Does Twitter predicts the movements of the stock market?

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This week, BBC has picked up a study by a student in doctorate of the Technical University of Munich, which has associated the tweets of the network of microbloggin with movements of the stock market. As it has been argued, in the study have been look at a total of 250,000 Tweets that included the initials of firms listed companies.

The end result of this student has been overwhelming. "One can predict the rise or fall of a value with a 87% chance of success with the Twitter network". Obviously everything has an explanation more complex and simple at the same time.

We return to the usual, common sense. The Twitter network does not predict anything or form a pronosticador of results algorithm. Simply a story that speaks positively of a company, fell into the hands of an investor or are "tuiteada" by a newspaper whose "follower" are investors. This news is viralizará quickly reaching the hands of many more investors, which will invest in this company.

As a result and logic of what is the stock market, the company's value will increase in bag. Otherwise it would be bad news of another company, which would have the same impact but negative.

In conclusion: Twitter not tells you what value will go up or going down, but practically we can say that other investors reported receiving will make. Knowing this, it is as if you dispusieras "Insider".

If you get to know what others will do, you know perfectly what you must and have to do. There is no more mystery.

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