On Friday morning I caught Wallstrip's chat with Tim Wolters, of Collective Intellect, who uses statistical models to extract knowledge from unstructured data sources. I really enjoyed this episode because it highlights how you can use data mining to create Event Driven Analysis (EDA). Coincidently, I had beers with the Market Doctor last night where he explained to me that part of his PhD thesis was based on EDA. Well that just opened up about an hour of technical discussion as we downed our favorite brews.
Its surprisingly easy to build a rudimentary model and evaluate press releases, earnings announcements, and other key fundamental data relative to the noise of the market. I'm quite interested in following up on EDA and have decided to build a "test" model after I finish writing and posting my YALE Lessons. I'll probably test the earnings and announcement releases of one or two companies (maybe competitors) against the S&P500 and see what I find.