Financial data mining goes grassroots

Now here is an idea whose time has come. You have shrinking inefficiencies in global financial markets, combined with more funds chasing fewer opportunities. Meanwhile, you have this burgeoning source of data growing on the internet (instead of just within S&P, Bloomberg, and Reuters). So, mine the internet for useful tidbits with which to make trading decisions. Nice.

While Majestic Research is looking for sales and income data (driven by consumer behavior) during their proprietary crawls, I say take the whole process a step further. Financial markets are less about raw performance data than they are about supply and demand, so use the net crawling techniques to develop sentiment metrics about companies based on how much they are talked about. Today’s lone blogger unhappy about some company’s performance is tomorrow’s pack of short-sellers.

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