Fundamentals are the boring financial stuff but if people are happy, making money and twitting away and also being tracked on their mood swings, why pop the party
Last October, Johan Bollen and Huina Mao, professors at Indiana University-Bloomington, brought a new dimension to stock market investing techniques by saying Twitter can be used to predict the Dow Jones Industrial Average.
Their original paper, "Twitter mood predicts the stock market," noted Twitter feeds such as OpinionFinder and Google-Profile of Mood States had an 87.6 per cent accuracy in predicting market changes.
On April Fool's day, a UK hedge fund, Derwent Capital Markets, reportedly is pumping in US$40 million (RM121.20 million) to obtain exclusive rights to the Twitter predictor, which it hopes will be the next great tool to help investors make money from the stock market.
In Malaysia, most funds and investors aren't savvy enough to use Twitter or other social networks such as Facebook, as tools to gauge or even hedge their bets in the stock market.
Yet, even then, we do have our own indicators, providing us clues on how to make daily trades.
The average Malaysian "Twitter-happiness" index on stock market is to see how the Dow Jones closed the previous day, and off late since the earthquake and tsunami, to monitor if the Japanese stock market is crashing again.
If the Dow Jones is up, people feel bullish and are willing to take additional risks on their daily trades. But if the Dow Jones is up by a lot, then people are cautious that it might fall the next day, hence they become apprehensive in their trades here.
It is not Twitter, or even close to it, but for the local investor, its the Dow Jones closing, news flash from CNBC, CNN and Al Jazeera that sometimes makes us feel that the whole world is going to crash, that determines how we trade, or even brave enough to trade on certain days.
The main Malaysian "Twitter" is still, however, the newspapers, and most recently financial blogs they can move stocks in a single post.
If they tell you that analysts told them that timber stocks are good because Japan needs a lot of wood to rebuild, then investors, punters and even gamblers will want to have a go.
Maybankard 2 Cards. 2 is all you need. Find out more.
Not since the heydays of Teh Soon Seng, have timber stocks become such an attractive play. These days, they are among the most heavily traded counters, and this must be making intraday shareholders very happy, regardless of the fundamentals.
Fundamentals are the boring financial stuff but if people are happy, making money and twitting away and also being tracked on their mood swings, why pop the party.
So, don't worry, be very very happy! - by Francis Fernandez of btimes.com.my
No comments:
Post a Comment