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

10.7. More Web, More Warnings

The previous chapter illustrated how traditional information sources transformed by the Web can be understood by using AI and IA approaches to analyzing electronic content in rich molecular arrangements. This chapter did the same for new, nontraditional "creature of the Web" flavors of information, and how they can be delivered in a manner that turns down the data torrent coming out of the fire hose of Internet information retrieval to a manageable, understandable, filtered stream.

Earlier in the book, we saw how the similar approaches applied to quantitative, rather than textual, information could be a powerful tool for investing and trading, but this could be overdone by fooling yourself with excessive data mining. For textual information on the Web, this is still a danger, but you have help from other people in fooling yourself. On the Web, there are plenty of people willing to help you make bad decisions. Novel approaches to the old game of market manipulation appear on a regular basis—as is shown in the next chapter.