Email of the day on the influence of search rankings
Comment of the Day

February 29 2016

Commentary by Eoin Treacy

Email of the day on the influence of search rankings

You may have already seen this article from Maudlin.

The main item of interest is how opinion can be altered by achieving good search results for your intended message. Of course it is possible, as postulated in the extreme (hopefully) that the influence could be towards a particular political candidate. The manipulation of media, in any form, would not be a new target in this regard.

Of more interest is, I think, the impact searches have (along with "trending") on some investment decisions.

In predicting how markets will react (or wondering why they did so react) it is worth considering how (not just where) the "market intelligence" is obtained.

Considering the current volatility, and the markets of the future, search engines and how they rank issues could become an important issue.

Eoin Treacy's view

Thank you for this educative article and email. There are a growing number of trading algorithms that focus on Twitter feeds for short-term trading alerts primarily around earnings announcements. The rationale is based on evidence that trending in feeds related to the stock tend to lead the announcement because of insider trading so you might be able to gain an edge. We can anticipate that this type of short-term trading will become more efficient as data grows and is parsed more efficiently. 

However it is difficult to imagine how much of a long-term influence giving preferential locations to positive perspectives could have on a share price in the medium term. After all, unless fundamentals back up a move the potential for a move to sustain beyond the short term is quite limited. 

 

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