I now have zero faith in our financial sector. How can you justify making investment decisions based on the "mood" of the market which is discovered by data mining Twitter? The "mood" of the market only shows you where the market has been, not where the market is going. Any previous information showing that the Twitter mood reflects the market, is causation without correlation.
I completely disagree. It is one thing if this fund's algorithm is based entirely off of data extracted from Twitter, that would be an utter mistake. However, if the algorithm is combining fundamental financial data, analyst's outlooks/forward looking statements, current trends/movements in the market, AND Twitter/media data then I think this could be quite successful. A huge reason why our capital markets are not perfect is because of emotion in the market (case in point Ford's strong run for the last year fueled by optimism and relatively strong performance and the pullback since qtr 4 earnings were released, and a thousand or more other examples). Effective investment algorithms must attempt to be comprehensive in taking into account factors that effect share prices and the public's sentiment is certainly one of those factors.