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Uphill to Stupid: Universality Abounds

All schools and colleges have two great functions: to confer and conceal valuable knowledge.
Mark Twain

Some writers have gained more attention than their ideas merit. It takes little thought to discard them.

Take Karl Marx and his school of thought, for example. In his Communist Manifesto, he wrote, ” Modern bourgeois society… is like the sorcerer who is no longer able to control the powers of the nether world.” Later, in his Capital: A Critique of Political Economy, Marx stated, “So far, no chemist has ever discovered exchange-value in …a diamond.” He wants you to believe that the bourgeois economy runs by magic.

Hypernomics knows better. And so do you. A diamond’s value is a function of its carats, color, clarity, and cut. Marx certainly knew of the Hope Diamond and that it was worth more than smaller stones. He was pulling the wool over readers’ eyes. There is not a lick of sorcery in diamond valuations. Thus, his view about diamonds is downhill of stupidity. He was more sinister than that. Instead, he concealed valuable knowledge. This would-be sleight of hand had implications for states that followed his lead.

In 1985, the USSR artificially constrained all salaries to 400 rubles or less per month (Alexeev, Michael V., et al., “Income Distribution in the USSR in the 1980s,” 27 Nov 1992), defying conventional (i.e., non-Marxist) economic wisdom. Doctors made little more than janitors. It made sense to the central planners. And then their economy collapsed—not despite their best efforts, but because of them.

When it comes to Valuing physical products (like a flawless, colorless, round, brilliant two-carat diamond or an Oscar II nuclear cruise missile submarine weighing nearly 15K tons with a top speed of 32 knots) instead of people, there’s no option other than Hypernomics.

In (C) below, the angled plane projects the value of Russian nuclear submarines using performance and price data from 20 and 57 ship classes in the United States and Russia, respectively. The equation used for that surface has a p-value of 9.85E-40. In (B), reflecting the same equation with its step function, the US pays about 60% more for the same tonnage and speed as comparable Russian boats, likely due to factors not considered separately in this equation (such as safety, max depth, comfort, etc.). All navies have behaved like that since they began.

With (A), the US and Russian navies abide by statistically significant but distinctly different Demand Frontiers, each with a p-value of about 0.03. Demand comes not from Marxist rants but from how all buyers purchase goods as their prices change. The slopes may change, but the central tenet does not.

When next you meet a Marxist, tell them the Eastern Bloc buys naval vessels the same way as the West. In other words, they buy like the bourgeoisie. And that is so bourgeois.

Which, despite the would-be disparaging tone, is a good thing.

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The Premature End of the B-21

What did the President know, and when did he know it?
Howard Baker, Watergate Hearings.

Last month, in a hearing before the U.S. House Armed Services Committee, Lt. Gen. Richard G. Moore Jr., Deputy Chief of Staff for Plans and Programs, U.S. Air Force, reaffirmed the USAF’s commitment to buy 100 Northrop B-21 bombers by 2039. The Gen told the Committee he needed to get “predictable funding.”

That won’t happen. The 100-unit bit, that is. We’ve got the “predictable funding” covered.

On September 26, 2018, after giving an award-winning paper at an international annual conference (iceaaonline.com), I was asked to present it again to its Southern California chapter. The venue was a Northrop Grumman facility, with several NG people in attendance.

It turns out that the funding the Gen receives for bombers, fighters, and attack aircraft is very predictable. But its limits are far lower than Gen Moore imagines. The Demand Frontier for this market has been stable for over 25 years and will limit the purchase to just over 50 units. Even if the program makes its FY 2016 target of $610M/plane, it has a slim chance (< in 1M) of making 100.

When it stops in 2039, people will point to “changing environments.”

But the target was never in reach. We knew that in 2018.

When I related that to the crowd, nobody ran out the door, telling the company to “hold the presses” on the B-21 sales prediction. Why?

How long will it take a military branch unequaled in precise targeting to realize that the time to take aim at program requirements is when the program launches, not when it falls apart decades later?

#hypernomics #b21 #innovation

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Time to Double

Most inventors who have an idea never stop to think whether their invention will be saleable when they get it made. Unless a man has plenty of money to throw away, he will find that making inventions is about the costliest amusement he can find.
Thomas Edison

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

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Market Anatomy: 7D View In Rotation

The whole aim of comparative anatomy is to discover what structures are homologous
Libbie Henrietta Hyman.

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

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All-Time Highs, But

On average, people should be more skeptical when they see numbers. They should be more willing to play around with the data themselves
Nate Silver, founder and editor-in-chief of FiveThirtyEight</small

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

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Discovery, Invention, and Stocks

There is a difference between discovery and invention. A discovery brings to light what existed before, but what was not known; an invention is the contrivance of something that did not exist before.
Sir William Ramsay

There was a hidden discipline lying about, unseen from view. I unearthed it. When I did, I discovered HypernomicsTM. Its foundation, the Law of Value and Demand, states that

  1. Features determine Value
  2. Value drives Price
  3. Price limits Quantity Sold
  4. Quantity Sold is a Feature.

Useful by itself, it needed an invention to get results quickly.

That came as HypernomicaTM (formerly MEE4DTM) software, built by Shad Torgerson, Kent Joris, and me. It speeds up the analysis of complex markets.

