My Master Plan to Save CAPS!
I remember when I first joined CAPS when it was in beta phase back in 2006; I think TMF started with a handful of select subs and staff and then opened it up to the unwashed masses like me in their sub community and it was the greatest thing since sliced bread. It seemed like everybody loved it and was addicted to this new service in it's first year or so however even back then I didn't really buy into the community ratings premise of the service. There were complaints about the player ranking system, myself included and they probably persist today but that's not what I'm here to write about. One of my favorite aspects of the competition is keeping track of interesting players in the competition via favorites. I've noticed in recent years most of the 20 or so favorites I've added have significantly reduced their new picks and blogging in CAPS or dropped out altogether including most of the TMF staff. One favorite who hasn't is TMFDeej and I happened to mention this too him the other day posting on one of his regular blogs. His response was something like yes, it's a shame that CAPS seems to have been orphaned in TMF, it's probably because it's not generating enough revenue. TMFDeej then remarked about a potential missed opportunity for the service to be on par with Seeking Alpha's service.
I never really thought of CAPS as a business but TMFDeej's comments got me to thinking about how CAPS could be transformed into something rivaling Seeking Alpha. I don't really know the economics of either service so I'm not going to focus on revenues except to assume that a rejuvenated CAPS could help drive subs to TMF's services. Based on the little bit I know of S.A. it seems like they generate revenue via some sort of fees from Yahoo and other sources for their articles and I'm going to make a case for something like this in CAPS as well. In a way what I value about CAPS is almost the exact opposite of it's original premise. I probably don't spend a split second contemplating the CAPS rating of a stock I'm interested in. Instead I value being able to track individuals that interest me for one reason or another and seeing their real life performance warts and all over long periods of time. I also value tracking myself warts and all over time with a gauge to judge myself by. My initial thoughts when mulling over what to do with CAPS now was to focus on this aspect of the competition and start marketing this to the CAPS community and potential players.
I did think that rethinking the service as a business probably needed more than a different marketing plan and I think I've come up with a way to tweak the model as well. Just like TMF provides newsletters dedicated to different types of investing philosophies and styles I think CAPS could start providing sub ranking systems like growth vs. value or an income focused category. I could see encouraging players to set up specific portfolios for these sub categories and searching players who excel at picking stocks in the categories within their broad based portfolios. I would add categories like Health Care or International Investing etc... and give players with talents picking stocks in the different categories some visibility and recognition. I would also co-opt the S.A. model here and encourage the best stock pickers in the different categories to write about their best ideas even compensating them ala S.A. I would think these articles could then be sold to services like Yahoo where TMF could generate revenues and spark interest in CAPS in a virtuous circle. One big advantage that I think CAPS would have over S.A. here is the CAPS article authors have a long term public track record to enhance the value of the articles and recommendations.
Writing has never been my strong suit and in addition to not having clever ending come to mind right now I am sure I'm forgetting ideas that will come to mind shortly after hitting the send button on this blog but this is my grand plan to save CAPS and hopefully some member of the powers that be in TMF land see this blog and ponder the possibilities