Financial innovation waits for no one
- September 25th, 2013
We didn’t get a chance to put a linkfest today but one post we did read really stood out. While the debate about crowdfunding continues Om Malik has a great up at GigaOM that puts the rise of new funding platforms like AngelList into perspective. Malik points out that AngelList is yet another financial innovation that will before seem decidedly mainstream. Malik talks about how day traders of the 1990s changed the way we trade. He writes:
Some innovation makes some financial product or technique less costly, and it, in turn, becomes more widely available. People race to try it, hoping to earn higher returns, and that works; for a while, anyway. Inevitably, however, the innovation attracts too many newcomers that those returns collapse, leaving huge losses, but also leaving the innovation behind for the future to benefit from.
Now it is angel investing that is getting the treatment. Malik writes:
Once again, financial innovation has cut costs and driven wider participation in a previously closed and clubby market. We have seen it over and over, from derivatives to mortgage-backed securities, and it is playing out again in angel investing.
That doesn’t mean there is easy money to be made in angel investing, Day trading wasn’t easy money eithers. However with the JOBS Act and changing technology we now have a whole new way in which investors can put money to work. Some, like Felix Salmon, argue that this will end badly for many, which may very well be true. But along the way how we invest will change forever.
Abnormal Returns is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. If you click on my Amazon.com links and buy anything, even something other than the product advertised, I earn a small commission, yet you don't pay any extra. Thank you for your support.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Abnormal Returns has over its seven-year life become a fixture in the financial blogosphere. Over thousands of posts we have striven to bring the best of the financial blogosphere to readers. In that time the idea of a “forecast-free investment blog” remains as useful as it did six years ago. More »
- What books Abnormal Returns readers purchased in July 2014
- Friday links: harder than you think
- Thursday links: no actionable information
- Wednesday links: losing their legitimacy
- Tuesday links: reinventing the wheel
- Monday links: mushy rhetoric
- Sunday links: an enlightening event
- Top clicks this week on Abnormal Returns
- Saturday links: staying private longer
- Friday links: exercising your strengths