Monday, December 15, 2008

BI Financial Markets with Data Mining

I have been a little absent due to the preparation of my Master's thesis in Decision Support Systems (DSS or BI), and it’s with a great pleasure that I share with you the theme that I will investigate during next year. This research project will be focused in the behaviour of financial markets through the use of Data Mining techniques. It’ll combine the technology through the creation of ETL processes, a Data Mart and Data Mining techniques, with the financial markets knowledge.

And the reasons that led me to choose this theme, are without doubt, the fascination for the mysterious world of financial markets, the fascination by data mining techniques (that are for me the true intelligence of a BI solution) and the need to create a DSS that enable the understand the impact of movements in financial markets in the budget of each one of us
Many of us invest money in the stock market through mutual funds, pension savings plans, through the brokerage firms and others ... but do we know what they are doing with our money? Could we trust on institutions that are investing our money? I think it's time to be ourselves the owners of our money and define what we want to do with it.

We have to know the right moment to subscribe, transfer or redeem financial products offered by various financial institutions, or even whether we should invest ourselves (in a long term and in a diversified way, we have high probability of good profits) in financial markets or put the money from under our beds.

And despite the banking sector is the most regulated in the world, still occurs several big frauds that could put in risk the survival of a company or even put in risk our savings... after several scandals in Portugal, France (Société General), and United States of America, today a new one…

Bernard Madoff, the former Nasdaq chairman and founder and president of a New York firm that invested funds for wealthy individuals, hedge funds and other institutions, was charged with operating what he told employees was a long-running $50 billion Ponzi scheme in what may be one of the largest frauds in history. Bernard Madoff was arrested today at 8:30 a.m… and some of his clients are BBVA, o HSBC, o Royal Bank of Scotland, Credit Agricole and Banesto.

How can a former chairman at the world's largest stock market with 20,000 listed companies have entered into schemes of fraud? Are these same markets efficient? There is much speculation and a lot of confidential information (inside trading) that is used to always generate profits for the same persons in the markets...

Aren’t you tired of being a spectator? I will use my arms (Data Mining) to understand better the financial markets and react to it with logic and not following the panic or the movements of the masses…

I never invested directly in stocks because I respect the stock market, however I was investing for few years in mutual funds that I earned about 20%... but I had the happy idea of leaving the market when I heard on the radio some advertising to subscribe mutual funds... which led me to think that people were entering into the market by “marketing” rather than the real value of companies... this one lesson that I learned by myself…


Ella Maschiach said...

Hi Pedro,

Interesting post, but I think that the current market has shown that it's not necessarily logical thinking that drives it. Sometimes people's emotions and fears have a greater impact. Still, good luck with your thesis – I look forward to hearing more about it.

All the best,

Pedro said...

Hi Ella,
Thanks for your visit!!!

"Sometimes people's emotions and fears have a greater impact"

Sometimes? I think Almost the times... and in some cases because high percentage of people are investing in stock martkets without any knowledge...

Thanks again! :-)

Anonymous said...

Hi Pedro,
I am studying software engineering and plan to pursue further studies in Finance or BI. I also have to present a seminar for college for which I have chosen BI for Finance as a topic. I would be glad if you could help me out a little!

Pedro said...

thanks for your visit!
Let me know how can I help you!


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