Project Ideas

Date: 06/30/2002 at 15:34:53
From: Javier Vacio
Subject: My 9th grade science project

Hi, 

I am in 9th grade and need a science project. Do you have any 
ideas for one in math? I go to a tough advanced school so please 
suggest some good ones. 

Thank you

Date: 07/01/2002 at 18:29:43
From: Doctor Ian
Subject: Re: My 9th grade science project

Hi Javier,

The best project will be one that you're actually _interested_ in.  
What are the three coolest things you've learned in your science 
classes so far? 

- Doctor Ian, The Math Forum
  http://mathforum.org/dr.math/ 

Date: 07/03/2002 at 19:52:12
From: Javier Vacio
Subject: My 9th Grade Science Project

Hi, 

I would like to to my science project on math that deals with the
stock market. And if you have any other great ideas besides the stock
market please, feel free to send me them. 

Thank you.

Date: 07/04/2002 at 07:01:12
From: Doctor Ian
Subject: Re: My 9th Grade Science Project

Hi Javier,

One of the things that's supposed to make the stock market work 
is that it's supposed to be very efficient at distributing 
information. I think it would be interesting to do an analysis of 
the behavior of stocks just before and after news becomes public.

For example, if a company misses its projected revenues, that's 
bad news about the company, and you'd expect the company's stock 
to decline in value _after_ the announcement.  This raises a 
question:  How _long_ after?  How much time does it take for that 
information to reach the people who use it as a basis for their 
actions? 

A second, perhaps more interesting question, would be this:  Are 
there situations where the stock starts dropping _before_ the 
news is released?  That would happen if large numbers of 
investors were dumping the stock _before_ 'hearing' the bad 
news... which would indicate that perhaps some insider-trading is 
going on.  From the perspective of the SEC, it would be 
interesting to be able to detect after the fact when this seemed 
to be happening.  

From the perspective of the news media, it would be interesting 
to be able to predict when bad (or good) news was about to be 
announced regarding a particular company!  This would only be 
possible if there is some describable pattern in the effect of 
insider trading on stock prices.  In a sense, it's the same kind 
of thing that seismologists are trying to do with earthquake 
prediction.  They know how to tell after the fact that an 
earthquake occurred, even if it was out in the boondocks where it 
didn't affect anyone.  The trick is to try to detect the early 
signs, in order to _predict_ the earthquakes...

Here's another thing I've been wondering about.  My brother's 
wife works for Reuters, and she mentioned yesterday that Reuters 
had a correspondent in Kuwait for years before Iraq invaded it; 
so when it happened, they were able to tell investors who 
subscribed to their news services about it something like 40 
minutes before the rest of the world found out about it on CNN.  
Supposedly, those 40 minutes were worth billions of dollars to 
investors who were able to dump stock in oil companies doing 
business in Kuwait.  It would be interesting to identify some 
similar events, and try to come up with an equation that tells 
you just how valuable it is to have information for N minutes 
before everyone else... in other words, everyone says that time 
is money.  Why not try to find out just how much money a given 
amount of time is worth?  

Here's one more thing:  People are always looking for good 
random-number generators.  Most involve some kind of algorithm, 
which spits out a bunch of numbers before (eventually) repeating. 
Mathematicians have made up all kinds of tests for randomness, 
which are used to compare the 'randomness' of these generators.  
Are there aspects of market behavior that are truly random (or 
more random than the generators now in common use)?  If so, then 
they could be used as a new source of random numbers. 

Also, to the extent that some of these tests involve calculations 
involving pi and e, you could go in the other direction, and show 
how you could use the behavior of the stock market to determine 
'experimental' values for pi and e. 

Do any of those sound interesting? 

- Doctor Ian, The Math Forum
  http://mathforum.org/dr.math/ 

Date: 07/11/2002 at 19:43:45
From: Javier Vacio
Subject: Thank you (My 9th grade science project)

Thank you so much for the help!  I really appreciate it!
All of the projects sound so interesting and advanced.