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Isoquant Models to Predict Funding for Private Equity Banks

Posted by on Dec 11, 2019 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, 2019 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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See the new light! America is the leader in Health/medical development not in Durable Goods manufacturing.

Posted by on Nov 25, 2019 in News | 0 comments

When Americans balk that we have lost our economic leadership and we’re no longer a manufacturing nation, they miss the fact of America’s in depth research and development in health care.  Conservative protectionists believe America has lost its lead worldwide in the manufacture of durable goods.  Reality is we are leaders in Commercial and Military Aviation but for EADS in Europe with the Airbus as the other worldwide competitor.  If one wants to consider military and aviation as the only durable goods then clearly America is still the...

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Misled business plans limiting Private Equity ROI on revitalizing older technology

Posted by on Nov 24, 2019 in News | 0 comments

Today often Private equity groups raise capital for firms under three possible scenarios.  First, a new technology, second a small cap company which has gained traction and now needs capital to accelerate and lastly firms who require capital for an acquisition to expand their balance sheet seeking to change their valuation for shareholders for successive financing in the future.  On occasion, sometimes more often than one would believe, the latter is frequent among small cap firms who are seeking mezzanine financing by acquiring a losing...

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Quantitative Economic Analysis Mitigates Investment Risks

Posted by on Sep 8, 2019 in News | 0 comments

Accounting and financial models that forecast revenues, costs, profitability, cash flows, and return on investment are essential tools in business decisions.  However, the past does not always foreshadow the future.   Investment analysis in the 21st century requires greater risk mitigation than just simply examining an existing business’s financial history, or in the case of a startup, a business plan endorsed by experts in the field.  Indeed, when a company considers capital investment in new technology through either organic growth or...

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Technology and the new Global Economy

Posted by on Sep 7, 2019 in News | 0 comments

If your company is a participant in the new Global Economy, whether you are the recipient on the supply side of materials or technologies or your revenues are dependent on the Demand side of this new Global Economy, outsourcing is no longer just about labour but about raw materials and entrepreneurship (innovation). Labour today is now a smaller component of the cost of the total inputs for finished goods sold in the EU and the US.   Raw material component costs for final goods traded and sold between the EU and the United States account...

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Biases and Medical Market Investing: Part Two

Posted by on Aug 10, 2019 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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Biased Investments – Cognitive dissonance disorder

Posted by on Aug 4, 2019 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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Biases and Medical Market Investing: Part One

Posted by on Jul 24, 2019 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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How much capital is needed to clear the runaway to profitability?

Posted by on Jul 16, 2019 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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