Tagged: twitter

Alpha Bet

We smell autumn on the wind in Denver.

Soon the backbone of the continent will transform from verdant to orange and yellow and caramel as the aspens salute departing summer. It’s a process spanning weeks, an epoch compared to equity-market timeframes nowadays.

Investors want an edge, and it’s important for investor-relations pros to recognize what that means. It seems like everyone has lost patience with patience. One IRO lamented this week: “I am now starting to be convinced that are very few ‘rational’ price-setters. Even the long-only funds are very short-term.”

It’s against insider-trading law for advantage to spring from valuable information gleaned privately from another person, so instead traders are winnowing the public social chaff of the many for “alpha” – a way to outperform expected market returns.

Social Market Analytics, a Naperville, IL firm run by PhDs in theoretical chemistry and electrical engineering, tracks what it calls S-factors, turning tweets into data science for identifying stocks and sectors signaling directional outperformance. (more…)