Share Price Prediction and Analysis Essay Example | Topics and Well Written Essays - 1500 words

Share Price Prediction and Analysis - Essay Example The following is a critical review of such literature. In addition, the discussion applies a synthesis of two approaches/models identified to predict the share prices for Tesco Plc from the publications of the firm’s financial statements for 2008 and 2009. Lastly, this discussion attempts to test the approach by comparing these two sets of predictions with actual share prices. A concluding remark, which comments on the results, winds up the paper. Approaches/Models for Predicting Share Prices In short-term or medium-term, different models or approaches are used in predicting the future prices of shares of various companies. Share prices of companies may take different forms such as linear, horizontal, cyclic, or seasonal as influenced by prevailing market and environmental factors (Hassan, et al., 2007). Due to lack of prediction methods that provide least prediction error, investors tend to apply numerous methods thereby comparing their results in a bid to finding the best mo del or approach to use (Chen, et al., 2003). ... Artificial Neural Network (ANN) is a share price prediction method that is commonly used. For many years, ANN has been developed and restructured in order to provide efficient and effective performances on predicting share prices of firms in a stock exchange for purposes of investment (Tom, et al, 2000). Nonetheless, most predictors used single dosage of ANN (Kim and Shin, 2007). Application of single dosage in predicting share prices rarely provides an opportunity to discover the decision rule that the model uses while making the predictions (Hassan, et al, 2007). Artificial Neural Network is a share price prediction model or approach, which is created through stimulation of biological central nervous system of investors or predictors (Swales and Yoon, 2002). One of the reasons explaining its extensive application is the ability to predict share prices from large databases (Olson and Mossman, 2003). The idea of back-propagation algorithm is the basis of Artificial Neural Network in predicting share prices of firms. ANN back propagation function is usually represented by the following function: Where, xi is the sum of inputs, which is multiplied by their respective weights wji; Aj is the predicted share value under the ANN model; and n is the end period in which the valuation is carried out. Decision tree (DT) model on the other hand is a data mining model or approach used in predicting or forecasting share prices within a stock exchange market. One of the reasons for its extensive application is the fact that DT has an excellent ability and capability of describing cause as well as effect relationships of various stock prices. From the concepts or application of DT, investors are

Air Asia Case Study Example | Topics and Well Written Essays - 1000 words

Air Asia - Case Study Example However, they tend to value quality service, and are willing to pay for excellent service. On the other hand, Asians are less likely to concentrate on quality of service, and are willing to compromise quality service for a low price. Furthermore, people in the U.S. and Europe can use other forms of transport for short trips such as speed rail, bus etc. However, there are hardly any world class rails in Asia, and air travel remains the only option for many travelers. Some people in Asia might use bus, but the advent of budget airlines has made it cheaper for travelers to fly instead. Given today's economic climate, low-fare service would be a hit in any part of the world and the Gulf region is no exception. Although, the Gulf region has a good per capita income, lower and middle class travelers would nevertheless welcome low-fare service and it would definitely affect the large carriers in the Gulf Region. Q2: Air Asia is a budget airline which was on the verge of bankruptcy, but sprang up in 2001 to become the world's cheapest airline. Air Asia is a budget airline and succeeded in getting the lowest cost per kilometer of any airline. It was largely in part because of the declining demand for air travel and fleet purchases in the aftermath of 9/11. Thus, time was a key player in ensuring that Air Asia got the lowest cost structure possible. Furthermore, Air Asia also differentiated itself from other carriers by initiating ticketless travel. Under this new method, travelers had to book tickets online and there was no hassle to for travelers to go through agents. This made travel easy for the passengers and helped further in the reduction of distribution costs. However, Air Asia was similar to other carriers because all carriers of its type focused on low cost travel and targeted small business travelers. Moreover, Air Asia just like other carriers also offered only three types of fares. This was to stimulate demand for these carriers and attract travelers from major airlines like Malaysian Airlines. Q3: By reading the case study, I feel that Air Asia was wrong in its decision of Internet booking. Although this has been a viable option for many travelers, it has also meant that the airline is losing potential passengers who do not have access to the Internet. Air Asia is targeting relatives and small travelers and many might not have access to Internet. Furthermore, I also feel that expanding too much in a short period of time might have its disadvantages. Purchasing a lot of fleet might be a cause of concern given today's shifting business climate. It would be difficult to make monthly payments if uncertain conditions force demand to plunge. First, Air Asia came into the market at the right time. Just after the terrorist attacks of September 11, the aviation industry took an uncertain turn and there was a drop in demand. This caused the market for fleets to go down and leasing costs were reasonable, causing Air Asia to penetrate the market. Also, Air Asia expanded beyond national borders and grabbed the opportunity to serve neighboring countries. Moreover, Air A