Quote:
Originally Posted by NajdorfDefense
As I've posted here before, people are working on ways to use FB/twitter to gain alpha thru stock investing from things as simple as the #of mentions of a product/firm [both good and bad] to more sophisticated ideas. Think about the CROX lifecycle.
It is obvious to see how this could be extremely useful at a small-cap HF. Or, if you started a firm selling this research to a small-cap HF. A dozen clients at 100-250k per annum, or a 10k per report basis, et al, is not that hard to imagine in a year or less.
If I was younger and had any programming skills, I'd start this firm tomorrow with 3-4 buddies. Worst case if you execute properly [as pure research] is selling it to some bigger research firm or bank for a few million each down the road. Best case is you launch a HF with some backing and become DE Shaw.
Yeah, I know this idea is cool in theory, but, as crazy as this sounds, I don't think there is the necessary amount of legit data on Twitter to get any meaningul info from it. Sure there are millions of tweets a day, but people just aren't using it for discussing products that much, the amount of people saying "Loving my new Reebok Crosstrainer 20s" or whatever is so small. I just searched for 'Sodastream', which is apparently a somewhat hot product and on the cover of a Bed, Bath and Beyond circular right now, and almost all the mentions are spam, or people entering contests, and one guy saying "DO WANT" in the first 40 results.
If you just look at total number of mentions, you're not going to get any idea at all of how the product is truly trending in consumers' minds, because there is just way, way, way too much spam and noise on Twitter.
Facebook, I have no clue, it may be a lot more useful if you could get to all the walled parts (which you can't since they're walled I guess haha).
Now I actually write all this out, know what I would actually do if I was going to launch this business: I would actually scour message boards and forums, I think THOSE would have a wealth of great info and you could extrapolate buzz (good or bad) on a product very easily and accurately from those. But then if I was marketing it, I would emphasize the Twitter part, because everyone thinks Twitter is some amazing magical hose of information and useful.
So okay, 3 paragraphs into my reply I realized this *IS* a super viable proposition, just with additional info on top of twitter and FB. So I like it!