Google Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) search engine is the most popular, and is the leader in the industry. The search provides information about anything and everything in just a fraction of a second. Recently, it has been observed by a group conducting a study that when people begin to search more about topics related with politics or business the possibility of a financial crisis is heightened, according to a report from SMH.
Search trend helps Google to predict
Stock market failures have been preceded by large search volumes about the topics related with business and politics suggests the Warwick Business School based on its results from a study.
“By mining these datasets, we were able to identify a historic link between rises in searches for terms for both business and politics and a subsequent fall in stock market prices,” said Professor Suzy Moat from the school, which is part of Warwick University in the British Midlands city of Coventry.
When people make searches on Google Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) with terms related to the stock market, then predictions can easily be made into the outcome and performance of the market. This information is more crucial than that provided by the stock market, which only has a record of shares bought and sold by the investors.
The study paper argues that Google Trends makes it possible for an individual to gain valuable insight into the stages that fall before final buying or selling takes place. The various actions undertaken by an investor if known to the traders can help them determine the consequences in advance.
An increased concern for the economy was indicated by the correlation between business and politics related searches. “This may lead to decreased confidence in the value of stocks, resulting in transactions at lower prices.”
Overtime, Google Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) has changed its image and now it serves dual purpose of making valuable predictions about the success and failure of album or film, the winner of an election or of the World Cup even. The predictions play an important role at times when it is about an epidemic that can possibly hit the nation or the stock market crashes that can affect the entire nation’s economy.
For example, if the number of searches for a movie before release were very high, then Google predicts it will be successful and similarly if searches with symptoms of a particular disease go up drastically it indicated that more and more people are about to get infected with it.