Use Twitter To Make Money Trading Panic

During their latest episode of the VALUE: After Hours Podcast, Taylor, Carlisle, and Dillian discussed Use Twitter To Make Money Trading Panic. Here’s an excerpt from the episode:

Tobias: So, Jared, if you’re looking across any number of asset classes, what draws your attention? What sort of anomaly or anomalous behavior are you looking for?

Jake: Yeah, what’s your frequency range?

Jared: I’m looking for noise. I’m looking for people-

Tobias: Twitter.

Jared: -talking about it.

Jake: [chuckles]

Jared: You know what I mean? You follow me on Twitter. So, I don’t know if you remember when natural gas prices were going up in Europe, and people were saying, they’re totally screwed.

Jake: Yeah.

Jared: I kept tweeting over and over again, “We will not be talking about natural gas in Europe a month from now.” Said that over and over.

Jake: [laughs]

Tobias: Yeah, I do remember that.

Jared: I said it recently with orange juice. I said it with lumber. Basically, anytime there’s a panic or a crisis or people are like, “This is unsustainable,” that which is unsustainable cannot be sustained. It’s just the nature of markets. The cure for high prices is high prices. The cure for low prices is low prices. It’s a natural argument for me reversion. Twitter is my number one tool. I’ve always told people, I would get rid of my Bloomberg before I got rid of my Twitter. I don’t need Bloomberg to trade. I can trade 100% off of Twitter. I don’t need to see what the price of something is. I need to hear what you think about it. That is the information that is important to me.

Tobias: How do you know that your Twitter follows are representative or worth paying attention to?

Jake: Good contrast.

Tobias: Yeah.

Tobias: Terrible track records?

Jake: Yeah. [laughs]

Jared: To get a little bit more in depth, there’s buckets of sentiment. So there’s a small percentage of people who are right a lot, and 90% of people are wrong a lot, and some people are wrong all the time. If you follow the same people for years, you get a sense of who is who. So if you’re in a trade where the wrong people believe one thing and the right people believe the other thing, it’s pretty obvious what’s going to happen.

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