Method and system for evaluating the investment ratings of a securities analyst

A computer-implemented method for measuring the performance of calls on securities by a securities analyst during an evaluation period, comprising:

• determining, by a computer system that comprises a processor and memory that stores instructions to be executed by the processor, a benchmark return for a benchmark group of securities for each call period of the evaluation period, wherein a call period corresponds to a time period during the evaluation period during which the analyst has a particular rating for a security in the benchmark group, such that there are multiple call periods during the evaluation period when the analyst changes the rating on one or more securities in the benchmark group during the evaluation period, wherein calls ratings available to the analyst for each security in the benchmark group comprise a first call rating, a second call rating, and a third call rating;
• computing, by the computer system, a total available excess return for each call by the analyst during the evaluation period, wherein the total available excess return for each call is based on an absolute difference of (i) a return of the security for the call during the call period for the call and (ii) the benchmark return for the call period, except that the total available excess return equals zero for each call by the analyst having the second call rating during the call period when the security performs within a band around the benchmark return for the call period;
• computing, by the computer system, a sum of the total available excess returns for each call;
• computing, by the computer system, a call success value for each call by the analyst during the evaluation period, wherein the call success value for each call is based on a return of the security during the call period of the call to the benchmark return during the call period;
• computing, by the computer system, a sum of the call success values for each call;
• and
• computing, by the computer system, an analyst overall performance value indicative of the success of the calls by the analyst during the evaluation period based on a ratio of (i) the sum of the call success values to (ii) the sum of total available excess returns for each call by the analyst over the evaluation period,
• wherein the computer device calculates the analyst overall performance value, and wherein:
• for each call having the first call rating for one of the securities, the call success value for the call is related to the return on the security for the call period minus the benchmark return for the call period;
• for each call having the second call rating for one of the securities, the call success value for the call is zero;
• and
• for each call having the third call rating for one of the securities, the call success value for the call is related to the benchmark return for the call period minus the return on the security for the call period.

A computer readable medium having stored thereon instructions which, when executed by a processor, cause the processor to:

• determine a benchmark return for a benchmark group of securities within an industry sector covered by a securities analyst for each corresponding call period for calls by the analyst on securities within the benchmark group during the evaluation period, wherein a call period corresponds to a time period during the evaluation period during which the analyst has a particular rating for a security in the benchmark group, such that there are multiple call periods during the evaluation period when the analyst changes the rating on one or more securities in the benchmark group during the evaluation period, wherein calls ratings available to the analyst for each security in the benchmark group comprise a first call rating, a second call rating, and a third call rating;
• compute a total available excess return for each call by the analyst during the evaluation period, wherein the total available excess return for each call is based on an absolute difference of (i) a return of the security for the call during the call period for the call and (ii) the benchmark return for the call period, except that the total available excess return equals zero for each call by the analyst having the second call rating during the call period when the security performs within a band around the benchmark return for the call period;
• compute a sum of the total available excess returns for each call;
• compute a call success value for each call by the analyst during the evaluation period, wherein the call success value for each call is based on a return of the security during the call period of the call to the benchmark return during the call period;
• compute a sum of the call success values for each call;
• and
• compute an analyst overall performance value indicative of the success of the calls by the analyst during the evaluation period based on a ratio of (i) the sum of the call success values to (ii) the sum of total available excess returns for each call by the analyst over the evaluation period,
• wherein the computer device calculates the analyst overall performance value , and wherein:
• for each call having the first call rating for one of the securities, the call success value for the call is related to the return on the security for the call period minus the benchmark return for the call period;
• for each call having the second call rating for one of the securities, the call success value for the call is zero;
• and
• for each call having the third call rating for one of the securities, the call success value for the call is related to the benchmark return for the call period minus the return on the security for the call period.