Open Source Research

This topic I posted on earlier took me on a trip down memory lane this morning. A comment to my earlier post took me to this blog in search of a link to William Ackman’s letter to the SEC.

In that letter, Ackman states:

"Our primary goal is to initiate what we call “Open Source Research”
where all market participants can have equal access to the primary
source data and construct their own views of losses without reliance on
the analytical judgment of rating agencies or the bond insurance
industry. By focusing the discussion on a fundamental, data-driven
approach, we expect that the dissemination of the Open Source Model
will enable market participants and regulators to accurately estimate
probable losses by relying on rigorous fundamental analysis of specific
credit exposures, a departure from relying on the opaque, faith-based
pronouncements that the bond insurance industry has promulgated to the

When I read that I recalled that I wrote a post proposing an open source model for research titled Open Source Research back in 2004. I am thrilled that it has become a theme that real market participants are embracing.

One thing Ackman can do to help open source research happen is publish his reports in HTML directly on the web instead of in pdf format. As I said in my post from four years ago,

We need tools for distribution, collaboration, rating, reputation,
commerce (just because its open doesn’t mean it has to be free), and
communication to make this work.  And for the most part, they don’t

I’ve changed my thinking a bit since then on the "free" question as you can see in this video, but it sure looks like we still need better tools.

#stocks#VC & Technology

Comments (Archived):

  1. Druce

    seems to be starting to happen… here’s a collaborative project to review size and timing oil megaprojects coming onstream.…there’s a matrix of ‘independent’ vs. ‘knowledgeable’, with say Princeton professor Ken Deffeyes at the top on both, industry consultant Yergin possibly not quite as independent, and Yahoo bulletin boards at the bottom on both. the reputation management tools associated with research efforts don’t deal well with this.there’s a funny kind of Laffer curve too… where when information is not worth much the quality of research is poor, as there’s more at stake the research gets better, and where there’s most at stake the players keep their information secret and the ‘research’ is about the most important questions like Saudi capacity you know the least.

  2. ceonyc

    At the NYSSA Annual Meeting last year, the SEC Chairman spoke a lot about this and how they were pushing hard on XBRL: You don’t want HTML, because it has no semantic structure to it, but with this XML format, it makes financial data much easier to compare, resort etc… essentially making GAAP, IASB a thing of the past, b/c you can swap formats with one click… once you publish in XBRL, you publish into everything and people can just suck out your data and use it as they please.

    1. Bill Davenport

      XBRL should be great for corp info, though been a long time coming, but can’t see this happening in terms of other web publishers / bloggers etc.

  3. Bill Davenport

    A few comments… they are releasing a “dynamic financial model” — their words — in PDF? Ditto Fred’s comment on posting it as html someplace… Even then couldn’t say it’d be “dynamic”… Maybe they could post it as well as an Excel file to a web site? Couldn’t find a web site for them… Going back to the earlier posting I just did a search on Palmer Square PLC (one of the issuers in their PDF file) in Google. Didn’t turn up the letter anywhere. So somebody who would have an interest in that issuer wouldn’t easily turn up today’s info on them, although it’s out there.

  4. Evan

    Fred,”One thing Ackman can do to help open source research happen is publish his reports in HTML directly on the web instead of in pdf format.”You might want to check out Scribd for stuff like this. It doesn’t actually convert the document itself to html, but it puts it inside of a flash widget that you can embed. In a lot of instances it’s actually a more compelling way to look at the document than pure html because you can control its footprint on the screen. You can also highlight, zoom in/out and search within the documents.I uploaded William Ackman’s letter here:…I don’t think it will work in the comments, but the embed code is here: <object width=”800″ height=”700″><param name=”allowScriptAccess” value=”SameDomain”/><param name=”movie” value=”…”/><param name=”scale” value=”noScale”> <embed width=”800″ height=”700″ scale=”noScale” src=”…” type=”application/x-shockwave-flash”></embed> </object>Full disclosure, I work with Scribd’s PR firm.

    1. Bill Davenport

      How friendly are these objects to search engines?

      1. Evan

        Hey Bill, I guess this is kind of a two part answer.1) The document uploaded on Scribd will be indexed by Google in less than 10 minutes. Documents like PDF will be OCR’d and thus the actual text can be crawled by search engines (which it can’t when it’s just a file hosted on the Web). So in that regard, extremely friendly.2) If you’re asking about how the object will impact search results for the page that embeds it (ex. if Fred embedded the Ackman document here and then someone searched Google for “open source research,” would that Scribd widget impact Fred’s ranking?) I do not know the answer. Let me know if you would like more info on that and I can try to dig some up for you.

        1. Bill Davenport

          #1 answered my question, thx. Sometimes flash stuff gets in the way and I wasn’t sure if that was the case with your objects.

  5. Roushan

    Fred, what are your favorite stock blogs?Thanks.

    1. fredwilson

      I’ll compile a listThere are so many good ones!Fred