Towards a User Reputation System!

Forum Guidelines
1

Backgrounder

ValuePickr Forum is visited today both by novices and wannabe stock pickers, as well as verysophisticatedinvestors. Some of us have made the transition from novices, to learners, to stock pickers to now being reasonable capital allocators. To know the difference visitCapital Allocation thread.

Its our dream to create a natural vibrant eco-system of learners, individual investors, industry professionals and Institutional investors in an environment that nurtures value-addition and growth to ourselves individually and collectively for the community.

If you are a visitor or user of ValuePickr Products & Services you areencouraged to read theTerms and Conditionsof Service, before you start using the website. Your use of the website implies you have read and accepted ValuePickr.com Terms and Conditions of Service. However as readership increases, we have a greater responsibility to the community. The intense stock-specific in-depth research and discussions that we engage in at ValuePickr may sometimes sweep a novice investor off his feet or overwhelm someone just by the sheer quantum of data/news/events supplied.

Disclosure Norms, while not being sufficient in itself will probably bring in initial level of transparency and accountability. Together with other measures of Accountability that we are planning to bring in, we hope to provide an adequate safety net for small investors. Ultimately the decision and responsibility for an investment decision is the reader's. One is advised totake professional advise before making any investments on their own.

To nurture a vibrant community ValuePickr does not restrict anyone from starting a thread on a stock of his/her choice. Only Caveat is if you are going to introduce a discussion on a stock, we expect you to do your homework and start the thread with some basic info-set, and 1st level analysis such as growth drivers, a few positives & negatives, immediate triggers if any, and enumerate some RISKS. Nothing very heavy is required, but enough to set the tone for 2nd level of discussions.

Here's an example of asimple stock idea initiation thread.


Establishing Transparency-Accountability-Credibility is a given.

ValuePickr is getting to be a pretty vibrant community - We managed to have attracted quite a few like-minded people with a basic willingness to share, learn and grow with each other.

Its a good idea to build from this basic requirement and INCENTIVISE everyone for enhancing his/her REPUTATION - simply put, how useful are you to the community and to individual members? What value have you added?

Charlie Munger is fond of saying "Incentives explain why people behave the way they do".

So a great way to influence community behavior towards achieving stated objectives is therefore, to put in place the right incentives!

Some initial thoughts from ValuePickr Admin

1. How do we incentivise/recognise the best among our most prolific contributors?

STOCK-PICKER CREDIBILITY

Objectives Parameters Measures Value Points
Transparency Public Portfolio
Stock recommendations		 Initiation
Disclosures
Updation
Exits		 High 50
Accountability Recommendation Performance 3m
6m
1yr
2yr		 High 100
Credibility Indentity/Interaction Photograph
Phone Availability
Face to Face		 Highest 50

2. How do we incentivise community members to themselves grow with the community - add value to each other and to ValuePickr community?

-Answering Q&A

-Idea generation

-Idea momentum (helping dissect the idea, scuttlebutts, info digging)

-Building Conviction (key contributions)

-Valuation Case (key contributions)

-Stock Story (creating/editing/reviewing/publishing)

-Management Q&A (framing questions, setting up meetings, management visits)

-Investor checklists

-Investor lessons

-New initiatives that add value (e.g. Subash Nayak's Portfolio commonality work)

-Feedback/Suggestions

-Referrals

3. Let's measure & incentivise Individual Progress/Growth

Level1 Level2 Level3 Level4 Level5
Novice Idea Generator StockPickr Capital Allocator Fund Manager

Please share your comments & thoughts freely. Look forward to member inputs to refine these, and put these in action, gradually as possible.

2

Hi,

I think this is a good idea but at the same time, requirement of too much disclosure and updates may hamper free flowing discussions. Usually people come to a forum to freely discuss things. The moment there are too many guidelines, one may feel restricted.

We may also have to discriminate that this is a discussion forum and not a stock recommendation platform.

Ayush

3

I agree with the views of ayush. I think going into all this rigmarole will in future cause unnecessary hassles and if it becomes too much for some valuable contributor there might be a feeling of restriction.

One can keep a scorecard with the relevant data but going into too much details and disclosures etc might kill the basic aim of the forum.

4

It is difficult to make a number based reputation system work without putting in a great deal of effort and time into it. Any community platform typically self-moderates itself and creates a reputation system by virtue of the contribution of individuals. There is no need to understand the people like Ayush, Hitesh & Donald are well respected in the community.

