Investors Bullish on Big Data
Everyone loves Big Data. Even Wall Street. Thanks to exceptional Big Data based success, online retailer Wayfair far exceeded expectations and watched its stock value rise 20 percent almost overnight.
When market watchers stepped back to look at why this increase occurred, they used a measuring stick that is becoming increasingly popular among investors: big data. Customers loved the data-based benefits of the Wayfair app, and they weren’t shy about sharing that love. Much of the popularity of Wayfair was expressed as reviews and social media buzz, captured by one of a growing number of businesses that target purveyors of specific, data-mined information.
These companies use Big Data to bring together multiple disparate data points, everything from online reviews and social media postings to a host of other connection points both in brick and mortar environments and even out in space. Yes, the satellites are watching, and big data businesses are using their images to make your life easier, better and more streamlined. How does this fit with the traditional investment world metrics of earnings results, quarterly reports and expert prognostication? Simple, it complements these measuring tools rather than replacing them. As with most other instances of Big Data entering a market, traditional tools are not abandoned; they are enhanced. Savvy investors know Big Data can offer them a competitive advantage in the trading market, and they are not about to let that advantage pass them by. Sure they are looking at reports and reading projections, but they are also looking at data points that can only be gathered and mined by modern data science. The basics are similar to those of every other industry currently being revolutionized by big data. Just as marketing, medicine, construction, government — and others — are benefitting through Big Data’s ability to use all the new data provided by the digital world, investors are beginning to gather information using data science. They are taking information they always knew was connected with investing — mood, buzz and other intangible markers — and mining its value using data science to establish better valuations for stocks. Big Data’s predictive ability is also being harnessed by savvy investors. The stock market will always be a gamble. They key is reducing the odds and making the best, most informed decisions possible. With Big Data’s proven predictive ability, market watchers can know more, sooner, and catch both trends and anomalies in time to get the most out of both. Jonah Engler is a financial expert from NYC.