Could Twitter Predict The Quality Of Stock Purchases?

Hatwin launched a hedge fund based on similar data in 2011, but shut it down after only a month.

A new trading product launched by Paul Hawtin of DCM Dealer will make it easier for investors and traders to monitor real-time sentiment about companies on social media networks like Twitter and Facebook. Hatwin launched a hedge fund based on similar data in July of 2011, but shut it down after only a month.

He told the Wall Street Journal this week that it failed because his investor base was too risk averse when it came to social media. His latest product targets the average investor, whom he believes will be more likely to embrace social predictors. He might be on to something — researchers at HP Labs found that Twitter was more likely to predict box office sales than the prediction markets, as well as presidential elections. Other companies use tools like those developed by Crimson Hexagon to gauge public perception through social media, as well.

[Picture by Flickr user Tax Credits]

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