Wisdom of the Crowds or Ignorance of the Masses? A data-driven guide to WSB
Valentina Semenova, Dragos Gorduza, William Wildi, Xiaowen Dong,, Stefan Zohren

TL;DR
This paper analyzes the WallStreetBets forum using topic modeling and network analysis to understand its influence on asset price fluctuations, revealing causal links and generating trade signals.
Contribution
It introduces a comprehensive data-driven approach combining topic and network analysis to study WSB's influence on markets, including new datasets and interactive tools.
Findings
WSB discussion topics show persistent and sporadic patterns over time.
Forum activity Granger-causes asset returns, especially meme stocks.
Trade signals derived from forum dynamics have predictive power.
Abstract
A trite yet fundamental question in economics is: What causes large asset price fluctuations? A tenfold rise in the price of GameStop equity, between the 22nd and 28th of January 2021, demonstrated that herding behaviour among retail investors is an important contributing factor. This paper presents a data-driven guide to the forum that started the hype -- WallStreetBets (WSB). Our initial experiments decompose the forum using a large language topic model and network tools. The topic model describes the evolution of the forum over time and shows the persistence of certain topics (such as the market / S\&P500 discussion), and the sporadic interest in others, such as COVID or crude oil. Network analysis allows us to decompose the landscape of retail investors into clusters based on their posting and discussion habits; several large, correlated asset discussion clusters emerge, surrounded…
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsComplex Systems and Time Series Analysis · scientometrics and bibliometrics research · Stock Market Forecasting Methods
MethodsAttention Is All You Need · RAdam · Softmax · Graph Self-Attention · Hyperboloid Embeddings
