Analyst’s Edge: "News the Crowd Can Use"

There’s a great article today on Wired.com covering user generated news sites. The article is short, very readable, and serves as a great backdrop to our launch of Analyst’s Edge earlier this week.

The jury is still out on the public’s ability to vet information, but the very existence of social editing indicates that a fundamental shift is occurring in way people think about news. Users of social editing sites are no longer passive media consumers. Instead they see media as a live discussion in which the public deserves a voice equal to that of an editor.

It is our hope that users will take the Analyst’s Edge site as their own, submit news, and vote up stories that they think are worthwhile reads. There are too many barriers between consumers of finance industry news and the producers of it. Too many sites have bizarre registration rules, crappy RSS feeds (or none at all), poor organization and usability, and little or no interactivity.

We have built Analyst’s Edge with the goal of eliminating these barriers and getting good news to people who want it…news the finance crowd can use.

Islamic Finance

Very interesting Reuters article on Islamic-friendly hedge funds I found through the Albourne Village weekly newsletter. In short, Islamic law bans gambling and generating interest on loans. This prevents short selling and debt. The article glosses over the issues investors face in trying to cater to this market, but in general it sounds like a very tough row to hoe.

Reuters reports that demand for hedge funds and for Islamic finance is booming, which makes a hedge fund that complies with Islamic law the holy grail for fund managers who want to tap huge liquidity in the Gulf. But most Islamic finance industry players say the two sides are incompatible and that common hedge fund strategies break Islamic law.

Others say that Islamic finance, in order to prosper, needs to develop tools to enable investors to hedge against risk, but that does not necessarily mean hedge funds. Standard Chartered does not offer Islamic hedge funds but is one of a number of lenders offering Islamic hedging products in a bid to meet growing demand from the world’s 1.2 billion Muslims for financial services that comply with their beliefs. Many common hedging practices are seen as speculative bets on currency and stock movements. Hedge fund strategies such as short selling are considered haram, or forbidden, by Islamic law. Lending on interest, the trading of debt and gambling are all haram. Practices deemed acceptable by Islamic law, known as sharia, are halal.

Albourne Village

Albourne Village, a site run by hedge fund advisor Albourne Partners, is a pseudo social network for hedge and private equity fund managers. They say the site has 47,544 users and has been around for ~7 years. From the looks of the site, they haven’t changed it since it was first built. It’s truly bizarre. Based on a “village” layout, different virtual buildings have different functions:

Like most villages, Albourne has a helpful map for visitors to use to navigate the winding streets and alleyways. With the aid of this map visitors can virtually walk along Albourne’s picturesque streets and explore the different style quarters. For those in a hurry or who haven’t found their bearings yet, the map provides direct routes to the principal locations of the Village. Many visitors tend to make a bee-line for the “old market square”, notable for its historic Town Hall and its impressive Library, before popping into the Bridge Inn for a quick pint and a friendly gossip with the local residents.

Users earn “apples” for submitting stories and posting on the message board – every user gets 500 when they sign up. There are currently 25,417,426 Apples in circulation. It is so difficult to navigate around the site that it is almost not worth investigating, but the service does product a very high quality weekly email newsletter aggregating news stories submitted by users. The message board also seems to get a lot of traffic, but it is almost impossible to read. The value of nearly 50,000 investment professional membership is huge, and the fact that the site gets any traffic at all with the current interface shows that users are getting real value from the system. The thought of hedge fund managers earning virtual apples they can cash in at the village pub is hilarious though. Albourne: if you want a site makeover, let me know. I know a guy.