Reconnecting

Well it all goes back to the end of 2019 and a catch-up dinner between Alex and I, the two founders of Bounce. Two ordinary guys who hadn’t seen or met each other in at least 6 years.

We had met working in the IT hardware industry. Fast forward to now, we both work full time for leading hardware and software businesses. Like I say, pretty ordinary stuff.

Dinner was never intended to be a brainstorming session as such.

We touched on the stock market and the relatively sparse participation our full-time jobs afforded us.

However, we both have inquisitive minds and without realising it we started to discuss how active you would need to be to really make a living from stock trading and whether it was possible to generate passive income from it.

We discussed the reality of the stock market where we the retail traders were the David to the Goliaths of the institutional buyers.

One similarity between us is that we are both quite grounded. Maybe it’s in our personalities or the industries we work in but data and accuracy is a big thing. We admit the hedge funds will always have an edge due to the spending power they possess to create algorithms to predict the behaviour of other algorithms.

An edge in the market

A good starting point was to understand what the actual ‘target’ was. It’s not to beat the hedge funds. It’s to find an edge in the market. An insight which your fellow retail trader does not have.

We discussed how sentiment these days was much more powerful than any other time due to how tangible and impactful it manifested itself in social media, forums etc.

Our initial thought was that we simply needed to be ahead by any small margin. Could sentiment analysis keep us ahead of the crowd? Could we automate the sentiment analysis of stock before the droves of retail traders had finished reading articles on Yahoo finance?

We left that dinner with plenty to ponder but we had opened Pandora’s Box.