Then I came across this great article that points out the potential for fraud in social networks and the effect on trading. Awesome article! We often forget how many people on twitter are not people at all, but companies, PR firms, criminals and bots. Sentiment on Twitter can be and is managed in some cases.
This is a bad trading idea that is a great marketing idea. People will invest their money, and they will well compensate the administrators of the hedge funds as they lose money. I am just a small voice in the social media world drowned out by other sentiment. Besides there will never be an internet bust, derivatives are good for pension funds, housing will never collapse and yes Virginia there is a Santa Claus.