The Google-curated Internet is full of sound and fury amounting to little, but the Twitterverse, it seems, knows what it is talking about.
That’s the upshot of two new investment studies which seek to use Google search and Twitter to inform trading strategies.
The first, from MIT, showed that measuring tweet sentiment on the day of Federal Open Market Committee meetings yields data which can be profitably used in trading.
Another, from Norway, using Google trends data, shows that high search interest in companies actually predicts low future returns in the following week, a finding in contrast to earlier similar papers.
It is, of course, not quite as simple as this, but the studies, part of a huge rush to invest profitably based on social media and Internet data, do tend to confirm Twitter’s reputation as a sort of insiders’ clubhouse, as opposed to Google’s more mass appeal.
