4 ms·

Hedge fund to use Twitter to predict stock market

9 points by jeffmiller 16y ago

secretasiandan 16y ago
Notice the caption in the picture of the metro article "A broker looks on in horror as the news that Justin Bieber has a mild cold brings about a global economic collapse (AP)" The article you really want is the one linked to http://thenextweb.com/uk/2010/12/16/investment-fund-set-to-use-twitter-to-judge-emotion-in-the-market/ http://thenextweb.com/uk/2010/12/16/investment-fund-set-to-u... I'm still pretty skeptical of this concept in general. That the fund doing this is a "family-owned investment boutique" sets off even more flags for me. I think this is just marketing for their asset management business.
- justinmares 16y ago
  I tend to agree with you. There is just too much information on Twitter to effectively and quickly process to make investing decisions. I also wonder how many funds they would need to keep up with to make this worth their while.
bluedevil2k 16y ago
Let me be the first to predict this will fail miserably. How much money and time have people wasted the past 100 years on "systems" to beat the stock market?. Need proof that there is no system to predict the market? There's no person on the earth that owns everything. Theoretically, if someone could predict the market even somewhat effectively, he wouldn't just make lots of money, he'd make ALL of it.
- djb_hackernews 16y ago
  That is a really naive view of market analysis. You don't have to predict what the entire market will do in order to profit. I'm not defending these guys, I also agree this will fail, but being first mover on information can be a huge advantage. If that information happens to come from Twitter, it's still an advantage.
- jcfrei 16y ago
  Your probably making the assumption that the information about the stock market is symmetrical. That's a very strong assumption which certainly doesn't reflect reality. New sources of information such as twitter can lead to an advantage as long as you're the only one using it.
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  - bluedevil2k 16y ago
    No, I'm not making any assumptions about information here, I'm merely restating a fundamental theory of portfolio management. The thinking that you can get "unique" information about the market is one lots of people have...and is 100% false. This has been proven time and again.
yummyfajitas 16y ago
Let me fix the title: Hedge fund claims to use Twitter to predict stock market in an effort to attract attention from investors. Other variations on this theme that I've encountered: Hedge fund uses all-Apple architecture to gain competitive advantage. (Translation: a platform-independent runtime [1] on top of XServe + imac/mac pros for workstations. ) Hedge fund uses NoSQL solutions to predict the market, minimize risk. (Translation: flat files for quote-level data, same as everyone else [2].) I'm sure they throw twitter sentiment into their machine learning program as one piece of data. The learning system might even give it a non-constant coefficient. But I'd be really surprised if it plays a major role. [1] I won't name the system, but it's something along the lines of (and might even be one of) the JVM, CLR or Smalltalk image. [2] I'm being unkind - some banks use ADABAS and other such systems from the 70's.
ams6110 16y ago
Here's a link to the original research http://arxiv.org/abs/1010.3003 http://arxiv.org/abs/1010.3003
deleted 16y ago
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9 points by jeffmiller 16y ago

Notice the caption in the picture of the metro article "A broker looks on in horror as the news that Justin Bieber has a mild cold brings about a global economic collapse (AP)" The article you really want is the one linked to http://thenextweb.com/uk/2010/12/16/investment-fund-set-to-use-twitter-to-judge-emotion-in-the-market/ http://thenextweb.com/uk/2010/12/16/investment-fund-set-to-u... I'm still pretty skeptical of this concept in general. That the fund doing this is a "family-owned investment boutique" sets off even more flags for me. I think this is just marketing for their asset management business.

justinmares 16y ago
I tend to agree with you. There is just too much information on Twitter to effectively and quickly process to make investing decisions. I also wonder how many funds they would need to keep up with to make this worth their while.

bluedevil2k 16y ago

Let me be the first to predict this will fail miserably. How much money and time have people wasted the past 100 years on "systems" to beat the stock market?. Need proof that there is no system to predict the market? There's no person on the earth that owns everything. Theoretically, if someone could predict the market even somewhat effectively, he wouldn't just make lots of money, he'd make ALL of it.

djb_hackernews 16y ago
That is a really naive view of market analysis. You don't have to predict what the entire market will do in order to profit. I'm not defending these guys, I also agree this will fail, but being first mover on information can be a huge advantage. If that information happens to come from Twitter, it's still an advantage.
jcfrei 16y ago
Your probably making the assumption that the information about the stock market is symmetrical. That's a very strong assumption which certainly doesn't reflect reality. New sources of information such as twitter can lead to an advantage as long as you're the only one using it.
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- bluedevil2k 16y ago
  No, I'm not making any assumptions about information here, I'm merely restating a fundamental theory of portfolio management. The thinking that you can get "unique" information about the market is one lots of people have...and is 100% false. This has been proven time and again.

yummyfajitas 16y ago

Let me fix the title: Hedge fund claims to use Twitter to predict stock market in an effort to attract attention from investors. Other variations on this theme that I've encountered: Hedge fund uses all-Apple architecture to gain competitive advantage. (Translation: a platform-independent runtime [1] on top of XServe + imac/mac pros for workstations. ) Hedge fund uses NoSQL solutions to predict the market, minimize risk. (Translation: flat files for quote-level data, same as everyone else [2].) I'm sure they throw twitter sentiment into their machine learning program as one piece of data. The learning system might even give it a non-constant coefficient. But I'd be really surprised if it plays a major role. [1] I won't name the system, but it's something along the lines of (and might even be one of) the JVM, CLR or Smalltalk image. [2] I'm being unkind - some banks use ADABAS and other such systems from the 70's.

ams6110 16y ago

Here's a link to the original research http://arxiv.org/abs/1010.3003 http://arxiv.org/abs/1010.3003

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