The Recession Proof Economy of Financial Data Meets The Degenerate Economy …Look Out Above

Happy Valentines Day, especially to my wife Ellen and of course my daughter Rachel.

It is fun to see my kids Rachel and Max coupled up and sharing their nice stories and gifts received and sent. The simple pleasures of life as a parent.

Onward…

As any reader here knows, I am fascinated by the markets and the world of financial data. I approach the sector from a consumer perspective as I rely on so many products and my partner Matt Ober from more of an institutional mindset (he worked at Bloomberg, Worldquant and Third Point before joining us).

Our fund has been investing in this space since we started Social Leverage in 2007.

We were seed investors in YCharts, ChartIQ and StreetContxt which have all been acquired and continue to grow fast.

Two other fast growing financial data companies in the portfolio are Koyfin.com and Finchat.io which are incredible products for investors and traders both institutional and retail.

One thing about financial data companies and really all fintech companies, is they tend to take much longer to get footing because building trust as it relates to money and markets takes time. BUT, once they get a strong footing they become cash machines

My ‘degenerate economy index’ holds many of the leading ‘arms dealers’ in the financial date world including CBOE, CME and ICE. The data picks and shovel business is wonderful.

One I don’t own is Factset, which has been a massive homerun of a company and stock for investors.

My buddy Ted Merz an advisor to us and 30 plus year veteran at Bloomberg, knows a thing or two about the sector and dove into a long research report from ‘The Terminalist’ titled ‘why financial data is so darn lucrative’, breaking down Factset:

One of the BIG questions about Factset in the era of AI is will their customers finally be able to break free of the grip of the cost of the product. Factset has thousands of people dedicated to logging data. That cost is baked into the price that their customers have to pay.

Outside of AI technology is the mainstreaming of digital assets, crypto, memecoins, tokens, sports betting and even collectibles creates new problems and opportunities for the incumbents and startups in the sector as the degenerate economy explodes.

At Social Leverage, we continue to make investments in companies like Finchat.io and Koyfin.com because we think cost structure, pricing, AI and digital assets are growing the entire TAM/pie. Even if AI and digital assets are not completely disruptive or disruptable (as it relates to Factset), as the Terminalist says, organizing and selling financial data is so darn lucrative!