Reply to post: Big Nothing

'Big data' predicts stock movements, boffins claim

Anonymous Coward
Anonymous Coward

Big Nothing

Another case of stating the obvious using the scientific buzzwords of the day to make it sound like a major breakthrough...

Ever seen a shoal of fishes suddenly shifting directions in the water because harry (the drunk herring) "thought he saw something"?

Well that's the Stock Market for you, it too can be driven by "herd" reactions.

A crash is a mass panic reaction where an increasing large number of investors rush to sell before everything crashes - and thus generate the very thing they feared.

In other words twitchy, nervous investors are the material of which crashes are made.

Doesn't take a genius to guess that periods of unrest and fear about key political/economic issues are going to make investors more fretful and likely to stampede like lemmings into a crash....

Crashes happen when people are twitchy, People are twitchy when they have major concerns about short term political or economical stability issues, when people have concerns they are more likely to do searches about it.This is all this research is saying - wow impressive!

Beyond this basic correlation, the research is only relying on hindsight (no verified predictions) and does not provide any critical analysis: search peaks are correlated to crashes, but do they always lead to crashes or do we have instances when this does not happen? When they lead to crashes, is there a clear "trigger level" that could be used as a reliable signal? If so how much warning would that give us? (are we talking days or minutes?)......

enough grumbling for a monday morning, gotta go join the stampede :-)

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