Nerds on Wall Street: Math, Machines, and Wired Markets

9.3. More Pre-News on the Internet

The SEC is a mother lode of investment information because it covers all the companies all the time, and there is so much of it to mine and so many ways to cross-reference and analyze it systematically; but it is far from the only source of pre-news that is ripe for these methods.

Other government agencies are prime picking. Essentially all federal court filings are visible on the Web, including bankruptcies and securities class actions. The Commerce Business Daily announces federal contracts of all sizes. A multibillion-dollar Boeing tanker deal is something everyone waits for, but a $100 million contract awarded to a small-cap firm with revenue of $50 million can easily be overlooked. Similarly, the Food and Drug Administration, Nuclear Regulatory Commission, and Federal Aviation Administration often announce decisions that materially affect the fortunes of specific firms. If you know what to look for, and where, an intelligent research assistant agent will do the repetitive drudge work for you.

The agencies are traditional sources of pre-news, but others are new, purely creatures of the Internet. Here are a few specifics of both flavors:

• Domain names. Keeping an eye on domain name registrations is an early merger and acquisition warning system. It is reliably said that the first outsiders to know of the $182 billion acquisition of Time Warner by America Online (AOL) in 2000 were people monitoring domain name registrations who spotted "aoltimewarner.com" ...