Wednesday, August 10, 2011

Win $20k with XBRL

The Wharton Research Data Services (WRDS) and some partners are running a contest to see who can come up with the most inventive and useful application making use of XBRL. The prize is $20,000. The catch is the winning application must be open-sourced.

XBRL is the eXtensible Business Reporting Language: essentially an open meta-tag mark-up language for financials. Chairman Cox, when he was with the SEC, championed the use of XBRL to create the EDGAR database. A free database all publicly traded securities required data and an intuitive way to extract the data is a game changer for the investing industry. These advances vastly lower the barriers to entry for institutional quality analysis and should help improve price discovery and market efficiency over time. At least that is what should happen on the domestic side, hopefully someday international equivalents of EDGAR are not too far away.

I have used XBRL in the past, pulling down insider filings from EDGAR and then parsing the data with perl scripts. I then combined that data into a corporate signalling model for small cap stocks. The whole process was surprisingly easy compared to the olden days of finding and paying for a data provider then writing and testing a custom loader. The most difficult part of the process was probably spending an afternoon figuring out what data was available, where it was, and when it was updated. Of course you only have to do that once.  Now I'm sure there are nifty commercial applications that will put a spiffy GUI front-end onto the database for easier exploration and navigation. Likewise, I know there are commercial applications that will now alert you in real time when data you are interested in changes. But maybe a good open-source version would be an interesting entry to the competition. But what I think I would really like to see is an  open-source Excel plug-in.

More details of the challenge are available at If you are interested, the deadline for submissions is January 31, 2012.

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