Jul
25
2013

The RavenPack Impact

RavenPack was started in 1999 by Hardy Schloer and Heiner Pollert with the goal to develop new and Quantum Relation Technology based integrated Artificial Intelligence Systems that could solve very complex problems in commercial, political and humanitarian areas. Even so, the technological approaches of RavenPack in these days was and is still today superior, the commercial exploitation of these technologies over the last 10 years has been very limited. However, the true success of RavenPack becomes only clear, when we examine more carefully, what happened in the past decade. When RavenPack was still in full development of its AI software during 2000 and 2001, the DOT.COM crash was in full swing, making it impossible to fund the project properly to build the technologies in its original plans.

In fact development was scaled down to a minimum, until the idea was developed by the end of 2002, to build a small prove of concept, that would give potential investors a prove of our technological capabilities. RavenSpace, the technology platform of RavenPack was created to solve very complex problems, so therefore the idea was born, to solve a completely intractable problem in the financial industry; the prediction of financial markets. The reason, why this problem was so inviting was the fact, that there is (or was before RavenPack) a rule of economics, that states, that markets are efficient, and that they cannot be predicted, because all information of the market is incorporated in the ‘price of now’. There are 100s of doctorial dissertations published in this area of economics, that supported this notion vigorously. This is called the ‘Efficient Market Hypothesis’ and can be easily referenced in any economic dictionary.  This can easily also read in layman’s terms at: wikipedia.org/Efficient-market_hypothesis

After tens of thousands of economists, traders and news commentators have declared this assumption a fact, RavenPack came along and proved initially in 2006, and conclusively through external studies as of May 2009, that all these assumptions of efficient markets are untrue. For example, Macquairy Research, USA a very large reputable Financial Service firm in New York did spend months of quantitative analysis on RavenPack data streams to verify conclusively, that our data was leading the market by sufficient time to react through algorithmic trading platforms to the information and generate a profit. Today, nearly one year later, there are dozens of projects on the way anywhere in the world by other companies, to build similar systems. Without a question, RavenPack has  proven, that the Efficient Market Hypothesis is, or least until today, wrong.  RavenPack had to do this with a budget that was less then 6% of the budget to build and commercialize this technology. It is therefore also understandable, that RavenPack never had enough funding to perfect its own Algorithmic Trading platform (RavenPack estimated for this 25 Million Euro, but had in the end only a fraction of this amount available to build a fully developed and tested trading system) .

Today, RavenPack lives from the task to generate real-time predictive data streams and feed them into the algorithmic trading systems of hedge funds and banks. Dow-Jones the US based financial service and news company recognized the value of this solution already in 2007 and contracted RavenPack to provide its technologies through their primer product  Dow Jones News Analytics. Today, ravenpack has become a brand name in the financial industry, and is beginning to gain traction on the commercial front. It is very clear. With proper funding of this project, and the absents of two major economical crisis (2000-2002 and 2008 to present) and a global security crisis (9/11 and its fallout), Ravenpack could have been today one of the most successful financial trading or service firms in the world. However, that is in retrospect no longer correctable. There is however another aspect in RavenPack’s success to bring leading transparency to the price of securities. It is the fact, that this transparency, that is now available in real-time will without any doubt will end the speculative edge of traders over the next 3 to 5 years. The technology that RavenPack started will be without any doubt be perfected and broadly used by all traders (must be used by all to stay competitive) and this is the very reason, why in the end nobody will be able to make ANY money in the financial industry. Or as one senior fund manager from a very large asset management firm in London said; the financial service industry with transform, because of what RavenPack started, end up to be simply money and security custodians with automated accounting. In 5 to 7 years 1 out of 500 people will keep its job in this industry, because it will collapse under its own need to make profits of undiscovered trading facts. RavenPack’s and soon everybody else’s technologies, using supercomputers in the financial trading decision generation, will end the entire financial industry, as we know it. This trend is now unstoppable, and has already begun in the trading houses of Wall street and other financial centers around the world.

Hardy Schloer, who left RavenPack in early 2008 has moved since on to use the Quantum Relation Technology approach to go back to the original goals of this technology – solving problems that really matter; the sustainability of our planet.

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