Just over 44 months ago, we set it on the most complicated market we could find — that of stocks. Using only stocks from the S&P 500, our HypernomicsTM Fund (private, not open to the public) managed to beat it by 2.35X. The likelihood of that happening by chance is very much less than one in a trillion. At the same time, our fund outperformed Berkshire Hathaway A by a factor of 1.39X.

HypernomicaTM is available now; soon, we will begin classes on it. Be among the first to benefit from this discovery and its companion invention.

There’s a preferred way to compare the means of two groups and verify if their differences came about randomly.That is the Student’s t-test. William Sealy Gosset conceived it in 1908 (published under the pen name “Student”). That test (the two-tailed version) reveals that the likelihood that HypernomicsTM beat the S&P 500 by 2.35X over 44+ months was due to chance was 2.01 E-237.That test for HypernomicsTM against Berkshire Hathaway A, where we beat it by 1.39X in the same period, calculates the probability that the result was due to chance as 1.57E-152. In short, our algorithm, built using the HypernomicaTM Software, works. It will work for you, too, whatever your market might be.

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Fantasy vs. Reality: Hypernomics & the End of Illusion

And yet it moves
Galileo

In 1633, the Roman Inquisition convicted Galileo of heresy. His offense? He pointed out that instead of the universe revolving around the Earth (A), Earth circled the Sun (B). For that, he spent the rest of his life under house arrest. In 1992, Pope John Paul II finally acknowledged that the Church had erred in condemning Galileo for saying the Earth revolved around the Sun.

The law of supply and demand tells us that markets have one equilibrium point where those lines intersect (C). Every introductory economics textbook has some version of it, an idea that has existed for over 130 years. And it works for commodities like iron ore.

But that’s where it ends.

It doesn’t work for business aircraft, where many models offer varying combinations of speed and cabin volumes command an equal number of prices, all upheld by variable quantities sold (D).

To understand economics, you need Hypernomics (E). It’s available for presale HERE.

Your competitors may be content waiting 359 years to see the world as it is.

But you shouldn’t be.

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Dimensional Collapse

Perspective is a most subtle discovery in mathematical studies
Leonardo da Vinci (Attributed)

Collapsing dimensions sound like the premise of a creepy science fiction film.

But art, engineering, and architecture have used them for centuries.

The angles in (A’s) 12th-century painting do not truly represent what the eye sees. Art, up to the 1500s, suffered from this technique.

But with the advent of Brunelleschi’s drawings of Florentine buildings in the early 1400s, artists, engineers, and architects could offer visualizations that more closely mimicked reality. The trick was using a vanishing point where all dimensions necked down to a solitary spot. In (B), it’s in the sky between the central figures of Socrates and Plato.

In my upcoming book with Wiley, Hypernomics: Using Hidden Dimensions to Solve Unseen Problems, I show how simultaneously understanding multiple markets mandates dimensional collapse. Hypernomics has a five-market, 16D drawing representing 3% of world GDP. Hypernomics needs collapsing dimensions to solve hidden problems that artificially constrained approaches cannot see, let alone explain (C).

Modern business analysis mandates dimensional collapse, as does modern art.

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Ants, Airbus, And Avoidance

Hit ’em where they ain’t.
Wee Willie Keeler

I finished a run the other day and stretched at the trail’s end. I looked down, and an ant caught my eye. Starting from position A1, it reached A2 and seemed to be going in a circle for a moment. But then, as its path widened to A3, A4, and A5, I realized it was doing reconnaissance! I raced home and found out that ants do that to “avoid hostile conspecific neighbours,” when considering where to set up camp, they use “a weighted additive strategy, the most comprehensive of consumer evaluations, to choose nests with the best combination of attributes.”*

People, of course, do the same thing.

In B, during 2009-2018, the business jet market had a lot of competitors offering various cabin and price combinations. Noticeably, though, there were a few prominent gaps in the market, akin to how the ants saw regions away from their neighbors. In Q1 of 2019, Airbus launched its A220-100 business jet in the most prominent open region (C). Along with the base airliner from which it came, this vehicle has several hundred orders, helping ensure its long-term viability.

When considering where to place your next product, work to avoid local opposition.

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How to Lose €10B+

The race is not always to the swift, nor the battle to the strong, but that’s the way to bet.
Damon Runyon

According to Harvard professor Clayton Christensen, nearly 30,000 new products are introduced yearly, and 95% fail.

But there are ways that one can help increase the potential for product success. It involves determining the Value, Demand, and Cost of goods and services before they launch. Buyers reveal how they Value the product features and their Demand. It is up to producers to figure out those parameters, along with their Costs. Not looking at all those variables in advance is a recipe for financial disaster.

You’re bound to fail if you placed a heavy bet on a program with long odds against you– but you went ahead with it, got it into production, and rode it out until it ran out of steam after losing tens of billions of Euros. That is the conclusion I reached for the Airbus A380 in my paper, “CSI EU: Cost Scene Investigation,” for which I won the ICEEA 2023 Best Modeling and Case Studies Track Paper. This step-by-step analysis gives you the framework for creating models that enhance your chances of being that one in 20 product that succeeds. Below is the video of the presentation: