The moment of truth, the sudden emergence of new insight, is an act of intuition. Such intuitions give the appearance of miraculous flashes, or short circuits of reasoning. In fact they may be likened to an immersed chain, of which only the beginning and the end are visible above the surface of consciousness. The diver vanishes at one end of the chain and comes up at the other end, guided by invisible links.
Arthur Koestler
Invisible links. Poppycock. We don’t need no stinking invisible links.
For too long, many have thought market actions were largely mysterious, their forces hidden, and actions unpredictable. When it comes to product demand, that is complete nonsense. Even when collections of products look different but do the same thing, they behave in ways we can predict.
A Invisible links. Poppycock. We don’t need no stinking invisible links.
For too long, many have thought market actions were largely mysterious, their forces hidden, and actions unpredictable. When it comes to product demand, that is complete nonsense. Even when collections of products look different but do the same thing, they behave in ways we can predict.
A Raven UAV doesn’t look anything like a Topaz satellite. Yet, doing the same mission using different altitudes, payloads, and speeds, they are bound by the same Demand Frontier, one that limits the arena’s most highly rewarded performers. If you prove worthy enough to be on the field of play, you often find a certain lower guarantee of recompense, known as Minimum Demand.
Such boundaries are only mysterious if you don’t do Hypernomics. doesn’t look anything like a Topaz satellite. Yet, doing the same mission using different altitudes, payloads, and speeds, they are bound by the same Demand Frontier, one that limits the arena’s most highly rewarded performers. If you prove worthy enough to be on the field of play, you often find a certain lower guarantee of recompense, known as Minimum Demand.
Such boundaries are only mysterious if you don’t do Hypernomics.
Spy satellites, military satellites, and Unmanned Aerial Vehicles (UAVs or drones) all perform the same mission and face identical financial limits. Below is an Upper Demand Frontier that includes models of all three groups. With a slope of -1.38, is steep (inelastic).That means more money is spent on five Topaz Spy Sats (5*$9.4B = $47B) than the 19,000 Raven Drones (19,000 *$25K= $475M).The steeper (-1.96) Minimum Demand Frontier reveals that one Mercury Spy Sat ($2B) fetches more than 19,000 RQ-I4s (I9K*$3K = $57M).
Time to Double
Edison knew. Our invention cost a bundle. But now, 5 years after its patent and 4 years since we used it for equities, our Hypernomica™. software only now reveals its power to the masses.
In the late 1400s, Luca Pacioli likely discovered the “Rule of 72.” As shown in A, with annual compounding, dividing 72 by the periods needed to double an investment gives a reasonable estimate of the effective interest rate. According to Investopedia, “The average annualized return [of the S&P index] since inception in 1928 through Dec. 31, 2023, is 9.90%.” Late last year, Charlie Munger said that “even wealth managers now have almost zero chance of outperforming the S&P 500.”
We wanted to do better than that. And we did, using Hypernomica™ to speed up our “Time to Double” investment (B).
There are worlds you’ve never seen working in their own non-physical dimensions. Hypernomica™ lets you see and work within these previously unseen structures, optimizing your outcomes. Find out what it can do for you.
#hypernomics #innovation
Market Anatomy: 7D View In Rotation
In mammalian anatomy, we can find several similar structures in disparate species. In (A), the human arm has the same parts as a cat. Humans and cats have a median or sagittal plane running through the body’s midline, which divides the body or parts into right and left halves. That plane is at right angles to the coronal or frontal plane, one running from side to side, which divides the body or any of its parts into anterior and posterior portions. The intersection of the sagittal and frontal planes forms the body’s vertical axis.
Hypernomics finds similar structures in markets. In (B), the market for business jets, the vertical price axis separates the green Value Space from the red Demand Planes, as in (C), the market for the turbofan engines that power business jets.
Just as mammalian limbs work in concert with the rest of their bodies, the market for business jets depends on the one for turbofan engines. They meet at the vertical price axis. To see this 7D system in motion, go to https://lnkd.in/gvvxVrCq
#hypernomics #marketanatomy #innovation
Inflation Bites
Most people have nostalgia for their youth. Being a kid. High school.
Me, I’m rather fond of 2019.
As shown in (A), those halcyon pre-COVID-19 days found government currencies stable. The United States Dollar (USD), The World’s Reserve Currency, found its appropriate resting spot at the vertex of the Outer Demand Frontier while resting squarely on the Upper Demand Frontier simultaneously. As shown in (B), for the six years before 2020, M2 grew slowly (< 1% annually) and predictably.
