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The Handbook of News Analytics in Finance
book

The Handbook of News Analytics in Finance

by Gautam Mitra, Leela Mitra
May 2011
Beginner to intermediate
384 pages
12h 28m
English
Wiley
Content preview from The Handbook of News Analytics in Finance

4

Measuring the value of media sentiment: A pragmatic view

Marion Munz

ABSTRACT

In today's online real-time environment, the news that carries material information affects the sentiment regarding the earnings multiple as it relates to stock prices. The sooner investors recognize that there is a news component embedded in the stock price, the sooner they will arm themselves with the necessary tools that would enable them to take corrective action if necessary. The old formulas used for valuing stock prices need serious revisions to incorporate the news sentiment as a critical variable.

Investors and traders alike must have the ability to act or react to fresh material information regarding investments and trades. The current online trading platforms offer just about every type of information related to stocks and equities in real time. However, there is an increasing need for tools that offer an ability to interpret real-time information, so investors and traders can make the best decisions possible.

News sentiment systems help to fill the gap in current stock price valuation formulas, because they can help to determine the extent of the valuation multiple allocated to a particular future earnings per share value to be reflected in the stock price.

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Publisher Resources

ISBN: 9780470666791Purchase book