Mac Greer: We have a new free service in beta here at The Motley Fool. It's called CAPS, and here to talk with me about it is Motley Fool co-founder David Gardner. David, welcome.
David Gardner: Hi, Mac.
Mac Greer: Let's start with the beginning. What is Motley Fool CAPS?
David Gardner: CAPS, first of all, is a website, CAPS.fool.com, to help investors pick better stocks.
Mac Greer: OK, I like that.
David Gardner: We are going to put one-star to five-star ratings on every stock in America. You might have a stock your broker told you about. You can look that one up. You might have eight that you have typed into your portfolio over on AOL -- come to CAPS, type them in, and see how they are rated. I bet we can help you find better stocks.
Mac Greer: You mentioned the ratings. How are these stocks getting rated?
David Gardner: Not in the traditional way. That is the really interesting thing about CAPS. The traditional way is that a single analyst -- Wall Street or independent -- puts a rating on a stock ... market outperform, four stars, whatever it is. It is one person. That's the way financial advice has been given for decades. CAPS is different. CAPS ratings are generated from the entire community. Every person has an influence on the stock rating. The catch is that the smartest minds within the community will have the greatest influence.
Mac Greer: How do we know who the smartest minds in the community are?
David Gardner: That's the other side of the equation. In addition to generating stock ratings for all companies under coverage, CAPS provides all participating players with a rating based on their performance. Players will receive a rating from 0 to 100 as compared with all other players. The stronger a player's track record in picking winning stocks, the better the player's rating; the better a player's rating, the more influence the player will have on the stock. As you can see, player ratings and stock ratings are linked in a way that makes CAPS very powerful.
Mac Greer : So let me get this straight. I go to any ticker in CAPS, and not only do I see the basic quote information -- current price, daily change, quick stats -- but I also see what the entire community thinks about the stock? Every person who has had an opinion on the stock will be right there on the stock page?
David Gardner: That's exactly right. And then, through one quick sort by player rating, you can easily see the opinions of the strongest players within CAPS. So, for any stock, CAPS automatically produces its own suite of expert opinions. You can also quickly read the best commentary by sorting based on number of recommendations.
I like to think of CAPS as a Swiss-army knife -- it's one giant tool with many specific applications. People will come into CAPS and make it work for them in a number of different ways. Maybe they will follow the strongest investors -- monitor their stock picks, read their commentary. Maybe they will follow a few of their favorite investors. Maybe they will just check the CAPS ratings on stocks of interest. CAPS produces a dynamic amount of information that can be used in many different ways.
Mac Greer: Sounds very cool.
David Gardner: We hope users find the experience very cool. CAPS serves as a power tool for serious investors. However, we have designed the site in a way we hope will have a broad appeal for anyone interested in finance. Lucky charms are awarded to players as they achieve certain milestones throughout the experience. Players' jester caps change color as they move up or down in rank. We want to capture the thrill of investing in a way that is fun and engaging.
Mac Greer: Interesting. So all participating players are evaluated based on their performance and achieve quirky milestones along the way. Sounds very Foolish.
David Gardner: It's Foolish, indeed. But beyond the fun, in capturing community intelligence, CAPS cuts to the heart of what The Motley Fool has always been about. We have brilliant people on our discussion boards, part of the Fool community. We have been heralded for the community we've built over the years, and the Fool community has shown that there are wonderful stock pickers out there who are simply not on TV or not getting the headlines -- whether they are retired doctors or techies out in Silicon Valley who know these tech companies better than the Wall Street analysts being paid to track them.
When you aggregate those people, you are seeing community intelligence in play. That has always been a big part of The Motley Fool's special sauce, and CAPS captures this element beautifully. When I think of CAPS, I imagine us building a stadium and then inviting the whole world in to take a seat. Anyone can go down there on the field and play, in front of the spotlight. Naturally, star investors will emerge, and rightly so, because in this case, it is going to be merit-based. The people who are the stars at Motley Fool CAPS will have earned their cap, as opposed to just having a suit and a business card, having been hired by an investment firm.
Mac Greer : And if I don't want to play?
David Gardner: You don't have to. You can sit there in your stadium seat for free and watch. Watch, study, and learn from all of the participating investors down there in the field. And when you're ready, you can jump in for yourself.
Mac Greer: There you have it; the service is Motley Fool CAPS. David Gardner, thanks for joining us.
David Gardner: Thank you very much, Mac. I enjoyed it.
Find better stocks and follow the best investors through harvesting community intelligence in a way never before possible. Motley Fool CAPS -- powerful research, with a fresh, Foolish face.