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'Big Data' Researchers Turn to Google to Beat the Markets

The New York Stock Exchange
The New York Stock ExchangePhotograph by Scott Eells/Bloomberg

Time to fire your portfolio manager? “Big data” researchers have found that mining Google search terms related to finance and plugging that data into an investment strategy would have outperformed all but the world’s greatest stock pickers over an eight-year stretch ending in 2011.

The findings of the research, “Quantifying Trading Behavior in Financial Markets,” were published today in the journal Nature by a team of big data academics, Professor Tobias Preis of Warwick Business School in the U.K., Helen Susannah Moat of University College London, and H. Eugene Stanley of Boston University. Freis and Moat have already created a stir by using similar data-crunching approaches to quantify and model stock price fluctuations of companies on the Standard & Poor’s 500 index and gross domestic product growth among many of the world’s biggest countries.