System, method and computer readable medium containing instructions for evaluating and disseminating investor performance information
View Patent ↗An investor's performance is evaluated by utilizing information pertaining to at least one transaction made by the investor, such as an individual or entity, involving at least one investment. This evaluation includes determining a performance score indicative of the investor's performance relative to other investors. The performance score is determined at least in part by considering an average historical performance of the investment, following the transaction. In addition, the performance score is also determined by a historical consistency of the investor's performances with respect to transactions involving the investment, and the number of transactions made by the investor. Then, the performance score of the investor may be compared against the performance scores of other investors. Advantageously, this performance score may be used to produce a ranked list of investors in a particular industry, as well as with investors in different industries.
1. A computer implemented method executed on a processor in communication with a memory and an output device for scoring investors according to an evaluation of the investors' performances relating to at least one transaction made by the investors involving investments associated with the investors, said method comprising the steps of:
generating by the processor a conditional raw score representing investor performance for each of the investors based on prior buy transactions and prior sell transactions occurring during a first period of time of each of the investors stored in the memory;
generating by the processor an adjustment to the conditional raw score of each of the investors based on a number of the prior buy transactions and prior sell transactions of an investor of the investors for which the adjustment is made occurring during the first period of time stored in the memory;
generating by the processor a final raw score for each of the investors indicative of each of the investors' performance based upon said adjustment to said conditional raw score;
classifying by the processor each investor into an industry, and grouping said investors into their respective industry groups;
ordering by the processor said investors in each industry group based on the final raw scores;
dividing by the processor, for each industry group having at least a first predetermined number of investors, said investors into a second predetermined number of sized groups;
ranking by the processor the first and second predetermined sized groups based on the final raw scores of the investors in each group, and assigning a final transaction industry score to each investor in a respective group; and
electronically transmitting by the processor at least one final transaction industry score of the final transaction industry scores assigned to each investor.
2. The method of claim 1 , wherein the investors comprise at least two investors participating in a same industry.
3. The method of claim 1 , further comprising producing a ranked list of investors according to said final transaction industry scores and electronically transmitting said ranked list to the output device.
4. The method of claim 3 , further comprising:
posting said ranked list on a computer system accessible via one or more data communications networks by other remotely located computer systems.
5. The method of claim 1 , further comprising posting or providing access to investor and investment information on a computer system accessible via one or more data communications networks by other remotely located computer systems.
6. The method of claim 1 , further comprising generating an evaluation list by removing at least one of: investors that are not people, investors affiliated with companies having a market capitalization of less than approximately fifty-million dollars, investors that have entered into less than two transactions within approximately ten years of the evaluation, and investors that have no transactions within approximately five years of the evaluation.
7. The method of claim 1 , wherein said investors include at least one of a corporate insider, an individual, a joint venture, a corporation, a trust, a partnership, or other investment entity.
8. The method of claim 1 , wherein the investors are identified based on information from a database containing substantially all entities filing insider documents with the Securities and Exchange Commission.
9. The method of claim 1 , further comprising basing the final raw scores on average historical performances of investments bought or sold in the buy transaction or sell transaction.
10. The method of claim 1 , wherein said step for calculating the final raw score for each investor comprises:
determining a first average return value (ave. return 1 ) and a second average return value (ave. return 2 ) for the at least one transaction, said first and said second average return values corresponding respectively to an average rate of return on the at least one transaction involving the investment for the first period of time (time 1 ) and an average rate of return on the at least one transaction involving the investment for a second period of time (time 2 );
calculating, in absolute terms, a first t-stat value (t-stat 1 ) for said first average return value and a second t-stat value (t-stat 2 ) for said second average return value, said first and second t-stat values calculated by utilizing said first and second average return values, a first standard deviation (SD 1 ) and a second standard deviation (SD 2 ) , a total number of transactions (decisions,) occurring during the first period of time before said evaluating, and a total number of transactions (decisions 2 ) occurring during the second period of time before said evaluating;
calculating a first degree of freedom (DF 1 ) for said first average return value and a second degree of freedom (DF 2 ) for said second average return value;
determining a first probability (prob 1 ) for said first period of time by utilizing said first t-stat value and said first degree of freedom, and a second probability (prob 2 ) for said second period of time by utilizing said second t-stat value and said second degree of freedom;
generating a conditional raw score (cond. raw score) for the investor by utilizing said first and second probabilities;
generating an adjustment to the conditional raw score (adjustment) by utilizing said total number of transactions occurring during the first period of time before said evaluating, and said total number of transactions occurring during to the second period of time before said evaluating; and
generating a raw score (raw score) indicative of said investor's performance by adding said adjustment to said conditional raw score; and
a step for calculating, using a computer, for each investor using said performance scores, a final transaction score indicative of the investor's relative performance with respect to all investors on said evaluation list.
