Last week my friend asked me to watch a new Netflix show that she had glowing reviews about.

The show is Bridgerton, a romance set in the Regency era.

Now, this genre isn’t exactly my cup of tea. So, unsurprisingly, I wasn’t a fan of the show.

When I told my friend how much I hated it, she responded with, “At least TikTok understands me.”

On TikTok, a popular social media platform, she had made connections between the show and certain novels and movies.

And TikTok showed her videos from users who had the exact same opinion as her.

Even her most niche and specific ideas about the show were reflected on TikTok.

It was as impressive as it was creepy. So how did the app manage to do this?

Well, as TikTok users often put it, it’s all thanks to “the algorithm.”

TikTok Can Predict Exactly What You Want

When you first join TikTok and start scrolling through the videos, they seem random and uninteresting.

This is usually when the TikTok veterans tell you to just keep scrolling and trust the algorithm.

After a few days the app’s “For You” page starts to live up to its name.

It only shows curated content that’s unique to you.

It doesn’t matter if you’re into extremely specific things, like French-Korean fusion food or chimps that were raised by big cats. TikTok has videos for you.

The algorithm that users refer to is a machine learning tool called a recommendation engine.

When you first use the app, it shows you a set of eight popular videos — each related to a different topic or trend.

The algorithm then gauges your engagement and interaction with each video:

  • Did you share it?
  • Did you rewatch it?
  • Did you follow the content creator?
  • Did you save it to your favorites?
  • How quickly did you scroll past it?

These are just a few data points the algorithm takes into consideration.

Based on this data, it comes up with another set of eight videos.

Over time this process predicts exactly the videos you want to see next.

And if your mood changes as you scroll, the algorithm can shift its predictions to match it.

Machine Learning Is Incredibly Effective

This algorithm is responsible for TikTok’s monthly active user count rising above 1 billion so rapidly.

Tik Toks Monthly Active users

(Source: Business of Apps.)

Now, TikTok isn’t the only one that uses machine learning.

All social media apps use some type of algorithm to keep you engaged on their platforms.

The global machine learning market is expected to grow 9X over the next seven years.

That’s because machine learning applications go beyond just social media apps.

If these algorithms are fed the right kinds of data, they can predict just about anything.

This makes it applicable to most fields, including investing.

This is exactly what Ian King and Steve Fernandez have been working on.

They managed to develop a strategy based on machine learning that can predict exactly when a stock is about to go up.

To learn more about this approach, check out Ian’s new presentation.

Regards,

text

Andrew Prince

Research Analyst, Strategic Fortunes

Morning Movers

From open till noon Eastern time.

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