By Robert Folsom | August 16, 2012
Bob Prechter’s insight regarding the unique importance of social mood dates from his August 1979 Elliott Wave Theorist:
It can be surmised… that it is mass human psychology which is registering its changes in the barometer known as the DJIA. This concept helps to explain the cause of future events: changes in the mass emotional outlook. That’s what comes first.
But only in the past two to three years has Prechter’s singular premise become quantifiable. The media caught wind of this in 2010, via analysis of the vast Twitter database by several researchers, most notably Indiana University’s Johan Bollen and Huina Mao in their paper “Twitter mood predicts the stock market.”
More recently these large-scale studies go by the name “big data” — the analytics of social media and other digital records by brute-force processing power and storage across hundreds and thousands of servers.
Put simply: Big data measures the trends and changes in collective behavior. It sees social mood at work.
This is more than an interesting story. It means socionomics is more interesting and relevant by the day. In fact, when you drill down, understanding socionomics makes it easy to understand the true utility of social media.
To that end, allow me to personally invite you to join the conversation on our Twitter feed: Social Mood Watch. Twitter is the hot social mood channel right now, but we’re not worried about being late to the party. After all, Prechter was the first to realize that the collective party had already started.
There are of course practical reasons Twitter is so successful to analytics — mostly because it puts your finger on the pulse of social mood. It’s also incredibly easy to use. We’re active every day and hope to hear from you. Click “Join the conversation” in the sidebar to join in.