Tuesday, May 19, 2009

Twitter is a Premium Source of Investment Data

To have an enduring edge in the realm of investments, one has to possess the innate ability to spot emergent trends before other market players spot them; furthermore, one also has to possess the ability to instantaneously formulate actionable investment (or trading) strategies that would facilitate the exploitation of opportunities spotted within the discerned trends; and most importantly, one also has to possess the ability to execute the said strategies at the optimal time, in order to extract alpha from the markets.

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Purveyors of conventional investment wisdom always assert that for an investment/trading outfit to be successful, it is imperative for it to operate like a national intelligence organization. However, gathering actionable investment intelligence/data is usually a mammoth, and almost insurmountable task.

Interestingly, actionable investment data is never available from conventional sources at the optimal or right time. By the time the data pops-up onto the screen of one's [insert name here] terminal, it is usually too late to act on it. Thus, it always pays to be innovative and experimental in one's quest for investment data.

Surprisingly, online social networks have emerged as one of the premium sources of actionable investment data. Unbeknown to most market players, Twitter, among the multifarious genres of social networks, stands out as the best source of Investment data for two reasons:
  • Twitter, is a relatively unbiased, heterogeneously mixed, and reasonably large sample of people who reside in advanced or developed economies (i.e., economies with the highest rate of internet penetration). Hence, this allows for reasonably accurate market inferences to be drawn-out from any reasonably large, randomly selected sample from the Twitter-sphere.
  • The Twitter-sphere is not a voluminous collection of data like the Blogo-sphere, because Twitter limits its users' updates to a maximum of 140 characters per update. Hence, because of this, extraction of investment data from Twitter will not require algorithms that are too complex. Furthermore, because of restrictions in the size of Twitter updates, meaningful data can be extracted at a much faster rate from the Twitter-sphere than from the Blogo-sphere.
Thus, you shouldn't be surprised to know that I am now regularly prowling the vast Twitter-sphere, and stealthy commencing my mining experiments.

This is what my Twitter screen-shot looked like a few hours ago: