Amazon engineer will let strangers manage his $50,000 stock portfolio 'forever'

http://www.cnbc.com/2017/07/06/amazon-engineer-will-let-strangers-manage-his-portfolio-forever.html

by lxm • 9 years ago

202 167 9 years ago

cnbc.com

arikr• 9 years ago

Its 0.4 percent return slightly outperformed the 0.2 percent rise in the S&P 500 since its launch on May 30.

Amusing excerpt. Highly relevant, of course.

dsacco2• 9 years ago

One of my favorite things about this story is the way it discretely slides an association between "Amazon engineer" and "has $50k to let go of 'forever' on a social experiment" across the table to the audience.

That's the real message that's going to be received by a large amount of the population reading this story as it makes the rounds on outlets like CNBC.

merkaloid• 9 years ago

He's probably not just any engineer because if you actually check the stream it looks like it is viral marketing for "robinhood.com"

willtheperson• 9 years ago

This is probably it. I personally signed up for Robinhood based on this project. I'm already interested in stock trading though so it wasn't that big of a commitment from me but they do have a nice App and signup process compared to other financial trading outfits I've used.

dawnerd• 9 years ago

I think so too. When it first launched I signed up for robinhood and tossed just 100 bucks to see how it worked. App needs a lot of work to be useful so I doubt I'll throw any more money at it. On the plus side, I am up ~4%

stockstream22• 9 years ago

StockStream was launched independent of Robinhood. I really like their platform, so am glad to include links to their site.

mabbo3• 9 years ago

He totally is just some random guy. I know this, because I worked with him for a few years in Amazon Fulfillment. Just found out today that it was him that made this project (haven't talked to him in a while).

encoderer• 9 years ago

$50k in RSUs annually is a decent target for a mid-level engineer (non-management). With overlap of grants after the first year and price appreciation of the stock, you can imagine how this can grow.

That said, I think Amazon has some unfriendly vesting terms compared to the SFBA-based companies I'm more familiar with.

cbhl• 9 years ago

Is this person a Twitch engineer? That's kind of a subset of Amazon engineer...

alttab4• 9 years ago

Based on information, I'd argue Michael Roberts isn't his real name so we will never know.

ryandrake• 9 years ago

That was my first question too. What "engineer" has $50K sitting around to practically throw away? Then I remember, when it comes to tech reporting, "engineer" could mean anything on the spectrum between "7th code monkey from the left" to "CTO".

nandemo2• 9 years ago

I think y'all are overestimating the risk. He isn't throwing it away. He's mentioned here that it's max 1 trade of 1 share every 5min. The initial portfolio is very diversified, so barring a concerted attack this experiment's returns likely won't be much different from a random actively managed mutual fund -- with the advantage of having no management fees and no trading fees either.

And he can stop the experiment any time.

dsacco2• 9 years ago

I think you misunderstood my point. I'm not at all surprised that he has $50k to do this with as an engineer (I could do the same). Engineers, as a class of people who work at companies like Amazon, are very well paid.

I was more commenting that many other people outside the industry are going to become familiar with this idea on a somewhat more visceral level now that it's at the point that CNBC is talking about it.

As an aside, you might be surprised at how many of those "seventh code monkey from the left" are clearing over $200k per year at Amazon. The last time I spoke to people I know at Google/Facebook I was hearing total annual compensation packages of about $250k for senior level in NY and CA.

If you don't have a family and aren't growing your spending habits to match your pocket you can easily have that much extra cash lying around (NB I hesitate to use words like "easily" because people tend to have an indignant reaction, but that doesn't really alter my point).

awad3• 9 years ago

Plenty of knowledge workers are able to effectively write off tens if not hundreds of thousands of dollars if they so pleased. No different than making a fun {car|house|vacation} purchase. People are wired differently, right?

psyc• 9 years ago

Really? I'm just a mid-level engineer, and I estimate I've easily blown over $100K on foolishness.

morley• 9 years ago

I'm really curious what his streaming software looks like. I've always been interested in how stream video gets composited and what tools are available, but I'm too lazy to look into it.

bendauphinee• 9 years ago

X-Split is the go-to solution for most streamers these days.

