Interview with Bulls On Wall Street Founder

Damien Hoffman Wall St. Cheat Sheet January 7, 2010

Posted on January 05 2010. Tags: Bulls on Wall Street, Investing, Rahul Sood, Social Media, StockGod, Trading

Rahul Sood has entrepreneurial cells ripping through his veins. He is most well known for founding luxury computer company VooDooPC in 1991 and selling it to Hewlett-Packard (HPQ) in 2006. Most recently, Rahul has merged his entrepreneurial prowess with his passion for investing. The result is a fantastic investing and trading resource called Bulls On Wall Street.

Bulls On Wall Street uses the popular Twitter platform to crowd-source investing and trading ideas. According to the Bulls engineers, approximately 10,000 people use the $$ and $ tags to discuss stocks on Twitter (the active users are in the range of 2500-7500, depending on how “active” is defined). Rahul’s mission is to build a premium community for the growing number of investors seeking to benefit from social media.

Rahul and I sat down to discuss his incredibly inspiring career path, his exciting new company Bulls On Wall Street, and his secrets to entrepreneurial success …

Damien Hoffman: Rahul, how did Bulls On Wall Street get started?

Rahul: I use Twitter a great deal to research customer feedback, complaints, response to products, etc. I noticed there were a large number of “traders” using Twitter as a way to communicate what stocks they were trading. I wrote a blog on the background of this phenomenon, but the bottom line is after viewing the stream I realized most of the communication was useless commentary — it wasn’t enough for an avid investor.

So, I started an experiment with a few friends. We wanted to take the concept further as there are only a few people who actually provide actionable data that one could choose to follow or not. We envisioned an engine that would show the user who the most influential and effective traders are so they could choose who they want to follow. It also aggregates all of the trading data on Twitter and combines it with research to see what could come out of it.

In a nutshell, the platform is a community effort — a “Gathering of Minds” of investors and traders. There are multiple moving pieces. Currently it’s designed for active traders, but in the future there will be resources for people with day jobs that don’t have time to manage their portfolios. In addition, our educational resource Bulls University is starting to take shape. Bulls University is designed for people who want to learn various types of trading, including swing, technical, fundamental, options, long term investing etc.

Damien: I notice you don’t have a Recommended List of people to follow. How do your community members know which investors/traders are worth watching?

Rahul: There is a system in place that helps you pinpoint the best investors thereby avoiding those bad investments that many of us have been caught holding. Ultimately, the system automatically decides who the cream is and let’s them rise to the top via a complex algorithm. It’s called the Bulls Influence-O-Meter.

Damien: Very interesting. Sounds like a great way to eliminate politics and other behind the scenes biases. Speaking of biases, why did you remain anonymous while launching Bulls?

Rahul: Good question. I started Bulls as a personal experiment to see if my theory of crowd sourcing for research and answers would work. I remember telling a billionaire friend about the idea and he didn’t like it. His biggest concern was the potential for pumpers to push their own agenda on others. My goal was to mitigate this risk as much as possible.

After taking my friend’s feedback into consideration, we wanted to ensure that risks of “pump and dumps” could be eliminated, technical analysis was sound, and fundamental research was accurate. We succeeded. It wasn’t hard because Twitter is fully exposed. Even though most people have handles, it’s very easy to spot the winners and latch on to them. You see, it’s not about randomly following traders into their trades — it’s about gathering the data from the top rated traders, and passing that data to the best of the best to evaluate and disseminate the information before taking a position!

Now of course not every investment is a winner. However, with proper risk management I was up over 400% overall in a 3 month period on a very part-time basis. So, the founding group decided it was time to launch a public beta.

We found some of the best traders on Twitter. There are only a handful of truly talented traders on Twitter who provide actionable data. We have the best group — no question about it. You can search the history of each one and look at all the testimonials. It’s amazing.

So to answer your question, the reason I stayed anonymous is I didn’t want people who follow me personally — on Facebook, Twitter, and my blog — to blindly jump in unless I was sure that it was as good as I thought it was.

