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Fascinating concept I came across on Yahoo (NASDAQ:YHOO) Finance -- Community Sentiment. The site wants to look at increases in message board content to identify when sentiment has shifted. This has the potential to be a very interesting tool -- albeit with a lot of caveats.

click for link to community sentiment

According to Yahoo:

Community Sentiment shows the stock message boards with significant increases in bearish and bullish message board activity in the last 24 hours when compared to the board's 30-day average.

How is this accomplished? Is Yahoo using AJAX to pull keywords off of posts? Is it merely a function of relying on the reported bullish/bearishness of the poster to develop ratings?

This has a lot of potential to be an interesting sentiment tool for individual stocks. But it also is fraught with the potential for abuse.

How easily can this be gamed by touts and scammers? While Yahoo! was asleep at the wheel, the Yahoo Message Boards were essentially rendered unusable by spammers. How long will it be before someone figures out how to "play" this ?


UPDATE: September 9, 2007 9:55am

Marketwatch (appears to be) working with Yahoo!, and is offering this version:


Sources:

MarketPerception

http://www.marketwatch.com/MarketPerception/


Yahoo Finance
http://finance.yahoo.com/newfp

Source: Yahoo! Finance Introduces Community Sentiment