sillysaurus32• 9 years ago

Why do so many people use XSplit over OBS? OBS is free and the featureset is (or was) more than a match.

sorkin2• 9 years ago

Really hasn't been in years. I've not even heard of anyone using it in over a year. But I mostly speak with people who stream video games.

r1ch2• 9 years ago

OBS Studio is the most popular software right now for Twitch live streams. It's open source and under active development. https://obsproject.com/

(Disclaimer: I'm one of the developers)

stockstream22• 9 years ago

Yep, I use OBS. Its awesome, thanks for all your hard work on it!

ohashi• 9 years ago

Thanks for working on OBS, it's awesome :)

dastbe• 9 years ago

are you the waffleimages r1ch?

jimmcslim• 9 years ago

Would an infinite number of monkeys making an infinite number of trades find proof of Fama's Efficient Market Hypothesis?

alttab4• 9 years ago

Clearly.

tpeo• 9 years ago

I don't see why they'd bother.

passivepinetree• 9 years ago

Twitch Plays Pokémon and other such games tended to be highly disorganized and take forever to accomplish basic tasks.

I wonder if that'll be the case here, and if so, whether that means better or worse investing.

matty22• 9 years ago

I guess it might depend on what timeline you're looking at? Generally, a more hands off approach to investing is better in the long run, so over the long run perhaps highly disorganized and taking forever to accomplish basic tasks would make for better investing?

gipp• 9 years ago

Video games require relatively long sequences of coordinated actions to accomplish anything, though. In trading, every action is fairly self-contained in a few important ways, e.g. the ordering of actions doesn't matter much.

jmcgough• 9 years ago

It's a much smaller group of people in this case, so my guess is that the people who'll stick around are people who already do trading and are somewhat knowledgable.

There have been other x plays streams with a small number of viewers that did pretty well at slowly beating their games. When you have thousands of people like TPP did, you attract trolls who spam "down9" ;)

MichaelGG3• 9 years ago

Pretty easy: "The game is divided into voting rounds, each lasting 5 minutes. Every 5 minutes the top buy or sell command will be executed and one share will be bought or sold. You may only vote once per round."

https://www.twitch.tv/stockstream

Buying or selling a share is basically atomic, so there's no coordination needed apart from the overall portfolio. Looking at the portfolio, http://stockstream.live/portfolio.html , most positions are just a few shares.

havella• 9 years ago

Maybe this is the beginning of "Twitch Trading". If ppl like seeing other ppl playing video games, trading stocks/futures could find an audience. The question is what would be the incentive for a competent trader/algo to let ppl see it's trades.

brahmwg• 9 years ago

As far as I know eToro already allows users to copy other traders strategies. The incentive for the trader to allow others to copy their strategy is likely some % gain based on the number of copyers, so if you develop a successful trading strategy and allow others to profit off it, you also profit. Just a hunch.

hkmurakami• 9 years ago

Possibly general solicitation of funds from retail investors. But I agree with you that if you're any good, you're not going to be asking retail for money, you're heading straight to UHNW individuals and whatnot.

gricardo99• 9 years ago

what would be interesting though, but much more of a niche, would be if some successful quant traders did an in-depth review of some "alpha" or strategy they ran some time ago, which is no longer profitable. They could discuss their tools, analysis , trading metrics, performance, and some discussion of why the strategy stopped working.

It would give a good window into the work-flow and skills required to do this successfully. Even if it's retrospective, going back a few years.

rfrank• 9 years ago

A friend of mine kinda does this, a lot of the content on his site is comparable to what you're describing.

http://www.verticalsolutions.com/papers.html

pilsetnieks• 9 years ago

Also a plausible cover for insider trading or other shady stuff.

sillysaurus32• 9 years ago

For realtime stats: http://stockstream.live/portfolio.html

Looks like they're down $577.18 so far. Jebaited

ChuckMcM3• 9 years ago

I wonder how they got one share of ZNGA for $0

ENTP• 9 years ago

I dunno, but the infitity% return is awesome.

stockstream22• 9 years ago

Some shares were gifted for free by Robinhood for referrals.

ChuckMcM3• 9 years ago

Pretty much defines a "blind trust" :-).