11. The method of claim 10 , wherein if SD 1 =0, then raw score=0 otherwise
t
stat
1
=
ave
.
return
1
(
SD
1
decisions
1
)
wherein if SD 2 =0, then raw score=0 otherwise
t
stat
2
=
ave
.
return
2
(
SD
2
decisions
2
)
;
wherein DF 1 =decisions−1; and wherein DF 2 =decisions 2 −1.
12. The method of claim 10 , wherein said probabilities are determined according to a predetermined look-up table using actual calculated values of:
DF 1 , DF 2 , t-stat 1 , and t-stat 2 , unless: DF 1 >100, in which case DF 1 is set to 100; DF 2 >100, in which case DF 2 is set to 100; t-stat 1 >20, in which case t-stat 1 is set to 20; t-stat 2 >20, in which case t-stat 2 is set to 20; t-stat e <0.01, in which case prob 1 is set to 0; or t-stat 2 <0.01, in which case prob 2 is set to 0.
13. The method of claim 10 , wherein
cond_raw
_score
=
{
1
-
(
.5
+
or
-
prob
1
]
+
[
1
-
(
.5
+
or
-
prob
2
]
2
}
*
100
,
wherein
prob
1
is
subtracted
subtracted from 0.5 if ave. return 1 >0, else prob 1 is added to 0.5; and wherein prob 2 is subtracted from 0.5 if ave. return 2 >0, else prob 2 is added to 0.5.
14. The method of claim 10 , wherein
adjustment
=
(
-
20
)
*
1
decisions
1
+
decisions
2
2
.
15. The method of claim 10 , wherein raw score=adjustment+cond. raw score.
16. The method of claim 1 , further comprising the steps of:
retrieving a list of investors;
generating an evaluation list by removing investors failing to meet predetermined criteria from said list;
calculating, using a computer, a performance score for each investor listed on said evaluation list indicative of the investor's performance by considering an average historical performance of an investment following a transaction by the investor, a historical consistency of the investor's performances with respect to transactions involving the at least one investment, and the number of transactions made by the investor;
calculating, for each investor using said performance scores, a final transaction score indicative of the investor's relative performance with respect to all investors on said evaluation list.
17. A computer implemented method executed on a processor in communication with a memory and an output device for use in producing a ranked list of investors according to an evaluation of the investors' performances relating to at least one transaction made by the investors involving investments associated with the investors, said method comprising the steps of:
retrieving by the processor a list of investors;
generating by the processor an evaluation list by removing investors failing to meet predetermined criteria from said list;
for each investor listed on said evaluation list:
generating by the processor a conditional raw score representing investor performance for the investor based on prior buy transactions and prior sell transactions of the investor occurring during a first period of time stored in the memory;
generating by the processor an adjustment to the conditional raw score (adjustment) by utilizing a total number of prior buy transactions and prior sell transactions stored in memory of the investor occurring during the first period of time; and
generating by the processor a final raw score indicative of said investor's performance by adding said adjustment to said conditional raw score;
calculating by the processor a final transaction score indicative of the investor's relative performance with respect to all investors on said evaluation list;
classifying by the processor each investor into an industry, and grouping said investors into their respective industry groups;
ordering by the processor said investors in each industry group based on the final transaction scores;
generating by the processor the ranked list based on the ordering; and
electronically transmitting by the processor the ranked list.
18. The method of claim 17 , further comprising:
posting said ranked list on a computer system accessible via one or more data communications networks by other remotely located computer systems.
19. The method of claim 17 , further comprising posting or providing access to investor and investment information on a computer system accessible via one or more data communications networks by other remotely located computer systems.
20. The method of claim 17 , further comprising generating by the processor an evaluation list by removing at least one of: investors that are not people, investors affiliated with companies having a market capitalization of less than approximately fifty-million dollars, investors that have entered into less than two transactions within approximately ten years of the evaluation, and investors that have no transactions within approximately five years of the evaluation.
21. The method of claim 17 , wherein said investors include at least one of a corporate insider, an individual, a joint venture, a corporation, a trust, a partnership, or other investment entity.
22. The method of claim 17 , wherein the investors are identified based on information from a database containing substantially all entities filing insider documents with the Securities and Exchange Commission.
23. The method of claim 17 , further comprising basing the final raw scores on average historical performances of investments bought or sold in the buy transactions or sell transactions.
24. The method of claim 17 , further comprising
retrieving by the processor a list of investors;
generating by the processor an evaluation list by removing investors failing to meet predetermined criteria from said list;
calculating by the processor a performance score for each investor listed on said evaluation list indicative of the investor's performance by considering an average historical performance of an investment following a transaction by the investor, a historical consistency of the investor's performances with respect to transactions involving the at least one investment, and the number of transactions made by the investor;
calculating, for each investor using said performance scores, the final transaction score with respect to all investors on said evaluation list.