USG initiatives to keep the economy moving started with COVID-19 and continued for over two years, during which the Fed swelled the growth rate of M2 to nearly 17% annually. We can predict the primary effects of that action on USD in (C). There, a 55% instant increase in M2 drops the value of USD to $0.93 along the Upper Frontier and to $0.51 on the Lower Frontier.
While these movements occurred over time and in relation to other countries’ money supplies, we still feel those effects today.
The amount of currency is a primary determinant of its value. Reserve banks will be well-advised to examine the Demand for their currency before issuing vast amounts more.
#inflation #hypernomics
All-Time Highs, But
They stood there laughing/They’re not laughing anymore—The Call, The Walls Came Down
Recently, it seems that everybody has been shouting about the financial markets. It seemed the markets set new records daily this week, which is excellent for those invested in these pools. The best firms and exchanges in the world are doing the best they’ve ever done. A skeptic might ask, is that all there is?
Well, I’m a skeptic.
About four years ago, using the principles I had discovered while writing my book, I took my money and used our software to create the Hypernomics Fund. There may be thousands of viable fund variations, but ours, based only on S&P 500 stocks and always going long, works better than many of the leading names in the business.
A few years from now, everyone will use Hypernomics principles or be behind those that do since it lets you see more of the markets’ inner workings than the alternatives.
You wouldn’t study the stars without a telescope. Don’t research your markets without Hypernomics.
#hypernomics #stockmarkets #innovation
Safety Pays
When trying to increase profits, many companies often chant the same old mantra, “Let’s cut costs.”
Aerospace is not immune to such cries. Recent events at The Boeing Company have highlighted how hurrying planes out the door led to a door bolting off a plane. The no-door idea works for Jeep but is a bad look on an airliner. Many see safety requirements as just another hurdle to jump on the way to making money. It’s a cost once sunk, never to be seen again.
But data analysis tells a different story.
All the excellent work Boeing (before Max) and others did to reduce loss rates increased airliner Value (sustainable prices). Below, the Boeing 737-800 had a hull loss rate of 0.2 per million flights. At less than 1/31st of the Tupolev Tu-204 loss rate, it explains how the Boeing 737 series commanded a higher price and sold over 100 times as many as its Russian counterpart with less capacity, range, and speed.
Diligent workers want to put out the best possible products. Keeping their established quality helps the brand’s Value and bottom line.
Take 52 turboprop and jet airliners (19 shown here) and determine their Value (sustainable price) based on their Payload and Maximum speed in MPH. You’ll get a nicely correlated answer. But add their loss rates into the mix, and you’ll get a better one (its p-value 1.47E-05). Being 10X safer costs time and money but adds over 50% to airliner Value.
A New Twins Thought Experiment
Einstein performed a thought experiment in which he imagined one of a pair of twins traveling near the speed of light while the other remained fixed on Earth. The faster twin, he stated, would age less quickly due to time dilation. Experimentation proved his theory with a pair of synchronized clocks, one flying in a jet, the other on the ground, as the jet clock recorded less time. This theory is the basis of GPS.
That method applies to my discovery of Hypernomics. I imagine one twin (A) plotting the 1) horsepower, 2) range, and 3) prices of electric cars. Meanwhile, in (B), her sister plots the 4) quantities sold and 3) prices of those models. In (C), I observed that as (A) and (B) have the same vertical axis, they combine to form a 4D system, where statistically significant relationships form on both sides, linking the opposing forces of Value and Demand. These forces have worked for all markets since the beginning of markets.
Einstein didn’t open a relativity shop for his theory. But you can apply these 4D methods and many more to your business problems, as my revolutionary book, Hypernomics (D), describes.
Hyperplane Economics: Beyond Conventional Boundaries
You’d be bored with economics, too, if you didn’t get a chance to whip out a hyperplane or two. It turns out that they are not just some superfluous hidden geometries but ways to see and solve unseen problems.
Here’s a riddle: How do you model the options for a new bomber?
Here’s how Hypernomics approaches that. First, work out the Demand Frontier for planes of that ilk, as shown in (A) below. Then, find a quantity or two you like and their related maximum prices. In the adjacent Value Space, derive the Value of the bombers as a function of speed, range, and quantity. Set the quantity in the Value Space to your limits along the Demand Frontier. Then, plot the hyperplanes for Value and let them intersect your horizontal price-limited planes. As straight lines in log space, those intersections appear as the curves in the linear plane (B), revealing your options.
