Institutional Investor features Phillip Resnik's work on social media language analysis.

Jun 15, 2012

Institutional Investor spoke with Phillip Resnik about his work on social media language analysis and its applications for assessing sentiment in the context of stock market trading.

The articles says:

Harnessing the power of language can be a boon to traders bent on something as seemingly subjective as a diagnosis of the market’s pulse. It’s one thing to scour news databases to find negative references to a company whose stock you’re about to sell short. But it’s another thing to detect what Philip Resnik, a professor of linguistics at the University of Maryland, calls spin.

“Language is ambiguous — words have multiple meanings,” says Resnik, who’s also a member of the university’s Institute for Advanced Computer Studies.

Traders have been mining for data in news archives for decades. And they’ve long known how to detect the mood of the masses by assessing puts and calls on stock options. But today, computers armed with the latest artificial intelligence, or AI, software are learning to decipher how the public uses language and which combinations of words can predict the kind of phenomena that interest investors and pollsters.