Washington, July 19 (ANI): When the stock market is overheating, the language used by financial analysts and reporters becomes increasingly similar, according to a new study.
After examining 18,000 online articles published by the Financial Times, The New York Times, and the BBC, computer scientists have discovered that the verbs and nouns used by financial commentators at the time converge in a 'herd-like' fashion leading to a stock market bubble.
Immediately afterwards, the language disperses, they found.
Mark Keane, Chair of Computer Science in University College Dublin, and Aaron Gerow, an MSc candidate in computer science, used a computer model to plot distributions of words from financial articles published between 2006 and 2010.
The findings showed that the trends in the use of words by financial journalists correlate closely with changes in the leading stock indices.
"Our study shows that reporters converge on the same language - 'stocks rose again', 'scaled new heights', or 'soared' - as their commentaries became more uniformly positive in the lead up to the 2007 crash."
"They also appear to refer to a smaller-than-usual set of market events - presumably because of an increased fixation on a small number of rapidly rising stocks," explains Professor Keane.
The study was presented at the International Joint Conference on Artificial Intelligence, Barcelona, Spain. (ANI)
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