Twitter Predicts the Stock Market

Watch out, Bloomberg: There’s no need for that expensive terminal when you have a Twitter feed. So says German doctoral student Timm Sprenger, who analyzed more than 250,000 tweets from a six-month period. He found that using only stock market news from the microblogging site, an investor could have made a 15 percent return—way better than bank interest rates, and better than what many people get using fancy analysts (for comparison, Warren Buffett’s Berkshire Hathaway sees a growth of about 20 percent in book value annually). Sprenger’s now working on a site that crowdsources financial information and prioritizes news by how frequently it’s retweeted.