We monitor Google Trends in our research process. Google Trends provide insight into market sentiment, consumer and business trends, and other factors that ultimately drive market action. Various academic research supports this approach. For example, here is a paper from UCSD, and here is a presentation from Warwick Business School. Additionally, research from the Data Driven Investor also discusses how to use Google Trends in your investing process. Choosing the right key words is important, as is separating signal from noise. Overall Google Trends is a data point that analysts need to consider when making investment decisions.
One of the most valuable resources on using Google Trends for investing is this paper in Nature. Here is a key quote:
Detailed market data on trading decisions reflect some of the complex human behavior that has led to these crises. We suggest that massive new data sources resulting from human interaction with the Internet may offer a new perspective on the behavior of market participants in periods of large market movements. By analyzing changes in Google query volumes for search terms related to finance, we find patterns that may be interpreted as “early warning signs” of stock market moves. Our results illustrate the potential that combining extensive behavioral data sets offers for a better understanding of collective human behavior.
Google trends can be used for both macro and micro economic analysis. If more investors are searching for stocks generally, thats probably a good time to buy the broad market indexes. If investors are searching for a particular consumer product , that might presage future strong earnings from that company. If investors are searching for how to buy stocks of a particular industry or company, that is a great sign that a surge of buying is coming.
Investors searching for uranium stocks.
The uranium sector has been out of favor for a long time. Few investors have even considered investing in uranium stocks. Many market participants might not even be aware of the uranium sector, or the history of the market. There is also a group of people who have bad memories of the last decade of bear market conditions for uranium. Before the uranium bull market can return, investors need to become seriously interested in buying uranium stocks again. Part of the goal of this site is to help investors get ahead of this trend.
With this in mind, recently we took a look at searches for uranium stocks. Here was the result:
As this chart shows, there has been a recent surge in investor interest for uranium stocks. There is a tall learning curve. Many will just take a while to complete their research. Others might find it too complicated. However, those that do their research will uncover the growing supply demand imbalance that is likely to lead to riches for many investors.
This rekindling of investor interest bodes well for future returns for uranium investments. Could the bull market in uranium stocks be about to start at last?