Earlier this month, following the US Securities and Exchange Commission’s decision to allow public companies to disclose corporate information through social media, Bloomberg announced that it had become the first financial information platform to integrate real-time Twitter feeds “directly into the investment workflows of market professionals.” Subscribers of the Bloomberg Professional service can now “monitor and analyze real-time Twitter updates issued by corporations, executives, government officials, economists, commentators, media outlets, and other voices that can influence financial markets” using command TWTR<GO>.
As Bloomberg’s core product manager for news explained in a recent blog post:
Traders and investors with access to a Bloomberg terminal can use TWTR to build a search filter for updates from Twitter (or tweets). Users can filter content from Twitter by company, ticker, industry, authors (or people) and Bloomberg-recommended markets and topics. Filters offer controls to manage tweet volume, so users can narrow their search parameters to those tweets that are most relevant.
Bloomberg pre-selected several thousand Twitter handles of companies and authors that report market moving or breaking news about the financial markets, companies, securities, or industries, and we are refining the list constantly with input from clients. We also created Social Velocity Alerts to capture when there is an unusual burst of social chatter around a given stock.
In looking to add value for its terminal customers, Bloomberg has also conferred considerable additional influence on the Twitter accounts selected for the new service. As New York magazine’s Kevin Roose has pointed out, “Being on Bloomberg’s VIP list isn’t just a meaningless status symbol . . . It’s tantamount to being able to broadcast your thoughts into every firm on Wall Street, and each person on the list gets more than 300,000 silent followers, who may or may not be trading millions of dollars based on their 140-character musings.”
So who exactly are these newly crowned über-influential Twitter users?
Bloomberg wouldn’t disclose to New York the full list of several thousand accounts that have been approved for display on the terminal. And if the company sticks to its pledge to continuously add more Twitter handles over time with the input of its clients, the list will remain something of a moving target. Nonetheless, working with a Bloomberg terminal user, New York compiled a “very partial list” of 100 accounts that are displayed on the terminal. The magazine readily admits that it was an imperfect exercise, given that Bloomberg’s social sentiment analysis tool also captures tweets from Twitter users not on the approved list (based on key word searches or ticker symbols). Still, applying some basic network analysis to the disclosed accounts yields some interesting observations about this slice of the chosen few.
Let’s start with a visual map of the accounts identified by New York and their follow relationships (click to enlarge):
What immediately jumps out is how highly connected all of these accounts are, suggesting that information originating in any one node can flow pretty quickly across the entire network — and get discounted equally quickly along the way. The average distance in the network between any two nodes is 1.8 hops; only three of the 100 accounts have no follow relationships with any of the others.
Additionally, as New York points out, the network is composed of “pretty much the list you’d expect.” It includes:
- News sites like @AllThingsD, @CNBC, and @Dealbook (The New York Times’ finance blog)
- Financial bloggers like @felixsalmon (Felix Salmon of Reuters), @ReformedBroker (broker and author Josh Brown), @thestalwart (Business Insider‘s Joe Weisenthal), and @footnoted (Michelle Leder)
- Journalists like @moorehn (Heidi Moore of The Guardian) and @KevinRoose (author of the New York magazine piece)
- Analysts like @ianbremmer (Ian Bremmer of Eurasia Group) and @anildash (Anil Dash, blogger and co-founder of strategy consultancy Activate)
- US politicians @senwarren (Elizabeth Warren), @senjohnmccain (John McCain), and @agschneiderman (New York Attorney General Eric Schneiderman)
- A few key U.S. government agencies, @USTreasury and @thejusticedept
Many investment professionals, it seems fair to say, are only now beginning to think through how to incorporate Twitter into their investment decision making. Some of the early evidence suggests that using Twitter for sentiment analysis is experimental at best. I’ve always thought that the power of Twitter is its ability to surface novel opinions and voices. But if these 100 accounts are at all representative of the full approved list of Twitter users on Bloomberg, it would be hard to argue that the new service is going to be an engine of out-of-the-box idea generation given the tight connections between the Twitter users — and the rapidity with which new ideas expressed in tweets can course through the network and, now, out through Bloomberg’s terminals.
Although this is hardly a scientific exercise, what follows is some additional network mapping and analysis of the Twitter accounts named by New York magazine that are now appearing on a Bloomberg terminal near you:
Power Twitter Users
(Accounts with More than 50,000 Tweets)
Accounts with the Most “In Degrees”
(i.e., Most Followers from within the
Network of 100 Twitter Accounts)
Accounts with the Highest “Closeness Centrality”
(i.e., Users with the Most Central Positions in the Network,
Enabling Them to Disseminate Information Most Quickly)
- The accounts most followed by this Bloomberg clique are decidedly not the same accounts that are most followed by the public at large. It appears that the Bloomberg Twitter users are more apt to follow bloggers (@reformedbroker, @zerohedge) than mainstream media outlets (@NBCnews, @FT). Only @CNBC appears in both network maps of the most followed accounts.
- Six accounts with the highest closeness centrality also make the power Twitter user list: @antderosa, @moorehn, @reformedbroker, @zerohedge, @thestalwart, and @scobleizer. Perhaps the takeaway here is that if you want limited exposure to this network, these are the accounts to follow. One minor surprise is @scobleizer, the account of tech blogger Robert Scoble. One would expect him to be central to a technology-focused Twitter network; less so in a network focused broadly on finance.
- Politicians and government agencies are largely on the periphery of this network. Senator Elizabeth Warren (@senwarren) follows only one person: fellow Senator John McCain (@senjohnmccain). His account does not follower her back. McCain’s only follows in the network are @CBSNews and @Oknox, the chief Washington correspondent for Yahoo! News. Only 12 of the 100 accounts follow Senator McCain. Half as many follow Senator Warren.
- Similarly, NY Attorney General Eric Schneiderman’s (@agschneiderman) only follows in the network are the US Justice Department (@thejusticedept), @NBCnews, and @CNBC. Only three Twitter handles in the network follow Schneiderman: @antderosa, @ianbremmer, and @lopezlinette.
- One exception to the relative isolation of the public sector: Nearly a quarter of the 100 Bloomberg Twitter accounts follow the US Treasury Department (@USTreasury). However, Treasury has only one follow: the US Justice Department.
Perhaps Bloomberg will decide to disclose the full list of Twitter handles that make its approved list. An analysis of the full network would surely yield some interesting observations. But then again, from an information discovery perspective, the entire exercise of isolating Twitter VIPs may be of limited value. As one of my colleagues at CFA Institute pointed out to me, the opportunity in leveraging social media is not so much in tapping into “the experts’” information stream as much as it is in observing influential sharing across an entire network. After all, it’s often the “non-experts” who are much closer to unpredictable events that give rise to investment risks and opportunities.
Or as another colleague put it more succinctly: It’s not about the people. It’s about the information.
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
Photo credit: ©iStockphoto.com/Nikada