Google search terms predict financial market moves

Tobias Preis of Warwick Business School, has found that the frequency of certain financial terms in Google searches can predict market movements. So, if you want to beat the market, just count the occurence of words such as “revenue”, “unemployment” etc…

I have no doubt this type of “taking the temperature” of the market by means of term frequency could work very well – after all, most market movements are not based on logic or even business outcomes, but on the emotions of the crowd, and using Google search term frequency seems to me as an excellent way to “get a feeling” of what the crowd feels… In short, financial markets are a “beauty contest” to a large extent.

Btw, the author Robert Harris explored exactly this idea in his 2012 thriller “The Fear Index“.

About swdevperestroika

High tech industry veteran, avid hacker reluctantly transformed to mgmt consultant.
This entry was posted in Business, Finance and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s