A marketing friend sent me an article the other day about how much a Facebook like is worth to a public company. This is not the first time I have gotten an article like this.
So, 99.95 percent of the change could be explained by the change in fan counts,” he says. In other words, the overwhelming majority of the change in a company’s stock price correlated with the Facebook likes that day or that period.
First, some credit needs to be given to the author of the study as he used the word correlated instead of caused. The title is, of course, is misleading. Let’s assume that the study is correct and valid.
This is another example of infoporn. A person will look at a 99.95% correlation and it appears to be a sure thing. Once again, I am assuming that everything in the study is correct.
First thing I know is that people will mess up a sure thing if they do not have a plan and it does not fit the trader. The second is that even .05% chance of being wrong means you can lose it all. Size matters, risk matters. Lastly, is this study an aberration or a trend? If it is a trend, when does it stop? Trends are made to end.
Below is a chart of Facebook, maybe they should get a fan page.
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