BI Dissertation – Master degree done!

Finally I got my master degree on Decision Support Systems/ Business Intelligence. It was almost 2 years and half and finally I defended my dissertation yesterday. I want to thank all those people who always encouraged me to “fight” for this and special thanks to my supervised Dr. Orlando Belo (Universidade do Minho – Portugal), Steve Vanstone (Bonds University – Australia) and Dr. Chong (Chinese University of Hong Kong – China). (Check out the previous post I wrote about the dissertation here)

Check below the abstract of my dissertation that I’m thinking to translate to English for sending to all those people around the world that gave me feedback about their works and some support to my dissertation.

Abstract
"In the current economic environment, the value of information is increasingly important in the habits and customs of each citizen. Prices per barrel of oil, Euribor rates, equity indexes, inflation rate, among others, arrive everyday at our homes through the media. Their study is increasingly important, especially by the need to identify their impact on our daily quotidian.

The application of Data Mining (DM) techniques, in an attempt to predict the movement of the stock market, has never been a very well accepted, mainly by economists and the academic world. It is an area of high complexity, and the fact that it involves money, mean that their research, especially successful, is not made public. However, these techniques exist, and are increasingly used not only in financial markets, but also in practically all other activity sectors.

This dissertation begins by making an approach to the complex world of the stock market, in an attempt to demystify it a little. Subsequently, based on investment rules normally applied by practitioners, it’s presented a model of an artificial neural network, which provides in a daily basis, the decision to buy, hold or sell a particular asset, supported by a decision support system to monitor and analyze the evolution of the made decisions."

Keywords: Decision Support Systems, Data Mining, Knowledge Discovery in Data, Business Intelligence, ETL, Data Warehousing

I also added some screenshots of dissertation presentation I made yesterday… if you’ll be curious about the data mining model results, just tell me and I will translate all slides.


I hope you enjoy this. Regards,
Pedro.

MSIAD - Stock Market with Data Mining (BI Thesis)

I was a little absent this month in preparation for my thesis ... I promise to write more often now! Yesterday was my first battle on my dissertation, which I think it was well reached. Naturally, any research in this complex world of stock markets, in this case of applying data mining techniques, requires first understanding the financial world... I tried to demystify the complex stock market world... His movement, the factors that influence decision making, forecasting and the investor that feeds this whole game markets... and it was presented yesterday

After understanding the stock market as I did, I‘ll now focus on the application of Data Mining techniques (initially only with neural networks) and the implementation of a strategy that will be based from all rules made public by some researchers. That is, I will create a decision support system that in addition to track my portfolio of shares, it’ll generate the final output of the day that will be a buy, sell or hold signal.My strategy will assume the loss and also fix a limit on earnings. I do not need to be monitoring the stock market during the day, because I will use Stop Loss functionality in all investments that fire automatically an order of sale if the price of some share will excess my defined limit (applied only if I’m on the market)

In this matter, I'll then begin to examine in more detail the research of Dr. Chong from Chinese University of Hong Kong, that he’s the only economist, investor and researcher I know at the moment and who kindly offered me help and sent me all Articles that he has done. Dr. Chong is in the photo at right. Check his website at :

http://www.cuhk.edu.hk/eco/staff/tlchong/tlchong3.htm

I already have done ETL processes to import historical data from a group of stock in my folder and a Datamart that stores the data in the form of information. It’s time to deepen into practice and return in May for a short presentation to be evaluated again. I assume the risk of this project that it’s very ambitious and attractive to me.

With nothing to lose! Regards!

Pedro

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…