Could Twitter predict the stock market? | Reuters

Could Twitter predict the stock market? | Reuters

Nice article for class from Reuters:

“A basic premise of behavioral economics is that the markets aren’t perfectly rational machines, but are expressions of human emotions like greed and fear. If you agree with that premise, and are looking for an immediate gauge of those human sentiments, then Twitter is one of the greatest tools ever invented….The trick is how to crunch that data effectively and make some sense of the 250 million tweets generated every day. Peterson, for example, filters the data using 1,500 different factors, culling keywords to track global moods. His is essentially a contrarian take on the markets: If the public is overly bullish, it’s time to be cautious. If it is extremely gloomy, on the other hand, it might be time to snap up a bargain.”