System, method and computer readable medium containing instructions for evaluating and disseminating investor performance information

• US 7,016,872 B1
• Filed: 06/19/2000
• Issued: 03/21/2006
• Est. Priority Date: 06/18/1999
• Status: Expired due to Term

• Current Assignee: Refinitiv US Organization, LLC (Refinitiv US Holdings, Inc.)
• Original Assignee: Thomson Financial Limited (The Woodbridge Co. Ltd.)
• Inventors: Columbus, Craig E., Bettis, J. Carr
• Primary Examiner(s): Kazimi, Hani M.
• Assistant Examiner(s): Subramanian, Narayanswamy
• Application Number:
  US09/597,742
• Time in Patent Office: 2,101 Days
• Field of Search: 705/36, 705/35, 705/36.R
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/1085 involving automatic teller machines [ATMs]
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

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.

Claims

1. A computer implemented method 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 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, said calculating the performance score for each investor on said evaluation list comprises;

determining a first average return value (ave. return₁) and a second average return value (ave. return₂) 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 a first period of time (time₁) and an average rate of return on the at least one transaction involving the investment for a second period of time (time₂);

calculating, in absolute terms, a first t-stat value (t-stat₁) for said first average return value and a second t-stat value (t-stat₂) 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 (SD₁) and a second standard deviation (SD₂), a total number of transactions (decisions₁) occurring more than or equal to the first period of time before said evaluating, and a total number of transactions (decisions₂) occurring more than or equal to the second period of time before said evaluating;

calculating a first degree of freedom (DF₁) for said first average return value and a second degree of freedom (DF₂) for said second average return value;

determining a first probability (prob₁) for said first period of time by utilizing said first t-stat value and said first degree of freedom, and a second probability (prob₂) 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 more than or equal to the first period of time before said evaluating, and said total number of transactions occurring more than or equal 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

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.

2. The method of claim 1, further comprising calculating a final transaction industry score indicative of the investor'"'"'s relative performance with respect to other investors on said evaluation list participating in a same industry as the investor.

3. The method of claim 2, further comprising producing said ranked list of investors according to said final transaction industry scores.

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 2, wherein said calculating said final transaction industry score comprises:

separating said investors into their respective industries;

ordering said investors in each industry into a performance score order;

dividing, for each industry having at least one-hundred investors, said investors into one-hundred substantially equally sized groups;

assigning a rank, ranging from one-hundred to one, to each group in each industry having at least one hundred investors, wherein a highest performing group in each industry is assigned a highest rank and the next highest performing group in each industry is assigned the next highest available rank and repeating until each group in each industry has been ranked;

assigning, in each industry having less than one-hundred investors, a rank, starting at a highest rank and decrementing by amounts equal to one-hundred divided by the number of investors in the industry, wherein a highest performing investor is assigned said highest rank and the next highest performing investor is assigned the next highest available rank equal to the previous rank minus the decremental amount and repeating until each investor has been ranked; and

wherein said rank constitutes the final transaction industry score of each investor.

6. The method of claim 1, further comprising producing said ranked list of investors according to said final transaction scores.

7. The method of claim 6, further comprising posting said ranked list on a computer system accessible via one or more data communications networks by other remotely located computer systems.

8. 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.

9. The method of claim 1, wherein said removing comprises at least one of:

removing investors that are not people, removing investors affiliated with companies having a market capitalization of less than approximately fifty-million dollars, and removing investors that have entered into less than two transactions within approximately ten years of the evaluation or investors that have no transactions within approximately five years of the evaluation.

10. The method of claim 1, wherein said calculating said final transaction score comprises:

ordering said investors into a performance score order;

dividing said investors into one-hundred substantially equally sized groups if there are at least one-hundred investors on said evaluation list;

assigning to each group, if there are at least one-hundred investors on said evaluation list, a rank, ranging from one-hundred to one, wherein a highest performing group is assigned a highest rank and the next highest performing group is assigned the next highest available rank and repeating until each group has been ranked;

assigning, if there are less than one-hundred investors on said evaluation list, a rank, starting at a highest rank and decrementing by amounts equal to one-hundred divided by the number of investors, wherein a highest performing investor is assigned a highest rank and the next highest performing investor is assigned a rank equal to the previous rank minus the decremental amount and repeating until each investor has been ranked; and

wherein said rank constitutes the final transaction score of each investor.

11. The method of claim 1, wherein said investor is at least one of a corporate insider, an individual, a joint venture, a corporation, a trust, a partnership, or other investment entity.

12. The method of claim 1, wherein if SD₁=0, then raw score=0 otherwise $t$

⁢

stat⁢

1=

ave.return1(SD1decisions1)

$\mathrm{wherein}<br><br><br><br>\mathrm{if}<br><br><br><br>{\mathrm{SD}}_2,=0,\mathrm{then}<br><br><br><br>\mathrm{raw}<br><br><br><br>\mathrm{score}=0<br><br><br><br>\mathrm{otherwise}$$t<br><br><br><br>\mathrm{stat}<br><br>2=<br><br>\frac{\mathrm{ave}.\mathrm{return}<br><br>2}{\left(\frac{\mathrm{SD2}}{\sqrt{\mathrm{decisions2}}}\right)}<br><br>$

;

wherein DF₁=decisions₁−

1; and

wherein DF₂=decisions₂−

1.

