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Saturday, December 28, 2019

MIT Model Forecasts Business Financials

If real, here is something of considerable value ... Note 'Belief Propagation' .... which we tested for things like predicting future product sales in varying context.  Looking more closely.

Model Beats Wall Street Analysts in Forecasting Business Financials
MIT News
By Rob Matheson

Massachusetts Institute of Technology (MIT) researchers have developed an automated model that significantly outperforms humans in predicting business sales using only anonymized weekly credit card transactions and three-month earnings reports. The researchers used the model to predict quarterly earnings of more than 30 companies, and found that it outperformed the combined estimates of expert Wall Street analysts on 57% of predictions. The human analysts had access to any available private or public data and other machine learning models, while the MIT model used a very small dataset of the two data types. The researchers used a variation of the standard inference algorithm, called Kalman filtering or Belief Propagation. This technique uses data measurements observed over time, containing noise inaccuracies, to generate a probability distribution for unknown variables over a designated timeframe .... " 

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