I gave a guest lecture at the University of Virginia for an undergraduate class titled "Wall Street and Technology".

1. Open Source Investing By Dave Haeffner

3. My aim (hah, get it?!) is that each of you leave here with either one useful idea, OR, one piece of schwag. If you end up leaving with both, then I consider this a phenomenal success. If you end up with neither, then I have failed.

4. To help give context, I’d like to share a bit about myself and my career, which has been a fairly windy road for such a short amount of time

5. 6.5 4 6 1

6. It’s been 6.5 years since I graduated from undergrad I’ve worked for 4 different companies Held 6 different roles And have changed careers once

7. I’ve spent over half my career at The Motley Fool, and have held 3 different roles while there I worked in IT Operations and now in Software Development and learned about investing along the way. But before I get too much into that, I’d like to share my view on technology

9. I believe it is a purposeful enabler It can help people realize and achieve their potential if applied correctly Which is the fundamental impetus of this lecture: Open Source Investing

11. Image 2 people: Alice and John Alice begins investing at a young age, socking $5,000 into a financial vehicle which returns an annual average of 9% (e.g. the stock market) After 10 years, Alice decides to stop saving At the same time, John decides to start investing ($5,000 a year in the same manner) Assuming Alice left what she invested untouched, John will not catch up, not even after 20 years

13. “The most powerful force in the universe is compound interest.”

14. To be an investor, to take advantage of compound interest, it used to be pretty difficult

16. This implies that you knew the inside baseball and how to place trades (or be like Warren Buffett and hang out in the basement of Standard and Poor’s basement and sift through their research)

17. Had to call and/or fax trades into a broker which went to a trading desk which then went to the trading floor

18. Incentives of the broker were (and are) aligned to volume of trades; not in best interest of the customerBrokers always struck me as more like used car salesman

20. Is there a better way? How do you think things have changed since then?

22. Data has become ubiquitous. You just have to want to open your eyes. With it, businesses emerged, leveraging free and premium data and creating content. Offering advice. Even creating investing methodologies around it.

23. http://www.fool.com/how-to-invest/thirteen-steps/index.aspx

24. Some of these businesses emerged and helped forge a sense of community Like minded people for the first time could come together and talk about investing It’s a lot like coffee shops. Collaborative spaces where diverse minds come together to share their ideas and new ones come about as a results

26. There are also DIY broker services at peoples’ fingertips. So now you have well informed, collaborative individuals, able to place trades no longer by telephone, but by smart phone.

27. Be your own broker

28. By having a community of individual investors, an interesting evolution occurred; community intelligence Back in ‘97 Kasparov was defeated by a computer: Deep Blue This computer was not just a single entity, it was programmed by many people to accomplish this feat. So in essence, Kasparov was defeated by a community of diverse skill sets working together for a common goal It’s this concept that led Motley Fool co-founder David Gardner to come up with the idea of “CAPS”

30. Another trend in the industry is that technology has taken place of a lot of human interactions bringing about things like high-volume trading By leveraging quantitative analysts (“quants”), sexy algorithms, raw computing power, and some investment capital, some firms are able to generate consistent market beating returns

32. But we’re starting to see the next evolution of high volume trading start to occur with qualitative data being used; leveraging subjective community intelligence An example of this would be sentiment analysis of social networks

33. http://twittersentiment.appspot.com/

35. Don’t sweat it if you aren’t there yet, you can start tomorrow

36. There’s more information available than you can possibly fathom, dig in

37. The technological landscape is continually evolving. It’s only a matter of time until Sky Net becomes real

40. Dave Haeffner Purposeful Technologist The Motley Fool dave@tourdedave.com @TourDeDave