Stephanie Wang, The Indianapolis Star
By Indiana University

Johan Bollen, an Indiana University professor, has developed a method of collecting tweets to predict the stock market.

INDIANAPOLIS — Millions of your 140-character tweets — that mindless drivel and those snippets of wisdom — have already predicted the bobbing of the stock market.

Soon they could divine the onset of the flu or the movement of politics.

Since his 2010 research article set people atwitter, Indiana University researcher Johan Bollen has broadened his formula for gauging society’s mood based on Twitter or Facebook posts. This week he won a patent for what many have dubbed “the Twitter predictor.”

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What you ate for breakfast? Your favorite sports team’s big win? That funny thing your cubicle neighbor just said? Crank it all through a formula and the tweets can hint at society’s collective mood of the moment, based on certain words about how you feel.

“Public sentiment is a pretty ghostly concept,” said Bollen, an associate professor of informatics. “You’re trying to quantify something that maybe people feel isn’t inherently qualitative.”

Other researchers have examined tweets to determine how happy people are in different cities or states. Marketers have looked at tweets to understand whether people like their products.

What Bollen found is that these moody tweets can be used to peer into the near-future, as indicators of what could happen socioeconomically or financially.

The first test tied tweets to the Dow Jones industrial average. Bollen’s research with doctoral student Huino Mao claimed close to 90 percent accuracy in predicting the stock’s short-term changes. When people seemed calm, the Dow went up. When they became anxious, it sank.

The recent patent brings his startup, Guidewave Consulting, closer to selling the invention for wider use. IU’s Research and Technology Corp., a Guidewave shareholder, can collect royalties from sales.

But not everyone buys into it.

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