COMMENT: Mr. Armstrong, I have been on Socrates for about one year now on what you now call your standard edition. I have to say, you have done an amazing job of programming. To have a computer simply provide a comment that is short and to the point that you can look at the whole world at your finer tips, is the most fantastic tool I have ever encountered. Its calls just on the Dow Jones have saved me countless multiples of the cost of service and I am a small investor. This is what you are expanding to over 5,000 instruments worldwide?
REPLY: Yes. The Global Market Watch was originally designed for hedge fund use and was inspired by one of our major institutional clients back in 1995. They did not have the time to read a written report on everything in their portfolio. They wanted a quick cheat-sheet that was visually a view of their portfolio. We use to sell this for $250,000 annually. However, since we are looking to simply open up Socrates to the world in hopes that it will ultimately help politically manage the economy rather than constantly shooting from the hip, the best way to prove the world is interconnected is to let everyone see for themselves.
Analysis is also changing. You still have the huxtsers who make up flashy headlines to sell stuff that is just opinion. Those days are fading. Under new EU Rules, investment banks charged fees for doing business and they gave you the research free if you did business with them. Indeed, that is how I started. The research was free as long as you were a client back in the days when I was a market-maker. When I retired, the clients still wanted the research. That was the beginning of our firm. Our reports were delivered by telex so the communication costs would often reach $250,000 annually. That is why we were institutional only. Then came fax. The cost to deliver dropped from $50 to $3. Now we have the internet and the cost to deliver is basically zero.
We have institutions buying GMW access per 100 for employees. For you see, research is changing. Under the new rules, research must be paid for separately. The London FT reported:
“Under draft rules published by the commission, the EU’s executive arm, last month, the fund industry’s decades-long practice of lumping together the fees they pay investment banks and brokers for research and trading will come to an end. Instead, for the first time, asset managers in Europe will have to make it clear to investors exactly what they are paying for.”
We have more people and institutions signing up than anyone would imagine. One bank just took 250 subscriptions for employees. Research has to be separate and accountable. It cannot be lumped in any more. Major institutions do not read the huxtsers who offer just opinion and all sorts of claims for they do not cover markets every day on a major scale. They also do not tell the press what they are doing until AFTER the fact. This is the only product like this in the world. No conflicts of interest or bias.
The Global Market Watch was designed as a window into the inter-connectivity of the world. It does not matter if you are investing in India or Singapore and Greece. Being able to cover the world in a consistent manner that is completely computer driven so there is no human interaction and opinion is the key to the future. All other analysis will eventually die out and become obsolete. We live in a global economy and this domestic restricted view is primitive to say the least not much different from those who refused to the believe that the Earth was not the center of the universe or the the Earth was not flat.