
Hedge fund to use Twitter to predict stock market - jeffmiller
http://www.metro.co.uk/tech/850701-hedge-fund-to-use-twitter-to-predict-stock-market
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yummyfajitas
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.

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secretasiandan
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-u...](http://thenextweb.com/uk/2010/12/16/investment-fund-set-to-use-
twitter-to-judge-emotion-in-the-market/)

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.

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justinmares
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.

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ams6110
Here's a link to the original research

<http://arxiv.org/abs/1010.3003>

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bluedevil2k
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.

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jcfrei
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.

~~~
bluedevil2k
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.