It would be better if we spend more time in actually discussing and analysing stocks than focussing on a numerical system to try and track “stock recommendations”.

I dont think I have seen anyone here outrightly recommending a buy/sell on a stock so let us not take ValuePickr the tipsheet way.

5

i fell there is no need for a number based rating system,let people bring up ideas,it is for all of us to discuss threadbare,ultimately it is the individuals decision.However i feel there should be a standard format when the initial story is bought up,if info is not available he can leave it blank and others can contribute so that all the info is available.

The admin/seniors could develop one,just my suggestion.

1.Industry analysis.

2). some kind os SWOT analysis.

3.Past five years financial performance,any red flags.

4.Future projections,capacity ,strategy,earnings

5 Valuations different methods,compare with peers.The company might be good and making progress in profits which may not be in sync with what we make,as we did not buy at the right price.

6). Various stake holder feedback,management,customer,employee etc,for many of the stocks we get the picture from the management Q&A,very difficult to gauge.However positive feedback from distributors and customers would help.Maybe easy for a retail facing one like hawkins,page etc,but difficult for something like PI Ind.I felt that was a mistake(PI IND)as we were solely listening to management voices.The astral distributor feedback was good.

6

I also feel that the system outlined here may be too onerous for some of the community members given the fact that many of the community members are not full time investment professionals and hence make contributions periodically but not regularly. I think the basis objective of the forum can be better served in ensuring that any new initiation of idea is done so as to cover certain basic aspects of investment analysis as biju has mentioned. This structured approach will ensure that the views represented are some what researched with basic details in place. Hence the follow up discussions may cover all relevant aspects of investment analysis.

I also feel that while adhering to value investment philosophy, measuring anyone’s performance on 3 months/6 months/ 1 year time scale isnot appropriate.Most of the great value investors describe 3-5 years as reasonable timeframefor price to catch up with value. Hence perfromance evaluation timeframe, if implemented, shall allow for sufficient time to match price with value.

7

Along with discussions, the disclosure will benefit novice investors at what rate to buy a stock and simple discussions is of no use to novice Investors. So while discussiong about a stock, telling the opinion is a good idea.

regards,

paturi

8

I take the liberty with disagreeing with the majority of the member by agreeing with the initiation of the administrator regarding transparency/credibility. The way valuepickr is gaining momentum, it shall be number one online community in no time (in the line of team-bhp), I have no doubt about it. The reason why this happened is because of many things,

  1. Exceptional stock picker like Hitesh bhai, Donald, Ayush and so on
  2. Transparency in term of the common valuepickr portfolio
  3. Exceptional quality of discussion that goes on here, the looking of positive/negative side of a stock story, colaborative analyzing of the stocks, thereby extracting the best of it.

The measures discussed by Administrator will help valuepickr enhance all these in various way, and should take this forum to another level.

  1. Stock recommendation, and measuring performance on 6 month, 1 year, 2 year will help us discover more folks in line of Hitesh bhai, and similar super stock picker. This will a win-win game for every one (the second line of stock picker will get recognition, other folks can get an idea on their recommendations).

  2. Agreed that value stocks take more than a year to get the true value, and hence 6 month, 1 year is not a nice time frame for them, but again if one look at the valuepicker consolidated portfolio, how many such stocks are present? I see most of them are a combination of growth + value, and most of them are hitting 52 week high days after days. It seems majority of the stock performance (except the one like TTK, Hawkins, Nesco - who have the ability to check investor’s patience) have positive, sensex beating 6month, 1year performance. If someone disagree with my observation, I shall update the sheet, with 6month and 1year price performance of the stocks in consolidated portfolio sheet.

  3. I see two benefits of public portfolio, mostly for the learner category. By looking at the portfolio of the well respected members, they can get a feel of the how the portfolio should be constructed. Secondly by sharing one’s portfolio, one can get feedback from senior member, and rectify any mistake one has (You can see it in action, folks reducing stock count by half by taking feedback from seniors)

  4. I doubt anyone has any issue with credibility section.

  5. The rating of the valuepickr should be considered as a** crude, approximate, not so perfect rating system**, which is just to give** some idea **on the qauality of the guy in a crude form. Once you know the fact, you won’t bother about how good rating you have, neither one should try to improve one’s rating, one should neither feel restricted by it.

