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About MarketPsych

MarketPsych LLC is a leader in behavioral finance, applying the competitive advantages from modern psychology into finance through data, research, and consulting.

DATA
World's most comprehensive sentiment data produced in partnership with Thomson Reuters
RESEARCH
Predictive analytics underlying economic research, trading strategies, and investment recommendations
CONSULTING
Best-in-class coaching for financial advisors, traders and investors

Latest News

May 21, 2015

Sign up for our next webcast on individual company sentiment data:  "Touchy Traders, Information Impact and Patterns in Prices: Thomson Reuters MarketPsych Indices for Individual Companies."  Tuesday 2nd June 2015, 9:00am ET/14:00 BST.

April 28, 2015

We'll be presenting at the 5th annual "Behavioural Models & Sentiment Analysis Applied to Finance" conference in London on July 15-16, 2015, which is consistently an excellent conference.

March 24, 2015

We're presenting a free webinar for CTAs:  "Systematically Exploiting Trends in Commodities, Forex, and Global Equity Indexes Using Media Sentiment Analysis."  Register Here (Select WEBCAST 4).

Recent Press

April 27, 2015

Hopkins research finds Twitter mood predicts success of IPOs -- Lorraine Mirabella Bloomberg Business

April 24, 2015

Emotional Arbitrage -- Chris Hall The Trade

January 29, 2015

Watch Out: Financial Advisors Are Selling ‘Life Planning’ Services -- Joanne Cleaver U.S. News and World Report


May 04, 2015

Our Age of Speculative Manias & Making Sense of Chinese and Biotech Stocks

Evidence of bubbles has accelerated since the [2007-2009 financial] crisis.
~ Robert Shiller ("Irrational Exuberance," 2015).

The celebrated author and humorist Samuel Clemens (pen name Mark Twain) documented his experiences in the Nevada mining stock bubble, and his writings are one of the earliest (and certainly the most humorous) firsthand accounts of involvement in a speculative mania.

After a brief stint as a Confederate militiaman during the beginning of the U.S. Civil War, Clemens purchased stagecoach passage west, to Nevada, where his brother had been appointed Secretary of the Territory. In Nevada, Clemens began working as a reporter in Virginia City, in one of Nevada’s most productive silver- and gold-mining regions. He enviously watched prospecting parties departing into the wilderness, and he quickly became “smitten with the silver fever.”

Clemens and two friends soon went out in search of silver veins in the mountains. As Clemens tells it, they rapidly discovered and laid claim to a rich vein of silver called the Wide West mine. The night after they established their ownership, they were restless and unable to sleep, visited by fantasies of extravagant wealth: “No one can be so thoughtless as to suppose that we slept, that night. Higbie and I went to bed at midnight, but it was only to lie broad awake and think, dream, scheme.”

Clemens reported that in the excitement and confusion of the days following their discovery, he and his two partners failed to begin mining their claim. Under Nevada state law, a claim could be usurped if not worked within 10 days. As they scrambled, they didn't start working, and they lost their claim to the mine.  His dreams of sudden wealth were momentarily set back.

But Clemens had a keen ear for rumors and new opportunities. Some prospectors who found rich ore veins were selling stock in New York City to raise capital for mining operations. In 1863, Clemens accumulated stocks in several such silver mines, sometimes as payment for working as a journalist. In order to lock in his anticipated gains from the stocks, he made a plan to sell his silver shares either when they reached $100,000 in total value or when Nevada voters approved a state constitution (which he thought would erode their long-term value).



In 1863, funded by his substantial (paper) stock wealth, Clemens retired from journalism. He traveled west to San Francisco to live the high life. He watched his silver mine stock price quotes in the newspaper, and he felt rich: “I lived at the best hotel, exhibited my clothes in the most conspicuous places, infested the opera. . . . I had longed to be a butterfly, and I was one at last.”

Yet after Nevada became a state, Clemens continued to hold on to his stocks, contrary to his plan. Suddenly, the gambling mania on silver stocks ended, and without warning, Clemens found himself virtually broke. 
"I, the cheerful idiot that had been squandering money like water, and thought myself beyond the reach of misfortune, had not now as much as fifty dollars when I gathered together my various debts and paid them."

Clemens was forced to return to journalism to pay his expenses. He lived on meager pay over the next several years. Even after his great literary and lecture-circuit success in the late nineteenth century, he continued to have difficulty investing wisely. In later life he had very public and large debts, and he was forced to work, often much harder than he wanted, to make ends meet for his family.