I find the experiment pretty interesting, how many people will try to make him go to zero? How many will want to make the value higher? If you were leveraging a pump and dump house how does that work? And home much can you trade at once? (all would seem to be a silly amount, but it has to be enough to make reasonable trades)

And how do you know it is actually real money? We used to do office stock pools where folks would start the month with "$100,000" and got two trades a day, one at noon and one when the market closed (easy to do on the west coast) at the end of the month the one with the most "money" would "win". It was fun and taught me a lot about market volatility (and that I would suck as a day trader :-)) but there was no actual requirement for money to actually trade hands. And even at $50,000 you're not buying or selling enough to move most stocks.

stockstream22• 9 years ago

And home much can you trade at once?

As of current rules, you can only make one trade of one share every five minutes.

I will likely change and tweak these rules over time.

lr4444lr• 9 years ago

The question that really bakes my noodle is, what if the people who try to make him go to zero collectively make his value higher? ;-)

kaffeemitsahne• 9 years ago

I've come across multiple papers investigating stock trading strategies, where they mentioned little or no effect for the actual strategy, but a significant positive effect for the opposite strategy.

likelynew• 9 years ago

If people knows how to make it go down, then they can easily earn from that.

arwhatever• 9 years ago

Is he going to support the software integration piece of this, forever?

stockstream22• 9 years ago

Yes

hammock• 9 years ago

Screaming Eagles are an arena football team that allows the fans to call the plays.

https://www.nytimes.com/2017/02/17/sports/football/indoor-fo...

kuldeep_kap3• 9 years ago

Does anyone know how is this implemented? Is there some stock trading API?

He also talks about some regulation at the end. Does the entity needs to be setup legally in a certain way?

oh_sigh• 9 years ago

Yes...presumably many companies offer it, but it may not get top billing because it isn't exactly a widescale consumer product.

Here's the one I use, which has great rates: https://www.interactivebrokers.com/en/index.php?f=5041

kuldeep_kap3• 9 years ago

thanks!

stockstream22• 9 years ago

I found a bit of code on github to access the robinhood api. That bit was actually not too difficult to implement.

The regulation bit not special, just a restriction on what trades are allowed.

kuldeep_kap3• 9 years ago

ha nice! I didnt know robinhood api was public. Any pointers?

Did you set it up as some formal entity or just through your personal account? Any pointers to learn about the restrictions. I'd love to so some interesting apps myself.

Update: I think i found it - https://github.com/sanko/Robinhood . Thanks!

CryoLogic• 9 years ago

I wonder why the Amazon engineer part is relevant?

grahamperich2• 9 years ago

it's not, it just gets the writer more clicks on his/her headline

luvandp3ace• 9 years ago

You need a hook. Especially when robinhood is trying to generate some viral growth.

stockstream22• 9 years ago

Hey everyone! Glad to see you're all enjoying the project. I'd be glad to answer any questions you have. Let me know!

matt_wulfeck• 9 years ago

How much money do you actually have?

stockstream22• 9 years ago

Heh, well I definitely don't consider myself to be super wealthy. $50k is not a small amount for me, but not the end of the world if I lose half.

mabbo3• 9 years ago

Wait, wait, don't I know you?

You worked in AFT Picking, right?

stockstream22• 9 years ago

Ah yeah, hey, how's it going? I remember you from the YYZ office.

0xfeba• 9 years ago

You should do a similar experiment with BTC, or BTC+litecoin+eth or something like that. The APIs are already there.

stale20023• 9 years ago

That wouldn't work.

The only reason he is getting away with doing this for stocks is that Robin hood doesn't charge any per trade transaction costs.

Day trading cryto would kill him in trading fees.

stockstream22• 9 years ago

Yeah did some initial research, but didn't find a good platform with an API and no fees.

omoikane• 9 years ago

I am just wondering how you would do your taxes next year.

stockstream22• 9 years ago

Just gonna hire someone to do it for me.

e12e2• 9 years ago

Shouldn't really be any harder? 50k going in, pay taxes on profits, or get deductions on losses based on where things stand December 31st (that is, assuming there are any taxes at all before liquidation) ?

