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Index
Cover
Title Page
Copyright
Table of Contents
Dedication
About the Author
Preface
Mathematical Mayhem
Framing the Issue
Trading on Sentiment
The Book
Notes
Acknowledgments
Part One: Foundations
Chapter 1: Perception and the Brain
A Long Estrangement
The Beauty Contest
What Moves Traders?
Chained to the Mast
The Brain: Structure and Function
Emotion versus Reason
In Summary
Notes
Chapter 2: Mind and Emotion
Crowds Moving Markets
Emotional Priming
Feelings and Finance
How Emotions Move Traders
Arousal, Stress, and Urgency
Anger, Fear, and Gloom
Information Impact
In Summary
Notes
Chapter 3: Information Processing
Media and the Flash Crash
Diversity Breakdowns
Price Patterns
Information Characteristics
A Scarce Resource
What's in a Name?
“All That Glitters”
Profiting From Social Inattention
In Summary
Notes
Chapter 4: Sentimental Markets
Reflexivity
Sentiment
Understanding Media
The Thomson Reuters MarketPsych Indices
In Summary
Notes
Chapter 5: Finding Signal in the Noise
Can Investment Research Be Believed?
Data Biases
Nonlinear Characteristics
Exploring Sentiment Data
Statistical Models
Cross-Sectional Models
Decision Trees
Moving Average Crossovers
Can Sentiment Be Trusted?
In Summary
Notes
Part Two: Short-term Patterns
Chapter 6: Information Impact
The Need for Speed
Bankruptcy Deja Vu
Faster than a Speeding Specialist
A Rehash of the #HashCrash
Breaking News
Leaking News
News Momentum
Gross National Happiness
Social Sentiment
The Human Advantage
In Summary
Notes
Chapter 7: Daily Reversals
Social Media and Insider Trading
Daily Reversals Research
Global Price Forecasts
In Summary
Notes
Chapter 8: Weekly Deceptions
Weekly Reversals
Emotions in Markets
Tricky Sentiments
The Lessons of Magic
In Summary
Notes
Chapter 9: The Only Thing to Fear
Estimates of Fear
To Catch a Falling Knife
Good News for People Who Love Bad News
Panics and Bounces
The Fear Factor in Markets
In Summary
Notes
Chapter 10: Buy on the Rumor
Price Forecasts
Sweet Anticipation
Earnings and IPOs
The Neuroscience of Disappointed Expectations
Tricks of the Stock Promoters' Trade
In Summary
Notes
Part Three: Long-term Patterns
Chapter 11: Trends and Price Momentum
What Causes Trends?
Investor Underreaction
Timing Trends with Moving Averages
Augmented Momentum
Going with the Flow
In Summary
Notes
Chapter 12: Value Investing
The Manic-Depressive Mr. Market
Value Investing
Selling to Optimists
Value Traps and Catalysts
In Summary
Notes
Chapter 13: Anger and Mistrust
Anger under the Microscope
The Value of Anger
Trust
Who Trusts Bankers?
The Trust Factor
Trust and Forgiveness
In Summary
Notes
Chapter 14: The Psychology of Leadership
Blaming Management
The Emotional Value of Human Sacrifice
Superstar CEOs
Buy Mistrusted Leadership
Buy Unstable Governments
Using Text Analytics to Improve Executive Communication
Conclusion
In Summary
Notes
Chapter 15: Navigating Uncertainty
How Investors Deal with Uncertainty
The Warrior Gene
Uncertainty about Asset Prices
Uncertainty at Boeing
Uncertainty across Equities
Certainly Doubtful
In Summary
Notes
Part Four: Complex Patterns and Unique Assets
Chapter 16: Optionality
Optionality and Wealth Creation
Habits Are Hard to Break
Catalysts
Detecting Optionality
In Summary
Notes
Chapter 17: Blowing Bubbles
A Brief History of Bubbles
Irrational Exuberance
Laboratory Bubbles
Staging a Bubble
The Bubble Checklist
In Summary
Notes
Chapter 18: Timing Bubble Tops
How Bubbles Pop
Brains of Steel
The Peak-End Rule
The Bubbleometer
Arbitraging Stock Speculation
Global Mean-Reversion
Keeping the House Money
In Summary
Notes
Chapter 19: Commodity Sentiment Analysis
What Drives Oil Prices?
The Predictability of Fear, Violence, and Oil Price Volatility
When the Heat Stays On
Commodity Psychology
In Summary
Notes
Chapter 20: Currency Characteristics
The Value of Uncertainty
Information Flow
Timing Currencies with MACDs
Using Currency Sentiment in Trading
In Summary
Notes
Chapter 21: Economic Indicators
Earnings Forecasts
Predicting Economic Activity
Quantifying Economic Pressures
News Flow as a Leading Economic Indicator
MPMI Results
Live Nowcasting
New Economic Indicators
In Summary
Notes
Chapter 22: Sentiment Regimes
Regime Dependency
Strategy-Shifting
Anomalies by Regime
Emotion versus Fact
In Search of Consistency
In Summary
Notes
Part Five: Managing the Mind
Chapter 23: Mental Hygiene
Traits of Super-Forecasters
Adaptability
The Power of Not Knowing
Stress Management Is Risk Management
Facing Your Fears
Reversing Stress
In Summary
Notes
Postscript
Appendix A: Understanding the Thomson Reuters MarketPsych Indices
Source Type Customization
Lexical Analysis
Entity Identification and Correlate Filtering
Linguistic Analysis Flow
Sentence-Level Example
Creating an Index
Source Text
Index Construction
Asset Classes Covered
TRMI Definitions
Visual Validation
Notes
Appendix B: Methods for Modeling Economic Activity
Professional Economic News vs. Social Media
Analysis of Single TRMI
Testing Methodology
Selected Models and Algorithms Tuning
Results Table
Notes
Glossary
Index
End User License Agreement
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