Half the Story
Today I saw an interview with a group that was forming a new investment exchange traded fund/index.
The stocks in this index will be chosen by monitoring social media to see what people are talking about. The thought is that when a company is positively mentioned often enough it will lead to higher stock prices.
This could certainly be true but it brings me back to my visits to the NYSE. There was always talk floating around about what great things a company might be doing but you never felt like you had the whole story.
The “Wisdom of Crowds” concept hypothesizes that the collective wisdom of many is always better than the opinion of a few. The question, however, that should jump out at us is “has my collection of data captured everything I need to decipher this collective wisdom?”
Or am I getting just half the story.