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Social Data Boom – More Important Than You Think for Markets, Trading and Investing

One of our partners, GNIP, has an awesome whitepaper on ‘Social Media and Markets: The Coming of Age‘. It is well worth a download and read.

I have been relying on social data very heavily since 2005. It is the year I started blogging, and here is the proof. It is amazing how many of those bloggers, investors and sites I followed back in 2005 (check that blogroll on the right side) continue to be my faves today. The biggest difference about blogging in 2005 versus today is the messiness of the platforms and the pages which I miss today and will likely return (that is a subject for another post).

In that time I have made over 100 angel investments, traded through a few crashes, invested through a boom, created Wallstrip and co-founded Stocktwits.

In the beginning of the ‘social data’ boom, I would look at videos on $CROX over at YouTube to try and get a feel for the product catalysts which I was very bullish on in 2006. One of our early Wallstrip’s explains how simple, but I felt interesting and relevant the data could be:

Today, the demand for social data in financial markets is increasing quickly. With the proliferation of API’s and distribution platforms including Stocktwits, the data is easier to ingest and analyze all over Wall Street. On Stocktwits, ‘cashtagging’ ($ticker) is up more than 300 percent in the last few years. I have long called Stocktwits streams ‘The Human Ticker’. I have spent the last 5 years helping build it, learning how to read it and trying to explain why it is important. It is good to see more people listening and appreciating the platform and it’s exhaust.

GNIP added this great graphic that explains how everyone else wants to do the same (click on it to enlarge):

Finance-Diagram-Final-1024x660

Reuters, a customer of Stocktwits, had this to say in their Annual Report:

The latest release of the Thomson Reuters Eikon desktop delivers the financial information, exclusive news and intuitive analytics that our customers worldwide have come to expect – along with an array of new capabilities, including a unique application for social media analysis. Eikon users can now track activity in real time across Twitter and StockTwits (a social network for the financial community) by analyzing the sentiment behind the tweets.

Almost 90 percent of Stocktwits ‘cashtagged’ messages that originate on our platform, stay only on our platform, not shared to Twitter, so we expect to see more customers like Reuters recognize our unique data set in 2014 and beyond.

  • lasertrader

    You have been at this Social Data game longer than anyone I know. There are some of us that were around when you invented the $ hashtag followed by the formalized Stocktwits community. What I find interesting is the number of traders that have been part of the community from the start and still participate and contribute. I would like to think that the Stocktwits community has helped make them more profitable traders and has given them an edge. I know it has for me. In addition it has enabled me to make new trading frineds from around the world that I have developed personal relationships with. Thank you for putting it together.

    One question I have for Stocktwits that I can’t figure out is why are the tools stock centric only. I can make lists of stocks and follow them but I cannot make lists of people. To me, the added value is in who is saying something about a stock and not just all the data coming out of a firehose. To this day I still keep my lists of people that get displayed as columns in Tweetdeck or Janetter etc. My contacts are sorted by types of “people”. I have lists for long term swing traders, daytraders, news sources, a specific subset of traders I want to know what they are saying right away “must watch”. This was part of the old Stocktwits Desktop application but unless I am missing it (send me to my room if I am) I cannnot do this in the current Stocktwits web interface. I would love to be able to make lists of people and pop them out duplicating my tweetdeck setup. If I had this, there would be no reason to use any twitter interface and I would only reside in Stocktwits.

    Bruce

    • http://www.howardlindzon.com howardlindzon

      if that is not fixed now, it will be soon so I owe you an answer.

      Very helpful lfeedback as always

    • http://www.howardlindzon.com howardlindzon

      one of the proudest things for me is to see TraderMike, Alphatrends Josh Brown, Upside, Pearlman , zerobeta and so many other 2008 and 2009 early stocktwits users, still going strong. The born on date in the profiles always makes me happy to see

    • http://www.chriscorriveau.com/ Chris Corriveau

      @lasertrader:disqus, agree that a lot of the tools are stock centric. This is to enforce our vertical but soon you will see some new things that will better combine the social and financial data into tools that allow a better integration of the two.

      Over the last few years we have learned a lot with things like Desktop and the use of the mobile apps. We will be doubling down on the concepts of lists and curation allowing you to get to the information and data you want when you want it in real-time. Stay tuned.

  • Cody Willard

    Terrific article, Howard. Lots of great info in the GNIP white paper too. Hope you’re great. Cody

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