IRM & Stock Market

Kirk Williams

CIS 450

November 4, 2003

On the Menu Today…

Integration of IRM and the US Stock Market

We are in the transition from a conventional economy to a knowledge based economy.

On the Menu Today…

Stock Market Information Resource Management Correlation between the Stock Market

and Information Resource Management Stock Market & Information Resources Integration of IRM and Stock Market IRM, Stock Market, and E-Commerce

What is the Stock Market?

Marketplace for buying and selling securities Two types of Stock Markets in US:

1. Securities Exchangesa. NYSE

b. American Stock Exchange

c. Midwest Stock Exchange

d. Pacific Stock Exchange

e. Philadelphia Stock Exchange

2. OTC1. NASDAQ

What is Information Resource Management?

Information Resource Management is an emerging discipline that helps managers asses and exploit their information assets for business development. It draws on the techniques of Information Science (libraries) and information systems (IT related)

Building a Knowledge Management Infrastructure by Dr. Guy-Alain Amoussou, 2003

Goals of Information Resource Management

The goal of IRM is to manage knowledge to support strategic business objectives.

Manage resources such as hardware, software, telecommunications, and databases

Reduce inefficiency & paperwork

Importance of Information Resource Management

In this global, knowledge-based economy, corporate success depends on managing information, transforming it into explicit knowledge, and capitalizing off of it

Utilize all components from IT and IS to support business processes

What is Information Resource Management?

Apply management techniques to Information on an organizational level.

Policies, standards, processes for managing the organization’s data, information, and knowledge as strategic business resource.

So…

What is the correlation between the Stock Market and Information Resource Management?

Let’s find out!!

Stock Market & Information Resources

Telecommunication Data Management Mobile Data Mining Software Hardware

Telecommunication

Traditional stock exchanges are centralized. The exchange is located in a single physical place, and all data (both market and trades) flow through a single system. The centralized system is responsible for transaction reporting and exchanging assets. Electronic exchanges, like the NASDAQ, allow remotely located traders to connect with the centralized system.An Internet Multicast System for the Stock Market by N. F. MAXEMCHUK and D. H. SHUR, 2001.

Telecommunication:

Multiple Data Sequences Dedicated Access Lines & Private

Networks High Bandwidth Requirement Network Engineering with primary goal of

preventing data loss

Telecommunication Issues:

Spoofing Denial of service Authorized service for transmission and

reception Encryption Security

Data Management

Stock Markets and brokers require real-time data access and is the ultimate in data management.

Brokers deal with the public over public and private networks

Public portfolio access can be interactive, customizable, and dynamic

IRM Data Management Research

Stock market / data management research is improving IRM processes

IRM Data Management Research

Clustering of data sets with similar attributes using Euclidean mathematics.

Clustering is perhaps the most frequently used data mining algorithm, being useful in it’s own right as an exploratory technique, and also as a subroutine in more complex data mining algorithms such as rule discovery, indexing, summarization, anomaly detection, and classification.

Data streams II: Clustering of streaming time series is meaningless by Jessica Lin, Eamonn Keogh, Wagner Truppel,2003.

Mobile Data Mining

The emergence of powerful mobile devices with reasonable computing and storage capacity is ushering an era of advanced data and computationally intensive mobile applications. Monitoring and mining time-critical data streams in a ubiquitous fashion is one such possibility. Financial data monitoring, process control, regulation compliance, and security applications are some possible domains where such ubiquitous [data] mining is very appealing.

Contributed articles on online, interactive, and anytime data mining: MobiMine: monitoring the stock market from a PDA by Hillol Kargupta, Byung-Hoon Park, Sweta Pittie, Lei Liu, Deepali

Kushraj, Kakali Sarkar, 2002

Mobile Data Mining

Stock Market IRM is not a traditional client-server model

Efficiently represent and communicate the data mining objects over wireless networks

Changing Human Computer Interaction for mobile devices

Minimal power/CPU consumption for compact applications

Again, Security.

Mobile Data Mining

The graphical techniques for designing interfaces on desktop systems do not apply well to handheld devices. Screen resources are limited; often screens are black and white to reduce cost and power consumption. Memory and processing power are much reduced from desktop systems.

Overcoming the Lack of Screen Space on Mobile Computers by Stephen Brewster, 2002

Mobile Data Integrity

Fair exchange protocols establish fairness and ensure that both participants can engage in the exchange without the risk of suffering a disadvantage (e.g., losing their money without receiving anything for it). In general, fair exchange protocols require the continuous availability of an external trusted third party (TTP), a dedicated site which is trusted by both participants. Implementations of TTPs for fair exchange have been proposed to be based on carefully secured Internet hosts in order to establish trust.

Supporting fair exchange in mobile environments by Holger Vogt, Felix C. Gärtner, Henning Pagnia, 2003.

