Facebook Inc (FB) and Twitter Inc (TWTR)’s Big Data Is Prone To Oversimplification: Tim Worstall

Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) provide us with a promise to provide enough data on individuals that we can make extremely precise guesses as to their likes, dislikes, and even actions. However, according to Tim Worstall, they will only be guesses. In his article on Forbes, Warstall used a research study to highlight the pitfalls of the big data that has almost become synonymous with the likes of Facebook and Twitter.

The article sheds light on the limitations of statistics by referring to a very interesting event in history, the outcome of the presidential elections of 1948, when Chicago Tribune published the headlines “Dewey Defeats Truman”, and the actual outcome was quite the opposite. The newspaper’s erroneous information was based on a telephone survey.

While sample size might be one issue that affects the Big Data gleaned from Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR), it is certainly not the only difficulty encountered in the analysis of predicting behaviour. The authenticity of the information that the subscribers expose is another concern. Warstall pointed out that there is often a considerable gap between our actions and what we say.

To this end, he gave the example of a nearly 50% divorce rate. People solemnly promise to stick together through the thick and thin with every intention to do so, but alas only a few really end up sticking to their word. Data from Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) would lie much lower on the ‘my word is my bond’ continuum.

Hence, using data from these social media platforms to draft public policy, thinking it represents the will of the people is bound to be fraught with controversies.

Warstall is not against using this data to highlight trends, but he is of the opinion that special care should be taken when interpreting the results from data gleaned by Facebook Inc (NASDAQ:FB), Twitter Inc (NYSE:TWTR) and the likes.

Free Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.