How hidden data can become an investor’s gold mine

Social media can help people find out about market-moving information before it makes headlines. Predictive software can hint at which tweets will go viral. But another tool is out there for investors and other news junkies to jump on. It finds signals tucked into the bowels of the web.

As David Leinweber wrote on Forbes on Wednesday, at least one company, Selerity, makes it easy to discover information buried online. It’s the sort of program that could prove valuable for investors who want to be first on trades and thereby make big money.

The tool could also be of use to — ahem — journalists who want to be learn about key information as soon as it appears on the internet, so as to deliver big stories before other outlets.

As with many other financial technologies, timing is essential here. Selerity talks about its software in terms of “ultra-low latency.” Announcements on dividends can be served up through an API in real time, the company claims. The company also pushes out data on crude oil in storage, retail sales and other metrics.

Investors like the prospects of Selerity. In February the company announced it had raised $3 million in Series B equity funding, and former Thomson Reuters CEO Tom Glocer was among the backers.

It’s becoming clearer by the day that people want to see new information right away. As we heard at GigaOM’s Structure conference in San Francisco last month, frameworks and backends can help developers easily write programs that contain this ability. Alex Volodarsky, COO of NimbusBase, told me last week he believes not too far in the future people will compare two apps that do basically the same thing and will ditch the one that doesn’t turn up new data in real time.

But without that new data, such applications are no good, which is why Selerity is in a good position.

Feature image courtesy of Flickr user popofatticus.