13. The method of claim 1, wherein said probabilities are determined according to a predetermined look-up table using actual calculated values of:

DF₁, DF₂, t-state, and t-stat₂, unless;

DF₁>

100, in which case DF₁ is set to 100;

DF₂>

100, in which case DF₂ is set to 100;

t-state>

20, in which case t-state is set to 20;

t-stat₂>

20, in which case t-stat₂ is set to 20;

t-state<

0.01, in which case probe is set to 0;

or t-stat₂<

0.01, in which case probe is set to 0.

14. The method of claim 1, wherein $\mathrm{cond\_raw}$

_score={[1-(.5+or-prob1]+[1-(.5+or-prob2]2}*100,

, wherein prob₁ is subtracted

from 0.5 if ave. return₁>

0, else probe is added to 0.5; and

wherein prob₂ is subtracted from 0.5 if ave. return₂>

0, else prob₂ is added to 0.5.

15. The method of claim 1, wherein $\mathrm{adjustment}=\left(-20\right)*$

1decisions1+decisions22

.

.

16. The method of claim 1, wherein raw score=adjustment+cond. raw score.

17. The method of claim 1, wherein said list is generated from a database containing substantially all entities filing insider documents with the Securities and Exchange Commission.

18. The method of claim 1, wherein the average historical performance of the at least one investment is considered over two periods of time.

19. A computer implemented system 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 system comprising:

means for retrieving a list of investors;

means for generating an evaluation list by removing investors failing to meet predetermined criteria from said list;

means for 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, said means for calculating the performance score for each investor on said evaluation list comprises;

means for determining a first average return value (ave. return₁) and a second average return value (ave. return₂) 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 a first period of time (time₁) and an average rate of return on the at least one transaction involving the investment for a second period of time (time₂);

means for calculating, in absolute terms, a first t-stat value (t-stat₁) for said first average return value and a second t-stat value (t-stat₂) 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 (SD₁) and a second standard deviation (SD₂), a total number of transactions (decisions₁) occurring more than or equal to the first period of time before said evaluating, and a total number of transactions (decisions₂) occurring more than or equal to the second period of time before said evaluating;

means for calculating a first degree of freedom (DF₁) for said first average return value and a second degree of freedom (DF₂) for said second average return value;

means for determining a first probability (prob₁) for said first period of time by utilizing said first t-stat value and said first degree of freedom, and a second probability (prob₂) for said second period of time by utilizing said second t-stat value and said second degree of freedom;

means for generating a conditional raw score (cond. raw score) for the investor by utilizing said first and second probabilities;

means for generating an adjustment to the conditional raw score (adjustment) by utilizing said total number of transactions occurring more than or equal to the first period of time before said evaluating, and said total number of transactions occurring more than or equal to the second period of time before said evaluating; and

means for generating a raw score (raw score) indicative of said investor'"'"'s performance by adding said adjustment to said conditional raw score; and

means for 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.

20. A computer implemented method 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:

a step for retrieving a list of investors;

a step for generating an evaluation list by removing investors failing to meet predetermined criteria from said list;

a step for calculating 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, said step for calculating the performance score for each investor on said evaluation list comprises;

determining a first average return value (ave. return₁) and a second average return value (ave. return₂) 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 a first period of time (time₁) and an average rate of return on the at least one transaction involving the investment for a second period of time (time₂);

calculating, in absolute terms, a first t-stat value (t-stat₁) for said first average return value and a second t-stat value (t-stat₂) 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 (SD₁) and a second standard deviation (SD₂), a total number of transactions (decisions₁) occurring more than or equal to the first period of time before said evaluating, and a total number of transactions (decisions₂) occurring more than or equal to the second period of time before said evaluating;

calculating a first degree of freedom (DF₁) for said first average return value and a second degree of freedom (DF₂) for said second average return value;

determining a first probability (prob₁) for said first period of time by utilizing said first t-stat value and said first degree of freedom, and a second probability (prob₂) 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 more than or equal to the first period of time before said evaluating, and said total number of transactions occurring more than or equal 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.

21. A computer implemented method 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 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, said calculating the performance score for each investor on said evaluation list comprises;

determining a first average return value (ave. return₁) and a second average return value (ave. return₂) 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 a first period of time (time₁) and an average rate of return on the at least one transaction involving the investment for a second period of time (time₂);

generating a conditional raw score (cond. raw score) for the investor by utilizing said first average return value (ave. return₁) and said second average return value (ave. return₂);

generating an adjustment to the conditional raw score (adjustment) by utilizing said total number of transactions occurring more than or equal to the first period of time before said evaluating, and said total number of transactions occurring more than or equal 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

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.