Website Spotlight: Market Profit

Savvy investors are starting to rely on social media 'buzz' or 'sentiment' as an independent, real-time pulse on potential stocks / companies, aiding in buy, watch and sell decisions.

Market Prophit, one of the leading social media 'heat index' solutions, offers investors a compelling and proprietary competitive advantage and strategic tool to add to their arsenal of research, for short and long term investment calls. I had the chance to interview the founder of MarketProfit regarding specific stocks, sectors, funds or the overall market? Igor Gonta, who has years of Wall Street experience at companies including Goldman Sachs and Credit Suisse, provided extra information about the site.  

-How did Market Prophit get started?

We started Market Prophit when we noticed that the amount of social media chatter about stocks started rising very quickly in early 2011. So we decided that investors needed a tool to digest all of the chatter in real-time, capture the overall trending sentiment for a particular stock, and generate easy-to-understand summaries of what the "crowd" in social media was saying.  

  

-What is the link between social media “buzz” and investment success?

Social media chatter about stocks is prevalent and growing every day.  The information that is being discussed is unique in many cases and can't be found in traditional news sources.  Hence, it's important to keep tabs on this new information "channel" to understand what is being discussed.  

 

-What companies are generating significant social “buzz” now?

There are many stocks that generate social buzz, Some companies tend to be always talked about like Apple, Google, Yahoo, and Netflix.  But there are others that are particularly buzzing right now.  Two of these companies are Tesla and 3-D Systems.  Tesla, the electric car manufacturer, has been talked about quite frequently due to it's electric car model S and the strides that they are making in this new industry.  3-D Systems and 3-D printers in general have been getting quite of bit of buzz due to the growth of this technology as many people are starting to get aware of it.

 

-How can investors incorporate social media in investing?

Many times, news about a particular stock or industry breaks in social media channels, not traditional ones.  And so it's important to use social media as another intelligence tool to gather information about stocks.  That's not to say that an investor should solely rely on social media chatter when doing research about a stock; but they can use it as an additional source of intelligence and information when doing so to potentially make more informed decisions.  Enclosed is an example of Market Prophit's sentiment signal showing a positive sentiment on 3-DDD Systems today before a rise in the stock price and then a temporary negative sentiment signal after the price has risen and temporarily stabilized.  

 

However, while sentiment signal values can provide indications of market mood about a particular stock or financial instrument, they aren’t necessarily always predictive and should not be relied upon exclusively for buy/sell decisions.  Rather, they can be used as an additional component of an existing trading strategy which takes other market variables/considerations into account.  Please also review our Disclaimer. (www.marketprophit.com/disclaimer/)