(And of course pay taxes on any dividends)?

criddell• 9 years ago

How do you think this experiment will play out?

stockstream22• 9 years ago

No idea. Was bearish at first, but lately a lot more bullish. Only time will tell.

cpr• 9 years ago

Hi Mike!

Was talking with your folks about your project at various recent Langley weddings.

Kudos for a great idea, well-executed!

stockstream22• 9 years ago

Thanks! Seems word spread through the extended family pretty quickly.

We should stay in touch though, add me on LinkedIn if you use it:

https://www.linkedin.com/in/Mike--Roberts/

thebiglebrewski2• 9 years ago

Can I throw in $10K of my own to be invested, but take out the profits later?

stockstream22• 9 years ago

If you'd really like to, just scrape the twitch chat yourself, count the votes and invest accordingly!

uiri• 9 years ago

Any plans to open source the software you're using to glue Twitch to Robinhood's APIs?

stockstream22• 9 years ago

Actually, those two bits are pretty small. Theres a ton of code all over github for interacting with Robinhood. The twitch chat API is really just IRC. Glueing those together was the easy part.

The more interesting and complicated components are the UI and the scheduling and a publish-subscribe module that I created, tho no plans to open source it anytime soon.

hoodoof• 9 years ago

Any plans to weight more highly the advice of those who have previously given good advice?

stockstream22• 9 years ago

Thought a lot about this during the development period, but nothing materialized. I might do it someday but would probably need to ramp up the scoring algorithm first.

awad3• 9 years ago

Serious Q: how do you personally deal with the trolls?

stockstream22• 9 years ago

There are no protections against trolls. At this point a dedicated group of less than a hundred could probably take over the vote.

I'd actually love to see more dedicated troll attacks. So far the main attack seems to buy $SEB since it's so expensive, but sometimes it later gets sold at a profit.

Personally, I've mentally written off the $50k so, I'll just be enjoying the show.

kogepathic2• 9 years ago

Why did you decide to do it with $50,000 and Robinhood instead of just creating a bot to trade stocks on an Investopedia stock simulator account? [0]

I mean, I understand that $50k might not be a lot for you, but if the aim is to see what the majority of random people on the internet feel like buying, while measuring the return of these decisions, this could be accomplished without putting up any actual money.

[0] http://www.investopedia.com/simulator/

fullshark2• 9 years ago

The actual money aspect is why this blew up. No one would care if it was fake money.

stockstream22• 9 years ago

One of the reasons I decided to do this project in the first place is because nobody has ever done this before (at least based on my research), and I wanted to be the first. There are plenty of stock simulators out there, so fake money didn't sound appealing to me.

guscost• 9 years ago

Random people will make different choices because it's real money, for one.

martin_hnuid• 9 years ago

Does Robinhood offer an API?

WalterBright2• 9 years ago

Brokerage fees on each transaction may quickly eat up his principle.

pgodzin• 9 years ago

Robinhood doesn't have transaction fees

WalterBright2• 9 years ago

I see, you're right. But there's the spread between the bid and ask prices, which will grind away at your profits if you rapidly trade.

crimsonalucard• 9 years ago

I bet he can beat 50% of all hedge fund managers.

MetaMonk• 9 years ago

Twitch plays NASDAQ

Pica_soO4• 9 years ago

Buy in a fractal denial pattern area near the New Coastline.

Global Warming.

Rising Sea-levels.

Human stupidity.

Profit.

Your grandchildren will be grateful. Or spoiled brats.

rizwank• 9 years ago

Fractal Denial? This is a new term to me... and the #1 link for Fractal Denial on Google is your post :)

Pica_soO4• 9 years ago

Its basically patent- trolling with ground. You buy enough to stop any construction process, dead in the water due to legal processes.

Now you can extort from any company going there, wanting to build something the money for the little area you sell + the money it would cost to restart construction elsewhere - 1$ + the legal fees saved by not going to court.

ProTip: You might want to share the wealth with local legislators later upon, to avoid having zoning-laws changed.

gcb02• 9 years ago

is forever in quotes because it implies "until 4chan gets here"?

petraeus• 9 years ago

Its 50k of advertising for robinhood, which is peanuts

pebo• 9 years ago

I bet it'll just track the s&p 500

Amazon engineer will let strangers manage his $50,000 stock portfolio 'forever'

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