Can the Internet Predict the Future?

Data is constantly becoming more and more available across the internet as people rely more and more on computers for their day to day lives. With these ever expanding databases available to the general public, companies have begun attempts to pore through them and create “temporal indexes” of tranding statements on the internet. These programs work by searching through vast numbers of websites, of all types, and looking for predictions. One major company involved in this kind of industry is Recorded Future, which claims to search through 100,000 websites hourly of any type imaginable. Generally, their services go for nearly $10,000 per month, but lately they have offered a more individual version of the product for less than $200 a month. That’s something many individuals could afford, which makes me wonder, why would anyone need to predict the future like this?

I have a lot of skepticism about this kind of technology. First and foremost, I would like to know how the programs distinguish between factual information and speculation or opinion. I simply do not see how a computer, reading information at the rate of 100,000 websites per hour, can separate out the useful information from the junk. Assuming, however, that it can, there are more questions as to its methods. How does it treat information that is only up on a website for a short time then is taken down? I don’t think this should just be treated the same way as any permanent information, as there was obviously some reason for it to be removed, be it false, slanderous, or otherwise. Apparently Recorded Future’s more expensive packages are purchased by hedge funds who use them to “predict the future” and enhance their trading profits.

Assuming that these technologies are legitimate, and as reliable as they are said to be, they are extremely interesting to me. The hedge fund product predicts stock values five days in advance, which is absolutely remarkable. I would love to see some sort of data concerning the accuracy of its predictions. Five days is a lifetime in the stock market – someone with that long a foresight could easily out trade their competitors, who were bound to working with real-time data. This seems obvious to the experienced investor, but these programs have proven that the news really does affect the stock market. It’s said that when people expect corporate restructuring, the stock of the company in question has a tendency to drop approximately 2 percent over the next month. I think this is proof of a previously only intuitive concept.

I actually fear the day when everyone has access to this type of technology. If everyone is trading stocks with a five day window into the future, how will that affect the market itself? I can’t see how it could possibly retain stability with millions upon millions of people trading with knowledge of the future.