A fascinating study on using Facebook to evaluate job candidates is being published in the Journal of Applied Social Psychology that demonstrates that a rule-based analysis of a candidates Facebook page can be a better screener for job applicants than typical interviews, resumes, and questionnaires.

One of the head researchers is Donald Kluemper, a management professor at Northern Illinois University.  “I think one of the differences is that you change the frame of reference,” Kluemper said. “You’re asking the rater, ‘Is this person a hard worker?’ On a personality test, the employee would be asked, ‘How hard a worker are you?’ One of the criticisms of self-reporting personality testing is that it can be faked. On a Facebook page, that’s a lot harder to do.”

At AlphaGenius we would wholehearted agree with this logical systematic technique for interviewing.  Many “expert” interviewers would claim you need to look at your candidate in the eye to evaluate what kind of worker she will be.  I have hired dozens of people over the years, and I can attest that very little can be gleaned from the formal interview to predict that candidates success in that position.  Interviewing, like standardized testing, is a skill that can be trained for.  There are good interviewers and bad interviewers.  Much like standardized testing is only a marginal measure of how someone will perform in college, good interviewing is only a marginal measure of how a candidate will perform over a career.  The resume and interview have had decades (centuries?) to evolve into a very well understood and gameable process.  The best interviewers get jobs, not the best applicants.

Using the social Internet for interviewing is simmilar in concept to AlphaGenius using the social Internet for  building investment models.  They both share the same distinct set of advantages.

1.  The respondents don’t know they are being measured.  They know they have voiced an opinion online, but they don’t know you are using it for interviewing/investing.  Therefor, the respondents are very genuine in their response as opposed to a contrived interview or survey.  It eliminates biases, gaming, pride and shame inherent in interviews and surveys.
2.  There is a lot of data.  Facebook profiles have much more data than can be gleamed from a resume and an hour interview.  Twitter and
blogs have a ton of data for investing.
3.  Not a lot of people are doing it.  Interviewing and investing differently from the pack both have their advantages.

This is just further proof that data from the social Internet will fundamentally change the way human decision making will evolve.  Many areas of expertise that were previously believed to be the sole realm of human can be replaced by rules and computers.  The social Internet is providing a new, unique data-set to guide and give advantages in human to human evaluations: job interviewers, psychologists, investors.  I am looking forward to a future study that shows certain peoples’ psychological disorders can be better evaluated from their Facebook profile than a psychiatric session.

If you want a headache, read the comments in an article like this.  Note that I am not knocking the article, but the bantering of the commenters.

Apple the Next Trillion Dollar Company

More fanboy arguing than a Gizmodo blog post.

What I believe at this point is that you cannot know the future of the world well enough to predict future earnings of a company past a few months.   The researcher Phillip Tetlock performed a seminal twenty-year study in which 284 experts in many fields, from professors to journalists, and with many opinions, from Marxists to free-marketeers, were asked to make 28,000 predictions about the future, finding that they were only slightly more accurate than chance, and worse than basic computer algorithms.

This is classic Behavioral Economics to have various “logical” commenters vigorously fight over predictions of an unknowable nature. Behavioral Economists would say, they made an instinctive conclusion about the stock/company, then used their logical mind to back-in and justify their instinctive feelings.  Humans often confuse intuition for rationality.  Humans often feel like they have thought long and hard about a decision when they are really just reinforcing the conclusion they intuitively came to.  You will see the same behavior whenever you see two sports fanatics with differing opinions on the same upcoming game.  They may as well argue over what the weather will be in 365 days.

Predicting earnings of companies far into the future is a crazy waste of human energy.  For further reading, check out what Daniel Kahneman has to say on the subject of flawed intuition: What was I thinking?