>Instead of looking at the frequency that the names of stocks or companies were searched, they analyzed a broad range of 98 commonly used words—everything from

>Instead of looking at the frequency that the names of stocks or companies were searched, they analyzed a broad range of 98 commonly used words—everything from “unemployment” to “marriage” to “car” to “water”—and simulated investing strategies based on week-by-week changes in the frequencies of each of these words as search terms by American internet users. > The strategy was relatively straightforward: The system tracked whether a word such as “debt” increased in search frequency or decreased in search frequency from one week to the next. If the term was suddenly searched much less frequently, the investment simulation bought all the stocks of the Dow on the first Monday afterward, then sold all the stocks one week later, essentially betting that the overall market would rise in value. > If a term such as “debt” was suddenly searched much more frequently, the simulation did the opposite: It bought a “short” position in the Dow, selling all its stocks on the first Monday and then buying them all a week later. The concept of a “short” position like this might seem a bit confusing to some, but the basic thing to remember is that it’s the exact opposite of conventionally buying a stock—if you have a “short” position, you make money when the stock goes down in price, and lose money when it goes up. So for any given term, the system predicted that more frequent searches meant the market as a whole would decline, and less frequent searched meant it would rise. So there were [98] terms followed with no insight as to how they were chosen. Then everything was bought/sold on the [following Monday] and sold/bought [one week] later. That seems like a lot of choices made seemingly arbitrary by the researchers. Reminds me of the xkcd comic on jelly beans [0] [0] https://xkcd.com/882/ https://xkcd.com/882/