Writers just love to repeat each other and they do it to sell product made by Procter and Gamble ($PG) and Ford ($F) while instead they could simply be linking. 🙂
Meanwhile, no one has made the money point and even though I did not intend to write twice on this, I am left with little choice as I only indirectly alluded to it in my first missive.
Academics, and especially social scientists, participate in a process of discovery which occurs publically only slowly over time. This process involves multiple researchers from multiple universities focusing on similar sets of hypotheses, formulating studies, critiqueing themselves and these peers, refining methodology, rerunning the studies with new methodologies, republishing, tweaking still further until finally reaching some semblance of a conclusion.
The kicker here, of course, is that even while this supposedly objective process occurs in the open, still confirmation and political biases abound.
Meanwhile, in this particular instance, there is another cohort working on the same problem. They are not publishing and their measure of success is much less inefficient and not at all dependent upon the political whims of academic institutions.
At this moment, hedge funds are pouring over the Twitter (and StockTwits) API and they are testing their models against the market directly. Distinct from their distant cousins at the universities, they are not sharing their results (you will not hear much about this) and the veracity of their methodologies are not subject to the same human shortcomings.
They ask: Does the model distill alpha? This is a simple question with an outcome set that is inarguable.