For more insight, consider adding payload and stealthiness to the mix.
Same Function, Different Form, Common Links
Invisible links. Poppycock. We don’t need no stinking invisible links.
For too long, many have thought market actions were largely mysterious, their forces hidden, and actions unpredictable. When it comes to product demand, that is complete nonsense. Even when collections of products look different but do the same thing, they behave in ways we can predict.
A Invisible links. Poppycock. We don’t need no stinking invisible links.
For too long, many have thought market actions were largely mysterious, their forces hidden, and actions unpredictable. When it comes to product demand, that is complete nonsense. Even when collections of products look different but do the same thing, they behave in ways we can predict.
A Raven UAV doesn’t look anything like a Topaz satellite. Yet, doing the same mission using different altitudes, payloads, and speeds, they are bound by the same Demand Frontier, one that limits the arena’s most highly rewarded performers. If you prove worthy enough to be on the field of play, you often find a certain lower guarantee of recompense, known as Minimum Demand.
Such boundaries are only mysterious if you don’t do Hypernomics. doesn’t look anything like a Topaz satellite. Yet, doing the same mission using different altitudes, payloads, and speeds, they are bound by the same Demand Frontier, one that limits the arena’s most highly rewarded performers. If you prove worthy enough to be on the field of play, you often find a certain lower guarantee of recompense, known as Minimum Demand.
Such boundaries are only mysterious if you don’t do Hypernomics.
Spy satellites, military satellites, and Unmanned Aerial Vehicles (UAVs or drones) all perform the same mission and face identical financial limits. Below is an Upper Demand Frontier that includes models of all three groups. With a slope of -1.38, is steep (inelastic).That means more money is spent on five Topaz Spy Sats (5*$9.4B = $47B) than the 19,000 Raven Drones (19,000 *$25K= $475M).The steeper (-1.96) Minimum Demand Frontier reveals that one Mercury Spy Sat ($2B) fetches more than 19,000 RQ-I4s (I9K*$3K = $57M).
Same Function, Different Form, Same Equation
Modern surveillance demands a lot of different platforms. The Russians run ELectronic INTelligence (ELINT) satellites over Hawaii, California, and the rest of the US (A). Western forces must get the same insight to be as well-informed.
We can get this data from airborne platforms outside of manned systems (such as the U-2 Dragon Lady, the E-3 Sentry, and the E-2C Hawkeye) by using satellites and Unmanned Air Vehicles (UAVs).
It turns out we can predict the Value (sustainable price) of Western Bloc satellites and UAVs using the same equation. In (B), with 30 Sats on the left and 30 UAVs on the right, we predict the Value of the US Mercury ELINT satellite using an equation considering 1) Payload, 2) Max MPH, 3) Altitude, and 4) Quantity sold. The Israeli Orbiter UAV (C) estimate using the same equation is highlighted in (D). With an adjusted R2 of 96.1%, its p-value is 8.83E-39.
As you might imagine, the Inner and Upper Demand Frontiers for these devices are highly correlated, too, giving direction on purchases.
More on that in another post.
Strategy Rethought
There’s a trend in defense matters to want the absolute best always. We tried to get 132 bombers with long range, massive payloads, and very low radar signatures. We got 21 B-2s. The USAF wanted 750 frontline stealth fighters. It received 187 F-22s. Nobody, it seemed, ever paid close attention to the budgets allocated to missile-carrying aircraft.
We see the same thing now in the US hypersonic missile market. The Congressional Budget Office (CBO) thinks it can buy 100 of the Lockheed Martin AGM-183 ARRWs (or a like device) for an average price of $14M (2016$), with a range of 1000 miles. For an agency with “Budget” in its title, you might think they would have done the analysis below. If they had, they’d find their projection is 108 standard deviations past that market’s highly correlated Demand Frontier.
We’ve paid heavily to make our frontline bombers invisible to radar – don’t imagine they need to use missiles with stand-off ranges to accomplish hypersonic missions.
The solution is clear: make any hypersonic missile smaller and cheaper with less range and payload and fly it closer to the target.
China claims to fly them. Russia wants them, too. It makes sense that the USA must also have these hypersonic weapons.
But, as in all budget matters, there are limits. At the current CBO projection for the average cost of the 100th missile of that ilk ($14M in 2016$)1,2 that price point is 108 std devs past the budget limit. The solution is to make a much smaller missile with far less range and fly it closer to its targets.