Fast 15: Ryan Frazier

Ryan Frazier began investing as a middle-schooler, challenged by his uncle to identify the hottest toys and gadgets among his peers.

“Then we’d invest in it and see what happened,” Frazier said.

These days, Frazier has graduated from using observational data collected on playgrounds and neighborhood streets. As co-founder and CEO at social data company TTAGG Inc., Frazier helps investors make better decisions by combining traditional investment methods with sentiment-based transactional data mined from social media sites.

The idea sparked when Frazier used data gleaned from sources like Twitter and Facebook to make a December 2010 investment. He had decided to invest in an apparel company rather than a more risky, next-big-thing manufacturer.

“The economy was still kind of down, but people always buy clothes, right?” Frazier said.

Based largely on data pulled from social media sites, Frazier invested in Urban Outfitters. Not long after that, its revenue rose 12 percent, he said.

That’s when he decided social data can be an important component in the investing equation.

“The world had gone real-time, but the data for these public companies had not,” Frazier said. “There’s more data created every 48 hours than there was in the history of the world up to the time when Google IPO-ed.”

Frazier said one of the keys is distinguishing transactional data from general feedback.

“Transactions are a more pure form of data. I can get on Twitter and talk about how much I love the new Lexus, but if I can’t afford to buy one, what good is that data, really?”

After he and some friends had success investing in such a manner, Frazier partnered with former University of Arkansas classmates — and software engineers — Kenny Cason and Britt Cagnina to launch TTAGG in October. It wasn’t long before others began to take notice.

Forbes.com contributor Peter Cohan wrote the following in a blog post: “What got my attention is that the rise and fall of the TTAGG index nicely preceded changes in that retailer’s stock price by a few weeks. Moreover, the TTAGG index was more accurate than Wall Street earnings forecasts.”

Frazier, a Hot Springs native who holds a degree in economics, is now focused on raising more capital, signing up more subscription-based clients and expanding TTAGG’s services.

— Rob Keys