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MRTS Analytics can bring valuable Cost/Capacity valuation

Posted by on Feb 19, 2016 in News | 0 comments

Imagine an early stage Biotechnology firm develops a disruptive technology. Expansion from R&D prototype to pilot production to full production often experiences lopsided unpredictable costs during the first year of ramping up and ultimately full expansion utilizing full input capacities. MRTS (Marginal Rates of Technical Substitution) can be a significant analytic tool to identify cash consumption when considering capital expansion. Sometimes firms develop a technology which has great marketability but they possess no internal resources...

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The Joy of Sets, Huge Sets

Posted by on May 27, 2016 in News | 0 comments

The technological ability to deal with huge data sets in novel ways is revolutionizing private eq-uity early stage investment decisions. Flying by the seat of the pants will fail spectacularly in competition with data-intensive systematic computer processing. Are too many decisions predicated on like history or gut feelings? A simple demonstration is a look back at the classic Monty Hall problem. This seeming paradox which some of you heard of was based on the game show “Let’s make a deal”. Contestants were given the choice of three...

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Isoquant Models to Predict Funding for Private Equity Banks

Posted by on Dec 11, 2015 in News | 0 comments

Today governments use econometric modeling to direct macroeconomic policy. Was the idea of Quantitative Easing decided upon solely using historical information or was it also based on “Consumer Behavior” modeling as well? Indeed, Behavioral Economics was considered. So why don’t private investment banks use economic models including Behavioral Economics to assist them to drive their portfolio base towards specific private investments in disruptive technologies? Because they’re still utilizing 20th century methods vs 21st century...

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Human Biases Verses Statistical Models

Posted by on Dec 10, 2015 in News | 0 comments

The genius of the human mind lies in the creation and systematic use of mathematical formulas, which are the underpinnings of science, rather than in intuitive leaps of faith. It is statistics which bestows science its predictability and objectivity. The ability to predict is the hallmark of science and separates it from fly by the seat of your pants conjecture. Most of us have seen Money Ball. It’s the true story based on a book how in 1999 how Paul DePodesta an economics major from Harvard joined the Oakland Athletics organization as an...

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How much capital is needed to clear the runaway to profitability?

Posted by on Jul 16, 2015 in News | 0 comments

Financial decisions are no different than deciding whether to sign a particular ballplayer or whether a drug produces benefits. We need objective metrics that deal with uncertainty. Uncertainty error will always remain but as put by statistician G.A. Barnard “while there must always be uncertainty involved in statistics, this need not imply any lack of precision the uncertainty may be capable of precise quantitative assessment”. Such metrics are the only alternative to intuitive decisions. And a wide body of research demonstrates...

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Biomedical Investments Assessment using “Regression Analysis”

Posted by on Jun 17, 2015 in News | 0 comments

Today many Entrepreneurs really find it ever more risky to invest in Biomedical firms as technologies are advancing so rapidly. The decision to invest is ever more complex unless one has a good knowledge of the operations and a firms past success record and how its securities trade on the market. Due to innovation and new paradigms shifts, many Biotech companies are in early stage development and tend to be small, developing only a few promising projects focused in digital genetic developments in pharmaceutical and medical devices. Most of...

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Biases and Medical Market Investing: Part Two

Posted by on Aug 10, 2014 in News | 0 comments

Our brains have not evolved to seek the objectively true but function as a belief generating machine. We then twist empirical evidence to fit our beliefs. The problem is that the process of evolution that has produced the human brain can never produce optimal design as it can never throw the old and outmoded out. Evolution has added on to primitive animal brains to create human brain but it has not replaced. What evolves is a quick and dirty system good enough to produce reproductive success and not necessarily anything better. Magical...

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Biases and Medical Market Investing: Part One

Posted by on Jul 24, 2014 in News | 0 comments

Risk management is older than homo sapiens. Our early ancestors did not have to ponder how best to invest in international emerging markets or medical device market analysis, but how to hunt game and not become game themselves. Mankind in its hubris and for motivational reasons defines itself by its reliance on reason. The human brain for all its wonders is “a flawed belief machine”. Errors in judgment are the product of the interplay of the necessary shortcomings in information-processing strategies and motivational factors. With medical...

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Errors using inadequate data are much less than those using no data at all

Posted by on Jul 1, 2014 in News | 0 comments

Statistician George Box, who passed away in 2013 at the advanced age of 93, pioneered many statistical techniques bearing his name, yet is as well known for a short simple quote as anything. He famously wrote “all models are wrong, but some are useful”. By this Box did not mean models, as in fashion models, were stupid but can be fun, although perhaps such statements on fashion models could be undoubtedly true! For private equity early stage investments and evaluating variables when trying to estimate market success, Box’s quote pertains...

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Biased Investments – Cognitive dissonance disorder

Posted by on Aug 4, 2016 in News | 0 comments

When Private Equity banks assess investments, objective quantitatively analyzed data is not a luxury but a necessity. “Measure what is measurable, and make measurable what is not so” said Galileo Galilei, when humanity was just emerging from the dark ages. This is more than good advice but the basis of science. Show me the properly analyzed data is a sure stepping stone to show me the money. If all you listen to is CNBC Cramer or when Jaimie Diamond tells you that you got a steal when he got to take over Bear Sterns and now he claims Jaime...

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