Can You Learn Anything from Stock Message Boards?
July 31, 2006 - Sentiment Indicators
Are stock message boards worth reading? If so, what clues point to useful information? In their November 2005 paper entitled “eInformation: A Clinical Study of Investor Discussion and Sentiment”, Sanjiv Das, Francisco Martinez-Jerez and Peter Tufano examine relationships among on-line stock message board discussions and related news and stock prices. They further employ content analysis software to measure the intensity and dispersion (level of disagreement) of message board sentiment. They focus on 170,000 messages from four stock message boards (Yahoo!, The Motley Fool, Silicon Investor and Raging Bull) for four stocks chosen to represent extremes of stock information flow (Amazon, Delta Air Lines, General Magic and Geoworks) during July 1998 through January 1999. Integrating the message board content with contemporaneous news items, stock price movements and one interview of a frequent message board poster, they conclude that: Keep Reading