- A software "brain" is about
to be launched to scan the Internet and tell owners which shares to buy
and sell, writes <mailto:mprigg@dircon.co.ukMark Prigg.
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- Intelligenesis, an American artificial-intelligence
company, claims to have developed a system based on the human brain that
can scan thousands of newswires and market reports to pick out companies
that are likely to do well.
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- Initially the system, called Webmind,
will be available only to Wall Street traders. Tests of a prototype have
shown a success rate of 90% in predicting the Dow Jones index. Wall Street's
best traders had a success rate of only 63%.
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- According to Lisa Pazer, the president
of Intelligenesis, the software can be adapted to any task in which data
have to be filtered. "Webmind is based on the way the human brain
sorts data," she says. "As our system scans newswires, it looks
for meaning in sentences and links similar data together in the same way
the brain does. For instance, if you were looking for information on a
particular company, the system would look not just at that company but
also at companies in similar areas. It would then use all this data to
predict how the company will perform."
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- Intelligenesis has been testing the system
for several months, using an American news service that holds two years
of financial data. The system has performed well, although Pazer hopes
that as soon as more data are available, the results will improve sharply.
"We are already ahead of human traders, but we should be. There is
no way a human trader can process all the data we look at," she says.
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- One current drawback of the system is
the huge amount of memory it requires. "Our test system has 4 gigabytes
of Ram and we could do with more," says Pazer. "However, one
solution to the problem is to run the system over the Internet, where the
processors and memory power of hundreds of computers can be used. We already
have a Java version of the system, so eventually a consumer version may
be available on the Net."
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- Users of the Webmind system can ask it
questions in normal English. Natural-language processing developed by Intelligenesis
allows the computer to work out what the user wants.
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- "You can be as specific as you want,
asking 'what shares should I buy today?'. As the system can apply its intelligence
to any problem that has large amounts of data, it will answer almost any
question. We also plan to allow Webmind to access audio and video data,
so it will monitor radio and television as well as newswires for you,"
says Pazer.
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- Intelligenesis is in discussions with
Wall Street firms and is deciding whether to work with them or set up its
own trading house with the system.
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- "Obviously making money is the key,
and if traders are working directly for us or we get a cut of what they
make, it is better for the company. There is already a huge amount of interest
in the system, and it gives trading houses a big advantage. We hope to
have the first commercial system up and running within a few months, by
which time we will have decided what to do with it." Pazer also hopes
to use the Webmind system for other applications, including news filtering,
and even as a Net search engine.
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- "Webmind will work with whatever
data you give it and will learn about what you want from it as you use
the system. The possibilities are endless, but obviously predicting movements
in share prices is where we can make the money, so that is what we are
going to do first," says Pazer.
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