tailieunhanh - Widespread Worry and the Stock Market

It should be noted that certain statements herein which are not historical facts are forward-looking statements, including, without limitation, those regarding: A) the intention to form a strategic partnership with Microsoft to combine complementary assets and expertise to form a global mobile ecosystem and to adopt Windows Phone as our primary smartphone platform, including the expected plans and benefits of such partnership; B) the timing and expected benefits of our new strategy, including expected operational and financial benefits and targets as well as changes in leadership and operation structure; C) the timing of the deliveries of our products and. | Widespread Worry and the Stock Market Eric Gilbert and Karrie Karahalios Department of Computer Science University of Illinois at Urbana-Champaign egilber2 kkarahal @ Abstract Our emotional state influences our choices. Research on how it happens usually comes from the lab. We know relatively little about how real world emotions affect real world settings like financial markets. Here we demonstrate that estimating emotions from weblogs provides novel information about future stock market prices. That is it provides information not already apparent from market data. Specifically we estimate anxiety worry and fear from a dataset of over 20 million posts made on the site LiveJournal. Using a Granger-causal framework we find that increases in expressions of anxiety evidenced by computationally-identified linguistic features predict downward pressure on the S P 500 index. We also present a confirmation of this result via Monte Carlo simulation. The findings show how the mood of millions in a large online community even one that primarily discusses daily life can anticipate changes in a seemingly unrelated system. Beyond this the results suggest new ways to gauge public opinion and predict its impact. Introduction Fear is an automatic response in all of us to threats to our deepest of all inbred propensities our will to live. It is also the basis of many of our economic responses the risk aversion that limits our willingness to invest and to trade especially far from home and that in the extreme induces us to disengage from markets precipitating a severe falloff of economic activity. Greenspan 2007 p. 17 The stock market usually reflects business fundamentals such as corporate earnings. However we also see many events that seem rooted in human emotion more than anything else from irrational exuberance during booms to panicked sell-offs during busts. It s not uncommon to see people even extend these emotions to the whole market a recent Wall Street Journal .

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