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MasterDATA (http://www.masterdata.com)
is the only source of historical composite breadth data. Our
firm currently compiles and sells data on 32 major stock
indexes and the 111 top trade volume Exchange Traded Funds
(ETFs). Daily, weekly, monthly and/or quarterly datafiles
are downloaded by subscribers in comma delimited text files
(.csv format). Subscribers can download these files by
visiting the web site or use the MasterDATAlink program
which automatically downloads via the Internet any or all of
the available files either manually or at specified times in
the background.
A composite breadth statistic is simply a
count of how many times a specific event occurs among the
constituent issues of the parent index or ETF (or any
composite for that matter). For instance, if 260
constituent issues making up the S&P 500 Index go up in
price for the day, "advances" are 260. If the remainder go
down, the "declines" are 240. There are many traditional
statistical breadth measures including advances, declines,
advancing/declining issues, up/down volume, new one year
highs/lows, etc. But the possibilities are virtually
limitless.
Historically, breadth analysis developed around statistics
compiled and published by the three major U.S. exchanges,
The New York Stock Exchange Composite ($NYA), American Stock
Exchange Composite ($XAX) and NASDAQ Composite ($COMPQ).
Widely used “market breadth” indicators are based upon these
exchange statistics such as the McClellan Oscillator,
McClellan Volume Oscillator, Advance/Decline Line, TRIN,
Arms indexes and many, many more. These same indicators can
now be easily applied to indexes and ETFs using historical
composite breadth statistics downloaded from MasterDATA web
sites. Certainly, this only scratches the surface.
ETFs are one of the fastest growing segments of the
financial markets.
Breadth analysis was perhaps the first method of technical
analysis derived when markets first originated. Because of
their very complex nature and time consuming compilation and
maintenance, statistics necessary to this method of
technical analysis were simply not available on indexes and
ETFs until MasterDATA began compiling the data in 2003.
Although, in my opinion, "breadth" technical analysis is
clearly superior when analyzing composites, it is currently
overshadowed by the open, high, low, close, volume (OHLCV)
method of technical analysis. Again, this anomaly exists
only because the needed statistics were not previously
available. The OHLCV method remains the “only game in town”
when applying technical analysis to individual issues, but
composite breadth analysis allows index and ETF analysis to
look “under the hood” at what the individual constituent
issues making up the composite are doing. After all, the
composite index or ETF ultimately reflects what its
components as a whole are doing. The data needed for
composite breadth analysis on indexes and ETFs is now, for
the first time in over 100 years, available from MasterDATA.
Currently, I am the entire MasterDATA management team. I was
a stock broker for over twenty years holding Vice President
positions at firms such as E.F. Hutton, Kidder Peabody,
Oppenheimer and AG Becker Paribas. I then started a
commodity firm, L.P. Carhartt & Company, Inc., specializing
in T-Bond futures trading where I became one of the largest
off-floor traders at the Chicago Board of Trade. I do know
how to build a business from a good idea.
For MasterDATA I developed the data structures and programs
to automatically generate the composite breadth data,
constructed and published all web sites, continue to provide
all daily maintenance of the data and much more and have
done so for the past five years. I remain fully committed to
this project.
Much can and will be done by bringing on board a staff with
skill sets and experience to expand our markets and
streamline our capabilities. Experienced marketing personnel
will allow us to build the customer base at a substantially
faster pace with a revenue stream to match. Marketing will
be divided into institutional and retail. Additionally,
infrastructure must be upgraded to support the growth and
profile of our evolving subscriber base.
MasterDATA’s objective is 1.7 million monthly visitors
* (total, not unique) to its
web sites within the next five years. 2%, or 33,333, of
these visitors converted to subscribers generates $4 million
in annual revenues from retail for basic subscriptions at
current prices. Planned future premium breadth data based
products will generate an equal amount. A much smaller, but
significant, number of institutional subscribers each paying
$12 to 24 thousand annually for customized, institutional
quality data and reports, will also generate similar
revenues.
Although MasterDATA is currently alone in
offering composite breadth data, many major sources of
alternative stock data exist. Most subscribers will continue
their relationship with these other OHLCV vendors when
subscribing to MasterDATA. Data vendors include Reuters,
eSignal, Premium DATA, Yahoo, Google, MSN, Thompson,
PCQuote, Bloomberg, DTN and many, many more. MasterDATA
intends to additionally offer its data through some or all
of these vendors.
When this new market grows to a certain
level others will almost certainly enter the market. By that
time, MasterDATA must be the gold standard, an absolute
fixture in composite breadth data.
Upon funding, MasterDATA will immediately
hire sales persons experienced in marketing financial
services. Shortly thereafter programmers will be hired to
support marketing efforts and begin a review and expansion
of data compilation systems. This nucleus will begin the
process of building market recognition and demand and the
branding of MasterDATA.
An Internet marketing staff will evolve
primarily targeting retail investors and will focus on web
advertising, PPC, blogs, webcast, podcast, affiliate
programs and SEO. This staff will create exposure for the
MasterDATA sites as well as solicit advertising revenue for
the MasterDATA sites.
For the institutional market, a separate
marketing staff will identify and contract customized data
requirements for institutional clients.
2009, the first year after funding, will
be a building year. Aside from personnel expenses, the
largest expenditure will be advertising and marketing. An
outside marketing firm will be retained and advise in the
allocation of the advertising and marketing budget. 2010
will see revenues slightly exceed expenses as revenues
accelerate while expenses remain stable. It is anticipated
that 2011 will be a solidly profitable year, recouping most
of the currently invested funds. Profitability in subsequent
years should achieve the 7 figure range and exhibit solid
growth thereafter.
Data is the primary force moving world
financial markets. Composite breadth data is a widely known,
integral part of market analysis used at all levels of
investment. MasterDATA will leverage its position as the
only source of this data for indexes and ETFs to become a
significant presence in the investment information industry.
*
Currently, “unique” monthly visitors for Morningstar.com
number over 1.2 million, Bloomberg.com over 4 million, and
finance.yahoo.com over 129 million. The “unique” number of
site visitors is generally significantly less than the
actual total number of visitors.
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