Social Media’s Influence on Investing

Forex iPad

Blogs and web articles have been influencing the buying and selling of stocks and other investment products for years through analysis and picks.  Articles on web have always been informative about forex trading, investments etc. As social media gains in popularity, this more concise and faster paced resource is also swaying investors in many ways.

In warning against a possibility for fraud in using social media, the SEC notes that social media is being used for “research on specific types of stocks, background information of a particular broker-dealer or  any kind of investment adviser, guidance on any kind of investing strategy, up-to-date information and news, or to simply discuss the markets with others”.

SEC website (http://investor.gov/news-alerts/investor-alerts/investor-alert-social-media-investing-avoiding-fraud)

In his book, TradeStream Your Way to Profits:  Building a great Portfolio in the Age of Social Media, Zack Miller discusses ways to use social media in making investment decisions.Investors may research companies through Twitter, LinkedIn or Facebook or any of the other many social media sites.  Zoomedia suggests on their website that companies advertise on Facebook to attract investors.

Investors may also follow brokers, other investors or friends who invest on these sites.  For example, even a cable ties supplier would socialize and ask his friends before he makes the purchase. Miller recommends piggybacking (following the investment decisions of others) on investments made by people the investor respects.Any of these resources may publish information about what they have invested in (and at what price), investment recommendations, research on investment or information they have learned from other resources.

Brokers and investment advisors have become active on Twitter.  Barclays Stockbrokers (http://twitter.com/BarclaysStock) publishes (with links) general investment advice, specific investment picks, and top ten or twenty lists of different investment products.

The website BabyPips.com published a list of legitimate Forex trading Twitter accounts.  One of the Tweeters they recommend is ForexTicket by Mataf.net (http://twitter.com/forex) who publishes specific forex trades.

The financial news organizations, such as the Wall Street Journal (http://twitter.com/WSJ), CNBC (http://twitter.com/CNBC) and CNN Money (http://twitter.com/CNNMoney), also publish Twitter feeds which dispense their own published news or “retweeted” news from other sources.

Another way social media is being used is to mine data to measure sentiment to determine which way the market or a particular stock will go.  According to Jonathan Yates (“Tweet Investing”), a study by Professor Johan Bollen of Indiana University found that an analysis of tweets on Twitter has “an 87 percent chance of successfully predicting stock prices.”  The hedge fund Derwent Capital Markets is starting a fund based on this analysis.

The article goes on to cite that a hedge fund run by Richard Peterson of MarketPsych posted gains from 2008 to 2010 based on analysis of Twitter and other social media.  The hedge fund actually posted a 5.4% gain in the last four months of 2008 while the S&P 500 lost 30%.  MarketPsych now sells mood analyzing tools for stocks which “changes about the feelings for a stock” as well as “detection of any kind of rumors and leaks of harmful information before this can be shown to the public via the news.” Visitors to the MarketPsych website can input stock symbols into its MarketPsych Sentiment chart and adjust different parameters in categories such as Topics (buzz, layoffs, merger/acquisition, etc.), Buzz Level and Sentiment.

What Social Media Can and Cannot do in Case of a Revolution

Revolutions

At a local gathering, a group of people was asked if they blogged, they shook their heads in disagreement. They were then asked if they changed their Facebook statuses or shared videos, articles etc on social media; to this, they enthusiastically agreed in unison. Not many of them knew that using social media – albeit for status updates, moderate sharing of website links and videos – is micro-blogging, which makes them all bloggers. The social media cloud in now so powerful that a teenager in a small town can address a huge audience; but it all comes down to the message one intends to convey.

[Read more…]

Application of Charts and Infographics in Social Media Interaction

Infographic Elements

There are people who love testing the patience of people around them and then there are people who appreciate and value it! Which group you belong to? Will you be screaming out from a brick-size book to make your point in a busy community hall? It’ll surely draw the attention of people but for wrong reasons. So, chart your information before you climb the dais. You’ll need more than just recitation to hook people to your facts.

[Read more…]

Impact of Technological Skills on New Media Journalists

New Media Journalists

Last April, Facebook launched a ‘Journalists on Facebook’ page, intended to serve as a resource for growing number of reporters using Facebook for the purpose of finding sources, interaction with people and to publish stories. A couple of months later, Twitter introduced a similar initiative as well. ‘Twitter for Newsrooms’ (#TfN), is a guide for reporters on how to best use the microblogging site for the purpose of reporting. The endeavor elicited a mixed response from journalists and media pundits.

[Read more…]

Facebook Goes Public – How This Decision will affect Facebook and the Overall Stock Market?

Facebook

The world’s number one social media website, Facebook, filed for its initial public offering (IPO) earlier in February 2012. It didn’t come as a surprise for many in the industry, as any private company in the US with more than 10 million US dollars in assets and 500-plus stakeholders is required to file for detailed financials with the Securities and Exchange Commission (SEC).

What makes the whole affair extremely interesting is Facebook’s financial value (somewhere between 75 to 100 billion US dollars), makes it the most anticipated IPO debutant for an internet company since Google’s IPO filing in 2004. And once Facebook’s market shares are out in the stock market, it will be interesting to see how it affects the Facebook culture to develop and ship features without any external interference or security.

[Read more…]