WORD has reached The Capitalist of an unconventional new approach to trading: using Twitter to predict swings in the Dow Jones Industrial Average.
The method is the brainchild of 28-year-old City trader Paul Hawtin and his brother Simon, whose new hedge fund, set to launch in April as a spin-off of their family-run investment boutique Derwent Capital, will monitor an average of 10 per cent of the 100 millions of tweets sent a day to find “sentiment threads”.
Based on how many user messages fall into one of six mood states – including calm, alert and vital – the software will make predictions about where stocks are heading three or four days in the future, giving Derwent’s fund managers some social media-enhanced intelligence on which to base their trades.
Paul Hawtin is so confident of the method behind the Twitter madness that he is launching the open-ended Cayman Island fund with an initial £25m, with a view to raising more than £250m from investors within 24 months.
Research from Derwent’s academic partners at Indiana University suggests the micro-blogging service will forecast the markets with 87 per cent accuracy – although market surveillance expert Dr John Bates remains highly sceptical.
“Predicting stockmarket moves via Twitter is highly unlikely,” he said. “If a financial crisis occurs in real-time, then information in 140 characters will not help organisations make real-time business decisions.”
IRELAND’S new government Fine Gael used St Patrick’s Day to put the country’s banking crisis behind it, by spreading the word to the world’s financial leaders that Ireland is “open for business” once more.
While Ireland’s new Prime Minister Enda Kelly spoke at a lunch for 500 American businessmen in Washington D.C., minister for social protection Joan Burton addressed 400 hedge fund managers, bankers and lawyers at a drinks reception at Middle Temple Hall, hosted by JP Morgan’s Zach Leonard (below right) in aid of the Forgotten Irish Fund.
“Ireland is looking forwards, not backwards,” said Basil Geoghegan, co-chair of the fund, who joined Conor Foley, the chief executive of sponsor World Spreads; Tiarnan O’Rourke, vice-president of Evercore Europe; and Peter Kiernan, managing director of Lazard; in dressing with a “dash of emerald” to knock back Guinness and champagne to the strains of an all-female traditional Irish band.
By all accounts, the party went with a swing – although The Capitalist hopes Geoghegan didn’t continue the St Patrick’s Day partying too late into the night, or he may have struggled at his breakfast meeting at the Irish Embassy this morning.
SAFETY GONG FOR BP
THE Capitalist commends the judges of Oil & Gas UK’s Safety Awards for their sense of humour, after the panel decided that BP should make the shortlist for this year’s award for Innovation in Safety.
And we all know how innovative it was at the height of the Gulf oil spill disaster. When the “top hat” dome failed to stop the 5,000 gallons of oil pouring into the Gulf per day, BP famously decided to create a plug of shredded tyres and golf balls to stem the leak. Perhaps, it was this kind of lateral thinking that drew the judges’ attention to the oil giant.
Ian Russell, Rob Turner and Jake Molloy from Sodexo, ABB Engineering Services and the National Union of Rail, Maritime & Transport Workers respectively, we salute you.
TYCOONS ON TOP
THE City’s millionaire racehorse owners were no strangers to the winners’ enclosure at Cheltenham yesterday, with property tycoon Trevor Hemmings’ Albertas Run winning the Ryanair Chase, despite a protestor running onto the course.
Meanwhile, Big Buck’s, the racehorse owned by Cenkos Securities founder Andy Stewart, created racing history by winning the Ladbrokes World Hurdle at Cheltenham for the third consecutive year under jockey Ruby Walsh, in a close finish with Grand Crus.
Apparently, the celebrations by Stewart’s party could be heard from the other end of the course – but spare a thought for his City rival Tim Leslie of James Cairn Asset Management, whose horse Any Given Day was beaten into a distant seventh.
HERE is a preview of the limited edition dress TV personality Claudia Winkleman will wear to host Comic Relief tonight (above) – which City ladies will be able to fight over when it goes on eBay tomorrow to raise money for the cause.
But if a designer outfit by up-and-coming designer Osman Yousefzada isn’t your style, you can help boost the Comic Relief profits by paying a visit to City restaurant Vivat Bacchus and ordering the Red Nose pudding created by chef Jordi Villa.
The elegant confection of praline mousse and caramelised nasturtium flowers is on the menu for £8, but customers can pay anything over that amount, with a minimum of £4 per dish donated to Comic Relief.