As ever, I don’t think there’s a “silver bullet” that Twitter delivers that can help make every investment/trading decision a winner but it definitely has its uses - and drawbacks.
Best source for market-moving news
Most people outside of dealing rooms (and even plenty within them) don't have access to a real-time news terminal. But, as Twitter has evolved over the years, it’s just as easy to find out what’s going on in an instant.
There is of course an awful lot of drivel on Twitter, but for me if I want to find out why XYZ has moved, Twitter is the first thing I turn to. Today is a perfect example - I have some shares in Tate and Lyle and saw this morning they were down more than 10%. I was somewhat perturbed and wanted to know why the market was ridiculously disagreeing with my insight into their value. Putting their ticker symbol $TATE into Twitter threw up plenty of news about the trading statement that came out and caused the panic.
Of course there are plenty of scheduled news announcements such as interest rates, unemployment, inflation etc. that can move markets all day long. Someone, somewhere will tweet this stuff as soon as it is released so this is another way that Twitter lets you see what’s going on. Indeed, some people seem to see this as something of a badge of honour to get this stuff out before anyone else - everyone needs a hobby, and we should be grateful to them.
Don’t believe the hype
Not the song by Public Enemy (has it really been 25 years?)
(This doesn’t apply to me of course My poor investment decision in Tate & Lyle is just a temporary blip in an otherwise faultless track record. PayPal me some money and find out more).
Individuals are better at Twitter than companies
Financial companies, as a whole, struggle with Twitter. The easy get out to this is “regulation” and “compliance”. But I would also suggest that of equal importance is simply this: most are just not very good at it. This has been covered comprehensively in the excellent BankersUmbrella blog here.
This may come as a surprise to some, but there are plenty of people who have an influence on corporate social media strategies who don’t actually use it. To me this would be like working at Jaguar Land Rover but not knowing what a car looks like.
There is a famous quote: the definition of an expert is someone who is 20 miles away from home. Maybe a social media expert is one who can spell Instergramme correctly. I am sure it will get better as time goes on but for now most financial corporate Twitter feeds seem to be rehashing old news or just promoting products - it’s not adding much. I could give you lots of entertaining examples here but, as I might want to work with some of these companies in the future, discretion is probably the better part of valour.
The best tweets come from individuals (who still may work for a company of course) with the usual disclaimer “all views are my own” etc. I think there is masses more value in following a person who is engaged and passionate about their subject - whether it’s finance, cars or celebrity breakfasts - than a faceless corporate account.
Filter out the Noise
Clearly Sartre foresaw the coming of social media when he coined the phrase “Hell is other people”. There is an awful lot of noise about everything on Twitter. If you follow a lot of people it can be difficult to find the news you are interested in at that particular moment.
This is where the Lists function in Twitter can make things easier. I have a few set up - for example: people who tweet about markets; those who do mainly car stuff; those who tweet utter twaddle but are still entertaining. If there’s a big announcement coming out, it will be the markets list I will be looking at to get the information as soon as possible - it all makes it very easy to hone in on what is relevant at that moment.
Like I said at the beginning, Twitter is far from perfect when it comes to tracking what is happening in financial markets, but there are definite steps we can take to have it work for us, rather than just being inundated with the irrelevant.
If you are still not convinced, then here’s a T shirt.