Fundamental Retail Investors Beat Technical?

Can a large language model (LLM) applied to social media data catalog the strategy choices, sentiment and trading behavior of retail investors? In the November 2025 revision of their paper entitled “Wisdom or Whims? Decoding Retail Strategies with Social Media and AI”, Shuaiyu Chen, Lin Peng and Dexin Zhou apply GPT-4 Turbo and BERT to StockTwits messages to classify retail investor strategies as: (1) technical analysis (TA); (2) fundamental analysis (FA); (3) other strategies (such as options trading); or, (4) no strategy. They then relate strategy classes to future stock returns and trading activity. Using StockTwits messages posted by 840,846 investors on 7,834 common stocks and associated accounting, price, trade order and financial news during January 2010 through June 2023, they find that: (more…)