Predicting Stocks Based on Google Search Results

October 9, 2011 in Daily Bulletin

A new study claims that Google search results are a good indicator of future stock performance. Many studies aim to predict stock performance based on the attention given to the stock by investors (as attention is a good indicator that they would like to buy that stock). It is difficult to find ways to measure these attention levels, though, and if this study is correct, Google may offer one of the most effective methods. Apparently, looking at Google search results also helps explain the high prices of IPOs as the number of Google searches for these stocks often surge during the week leading up to the IPO.

Source: Freakonomics Blog