Reuters - Video

EDITION: U.S. | U.K. | IN

Business

Cash tagging in on social media

Friday, Jun 20, 2014 - 02:43

June 20 - The increase use of Twitter and other social media to provide stock tips to investors is giving rise to a new class of analysis and scrutiny of the tips and those making them. Bobbi Rebell reports.

▲ Hide Transcript

View Transcript

In the high speed race to get ahead on stocks- for a growing number of investors- nothing matters more than the cashtag. Started by StockTwits back in 2008- cashtags have become ubiquitous- up 550% in the last three years. Brian Egger, author of the upcoming book Social Media Strategies for Investing: SOUNDBITE: BRIAN EGGER, CEO, BREAKINGCALL.COM AND AUTHOR, SOCIAL MEDIA STRATEGIES FOR INVESTING (ENGLISH) SAYING: "The bull and bear indicators on StockTwits are actually significant predictors of the stock price returns for stocks like Apple, Google and Microsoft that is a major example of the predictive ability of these venues." There are two basic approaches. Crowdsourcing- sites like StockTwits, Estimize, SumZero and Harvest Exchange. They aggregate stock commentary, earnings estimates and investment research. SOUNDBITE: BRIAN EGGER, CEO, BREAKINGCALL.COM AND AUTHOR, SOCIAL MEDIA STRATEGIES FOR INVESTING (ENGLISH) SAYING: "Estimize, which claims that their crowdsource estimates are more accurate than the Wall Street consensus 67 percent and 77 percent of the time. They clearly rate people. There are stars within their group that are more accurate predictors. So, within each of these social communities and platforms there is a weighting or a ranking system." And then there are data analytics services- like Dataminr, Gnip, Social Market Analytics and Market Prophit. They scrub the raw data and analyze the messages based in different algorithms, and sell it to hedge funds and proprietary traders. SOUNDBITE: BRIAN EGGER, CEO, BREAKINGCALL.COM AND AUTHOR, SOCIAL MEDIA STRATEGIES FOR INVESTING (ENGLISH) SAYING: "They buy this big Twitter firehose data. They ingest it all and then they eliminate duplicates and spam. They try to verify the location and identity of the Twitter messenger. They try to weight, based on social media influence, the Klout scores of these individuals, and they also subject all this data, to linguistics analysis, to determine whether or not it's a real signal or not." So for example, Market Prophit not only tracks how much chatter there is on a stock- they use an algorithm to score and rank who has had the best calls on a stock. MarketProphit CEO Igor Gonta: SOUNDBITE: IGOR GONTA, CEO, MARKET PROPHIT (ENGLISH) SAYING: 'We rank people also per security so we might say who are the best three pundits for Facebook last week and we identify them every day and we update those scores every day." Gonta says his site offers a blend of Klout and Morningstar, mixing social media credibility- with fundamental accuracy. SOUNDBITE: IGOR GONTA, CEO, MARKET PROPHIT (ENGLISH) SAYING: "We have identified a few folks that you may have never heard of and they don't have many followers on Twitter but if you look at their track record of their predictions on our website it far exceeds market performance." Market Prophit just partnered with Interactive Data and will be on their eSignal platform.

Cash tagging in on social media

Friday, Jun 20, 2014 - 02:43

Top News »

Money »

S&P 500 to new record on improving economy S&P 500 to new record on improving economy

Fri, Aug 29, 2014 - (2:31)

Finding meaning in the S&P 500 2000 mark Finding meaning in the S&P 500 2000 mark

Mon, Aug 25, 2014 - (2:35)

S&P falls back from record high S&P falls back from record high

Fri, Aug 22, 2014 - (1:35)

S&P 500 closes at new high S&P 500 closes at new high

Thu, Aug 21, 2014 - (1:24)

S&P 500 just shy of record S&P 500 just shy of record

Wed, Aug 20, 2014 - (2:23)

Apple hits $100 a share Apple hits $100 a share

Tue, Aug 19, 2014 - (2:06)

Nasdaq closes at 14-year high Nasdaq closes at 14-year high

Mon, Aug 18, 2014 - (2:23)

Putin puts Wall Street in buying mood Putin puts Wall Street in buying mood

Thu, Aug 14, 2014 - (2:10)

The Exchange »

The Exchange: Hot commodity The Exchange: Hot commodity

Wed, Jul 16, 2014 - (9:25)

The Exchange: Constitutional crusade The Exchange: Constitutional crusade

Wed, Jun 25, 2014 - (11:35)

The Exchange: The value of money The Exchange: The value of money

Mon, Jun 02, 2014 - (9:53)

The Exchange: China’s Second Continent The Exchange: China’s Second Continent

Tue, May 27, 2014 - (9:35)

The Exchange: A master of business arts The Exchange: A master of business arts

Thu, May 08, 2014 - (8:24)

The Exchange: America's bankrupt cities The Exchange: America's bankrupt cities

Mon, May 05, 2014 - (8:52)

The Exchange: Let the rocking commence The Exchange: Let the rocking commence

Tue, Apr 08, 2014 - (8:13)

The Exchange: The Moneyball fallacies The Exchange: The Moneyball fallacies

Mon, Mar 24, 2014 - (9:54)

Is doing good a good business? Is doing good a good business?

Mon, Mar 17, 2014 - (7:38)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, Feb 19, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, Jan 10, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, Aug 29, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, Aug 29, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, Aug 05, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, Dec 17, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sat, Dec 08, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Sun, Dec 09, 2012 - (10:39)

Moving Pictures »

Images of August Images of August

Fri, Aug 29, 2014 - (1:00)

Burning Together Burning Together

Mon, Sep 01, 2014 - (2:23)

Mending dolls, teddies and hearts Mending dolls, teddies and hearts

Fri, Aug 22, 2014 - (3:12)

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, Aug 11, 2014 - (2:27)

Burned memories Burned memories

Fri, Aug 08, 2014 - (3:02)

Images of July Images of July

Thu, Jul 31, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, Jul 11, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Wed, Jul 02, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, Jun 20, 2014 - (3:04)

World Cup: Around the globe in 50 goals World Cup: Around the globe in 50 goals

Fri, Jun 06, 2014 - (1:08)