The Death of Twitter Trading?
Almost a year ago, we posted a few articles on strategies focused on using Twitter as a mechanism to trade stocks. Our basic conclusion was “BS!”
Here are the original articles:
And an original quote:
In my mind, this sort of analysis [trading on twitter] is akin to my dad’s stock trading rule of thumb: If the Dallas Cowboys win the Thanksgiving Day football game, the market will be on a tear; if they lose the game, the market will suck wind the next year. He swears by it,but unfortunately, my limited inheritance is invested in this strategy–aye carumba.
Anyway, my main takeaway is that using mood to predict stock prices doesn’t pass the sniff test, and yet, the financial blogosphere went crazy when this paper was released and a couple of folks raised a $100mm for a hedge fund. Amazing.
A recent Financial Times articles puts the nail in the coffin for “Twitter Traders.”
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