The Matt Drudge market indicator. Can the Drudge Report Headlines affect your investment portfolio?

Fortune ^ | 07/11/2011 | Duff McDonald

[SeekAndFind]

Matt Drudge has been called many things but, unless I am mistaken, a stock market seer is not one of them. On Wednesday, someone did just that. Or, to be more specific, someone suggested that the Drudge Report is a contrary indicator. Same difference, really.

Drudge made his name covering Monica and the blue dress, and continues to be a player in the political conversation. Anybody familiar with his site knows there's one big link at the top of it, and when he links, traffic follows. The enduring nature of his influence is awe-inspiring.

And that's all he does, if you can believe it. The man has made a fortune, and continues to do so, one link at a time. He is the envy of all bloggers. In 2007, I tried to put a value on his operation, but in retrospect—we concluded $10 million to $20 million at the time—it seems absurdly low. Sorry for underestimating you, Matt.

What Drudge does not do with any regularity is post finance-related links. And here's why that gets interesting. Paul Hickey and Justin Walters, the ridiculously prolific quantitative researchers behind Bespoke Investment Group, published a piece of research on Wednesday called The Drudge Headline Indicator. The gist of it is this: you might be able to use Drudge in your investment strategy.

According to the Bespoke report: With 30 million daily views, Drudge is arguably the most widely followed news source on the web.

[Dixie Yooper]

I find that the financial headlines and few links on Drudge Report to be much more accurate than the Obama-bias crap that CNN-Money uses as headlines and stories. I would never base any investment stratgies on either.

[jimbo123]

Drudge told his readers on June 1 of this year that, We Are on the Verge of a Great Great Depression. "You don't tend to see that at the top of a market," says Hickey. To invert a common phrase, then: Sellers beware. If Drudge is to be believed, we're in store for one hell of a rally.

The democrats are Wall Street are in a panic. The layoffs at Goldman and the rest are starting in a couple of weeks and they're trying to tell people a rally is on the way because of Drudge's headlines? Thank goodness Obama didn't give them Cap & Trade. It's reckoning time for the democrats on Wall Street.

[mo]

the Democrat tentacles reach deep....trying to spin the un-spinnable, relieve the natural consequences of their playing fantasy with our lives and finances, and think that 30 million viewers of a web-page can turn around the implication of 10’s of trillions of debt and financial profligacy, rape and mismanagement.

Liberalism is truly a mental illness.

[MeneMeneTekelUpharsin]

Drudge tends to print the truth as opposed to what many want to hear, big players behind the scenes tell him to or what he thinks will make him money at everyone else’s expense. Beats reading the MSM.

[DCBryan1]

Drudge’s headlines mainly effect my ammo buying purchases (i.e. all the recent flash mob stories).