Damien: One of the most famous criticisms of public market gurus is “If they are so good, why are they spending time telling others about their secrets?” Can you explain why you and your talented team are interested in sharing their knowledge and trading ideas?

Rahul: You’re 110% correct. Most investors keep their secrets, which doesn’t help the retail investor. The goal of Bulls is to empower the retail investor — to turn the sheep into wolves and expose the sharks. This is my way of paying it forward and helping others succeed. I am a firm believer that what goes around comes around. That is why we participated and helped to create the Bulls community.

Damien: What are some “pay it forward” ideas you are invested in now?

Rahul: I rarely find good small caps in North America that I like, but I enjoy many of the small caps in China. I invest in anything from organic food, coal, textiles, oil, green energy, and emerging technologies. I also invest in big cap companies on our side of the pond. I have found one American small cap that I love – it’s called Syntroleum (SYNM). Amazing company with one of the best management teams I’ve seen. I like the fact that they’re turning chicken fat into clean green diesel. They will have a plant online in 2010 that will produce 75,000,000 gallons a year of this fine fatty gas. The cool part is they’re 50% partnered with Tyson Foods, which is awesome for a small cap company, and Tyson has plenty of chicken fat to unload.

Damien: Rahul, you are the CTO of a business development group at Hewlett-Packard. How do you have time to research prospective investments?

Rahul: I work from home. I spend most of my time researching new companies, new technologies, etc. It doesn’t take much for me to do research using the Bulls platform and Twitter. Investing in companies, private or public, is something I’ve always done. As an entrepreneur, I’m afraid it’s in my blood.

I am a very public person and involved in social media. I get people complimenting and complaining to me all the time. Now that my Bulls identity is public, people will understand why I always tell traders to run out and buy 2 HP 30″ displays for their workstations!

Damien: That’s an awesome convergence of your daily work flow. However, I’ve noticed a lot of new day traders who are attempting to trade full-time. Obviously, the loss of jobs coupled with high intra-day volatility has attracted a new wave of wanna-be day traders. Has the number of people day trading receded now that markets have calmed and intraday trading is not as simple as shorting anything that moves?

Rahul: There is a significant trend of retail investors who fired their brokers after the crash of 2008 and they’re trying to take control of their own finances. The number of discount brokerage accounts that were opened in the last year were much higher than normal.

The markets this year were unpredictable, but if one were patient and focused on individual company fundamentals rather than trying to be Nostradamus they probably did very well. I expect this trend to continue. People are starting to trade stocks at a much younger age, and the tools available to us now are like nothing we’ve ever seen in our lifetimes. Do you remember what it was like in 1993? My goodness man. Brokers, promoters, and telephones. I can’t believe how far we’ve come.

Damien: The industry has made some incredible evolutions. For those who are interested in stepping into the future, but may not know how, can you please explain what steps someone should take to get started at Bulls On Wall Street?

Rahul: Sure.

1) Go to www.bullsonwallstreet.com and view the intro video to get an idea of how things work. 2) Login with your Twitter account. 3) Make sure you follow @bullsonwallst from Twitter to ensure that your tweets appear on our stream when you use the “$$”, “$” in front of a stock symbol, or #bows tags in your tweets. 4) Visit the Premium page and click on some of the videos on the bottom left. 5) Watch the stream for a few days and choose who to follow.

The site is still in beta. So, I would recommend people get a feel for it first. You may want to follow @copperstl, @kunal00, @urban_ryno, @stockgod to start. Visit the Bullpen, our community forum, and ask questions. I would also recommend reading through all the blogs! @copperstl is probably your best bet to follow as a beginner, get connected with her and she can put you on the right path.

In the remainder of my interview with Rahul, we learn how Rahul built VooDooPC and sold it to HP, and Rahul shares his top secrets to success. Those topics plus my acclaimed collection of exclusive interviews (with tons of bonus material) can be found in my upcoming book release: Interviews with the Brightest Minds on Wall Street. To make a free reservation for your copy from our first printing, simply join our VIP list below and we’ll let you know when the book is ready:

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Damien Hoffman - who has written 328 posts on Wall St. Cheat Sheet.

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Interview with Bulls On Wall Street Founder

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