Social investment in a menacing search for high returns

May 5, Sunday. Warren Buffett's flagship Berkshire Hathaway (Berkshire Hathaway) reported quarterly results in Friday, with profits rising by 51% per year to $4.89 billion trillion. He has no intention of making a lot of money for Berkshire Hathaway, and what I want to say is that the legendary investor, who has no knowledge of technology "pride" and has no disdain for a computer on his desk, has recently appeared on the social platform Twitter to send his first tweet. Buffett's Twitter "debut" is only a few five characters--warren is in the house--but shocking, countless followers. "Distressed" seven years to earn more than three times times two days ago, old finished in the "altar" found a blog, entitled "Remember Buffett's World". This article aroused the attention of the old, not because of "the stock" of the most "push", but the blogger mentions the BBC quoted analysts found that if a period of distressed, portfolio or stocks and other keyword search volume reduced, the stock market will usually rise. Because there are traces to be found, investors use in the Google Trends can easily grasp the statistics, the FRY is not difficult to be handy. The BBC pointed out that the relevant strategy can bring up to 326% of the profits. The analysis, cited by the BBC, originates from Tobias Preis, a business school scholar at Warwick University in Britain, and two physicists at Boston University, Helen S. Moat and H.eugene Stanley, April 25, published in the scientific journal Scientific Reports. The use of Google Trends in financial markets for quantitative trading behavior. The trio first put financial-economic-related search words such as "debt", "stock", "portfolio", "inflation", "housing" and so on, divided into a category, with a random selection of words such as "color", "religion", "cancer" and other search results in contrast, found that the first group of words related to the financial economy, Has a higher correlation with return on investment. On this basis, three people in the financial orientation of the keywords in the empirical study to see once applied to the stock market, which Word can create the most generous return for investors. They first set out a strategy to simulate investment, finding that this week (the end of the week in Sunday) "distressed" searches for more than the average of the past three weeks, investors are only required to sell the Dow Jones before the close of the first trading day and close the warehouse before the first trading day in the next week, whereas To buy the Dow Jones before the close of the first trading day and sell out before the close of the first trading day of the following week, which brought investors a 326% return over the period from January 5, 2004 to February 22, 2011, with a "buy/hold" strategy (the Dow returns only 16%), Or out of the weak stocks into a strong share of the "power" strategy (Dow return 33%), the difference can not be. Three scholars have found that with other financial and economic terms such as "stocks", "portfolio", "housing" and so on, the return on investment strategy is better than the "buy/Hold" or "power" strategy, but it is significantly less profitable to implement the strategy according to the "distressed" search amount. After reading the results of three scholars, old Bi immediately appeared a lot of questions, try to cite two cases: first, "distressed" investment returns far superior to other financial-related search terms, should be with the European debt crisis over the past few years dominated market sentiment. Lopi has not been thoroughly verified, but I would wager that the "Roubini" replaced by the surname "distressed" of "Dr. Doom" Rubini (Nouriel Roubini) would perform exactly the same investment strategy, and that the return is likely to be close to or even better than the "distressed" search results. That is because Rubini in Google Trends "popularity" and market panic sentiment is proportional, the more Binghuangmaluan panic, "Roubini" search volume will be higher. In other words, Rubini's "market value", such as media exposure, is inversely proportional to the stock market's rise. Second, the use of Google Trends as a stock tool, said it is just "homeopathy" a variation, but from the "distressed" (or the "Roubini") in return far away to win other search words, sufficient proof of this method is effective, Also depends on whether the key words can cater to the unique environment of the market time and space. For example, assuming that Google trends in the 70 's, the "inflation" for the search based on the stock, the effect is likely to be better than "debt." Another example, Google trends in the late 90, if the road, according to the "Internet" search volume decided to buy or not to buy a branch of the IPO, the effect should not be "distressed" ratio. In other words, the stock market, investors must timely, but also in response to "panic" and "greedy" sentiment which head Start, properly determine the trading strategy, not a almanac see old. "Collapse" is becoming the norm. From Buffett down, to mingle with social users, to "social investment" menacing, and then to physicists through the empirical issue of Google Trends stocks promising message, even if you are a true conservative or value investors, Nor should we take an indifferent attitude as the market ecology of the development of science and technology is constantly changing. This is like high-frequency trading, the impact is not limited to the program traders, the recent Associated Press Twitter account was hacked, the White House attack on the president injured news, U.S. stocks immediately plunged, some people immediately to follow the News digest, and the rapid speed of the program to buy and sell stocks. Under the "new normal" which does not exist more than 10 20 years ago, such as high-frequency trading, social investment and so on, big and small "lightning collapse" will only increase with time, pay more attention to this aspect of development,Once the city has become hasty, investors and regulators will not be mess. All rights reserved: Hong Kong letter Newspaper Financial News