Investor sentiment and stock returns: Wisdom of crowds or power of words? Evidence from Seeking Alpha and Wall Street Journal

Ioanna Lachana and David Schröder

Journal of Financial Markets, 2025, vol. 74, issue C

Abstract: In light of changes in the media landscape from traditional print towards social media, in this study we compare the ability of investor sentiment measures obtained from various media sources to predict short-term market returns. We show that investor sentiment extracted from the social media platform Seeking Alpha is better in predicting market returns than investor sentiment obtained from the Wall Street Journal, a traditional print medium. Seeking Alpha is more suitable for the extraction of investor sentiment due to the richer language and timeliness of online media.

Keywords: Investor sentiment; Text mining; Financial markets; Traditional media; Social media; Stock market returns (search for similar items in EconPapers)
JEL-codes: D53 G12 G41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finmar:v:74:y:2025:i:c:s1386418125000102

DOI: 10.1016/j.finmar.2025.100970

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