In the film
- “The Wolf of Wall Street,”
there’s a scene in which the firm run by Leonardo DiCaprio’s character is taking another company public. His character turns to the camera and starts to explain what an initial public offering is. Then he interrupts himself. “I know you’re not following what I’m saying anyway, right?” he says, laughing at an audience he considers too unsophisticated to understand.
Much of the perception of Wall Street has been that because financiers had access to knowledge that most Americans didn’t, they did risky things with money that wasn’t necessarily theirs. A new app called Invstr purports to make sophisticated financial information available to the layperson. It constructs a gaming platform and a social net
work around the market, so that Main Street can follow along.
The app’s creator, Kerim Derhalli, said that after the crash, he “felt very strongly that we needed to recreate the social purpose and reconnect the financial markets to society.” His 30-year career in the finance sector included a $16.5 million suit accusing Lehman Brothers of failing to compensate him properly; the suit was settled in 2003 — favorably for Mr. Derhalli, according to published reports at the time. Invstr, which has offices in London and Istanbul, is opening a New York office.
For now, the primary way the company educates its users is its gaming platform, which allows users to place moneyless bets on prominent stock listings. Before the market opened one recent day, I wagered that Twitter would open higher in the morning than it had closed the night before. (I lost.) The app also offers access to a vast news feed of financial information, a social platform with forums specific to certain stocks and a tab that constantly updates the day’s market information.
The app is free to download, but users must pay for much of the information it provides. Specialized reports on certain industries cost “icents,” the in-app currency that must eventually be purchased with actual money, as do certain kinds of wagers within the gaming platform.
I’m a fine test case for the app, as I know next to nothing about finance, and I found the glut of information supplied within Invstr to be very confusing. There is not much in the way of a guide — if you do not know your way around a stock chart, you are likely be lost within minutes. And there are too many screens and tabs to navigate. It’s hard to imagine that it could help someone utterly new to the financial world learn how to operate within it.
For help, I turned to my friend Eben Lazarus, a doctoral student in economics at Harvard. He said that while the app fulfilled the mission of providing information and services that would allow a person to follow the market, that was not necessarily a good thing. “Through decades and decades of good academic research, we know that trading is hazardous to individual investors’ wealth,” he said, pointing me toward a study that said as much. “The idea that the app is perpetuating is that financial markets are no more and no less than a game.”
Putting that aside for a moment, let’s say that democratization of market information is a good idea, as Mr. Derhalli says. It still shouldn’t take a doctoral student in economics to understand an app devoted to that notion.