According to a new study, an
increased search of words like debt, stocks, and portfolio can portend a downturn in the stockmarket. The opposite
is true when the searches of said words lessen. The study, published in Scientific Magazine, makes sense when
compared with the information found in previous studies. That data also
suggests that the frequency of some google searches, like those related to the
flu, can be used as predictors.
Paul Gao of Notre Dame University
has conducted research that shows how to predict market trends based on
searches motivated by fear. He feels more physcological research should be
done to determine exactly how people’s searches dictate their actions in real
life. The researchers observed 98 words, ranging from
kitchen to unemployment. They used 7 years worth of pre-existing google data to cross reference frequencies and the closing price of the Dow Jones. This information could be used by investors to reap huge benefits. But, they warn, if too many people find out, it will soon be useless.
Nature of Science
Importance of Repeatability
Role of Skepticism
Role of Chance
Paul Gao of Notre Dame University
I found this very interesting, That just a simple search because the mind is worried about a future event can sometimes correlate to when the negative or positive event happens. Here is an article that is very informative on this same issue on the same topic! http://www.bbc.co.uk/news/science-environment-22293693
ReplyDeleteWow, that is so interesting how the human's worries (which can be misplaced or incorrect) can actually predict what the future holds. I wonder if this would be true on a large scale basis. Perhaps worries can predict wars or major world events. I found a similar article that contains a graph of search terms and how effective they are at predicting the stock market.
ReplyDeletehttp://blogs.smithsonianmag.com/science/2013/04/google-search-terms-can-predict-the-stock-market/