neumannsol.com

Excellent article on the pitfalls of home ownership (and the bias against renters in US) by Paul Krugman in NYtimes yesterday.

But here’s a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

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And the belief that you’re nothing if you don’t own a home is reflected in U.S. policy. Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn’t let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.

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There are some real disadvantages to homeownership.

First of all, there’s the financial risk

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Owning a home also ties workers down

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Finally, there’s the cost of commuting.

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All I’m suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting.

And while we’re at it, let’s try to open our minds to the possibility that those who choose to rent rather than buy can still share in the American dream — and still have a stake in the nation’s future.

Really funny story from Barry at his BigPicture blog:

http://bigpicture.typepad.com/comments/2003/11/a_funny_thing_h.html

I really like the utterly gracious comment by Prof. Engle

“I catch myself being a moron again, and hasten to add: “Not that 5 minutes on Fox compares to a Nobel.”

Again, utter graciousness from the (Prof. Engle) gentleman: “It just shows how people overemphasize perceived expertise.”

One of the better indicators of statistical significance is the so-called ‘interocular trauma test.’

It’s only satisfied when you have results that are so glaringly obvious that they hit you between the eyes.

Or stated another way: Plot the data. If the result hits you between the eyes, then it’s significant.

Excellent article by Dr. Atul Gawande in the New Yorker:

Talks about how recency bias (”The Checklist”) can be used to save lives.

“The researchers found that simply having the doctors and nurses in the I.C.U. make their own checklists for what they thought should be done each day improved the consistency of care to the point that, within a few weeks, the average length of patient stay in intensive care dropped by half”.

“The checklists provided two main benefits, Pronovost observed. First, they helped with memory recall (recency bias at work!), especially with mundane matters that are easily overlooked in patients undergoing more drastic events. (When you’re worrying about what treatment to give a woman who won’t stop seizing, it’s hard to remember to make sure that the head of her bed is in the right position.) A second effect was to make explicit the minimum, expected steps in complex processes.” (emphasis mine)

[…]

” But this time he found few takers.

There were various reasons. Some physicians were offended by the suggestion that they needed checklists. Others had legitimate doubts about Pronovost’s evidence. So far, he’d shown only that checklists worked in one hospital, Johns Hopkins, where the I.C.U.s have money, plenty”

[…]

“The fundamental problem with the quality of American medicine is that we’ve failed to view delivery of health care as a science. The tasks of medical science fall into three buckets. One is understanding disease biology. One is finding effective therapies. And one is insuring those therapies are delivered effectively. That third bucket has been almost totally ignored by research funders, government, and academia. It’s viewed as the art of medicine. That’s a mistake, a huge mistake.”

So, today I was able to convince Pawel (a fellow UMBA at CBS) to start blogging his ideas about CPM.

Check out his “Holy Grail” blog.

Well, lets for a moment, step into the role of a VC/Angel and see what they look for in a deal:

Core Requirements:

• Management team: Deep domain experience (> 5-7 years)
• Companies with distinctive products with proprietary edge & strong customer appeal
• Localized investments

Investment Guidelines:

• 3-5 years time horizon with 15-20x return (that’s not 15-20% IRR, but 15-20 times their money back!)
• $1m-$5m in investments
• Ongoing Investments
• Equity or Convertibles
• Management should have real skin in the game
• VC’s assume the role of a lead investor

Business Plan:

• Strategic Direction
• Understanding of the Niche Markets & the proprietary nature of the business
• Resumes
• Analysis of the markets: Trends, Competitive climate, etc.
• Distribution channels
• Projections
• Uses of Cash

So, it is vital to have deep domain experience on your team, and an idea which has the potential to generate 15-20 multiples in 3-4 years.

Check out Mark’s blog on getVentures for lots of great info and details.

NeumannSol = Neumann Solutions

Neumann = John Von Neumann

John von Neumann = One of the greatest mathematicians, one of the greatest quantum physicists, one of the greatest computer scientists (before the advent of digital age!) and one of the greatest minds of all times.

Some links

http://mayet.som.yale.edu/coopetition/vN.html 

wikipedia

cs.vt.edu