4 ms·
Love the UI but feel a little ambiguous about the basic principle behind it. Would love to hear others' opinions about it though... I could be wrong on this one
by blurry 18y ago
Love the UI but feel a little ambiguous about the basic principle behind it. Would love to hear others' opinions about it though... I could be wrong on this one.
As I understand, you basically attempt to correlate stock movement with two major components: (1) market/sector movement, and (2) news.
The first one is easy. Market/sector goes up, stocks go up, market/sector goes down, stocks go down (in absence of major news, more on which below). I doubt you would have created the website to prove the obvious, so I'll leave this one alone.
The second one is where I see the major problem. The problem being that NEWS DO NOT MOVE STOCKS. You'd think they would. After all, good earnings report, stock goes up, bad earnings report, stock goes down, right? Except that's not what happens. Granted I have limited trading experience (selling/buying/sometimes shorting several times a month at the most) but I've seen enough to conclude that there is no meaningful correlation between news and stock movement.
I just tracked several stocks that I happen to follow where I have a reasonable idea as to why they've moved in the last year. Your chart only proved the above. News were well presented along the spikes/dips (again, the UI is awesome) but the clear presentation only served to show that no correlation exists. (To clarify, by news I mean anything and everything, e.g. earnings reports, analysts upgrades/downgrades, company announcements, actual news, etc; and by no correlation I mean good/bad news accompanied spikes/dips equally.)
Anyone care to argue with me? Prove me wrong!
- gaika 18y agoThanks! Agree that most of the news are fluff or something that is already expected by the market. But there are events that have profound effect on the stock and we try to identify them.
- blurry 18y agoIf you want to talk about events that have a profound effect on stocks, it would be tremendously useful to add trading volume high/lows to your charts. I don't mean trading volume in general but rather exceptional events, like a hedge fund or an institutional owner unloading a bunch of shares for example. You could compile a history of NYSE Arca trading spikes/dips as one source (http://datasvr.tradearca.com/arcadataserver/JArcaBook.php?Symbol=V http://datasvr.tradearca.com/arcadataserver/JArcaBook.php?Sy...) and there are probably several others. Those are true movers and would add tons of credibility to your tool by showing what I'd expect to be a near 100% correlation. Another not-so-crazy crazy idea would be to plug amazon's mechanical turk worker bees to track stock mentions on Jim Cramer's Mad Money and plot that into your charts. I am not suggesting this for the actual usefulness but rather as a gorilla SEO/marketing trick. I once consulted for a company that does online doll dress up games and it occurred to someone to create a Hannah Montana doll. That basically made them. Little girls search for Hanna Montana, see the Hanna Montana dress up game, and voila, they go from several thousand to 2MM+ registered active users (with paying parents) in several months. I really think Jimmy C could do the same for you.
- ryporter 18y agoI completely agree with your second point, and, FWIW, I suspect Nassim Taleb would as well. This site seems to promote the "narrative fallacy" that Taleb rails against in "The Black Swan." I worry that it could end up with some very embarrassing results-- e.g., two separate news feeds report on the same event at different times, a positive effect is ascribed to one of the stories, and a negative effect is ascribed to the other.