Pacific Standard March-April 2013 Cover

Big Data, Big Money

stock-market-growth

Now that we know a single hacked Twitter account can erase $136 billion from the American stock market in seconds, maybe it’s time to re-evaluate this whole “let the machines do the trading” strategy. Or not. A remarkable study, published this week in Nature Scientific Reports, details how a simple Google Trends algorithm makes a better day trader than most of the suits on Wall Street. Tobias Preis, of the University of Warwick, led a trio of researchers in designing the trading strategy. It started with a simple idea: Investors—whether skittish or bullish—make financial ... Read More

Greenhouse Gas Reports Send Stock Prices Higher?

Coming clean about greenhouse gas emissions can make some companies squeamish. Because emissions are bad, businesses fear that talking about them might be, too. But a new study out of the University of California, Davis finds that by entering into the conversation voluntarily, companies can boost their bottom line. A study of 172 companies found that stock prices jumped, on average, a half a percent in the five days surrounding an emissions-related press release. While that change might not seem substantial, bundling all those little benefits together meant an extra $10 billion for the ... Read More

Smoggy Days Make for Sickly Stock Market

Stock prices have been on the rise, tempting cautious investors to plunge back into the market. If you are one of them, you might consider this unconventional piece of advice: Buy low, sell smoggy. That’s the implication of a study conducted by two Israeli scholars published in the Journal of Economic Psychology. They report poor air quality in the vicinity of the trading floor "is negatively related to stock returns, even when controlling for other variables." Tamir Levy of Netanya Academic College and Joseph Yagil of Haifa University note that exposure to polluted air can trigger ... Read More

A Firm of One’s Own

The notion that employees might become owners of the companies where they work has centuries of history, but in the early 1970s, employee ownership in the U.S. was mostly confined to a handful of experimental companies. Over the last three decades, however, a stealth economic revolution has occurred. By 2006, the General Social Survey estimated that 35 percent — or more than 25 million — of the employees who work for U.S. corporations were participating in one or more stock ownership plan in their companies. A series of tax laws enacted between 1974 and 1997 (most notably employee ... Read More