The Anthropocene Gap
Chapter 6: Financial markets, robots and ecosystems
Here's a story you've probably never heard of before. Anne Hathaway is a young 30-something American actress, known from movies such as The Devil Wears Prada (2006), and the Batman movie The Dark Knight Rises (2012). One interesting thing with Ms. Hathaway (at least for the purpose of this book) is that every time she makes the headlines, the stock of Warren Buffett's Berkshire-Hathaway goes up. In 2010 when Ms. Hathaway co-hosted the Academy Awards, the Berkshire-Hathaway stock made two unexpected upward jumps. First, on the Friday before the Oscars, Berkshire shares rose over 2 percent. On the Monday following the awards, they rose again by over 2.9 percent (Mirvich 2011, Stodola 2011). News analytics via automatized monitoring of 'chatter' on the Internet is making fast progress in stock markets. It's not a far-fetched guess that this bizarre correlation between the value of a company's stock, and the actions of a young actress, is created by recent and rapid advances in news analytics and automatized trade. The mechanism could be the following: A computer monitoring news feeds (in a similar way as done by GPHIN for epidemics as explored in Chapter 4) finds an unusual number of positive Hathaway mentions (in other words, the actress), and rapidly executes buying orders in shares of the company. As stocks go up, the ultrafast buying computer has executed a successful 'momentum trade' as other slower traders aim to buy the now 'hot' share.
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