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How to use Google search data to invest (podcast)

In my book, Tradestream, I talk a lot about what I call “Co-lateral Research”.  This is information inherently non-financial in its nature that investors can use to make better investment decisions.

Take Amazon Sales Ranking, for example.  Amazon provides almost real-time ranking of its best selling items.  While Amazon won’t reveal exactly how many units of Apple’s ($AAPL) iPad it’s selling, investors can get a qualitative feel for how well products are moving.

Summary

UNC Professor Joey Engelberg has been studying another form of co-lateral research, Google search data.  He’s been studying search trends for stocks (ie $PCLN or $NFLX) as a way to measure investor attention.  Prof Engelberg has found a linkage between changes in search volume and subsequent moves in stock prices.  He joins us for this installment of Tradestreaming Radio.

We discuss

  • which particular stocks investors pay attention do during the trading day
  • the demand side of news and information for stocks
  • how Google search volume is correlated to stock pricing
  • a trading strategy that uses search volume to beat the market

Listen below

Resources:

 

  • http://newrulesofinvesting.com/2011/03/31/how-financial-blogging-landed-me-a-book-deal/ How financial blogging landed me a book deal | New Rules of Investing

    [...] Only, instead of writing why you should go out and buy an iPad2 with both hands, I’m writing about Covestor‘s marketplace for investment services, AlphaClone’s solution to investor insanity, and Joey Engelberg’s find that studying Google search volume can make investors money. [...]

  • http://www.tradestreaming.com/2011/04/04/how-to-use-google-search-data-to-invest-transcript/ How to use Google search data to invest (transcript)

    [...] Finance at the University of North Carolina’s Kenan-Flagler Business School  (listen to the podcast). You can always subscribe to Tradestreaming Radio on [...]

  • http://www.tradestreaming.com/2011/04/05/marketpysch-profiting-from-investor-psychology-and-the-internet/ MarketPysch: Profiting from investor psychology and the Internet

    [...] is to use this data to create profitable trading strategies.  Previous podcasts have looked at using Google search data to find rising stocks.  Other tradestreaming techniques have centered around creating forecasts of future events using [...]

  • http://newrulesofinvesting.com/2011/04/08/marketpysch-profiting-from-investor-psychology-and-the-internet-podcast/ MarketPysch: Profiting from investor psychology and the Internet (podcast) | New Rules of Investing

    [...] is to use this data to create profitable trading strategies.  Previous podcasts have looked at using Google search data to find rising stocks.  Other tradestreaming techniques have centered around creating forecasts of future events using [...]

  • http://www.tradestreaming.com/2011/05/25/marketpsych-profiting-from-investor-pychology-transcript/ MarketPysch: Profiting from investor psychology and the Internet (transcript)

    [...] quantify investor intention, and we had a guest on, a professor at UNC who had found a connection between trends in Google search data and stock price movement. We even outlined a profitable trading strategy to look at [...]

About Tradestreaming

Tradestreaming is a community of investors learning directly from experts. I’m Zack Miller, investor, entrepreneur, and founder of Tradestreaming.com and I literally wrote the book on how to invest in the age of Facebook and Twitter. Tradestreaming is the resource I’ve created to help me become a better investor.  I believe it will help you … Continue Reading