Mmm, Cake… Cake Financial that is

Cake Financial has launched their public "alpha" today at TechCrunch40.  Bringing a new spin to social networks, Cake enables investors to track their performance next to their peers, their friends, and other investors.  By automatically plugging in to most of the major brokerages, Cake can automatically retrieve your holdings for up to ten years and track your performance compared to the rest of Cake and the market.

From their blog:

Specifically designed with the 40 million Gen X and Gen Y consumers in mind, Cake is a new kind of financial service. Members can open an account with Cake in minutes because there is no transfer of money or change in existing brokerage relationships to get started. Instead, members can link their Cake account to an unlimited number of existing portfolios from leading online brokerage firms. This allows Cake community members to see up to 10 years of historical activity as well as current portfolio holdings, trading activity and performance data of fellow members. All safely, securely and anonymously.

A recent study from the Harvard Business School reveals that many ordinary investors consistently beat the market. Cake is designed to allow members to capture and share the behavior and habits of these high performers with each other. 
Social networks are slowly beginning to infiltrate investing.  Motley Fool picked up on it with CAPS last year and Cake has this latest offering.  CAPS does a great job gauging the whole market, but Cake brings more intimate, person-to-person conversations to the table.  Can’t wait to see how Cake matures.  Go check it out.

4 thoughts on “Mmm, Cake… Cake Financial that is”

  1. I’m not following their logic.

    According to their release:

    “A recent study from the Harvard Business School reveals that many ordinary investors consistently beat the market. Cake is designed to allow members to capture and share the behavior and habits of these high performers with each other.”

    How do they know that the participants in this social network will be the “high performers”?

    The answer is they don’t know. Proceed with caution, my friend.

  2. Hi-

    This is Steve Carpenter, the CEO of Cake. I wanted to take a second to respond to Ron’s question, which is a great one.

    Even though we are in our early days, we already have a bell curve of investors that looks like the market. This means that we already have alot of members that have consistently beat the market over the past few years. This group will only get bigger as more people use Cake.

    Your concern is a valid one and the good news is that this does not need to be a concern. I encourage you to sign up and join and see for yourself.

    Thanks for taking the time to post.

  3. The way that I read it was that you can now see what “ordinary” investors are doing and how they are outperforming the marketplace. I would expect the standard bell curve, and most Cake users to look towards the far right of it for those high performers.

  4. I also recommend that you take a look at Covestor (www.covestor.com)

    Since launching its public beta several months ago, it has attracted substantial members and the attention of such publications as Better Investing and Barron’s. You can see some of the coverage on the site.

    Covestor tracks the real trades of members via a secure link to members’ brokerage accounts. It offers a platform to the proven self-investor and will eventually enable investors to earn fees for the hard work they are already doing. The earlier you sign up on Covestor, the more time you have to build a following among those who are attracted to your outcomes. Covestor gives you the opportunity to explain your rationales but in an environment where your actual trade are transparent. People can see what you are doing what you say are doing.

    Anyone who wants to follow you can sign for email alerts of your activity. They do not even have to be a Covestor member. However, since Covestor membership is free, it makes sense to go ahead and sign up as soon as you can, especially if you think you are someone others will want to follow.

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