Having said that, I do understand that there will be some psychological pressure after introduction of this rating system, which will hider free flow of idea. If someone feel quite uncomfortable, then he should have option to opt-out from this rat race.

At the end of the day, what we want is a system of accountability/credibility, where folks with not-so-nice intention fear to monger around, as there is a system to catch them, where we trust each other, where we recognize folks for their stock picking capability, a place where beginners can learn stock picking, stock analyzing, portfolio building tricks form folks who are master in this.

9

Subash, The objective and idea is good. But why have a sort of ranking system in this wonderful site. In the long run each of the individuals will be getting what they deserve and its for the users whether new or existing to stick to this site and contribute more. This is just my personal opinion.

10

Thanks guys for writing in. As is my wont I have been sampling considered views from various stakeholders. The view that emerges:

1). Your decision to participate in a formal/informal Reputation System clearly is choice-driven, or value-system driven or both. You do have a Choice. Let’s look at Hitesh - our most prolific contributor. What has he taken responsibility for - He always introduces his stock ideas as per his standard format - usually positives, negatives, risks. Does he make it a point to mention his exits and re-entries - yes. He is the first one (among prolific contributors) to make his Portfolio Public - and take pains to defend/learn. I may be doing all the others but chose not to make my portfolio public (for my own reasons - I may not be ready, too risky/aggressive an approach for most, etc).

2). ValuePickr is not forcing the Choice on anyone. You may choose to take part in all, in one, a few, or none at all. Entirely your choice. You may chosen to remain “incognito”. Totally acceptable. And we will continue to respect individual choice and continue to value the inputs you will bring in/provide from time to time. You will continue to be able to participate in all activities (without restrictions) at ValuePickr like posting on a Forum, or other services. Your Reputation system score will point users to the choices you have made. There is also no RIGHT or WRONG thing here. Its your individual choice.

3). Having said that, as a responsible community - with the readership expanding to - lay users, novice users, non-savvy investors - **ValuePickr needs to establish the Transparency-Accountability-Credibility **track record of first, its most prolific contributors (on an as-is basis, the way you have chosen to conduct yourself). And eventually put in incentive-systems that encourages everyone to embrace Hitesh-like work-ethics & value-addition to community, and go even-better in due course. Recognise and Reward Value-Addition.

4). That is the only way ValuePickr will continue to provide Quality, Value, and Service to the larger Investment Community. I am sure a well- thought out system and follow-up process will see increasing voluntary participation in this proposed Reputation System. Even in 10% of the users embrace it whole-heartedly, ValuePickr will be a richer value-additive community.

Finally, let’s not forget this whole chain of extremely fruitful discussions started off on the CAUTION from ValuePickr Admin )- let’s put in checks & balances - ValuePickr (as it is today) is vulnerable to malafide intentions.

I am convinced ValuePickr is much better-placed today, than we were a month before when we were sort-of blind to the implications.

Please keep your comments/suggestions freely coming in.

11

The performance track is not a static system - it is a dynamic system, building on with time and with every pick.Today we have a performance track of roughly 2 years+. Tomorrwo we will have for 3 yrs, 5 yrs, hopefully 10 years - if we can continue to deliver value.

We need to make a start. With some folks we may be able to show 2 year+ record as on date; with some who joined later…may be 1 year or less…as of now.

With a dynamic, quarterly updated record, pretty soon these things should fall in place.

-Donald

isnot appropriate.Most timeframefor

12

Thanks for the clarification Donald… a passive credibility criteria makes sense. No overdue pressure on the contributors and some additional information available to others.

13

I guess an idea, if it looks reasonably good, needs to be implemented on trial basis to really understand if it works the way it was thought to be. I can see following merits/de-merits of the idea (most have already been captured though)

Merits:

Its a choice based system so not every body needs to participate in it.

For An on/off users (like me) doesn’t create any pressure and for Contributors like Hitesh, Ayush, Donald and others, it gives a platform to facilitate (incentives) their own growth and thereby of the forum.

For some one joining the forum after months/years, he/she probably will have a mechanism in place to identify the leaders quickly.

Demerits:

It will probably create some overhead.

It might not fit paradigms of some genuine contributors, keeping them off the forum.

Having said that, I like to add one thing…whether a system is in place or not, stars shine. Value flows first and then come the incentives. And almost every body mentioning Donald, Ayush and Hitesh is a true testimony to that.

Thanks.