New Twitter-Based Hedge Fund Beats the Stock Market 209
nonprofiteer writes "Derwent Capital, a new hedge fund that makes trades and investments based on Twitter sentiment, beat the market — and other hedge funds — in its first full month of trading. From the Atlantic: 'Using an algorithm based on the social media mood that day, the hedge fund predicted the market to make the right trades. Sounds unbelievable that something cluttered with mundane musings and media links could have anything smart to say about the market. But it's working so far.' Blind luck?"
One whole month! (Score:3, Insightful)
It beat the market for one whole month? Wow! That puts them in the same class as 50% of high-school finance students!
Show me the three year and I might start to be impressed. If it doesn't go broke in 10 years, then I might take it seriously. A random pick of stocks has a non-negligible chance of beating the market as a whole in a single month.
Sudden crash? (Score:4, Insightful)