Software

Stock Market IRM are web-based systems What is the language widely used to

implement this? XML ensures data structure in data

streams

Hardware

Data Warehouses Data quality and data integrity are issues Stock markets have Centralized data

warehouses serving hundreds of thousands of other servers

Distributed systems

Massive amounts of Data Archiving across multiple systems

Data integrity is an issue in any distributed system Source Data Analysis

Database Structure doesn’t always match contents Thorough data analysis

Epice

The point is, ladies and gentleman, is that greed -- for lack of a better word -- is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind. And Greed -- you mark my words -- will not only save Teldar Paper but that other malfunctioning corporation called the USA.Wall Street,1985

Integration of IRM and Stock Market

Stock Exchanges and IRM Stock Market Oversight and IRM Effects of IRM on stock market investing

Stock Exchanges and IRM

The Stock Market’s relationship with IRM is one that entails finance, economics, AI, psychology, and mathematics

Stock Market Oversight and IRM

Securities and Exchange Commission The primary mission of the U.S. Securities and Exchange

Commission (SEC) is to protect investors and maintain the integrity of the securities markets. As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, these goals are more compelling than ever.

http://www.sec.gov/about/whatwedo.shtml, 2003

Edgar

Electronic Data Gathering, Analysis, and Retrieval system

Historical 10-K and 10-Q reports Millions of document transactions per

monthhttp://www.sec.gov/edgar/aboutedgar.htm, 2003

Effect of IRM on Stock Market

Overconfident investors overreact and under react

This causes fluctuations in the stock market

Effects of IT and IRM on the Stock Market

The ubiquity of online trading services allows individuals to trade without the need to consult a human broker. Also, financial intermediaries and portals have emerged offering market information and trading tips. This information rich environment enhances the cumulative and the individual knowledge of traders, thereby making the market more informed and rational. However, the availability of online trading avenues also introduces a high number of uninformed traders into the systems, thus introducing irrationality into the market.

Is more information better? The effect of traders' irrational behavior on an artificial stock market by Wei T. Yue, Alok R. Chaturvedi, Shailendra Mehta, 2000

Benefits of IRM in publicly traded corporations

Productivity paradox Companies that institute IRM increase their

value and their stock price

Firms that are high IT users are also more likely to adopt work practices that involve a cluster of organizational characteristics, including greater use of teams and broader decision authority.

Intangible Assets: How the interaction of Computers and Organizational Structure Affects Stock Market Valuations, Erik Brynjolfsson, Lorin M. Hitt, Shinkyu Yang, 1998

Corporate IRM Implementation

Wal-Mart Amazon FedEx Outsourcing IRM experts

IRM, Stock Market, and E-Commerce

Rise and Fall of the Dot Com E-Investing Automated Consulting Stock Market Simulation

E-Commerce

Did eTrade cause the burst the eBubble? DotCom: venture capitalists put up cash

and that helps a company go to a bank to get backed to go public. Banks and venture capitalists hype the stock, public increasingly market-driven so buys stocks in these worthless companies

E-Investing

Implementation of IRM / stock market front-end is web based.

Traditional brokers like Price Waterhouse have been forced into e-commerce to survive

Day Trading on the Web

Day Trading on the Web Dynamic, Real-time stock quotes and

transactions Use your Palm compatible device, WAP

enabled cell phone or Pocket PC to place orders for stocks, get real-time stock quotes and account balances, and check order status and transaction history.

ETrade

www.etrade.com

Scottrade

Automated Consulting

Forecasting Maximize returns, minimize risk Predictive Modeling: statistical techniques,

neural networks, genetic algorithms

Automated Consulting

Stock market systems are difficult to model Piecewise Normalization of stock market indices

Indexing time sequences with Fourier Transform Designing algorithms for stock market indices

based on historical data is NP-hard Discrepancy between the efficient market

hypothesis and empirical evidence

Stock Market Simulation

IRM Research Stock Market Game Program (

www.smgww.org) Virtual Stock Exchange

(game.marketwatch.com)

E-Information

So if IRM is so good on the web, how did places like Enron defraud their workers from 401K benefits?

That’s accounting. This is IRM.

IRM & Stock Market

Today we saw how the Stock Market and IRM coexist and support one another.

Bibliography

Amoussou, Guy-Alain Building a Knowledge Management Infrastructure. September 4, 2003Brewster, Stephen. Overcoming the Lack of Screen Space on Mobile Computers.

Personal and Ubiquitous Computing, Volume 6 Issue 3: January 2002Brynjolfsson, Erik. Hitt, Lorin M. Yang, Shinkyu. Intangible Assets: How the interaction of Computers and

Organizational Structure Affects Stock Market Valuations. Proceedings of the international conference on Information systems. December 1998

 http://www.sec.gov/about/whatwedo.shtml. 2003 http://www.sec.gov/edgar/aboutedgar.htm. 2003Kargupta, Hillol. Park, Byung-Hoon. Pittie, Sweta. Liu, Lei. Kushraj, Deepali. Kakali Sarkar. Contributed

articles on online, interactive, and anytime data mining: MobiMine: monitoring the stock market from a PDA. ACM SIGKDD Explorations Newsletter. Volume 3 Issue 2: January 2002

 Lin, Jessica. Keogh, Eamonn. Truppel, Wagner. Data streams II: Clustering of streaming time series is meaningless. Proceedings of the 8th ACM SIGMOD workshop on Research issues in data mining and knowledge discovery: June 2003.

 Maxemchuk, N. F. Shur, D. H. An Internet Multicast System for the Stock Market. ACM Transactions on Computer Systems (TOCS). Volume 19 Issue 3: August 2001

 Vogt, Holger. Gärtner Felix C. Pagnia Henning. Supporting fair exchange in mobile environments. Mobile Networks and Applications. Volume 8 Issue 2: April 2003.

 Yue, Wei T. Chaturvedi,Alok R. Mehta , Shailendra. Is more information better? The effect of traders' irrational behavior on an artificial stock market. Proceedings of the twenty first international conference on Information systems. December 2000.