![]() Otherwise, we remain blind to a very real, very palpable, very important mechanism for economic change, as well as a crucial element for economic forecasting.” “We need to incorporate the contagion of narratives into economic theory. Shiller, the American economist and 2013 Nobel Laureate has been speaking about so-called narrative economics for quite some time. However, it’s difficult to determine which one came first. Just today, #StockMarketCrash was trending on Twitter with the S&P 500 and Dow Jones Industrial Average both down. “If BUZZ collects a few billion in assets, every single person making a social media post mentioning a ticker will understand that if they do it frequently and cleverly enough, they can get an index to pile on their trade,” says Dave Nadig, Chief Investment Officer and Director of Research of ETF Trends and ETF Database. While it’s “collective sentiment” that’s being aggregated, an individual influential figure like Portnoy may still intentionally or unintentionally sway the collective that’s being analyzed. If BUZZ continues to exclusively rely upon social sentiment, and Portnoy continues to discuss stocks with his 2.4 million followers on Twitter, then it’s possible that a feedback loop is spawned. Unfortunately though, we have to split the hair between “try not” and “will not.” Nor will the ETF try to manipulate the market.” This stack is more complicated, but its robustness could decrease risk.įox Business and Portnoy confirm that “BUZZ isn't going to chase after volatile stocks like GameStop or AMC. Each input can also be weighted accordingly. Portnoy’s ETF is onto something, but a more comprehensive cultural intelligence data set may consider top-down media sentiment a larger, more representational sample whether the poster is currently holding a stock or not and online search volume for a stock. Over half of Twitter users have no college degree, and 92% of U.S. While that’s the purpose of this ETF, it’s worth noting the selective sample here. After all, you can only analyze social sentiment by those who elect to engage on Twitter and those who actively share their thoughts on a given company. Secondly, social media sentiment is not always a fair representation of the general public’s opinion. And as a result, a social sentiment tool is unable to scrape every single mention of a company across social media, only those made available. Less and less content is being made publicly available to study. The Cambridge Analytica scandal was a key driver here. A potential slip like the one above may determine whether or not a stock is bought, and whether or not an investor gains or loses money.Īccording to Jamie Wise, CEO of Buzz Holdings and the originator of the index, “We are using broad social media sources, principally Twitter and StockTwits.”īeyond the AI’s accuracy, what’s also debatable are the sources themselves.įirstly, as privacy and security concerns remain top of mind for social media users, platforms have begun better protecting their content, preventing third parties like social sentiment tools from crunching their data. Investors should be aware that there are no details about the ETF’s natural language processing, making it impossible to know how it might categorize such a loaded phrase. Sentiment of +12,000 social posts about "$BUZZ ETF" between and Matt Klein via NetBase Quid
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