Active investing is all about finding stocks that will outperform the market (index). Passive investing is basically investing in the total market or some approximation of it such as SP500, DJIA, Russell etc via an index fund. Investment advisors get paid to do active investing and they better beat the market (at least more often than not). Otherwise why pay them 1-?% to get 8% return when you can get that from an index fund which charges you 0.25-0.75%? So money managers are constantly looking for the best (relative to country, market or industry) stocks to add to their portfolios given their investment style or guidelines. Paranumeral is designed to be a tool to aid money managers, and anyone else really, in evaluating potential stocks. It does not limit the money manager to a top X list but instead allows him or her to get another opinion on whichever stock they care for. It also does not broad brush and bucket into buy, hold or sell.
Each query, currently one ticker at a time, produces one number. The closer to zero that number, the closer that stock is predicted to perform relative to the market basket of stocks in the system at the time (~6K for this quarter). The more positive/negative the number the better/worse that stock will perform relative to the market. The prediction time frame depends on the arrival of new information. In essence it outputs a prediction given the latest, and all previous, financial statements for the company and all other companies in the system. The prediction will change as soon as new statements for this company, or any other companies, deemed relevant are loaded in the system. Prices, for given company, market overall or relevant companies, after latest financial statement dates currently do not affect the prediction but may do so in the future.
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