Adam Hayes'  Instablog

Adam Hayes
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I have worked in the financial markets since 1999 in New York, Chicago, Amsterdam, and electronically. Expertise in listed equity options strategies and volatility sales & trading. Was a Market Maker in options on the AMEX and also worked on the trading floors of the CBOE, CME and EuroNext.
  • Why Seeking Alpha Articles Should Be Ignored. 5 comments
    Jan 3, 2014 11:47 AM

    Since 2004, Seeking Alpha has been an incredible resource for the individual investor to not only receive information regarding the markets and individual stocks, but to also pen their own articles for the benefit of others. This freedom allows unheard voices to get an audience and that is a very good thing.

    But it is also a very dangerous thing. Seeking Alpha articles show up in company news feeds along side legitimate news sources, and there is no asterisk telling potential readers that the articles written on Seeking Alpha are not written by financial journalists, financial professionals, or even educated individuals.

    It allows articles to be published and distributed to mainstream financial websites that should be relegated to blog posts, forums or comment sections.

    Take for example this recent article that was sent to nearly 40,000 people and read by many more. Mind you, the author of this article was paid by Seeking Alpha real money:

    I highlight this article because many individual investors are interested in finding out about the 3D Printing space and when you look up 3D Systems (NYSE:DDD) or Organovo (NYSEMKT:ONVO) on Google Finance you see this article as company news for the day (Dec 30, 2013).

    So is this news? No! It is pure drivel! It is the unsubstantiated opinion of one individual, who is not a market professional, researcher or academic. There is no data and no analysis. But to many this appears as real news and real investment decisions may be made. Scrolling down to the comment section of that article we see most users find the article to be worthless- but the damage has already been done.

    Another recent 'article' posted by a user with all of 2 articles (including this one) showed up in the company news feed for Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB) which has been a hot topic lately, and is precisely why I highlight it. Should this article really be used to make investment decisions?

    More dangerous still is that this outlet can be used nefariously to run pump and dump schemes or to otherwise spread misinformation. There have been examples of contributors coming under SEC scrutiny (mainly in penny stock schemes), however for the most part these articles generally fly under the radar and are never investigated- even if wrong doing has occurred.

    So what is one to do when they see an article from Seeking Alpha in the news feed? Don't believe everything you read there as fact, or simply ignore it. When was the last time you read a truly compelling, independent analysis on Seeking Alpha? When was the last time real material news broke first on that site? How many times did it produce actionable and profitable trading decisions for you? I would love to hear those true stories in the comments.

    Disclosure: I am long DDD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)
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  • REIT
    , contributor
    Comments (264) | Send Message
    thats why i always say "show me your model" and be kind to show me your assumptions too.


    second thing how about SA reviewing before publishing and finally appropriate quality control measures to avoid bad articles flowing out
    3 Jan 2014, 11:57 AM Reply Like
  • Adam Hayes
    , contributor
    Comments (51) | Send Message
    Author’s reply » Just for full disclosure, SA editorial staff reviewed this article and Rejected it for normal publication. :)
    3 Jan 2014, 12:30 PM Reply Like
  • KJP712
    , contributor
    Comments (471) | Send Message
    If you cherry-pick one article out of thousands that will arrive at whatever result you desire.For instance,this article looks like a hit-piece on Seeking Alpha.At least from my view...
    3 Jan 2014, 12:51 PM Reply Like
  • Adam Hayes
    , contributor
    Comments (51) | Send Message
    Author’s reply » This is kind of my point. I purposefully did not choose more data and kept my analysis very lean and mostly vague. :) It's kind of a joke this article (but not really).
    3 Jan 2014, 01:06 PM Reply Like
  • KJP712
    , contributor
    Comments (471) | Send Message
    That is kind of like my Instablog that so few comment or even read.If you followed those picks in 2013 your return would have been 37.8% like mine.Some who write here offer very little in content but connect their articles to Twitter and Facebook for maximum exposure.I like to lie in the weeds and focus on my trading business.That is what is important.I know guys with all kind of trading designations who blew up their accounts in 2008-2009.I rose from the ashes and I am still running my own show.
    3 Jan 2014, 01:23 PM Reply Like
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  • Why Seeking Alpha Articles Should Be Ignored.
    Jan 3, 2014
  • just like yesterday- imagine how much lower the market would be today if the dollar weren't down 1% too
    May 20, 2010
  • wow.. imagine how much lower the market would be today if the dollar weren't down 1% as well.... scary to think about!
    May 19, 2010
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