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Launch HN: Enombic (YC S20) – Create your own stock indexes

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Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#101

Post by SilasX »

_eb13 wrote: post #99
SilasX wrote: post #38

Would it be able to reproduce strategies that involve options? I recently learned of the SWAN ETF, which captures (or attempts to) most of the S&P's return with significantly less volatility. It holds mostly Treasurys, plus options that are in the money if the S&P gains a certain percentage[1]. https://www.amplifyetfs.com/swan-holdings.html They had to create the "S-Network BlackSwan Core Total Return Index" for it.…

No options at the moment. We'd be excited to support them down the road though. SWAN ETF is super interesting. Wonder if there is a "long" analog. E.g. comparable motivation and performance.

What do you mean by a long analog? SWAN is long the S&P, it just softens the downside.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#102

Post by julienchastang »

On the topic of creating your own index, we’ve all heard of the SP 500, or the Russell 2000 indices, but isn’t it possible to mine the historical data to create an index that has a better rate of return based on one or more criteria such as market cap or P/E? E.g., stocks that fall within this range of P/E tend to outperform the market in a ten year time range. This would be an elaboration of the concept that small cap stock indices tend to do better over time because they have more room to grow, in contrast to the SP500 dominated by FAANG companies that have most of their growth behind them. I doubt this is a novel idea, but I just have not heard of it before.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#103

Post by wheybags »

Oh man, this is actually exactly something I want. I want to invest in the s&p 500, like an index etf, but I want to filter out companies which I don't agree with ethically. I also want to look at my custom index's performance historically so I can see how well it tracks the overall market.

It is extremely hard to actually do this. There's a plethora of hurdles in the way - you need to get data (I bought some historical s&p 500 data, seemed to be the only way), and then you need to figure out what to do with it too. When you look at a graph on the index, what is that based on? Do they rebalance every day? Monthly? Who knows? I was never able to reconstruct an s&p 500 graph from source data myself as a baseline.

I will definitely be giving this a try.

EDIT: signed up for the waitlist!

Also, a question: Can you use this without some sort of linked broker account? IE, you tell it what you've got, and it spits out instructions that you execute manually? I ask because I'm in Europe, and only the big American brokers ever seem to get proper integrations with anything.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#104

Post by gwd »

corry wrote: post #31

Love this idea. For the folks in the comments so far who are uncomfortable with the combination of "index" and "picking stocks", I think that's unfair. This is obviously a service for relatively sophisticated folks who (1) want ETFs that don't exist, or (2) want to make minor changes to existing ETFs, or (3) don't want to deal with the ETF fees/overheads for whatever reason (although presumably Enombic will have fees…

> (2) want to make minor changes to existing ETFs

This is exactly the use case I've wanted for a long time -- I'd much rather just park most of my money in an S&P 500 index fund. But there are some companies there whose business practices I just find scummy; and if I own stocks in that fund, those companies will be doing those scummy things in my name and for my benefit. I realize there are "ethical" index funds, but somehow their senses of ethics and mine don't match 100%. I'd very much like to be able to say, "The S&P 500, but not X Y or Z."

I'll definitely be looking into this.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#105

Post by mdorazio »

w1 wrote: post #74

Have you considered allowing the creators of a popular index to receive a small fee, similar to current ETF commission structures? Y’all seem like you’re in a great position to create a vibrant community for the next generation of investors, and giving financial influencers a return could help bring people to your platform.

Same thought from me - along the lines of recreating the "Becky" index from WSB [1] as an actual ETF that people could invest in for ~0.1% fees.

[1] https://www.reddit.com/r/wallstreetbets/comments/b6hvdf/i_in...

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#106

Post by adv0r »

I want to be able to charge a fee on top of my indexes before making "subscribable" by others. That'd attract a shitload of users ;)

EDIT1: Also: are you familiar with your competitors on the crypto side of things? Iconomi, to name one.

EDIT2: Is this available to non-US users? That'd be huge, as we are not able to access ARK directly , to name one

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#107

Post by _eb13 »

julienchastang wrote: post #102

On the topic of creating your own index, we’ve all heard of the SP 500, or the Russell 2000 indices, but isn’t it possible to mine the historical data to create an index that has a better rate of return based on one or more criteria such as market cap or P/E? E.g., stocks that fall within this range of P/E tend to outperform the market in a ten year time range. This would be an elaboration of the concept that small c…

Absolutely. Would you want to make this index?

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#108

Post by sweeneyrod »

crazygringo wrote: post #94

This is fascinating. Since you don't have any info at all on the site (at least not without signing up), a few questions: - Since it's not just for designing the indexes but actually investing them... how? Do you link to a Robin Hood API or something? What trading platforms do you integrate with? - Obviously a huge part of an index is maintaining desired weightings/criteria, which involves buying and selling shares i…

"Obviously a huge part of an index is maintaining desired weightings" Actually it's not. Suppose I have an index that should contain AAPL and TSLA weighted by market cap, with total value $100,000. Say they both have 1000 shares in existence, and on Monday their prices are $100 and $300 respectively. Then my index will consist of $25,000 = 250 shares in AAPL and $75,000 = 250 shares in TSLA.

Now suppose on Tuesday the price of TSLA has increased to $700, so my index should be 1/8 AAPL and 7/8 TSLA. It's tempting to think this means I have to rebalance by selling AAPL/buying TLSA. But that's not right! I have 250 AAPL shares which are still worth $25,000, and 250 TSLA shares which are now worth $175,000. So I'm already at the desired 1:8 ratio.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#110

Post by wheybags »

gwd wrote: post #104
corry wrote: post #31

Love this idea. For the folks in the comments so far who are uncomfortable with the combination of "index" and "picking stocks", I think that's unfair. This is obviously a service for relatively sophisticated folks who (1) want ETFs that don't exist, or (2) want to make minor changes to existing ETFs, or (3) don't want to deal with the ETF fees/overheads for whatever reason (although presumably Enombic will have fees…

> (2) want to make minor changes to existing ETFs This is exactly the use case I've wanted for a long time -- I'd much rather just park most of my money in an S&P 500 index fund. But there are some companies there whose business practices I just find scummy; and if I own stocks in that fund, those companies will be doing those scummy things in my name and for my benefit. I realize there are "ethical" index funds, but…

1000% agree. "Ethical" is not restricted to "no guns, alcohol or cigarettes".
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