Technology Review: Blogs: Guest Blog: AI That Picks Stocks Better Than the Pros
http://www.technologyreview.com/blog/guest/25308/

From MIT. Information on Emerging Technologies & impact on business & society

academic study claims to use text in news to automate trading and beat Wall Street. Tested on 5 weeks + bizarre informative features --> sounds fishy

The ability to predict the stock market is, as any Wall Street quantitative trader (or quant) will tell you, a license to print money. So it should be of no small interest to anyone who likes money that a new system that works in a radically different way than previous automated trading schemes appears to be able to beat Wall Street's best quantitative mutual funds at their own game.

It's called the Arizona Financial Text system, or AZFinText, and it works by ingesting large quantities of financial news stories (in initial tests, from Yahoo Finance) along with minute-by-minute stock price data, and then using the former to figure out how to predict the latter. Then it buys, or shorts, every stock it believes will move more than 1% of its current price in the next 20 minutes - and it never holds a stock for longer.