how I feel about the
Economy I learned on TV’
Profile
MINNYANVILLE
DOLLAR COLLAPSE
CROSSINGWALLSTREET
THE EPICUREAN
DEALMAKER
MISH‘S
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 describes you as ‗a beam of
enlightened thinking in a sea of delusional complacency‘
and New York magazine calls you ‗a level headed bear
with a knack for seeing through the statistical fog of
economic data‘, it ‗s hard to go wrong with Barry Ritholtz‘s
blog.
You should check out: The entire site, but the Macro
notes are great: ‗succinct summation‘s of the weeks
events‘
Profile
ECONBROWSER
MINYANVILLE
DOLLARCOLLAPSE
THE EPICUREAN
DEALMAKER
MISH‘S
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.
4. JESSE’S CAFE AMERICAIN
Profile
ZERO HEDGE
MAX KESIER
(no longer links)
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4. JESSE’S CAFE AMERICAIN
Who links to Jesse’s Cafe Americain
NAKED
CAPITALISM
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5. ZERO HEDGE
This blog doesn’t have an ‘about’ section, it has a manifesto. So it’s no surprise that it has a strong point of view. It’s mission is to ‘ widen the scope of financial, economic and political information available to the professional investing public’. Check out: Among their highly critical articles, their forum.
Profile
MINNYANVILLE
MAX KESIER
FT
FEDUPUS
CROSSINGWALLSTREET
THE EPICUREAN
DEALMAKER
MISH‘S
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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.
6. MISH’S GLOBAL ECONOMIC ANALYSIS
Profile
FEDUPUSA
URBANDIGS
MAX KEISER
MINYANVILLE
DOLLARCOLLAPSE
ECONBROWSER
ZERO HEDGE
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6. MISH’S GLOBAL ECONOMIC ANALYSIS
Who links to Mish’s Global Economic Analysis
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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
Times. This is why: ‗Many of the posts will be supplements
to my regular columns; I‘ll be using this space to present
the kind of information I can‘t provide on the printed page –
especially charts and tables, which are crucial to the way I
think about most of the issues I write about.‘(Krugman)
Check out: His rows with other economists and
newspapers ‗ I‘m gunna haul out the next guy who calls
me ‗crude‘ and punch him in the kisser‘
8. KRUGMANS BLOG
Profile
ECONBROWSER
BASELINESCENARIO
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8. KRUGMANS BLOG
Who links to Krugman’s Blog
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An influential and widely read blog which has been touted
for it‘s apparent predictive abilities. Here‘s why: „On
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
something “special” about the news that comes from FT
Alphaville.‟
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 entitled ―
How did a world class think tank end up in Alabama?‖
10. LUDWIG VON MISES INSTITUE
Profile
MISH‘S
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:
“You can go to the major financial media like CNBC.com
and read an article. Then you can visit Karl‟s site and read
exactly why CNBC‟s article is flawed in many ways.”
11. THE MARKET TICKER
Profile
MISH‘S
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
insider ‗commentary on Wall Street, global finance,
markets and their participants‘. The Epicurean Dealmaker
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
University‘s Guanghua School of Management.
Profile
ZEROHEDGE
FT
MISH‘S
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
‗Want to crash JP Morgan? Buy Silver‘.
Profile
ZEROHEDGE
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17. MAX KEISER
Who links to Max Keiser
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18. ANGRY BEAR
One of 24/7 Wall Street’s top 20 blogs, Angry Bear is ‗Half
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 issues.‘
Profile
ZEROHEDGE
BASELINESCENARIO
ECONBROWSER
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18. ANGRY BEAR
Who links to Angry Bear
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19. THE ECONOMIST
The Economist‘s range of 17 blogs supplements the
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.
“I'm 29, tattooed, potty mouthed, OMG a girl! and an
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
bask in it here on Jr. Deputy Accountant.”
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
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Contact Details:
Stewart Conway Managing Director, The Social Business Group, Centro 3, 19 Mandela
Street, London NW1 0DU
Email: [email protected]
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publishers of MindfulMoney.co.uk
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