The Same 500 Posts Set the Story Markets Trade On
One shared feed picks the day's most entertaining story, and investors trade and fund startups off what they see.
Invest Like the Best with Patrick O'Shaughnessy · Everything in Capital Markets is Downstream of AlgorithmsStock prices and startup funding now start with the same morning read, about 500 posts selected by software for hundreds of millions of people.
The description comes from an investor who spends his time with startup founders and the funds that back them, speaking with fellow investor Patrick O'Shaughnessy. The investor calls X "the global newspaper" and a "source of truth almost for the whole world." Thirty years ago people discussed the latest Wall Street Journal article, he says. Now they discuss the latest post.
The reason everyone sees the same thing, he argues, is what he calls the uni feed. Each day, the system serves roughly the same 500 posts to hundreds of millions of daily users. Most readers never post, so the audience of quiet readers is far larger than the group of writers, and many of the most important people in capital markets, politics, and technology read throughout the day.
Distribution is open in a way that surprises newcomers. A new account can publish one strong post and, in his words, "it'll display you in front of 500 million people." Reactions add weight, because readers can see influential accounts respond, and each response makes the original post look more worth reading.
What spreads is what amuses. Readers may say they come to learn, but in his account they come to be entertained, and recommendation software favors entertaining material. So the story that settles over the market is often not a long studied argument but a vivid post that is engaging and close enough to repeat.
The investor argues that people underestimate how much of that daily story becomes action. In his account, policy, venture rounds, and new businesses are increasingly formed on the timeline. Asked where he sees value as an investor, he suggests that the small number of active buyers and sellers trade based on narratives chosen for them. His understanding, as he puts it, is that automated recommendation systems on Twitter and YouTube select which posts get shown, and the people who see them then set prices off those stories.
His word for coping with that world is "timeline native," meaning an organization that watches the feed closely and responds in ways that then change the feed. He presents it as perhaps another filter for which firms keep up.
Questions people ask
What is X and why does its feed matter more than other social feeds?
X, formerly called Twitter, is a social network where people post short messages, links, and video, and software picks a For You list for each user. Because many executives, officials, journalists, and investors read and post there, a widely shared post can quickly reach group chats, newsrooms, and trading desks.
How can a few posts move a stock price?
Prices are set by the last few buyers and sellers, not by an average of all holders. If a vivid narrative changes what those active traders expect about growth or risk, their orders can move a stock even when most shareholders saw nothing.
Why would venture funding follow the feed so closely?
The investor describes venture rounds and new businesses as forming on the timeline. Since startup value rests on beliefs about the future more than current sales, a shared narrative can lead many firms to look at the same kind of company at the same time.