Clemens had made a plan to sell his silver stock shares when Nevada became a state. His rapid and large gains stoked a sense of invincibility. Soon he deviated from his stock sales plan, stopped paying attention to the market fundamentals, and found himself virtually broke.

Clemens was by no means the first or last person to succumb to mining stock excitement. The World’s Work, an investment periodical published decades later, in the early 1900s, was beset by letters from investors asking for advice on mining stocks. The magazine’s response to these letters was straightforward:  "Emotion plays too large a part in the business of mining stocks. Enthusiasm, lust for gain, gullibility are the real bases of this trading. The sober common sense of the intelligent businessman has no part in such investment." (from Meir Statman)

While the focus of market manias changes - mining, biotech, Chinese stocks, housing, etc… - the outline of a speculative bubbles remains remarkably similar over the centuries.  Today's newsletter examines the latest research into speculative bubbles and looks at how we can apply that knowledge, with examples of the recent booms (bubbles?) in Chinese stocks and Biotech.  This newsletter is much longer than usual letter, in part because the topic is both complex and important.  Skip ahead to the end for the Chinese and Biotech conclusions.  A more thorough treatment of bubbles is in my next book, coming out in late 2015.  

continue reading...

World Markets

- (30 day data)

Price Buzz Sntment Econunc Govinst
United States +0.7%
United Kingdom +0.0%
Germany -0.3%
Japan +2.1%
China +10.4%
India +0.6%

updated 2015-05-27

Currencies

- (30 day data)

Price Buzz Sntment Prcfrc Volatil
US Dollar -0.7%
Euro +0.7%
Brazilian Real -5.3%
Japanese Yen -2.5%

updated 2015-05-27

Commodities

- (30 day data)

Price Buzz Sntment Prodvol Cnsmvol
Crude Oil +1.7%
Natural Gas +11.2%
Gold -2.2%
Corn -1.7%

updated 2015-05-27

US Sectors

- (30 day data)

Price Buzz Sntment Innovtn Earnfct
Technology -1.0%
Energy -4.1%
Utilities -1.4%
Financials +1.0%
Industrials -0.2%

updated 2015-05-27

US Large Cap

- (30 day data)

Price Buzz Sntment Mktrisk Fundmstr
Apple Inc +1.1%
Bank of America Corp +7.0%
General Electric Co +1.5%
JPMorgan Chase & Co +5.9%
Microsoft Corp -3.1%
Wal-Mart Stores Inc -4.9%

updated 2015-05-27


Countries Top Lists

- (30 day data)

Social Inequality
Highest Lowest
South Africa Saudi Arabia
Israel Switzerland
France Netherlands
Denmark Russia
Brazil Belgium
Credit Easy vs Tight
Highest Lowest
Netherlands Denmark
Canada Switzerland
China Singapore
Mexico Sweden
Spain Ireland

updated 2015-05-27

Currencies Top Lists

- (30 day data)

Relative Buzz
Highest Lowest
Euro Norwegian Krone
US Dollar Argentine Peso
Chinese Yuan Renminbi Iranian Rial
Australian Dollar United Arab Emirates Dirham
Japanese Yen Swedish Krona
Time Urgency
Highest Lowest
Chinese Yuan Renminbi Egyptian Pound
Swiss Franc Iranian Rial
British Pound Argentine Peso
Polish Zloty Thai Baht
Hong Kong Dollar New Zealand Dollar

updated 2015-05-27

Commodities Top Lists

- (30 day data)

Supply vs Demand
Highest Lowest
Soybeans Hogs
Corn Heating Oil
Palladium Platinum
Crude Oil Silver
Wheat Orange Juice
Emotion vs Fact
Highest Lowest
Gold Orange Juice
Copper Heating Oil
Platinum Hogs
Crude Oil Soybeans
Silver Palladium

updated 2015-05-27

Equities Top Lists

- (30 day data)

Management Change
Highest Lowest
Marsh & McLennan Companies Inc Emerson Electric Co
FMC Corp Mattel Inc
State Street Corp Cigna Corp
Kimco Realty Corp Danaher Corp
United Parcel Service Inc BB&T Corp
Trust
Highest Lowest
Pepco Holdings Inc Consolidated Edison Inc
Dun & Bradstreet Corp Crown Castle International Corp
Nordstrom Inc JPMorgan Chase & Co
Archer Daniels Midland Co ConAgra Foods Inc
Phillips 66 Chubb Corp

updated 2015-05-27