IRM

1
IRM Stock Market

• Kirk Williams
• CIS 450
• November 4, 2003

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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.

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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

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What is the Stock Market?

• Marketplace for buying and selling securities
• Two types of Stock Markets in US
• Securities Exchanges
• NYSE
• American Stock Exchange
• Midwest Stock Exchange
• Pacific Stock Exchange
• Philadelphia Stock Exchange
• OTC
• NASDAQ

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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

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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

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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

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What is Information Resource Management?

• Apply management techniques to Information on an
  organizational level.
• Policies, standards, processes for managing the
  organizations data, information, and knowledge
  as strategic business resource.

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So

• What is the correlation between the Stock Market
  and Information Resource Management?
• Lets find out!!

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Stock Market Information Resources

• Telecommunication
• Data Management
• Mobile Data Mining
• Software
• Hardware

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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.

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Telecommunication

• Multiple Data Sequences
• Dedicated Access Lines Private Networks
• High Bandwidth Requirement
• Network Engineering with primary goal of
  preventing data loss

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Telecommunication Issues

• Spoofing
• Denial of service
• Authorized service for transmission and reception
• Encryption
• Security

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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

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IRM Data Management Research

• Stock market / data management research is
  improving IRM processes

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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 its 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.

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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

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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.

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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

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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.

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Software

• Stock Market IRM are web-based systems
• What is the language widely used to implement
  this?
• XML ensures data structure in data streams

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Hardware

• Data Warehouses
• Data quality and data integrity are issues
• Stock markets have Centralized data warehouses
  serving hundreds of thousands of other servers

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Distributed systems

• Massive amounts of Data Archiving across multiple
  systems
• Data integrity is an issue in any distributed
  system
• Source Data Analysis
• Database Structure doesnt always match contents
• Thorough data analysis

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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

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Integration of IRM and Stock Market

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

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Stock Exchanges and IRM

• The Stock Markets relationship with IRM is one
  that entails finance, economics, AI, psychology,
  and mathematics

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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

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Edgar

• Electronic Data Gathering, Analysis, and
  Retrieval system
• Historical 10-K and 10-Q reports
• Millions of document transactions per month
• http//www.sec.gov/edgar/aboutedgar.htm, 2003

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Effect of IRM on Stock Market

• Overconfident investors overreact and under react
• This causes fluctuations in the stock market

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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

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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

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Corporate IRM Implementation

• Wal-Mart
• Amazon
• FedEx
• Outsourcing IRM experts

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IRM, Stock Market, and E-Commerce

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

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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

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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

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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.

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ETrade
www.etrade.com
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Scottrade
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Automated Consulting

• Forecasting
• Maximize returns, minimize risk
• Predictive Modeling statistical techniques,
  neural networks, genetic algorithms

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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

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Stock Market Simulation

• IRM Research
• Stock Market Game Program (www.smgww.org)
• Virtual Stock Exchange (game.marketwatch.com)

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E-Information

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

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IRM Stock Market

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

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Bibliography

• Amoussou, Guy-Alain Building a Knowledge
  Management Infrastructure. September 4, 2003
• Brewster, Stephen. Overcoming the Lack of Screen
  Space on Mobile Computers.
• Personal and Ubiquitous Computing, Volume 6
  Issue 3 January 2002
• Brynjolfsson, 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. 2003
• Kargupta, 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.