Deriving wisdom from virtual investing communities: an alternative strategy to stock recommendations

Rahul Kumar*, Shubhadeep Mukherjee, Bipul Kumar, Pradip Kumar Bala

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Purpose: Colossal information is available in cyberspace from a variety of sources such as blogs, reviews, posts and feedback. The mentioned sources have helped in improving various business processes from product development to stock market development. This paper aims to transform this wealth of information in the online medium to economic wealth. Earlier approaches to investment decision-making are dominated by the analyst's recommendations. However, their credibility has been questioned for herding behavior, conflict of interest and favoring underwriter's firms. This study assumes that members of the online crowd who have been reliable, profitable and knowledgeable in the recent past will continue to be so soon. Design/methodology/approach: The authors identify credible members as experts using multi-criteria decision-making tools. In this work, an alternative actionable investment strategy is proposed and demonstrated through a mock-up. The experimental prototype is divided into two phases: expert selection and investment. Findings: The created portfolio is comparable and even profitable than several major global stock indices. Practical implications: This work aims to benefit individual investors, investment managers and market onlookers. Originality/value: This paper takes into account factors: the accuracy and trustworthiness of the sources of stock market recommendations. Earlier work in the area has focused solely intelligence of the analyst for the stock recommendation. To the best of the authors’ knowledge, this is the first time that the combined intelligence of the virtual investment communities has been considered to make stock market recommendations.

Original languageEnglish
Pages (from-to)668-688
Number of pages21
JournalJournal of Modelling in Management
Issue number2
Early online date14 Sept 2020
Publication statusPublished - 25 May 2021


  • Business analytics
  • Investment management
  • Multi-criteria decision-making
  • Multicriteria programming
  • Operations research
  • Stock recommendation
  • User-generated content
  • Virtual investing communities


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