No matter how much money you made on the stock market and no matter how well you think you know the markets, no one can really predict with a 100 percent certainty which way a given stock is headed. Stock market prediction has drawn the interest of many people over the years. However thus far, no one was able to come up with a formula that had more than a 50 percent accuracy in predicting the markets. Financial ratios and analysts can only do so much. This might all be about to change though. A recent study from Warwick Business School and Boston University suggests that tracking search terms that are imputed into Google can predict a market crash. So the question remains, can Google predict the stock market?
An algorithm can identify patterns based on the terms people use in the search engine and will be able to predict the future direction in which the market is headed. Apparently the algorithm has been able to achieve a prediction accuracy of up to 65 percent which is significantly better that any other system we have today.
This all sounds great. What’s your opinion? Could this algorithm have some real importance? Let us know in the comments. And if anyone knows when the next crash is scheduled for, feel free to give us a heads up… that would be great.
