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Christopher Josephs, Iris Co-Founder, joins Yahoo Finance to discuss The social social investing application Iris and how it introduces transparency and community into the world of investing.
ALEXIS CHRISTOFOROUS: Young investors have a new strategy-- tracking the financial disclosures of members of Congress for stock tips. Take a listen.
CHRISTOPHER JOSEPHS: And would you look at that? A little like clockwork. The US government has an agreement to purchase a supercomputer from-- who else-- Nvidia. Yep, Nvidia, the one-- yep, the one that Nancy bought back on 7/23/21 in that tweet. The news comes out literally yesterday, like 8/24/21. She knew. And you would have known if you followed her portfolio on Iris.
ALEXIS CHRISTOFOROUS: Of course, Nancy being the House Speaker, Nancy Pelosi. Joining me now is the guy you just saw in that TikTok, Christopher Joseph, founder of the social investing platform Iris. Good to have you here, Christopher. I want to be clear, your platform is not a broker dealer. So tell us what Iris is, and why did you decide to start tracking lawmakers' stock trades?
CHRISTOPHER JOSEPHS: Yep, yeah. Thank you for having me. I'm excited to be here. So what Iris essentially is, is you are right. We are not a broker. What we are is we're a broker agnostic social investing arm to your current broker. So you can download Iris and you can connect your portfolio, whether it's Robinhood, TD Ameritrade, Fidelity, Webull, Coinbase. We're eventually going to have them all. And this allows you to transparently follow your friends' investments and get notified of when they make trades.
So we're not in the business of competing with a Robinhood or anyone on that level. We are trying to add transparency and a little bit more comfort for people to follow other people's investments in real-time. And--
ALEXIS CHRISTOFOROUS: So--
CHRISTOPHER JOSEPHS: --since-- oh, I'm sorry. Keep going.
ALEXIS CHRISTOFOROUS: Well, you mentioned Robinhood. I mean, you actually work with Robinhood in that you help trades flow to a platform like a Robinhood, right, and other platforms like it.
CHRISTOPHER JOSEPHS: So we don't work directly with them. What we do is we integrate with their API. So you essentially just log in to your Robinhood on our app, and any trade you make on Robinhood automatically gets integrated into our platform so that your friends and other people who are following you can get notified and see, oh, you know, you just bought Apple shares. I can maybe text you or I can DM you on Iris and say, hey, why did you buy Apple? Or I can track that investment and see how you do along a longer time period.
ALEXIS CHRISTOFOROUS: So now you're able to track what these lawmakers are buying and selling because, by law, they have to be transparent about what they're doing with these trades, I think within 45 days of the trade actually clearing. What have you found? Does the market move based on congressional disclosures at all?
CHRISTOPHER JOSEPHS: Yeah, it's funny. So the Stock Act is kind of what you were referring to, where any lawmaker, when they make a trade, they have 45 days to disclose that trade. Nancy Pelosi has been the one that the retail community has been following specifically, but a lot of other lawmakers do it. And we plan to add more.
The reason why Nancy, though, became so popular-- or Speaker Pelosi, excuse me-- became so popular it was because every trade she was making inevitably turned out to be such a long-term winner. It started early in 2020 with Crowdstrike. And then she bought Tesla. And then there were some laws passed that were pro for the EV market. She bought Google, and then the laws came out that they weren't going to go after big tech. And then she just recently bought Nividia.
And we've been tracking these performances, and every single stock she's bought in the last two years have gone up significantly, albeit the entire market has gone up significantly. But these are very, very risky bets, too, because she's buying leap options, as opposed to just stock. So, I think we haven't been able to run the exact numbers of how much her performance is up over the last two years, but every single stock she has bought has been up around 20% to 30% since her initial investment.
ALEXIS CHRISTOFOROUS: You know, when it comes--
CHRISTOPHER JOSEPHS: So for us retail guys, it's like, hey, let's follow them.
ALEXIS CHRISTOFOROUS: Yeah, yeah. So when it comes to lawmakers, though, I mean, they are privy to certain information that could be market moving. I have to think they're always walking a fine line of possible insider trading. Do you see a theme here? And are you on the lookout for things like that that maybe, you know, some of these trades seem a little suspicious in their timing?
CHRISTOPHER JOSEPHS: Yeah, and I-- it's pretty obvious that we've all been watching this. I think it started with a couple of congressmen and women during COVID where they had, quote unquote, "inside information." Maybe they did, maybe they didn't. And then they sold stock before COVID became a thing. It's not out of the question to think that they may necessarily know something that the retail investing community doesn't. And if they're the ones passing the laws, it's probably smart to keep up and see what they're buying.
And the Nancy Pelosi trades that her husband has made kind of backed that theory up, where with Tesla and the EV industry or Google and big tech, Microsoft with the Jedi contract, I believe, from back in earlier this year, it's not out of the ordinary, and it's not the craziest theory to think. We don't think that they do, but it's something that we have made sure to keep an eye on.
ALEXIS CHRISTOFOROUS: Before we let you go, I'm curious how you make money. Are you charging people who come to the platform? Is it through advertising? Do they buy the app? How does it work?
CHRISTOPHER JOSEPHS: Yep, yeah. So everything right now is completely free. We don't plan to ever do any advertising. Definitely not in the business of selling the data. We actually take all that data and give it back to our community, which has been kind of something that our community has loved. Where we plan to make money is some sort of subscription service, where you can follow the investments of brilliant people, and then they can get paid for sharing those investments. And then you could essentially become a better investor by following the people.
The reality is, retail investing, we're called dumb money, but we're becoming much, much smarter with how we go about investing. And one clear way to do it is if you introduce transparency and you allow proven, verified investors to share their portfolio, me, as an investor that doesn't have the time to do this 24/7, I would be happy to pay a premium of $20 a month or so to follow that brilliant investor and essentially invest alongside him, as opposed to just me trying this on my own.
ALEXIS CHRISTOFOROUS: All right, the platform is called Iris. Co-founder Christopher Josephs, thanks so much for being with us.