[Cross-posted on the Gridstone Blog].
Ft.com has a nice widget that is very recent by my reckoning. If you hover over the name of a public company in any article on ft.com, a nice “chartlet” pops up. If you click on the company it takes you to the company in the Company Research part of their website.
I thought the pop-up was quite cool. It performs well, looks nice. It could even have been useful to readers. If I have one problem with it, it is the choice of the chart – a daily price chart.
Cut to Yahoo Finance. The default chart on the landing page of any company here too is the daily price chart. Google Finance is different, but not by much – their default chart is a three day price chart.
I don’t know about you, but I am never interested in a daily price chart. My interest in companies
– Is not always from an investor’s standpoint. Most of the time, I am interested in a company for other reasons – as a customer, as a partner, as a competitor or just out of plain curiosity.
– When I am interested in a company as a personal investment, I never look at the day’s price chart. That’s just noise. As an individual investor, the last thing I have the time (or the skill) for is to time the purchase or sale of a stock. That’s what day traders do.
I may be wrong about this, but my guess is that a majority of the users of finance websites and especially ft.com, are not day traders. They are not interested in the daily fluctuations of the stock. I don’t think that they can even process a daily price chart. Who can remember the price of a stock on a daily basis? Maybe you can. I have been known to draw a blank when unexpectedly asked for my mobile number!
So the question naturally arises as to what does Gridstone Research do with price charts? Actually, we don’t offer them (yet). Our focus is squarely on fundamental information at the moment and that’s keeping us quite busy. In time, we’ll have price charts too. In the meanwhile, this is what the chart on our company landing page looks like.
As a readership expansion strategy, pop-up route is doomed. Online readers want a quick update on the latest buzz and certainly would not relish several pop-ups in a page. Richer the content, longer it takes to buffer as well. It’s `reader annoyance’ at best.
As a revenue model for analyst firms (pluggin in their charts with online dailies)? I doubt if dailies would be willing to pay for that. They know while a reader could be obsessed with a piece of news on iPhone, she’ll be hardly interested in knowing what is Apple’s 200 DMA or its EBITDA margin. If analyst firms offer it as freebie to derive brand mileage, then may be.
Coming to day traders. Professional day traders and arbitrageurs are focused operators. They are `hot’ after one or two stocks for 2 or 3 weeks before they move on to the next buzz. During that `hot’ period, they know everything about price action in the stock(s) they chase. So even for them, pop-up charts are meddlesome kibitz. Having spent a whole trading day in front of the monitor looking at nothing but those price movements, they may retch if they are fed with more on those, again. Especially if it happens to be a day when their calls had gone horribly wrong, last thing they want is an action replay. They might be in for some light read, to shake off the blues seeking some calming distraction. The pop-ups could rub it in if they leap off a page when they least expect it.