Dave Portnoy’s New ETF Chooses Stocks Based on Social Media Chatter and It’s Poised to Be Huge

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The Dave Portnoy-backed VanEck Vectors Social Sentiment ETF (BUZZ) started trading on the New York Stock Exchange yesterday.

The ETF seeks to track the performance of the 75 large cap U.S. stocks “which exhibit the highest degree of positive investor sentiment and bullish perception based on content aggregated from online sources including social media, news articles, blog posts and other alternative datasets,” according to the fund’s prospectus.

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In a video posted on Twitter earlier this week, Barstool Sports founder Portnoy said that “I got approached by these guys who built an algorithm five years ago. The algorithm was basically designed to scrape the internet, social media to find positive sentiment on stocks. It kind of lingered, it did its thing.”

Portnoy added that then, “COVID happened…The amount of chatter on the internet about stocks exploded.”

The ETF’s stocks include Tesla, Twitter, Facebook, Amazon, Pinterest, Apple, Draftkings, Pfizer, Novavax and Moderna, according to its prospectus.

“Millions of people use social media and other online platforms to express opinions and share ideas–including those related to their stock portfolio. The vast amount of content generated across these platforms contains valuable insights that can help investors gain a potential edge over the broader market,” VanEck says in a blog post.

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“Instead of relying on a smart friend or favorite TV pundit, one can assess millions of diverse opinions to ascertain the mood of investors–potentially even before the market as a whole realizes it. This is one reason why professional money managers have sought to gain an informational edge through market sentiment indicators, driven by social media analytics.”

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In a tweet yesterday, Jim Cramer said that BUZZ “is an ETF that fascinates me; algorithmically chosen; endorsed by someone loved by many: @stoolpresidente .. if people blitz this etf today it will move 75 stocks that the algos say are the most compelling stocks today…”

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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