WeSeed is a new startup that looks to demystify the stock market for those that have never touched it. The site offers some of the same type of research tools you might expect to find on a typical finance site, but the focus is on helping you find investments that relate to products that you already know.
To do that, WeSeed offers mock portfolios in dozens of different topics (fashions, autos, entertainment, etc.), celebrity “portfauxlios” (what would LeBron James invest in?) and a search tool letting you identify public companies relating to a specific topic. From there, WeSeed lets you maintain a virtual portfolio to test your theories, as well as community features so you can talk about specific investments with other users.
Essentially, the concept is to make you think like an investor – if you see something in the supermarket or think you may have discovered the next big fashion trend, WeSeed wants to help you translate those street smarts into investments. While this approach might sound simplistic, WeSeed points to a number of studies that show investment clubs – the offline equivalent of much of what the site does – typically outperform professionals and the S&P 500. For example, Consumer Reports noted that from 1996-2006, investment clubs outperformed major market indices 80 percent of the time.
The big potential issue with investing this way is that while you might think you’re onto something, what if it’s already priced into the stock? To address this, each company in WeSeed’s index includes a “fair value” ranking determined by professionals. Additionally, the discussion area that accompanies each stock should give users a basic idea of the general sentiment towards a company’s valuation.