Some thoughts on comparable companies analysis and machine learning

I’ve been reading up on investment banking lately for work, also out of interest. The first chapter in Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions by Joshua Pearl and Joshua Rosenbaum talks about comparable companies analysis, also called trading comps. It’s one way that investment bankers go about valuing private companies that are about to go public, or those that may merge or be acquired by another company, for example.

Automating comparable companies analysis

The process seems fine, it involves data collection, then essentially comparing the “target” (the company you’d like to value) to those in a “comparables universe.” It’s all manual work, with the most difficult part being amassing the universe of comparable companies. The rest of it essentially involves simple addition, subtraction, multiplication, and division. And it makes me think… why can’t we just automate it with machine learning?

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Made to Stick by Chip & Dan Heath [Book Review]

This is a New York Time’s best-selling book written by two brothers, Dan and Chip Heath. In this book they answer a question that a lot of us think about: why do some ideas gain traction, while others that seem better get ignored and fall to the side?

Here’s what you need to make your ideas SUCCESful and sticky. Make your ideas:

  1. Simple,
  2. Unexpected,
  3. Concrete,
  4. Credible,
  5. Emotional,
  6. and tell a Story.

Use SUCCES as your acronym and guide, and your ideas will sticky.  That is, memorable and interesting. Understandable, and will have a long lasting impact, and even change your audience’s behaviour or opinion.

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Life and Death in Shanghai by Nien Cheng [Book Review]

You need to read this book. This is isn’t made up. It’s a real account of a Nien Cheng’s life during the Cultural Revolution. Nien Cheng was kept imprisoned for over 6 years at Number One Detention house in Shanghai, from 1966 to 1973. During that time she was interrogated, beaten, and left isolated, all while being pushed to “confess” to being an “imperialist spy.” Why this treatment? Because she was western educated, and the widow of the former manager of a foreign firm in Shanghai. She wasn’t guilty of anything, and refused to produce a false confession, despite the quite literal torture. She made it out alive, miraculously, but her daughter wasn’t so lucky- she was beaten to death on the streets of Shanghai by the Red Guard. All because of who her family was. Nien Cheng was never the same after the death of her daughter. It’s so sad.

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Mastering Bitcoin by Andreas Antonopoulos [Book Review]

Yes, this is a Bitcoin article. Yes, I know it’s super hot and perhaps cliché to write a blog post on this, especially at this time. As CNBC put it, $550 billion in cryptocurrency has just been wiped off the market since the record highs last month. Everyone’s talking about it. Everyone (i.e. 25 million people) has/have bought (and probably by now, a lot have sold) Bitcoin. I hear people talking about cryptocurrencies everywhere. The other day, on the bus, I was pleased to hear someone explaining Bitcoin “mining” to his (obviously bored, and uninterested) friend- I was pleased because he actually explained it right! Maybe this guy read Mastering Bitcoin by Andreas Antonopoulous?

I wanted to write up a quick post about this fabulous book. I mentioned it in my post in October, called Bitcoin, What’s the Math?, since it was so great for really helping me learn about what Bitcoin is, what it’s for, and most importantly, what it isn’t. All I want to say is, if you’re really serious about Bitcoin, go and get a copy of this book. I’ll lend you mine. You can probably find the ebook online, at your local library, or from a friend. You can even read it for free as noted in the Github repo, but “convenience costs money.”

This book is really the Bible of Bitcoin, and there are many lessons learned in this book that apply to cryptocurrencies in general. Of course Bitcoin isn’t perfect, but it was the first major cryptocurrency that got things going, so it’s great to start here. Those who are adventurous can try to get a hands on Mastering Ethereum, which, if it’s anything like Mastering Bitcoin, will be another masterpiece by Andreas!

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Homo Deus: A Brief History of Tomorrow by Yuval Noah Harari [Book Review]

Sapiens is where we came from, Deus is where we’re going. Although I’ll admit, I haven’t even read the first book in this (sort of) series. But I should- Homo Deus is a phenomenal book, and I’m sure Homo Sapiens is too.

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How Not to Be Wrong: The Power of Mathematical Thinking by Jordan Ellenberg [Book Review]

This book is so good! About 50 pages in, I knew I had to buy it for my 14 year old cousin for Christmas. As I told her, this is a perfect book for someone who wants to develop their mathematical thinking. I told my cousin that she doesn’t have to read it now, but hopefully she does by the time she’s in her second year of university. While the math is made quite simple, the stories surrounding the math could be a bit difficult for a 14 year old to grasp- references range from Are You There God? It’s Me, Margaret by Judy Blume, to the Laffer Curve, from a discussion of HDL/LDL levels to stock brokers, and beyond.

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WTF?: What’s the Future and Why It’s Up to Us by Tim O’Reilly [Book Review]

In his provocatively titled booked, WTF?: What’s the Future and Why It’s Up to Us, Tim O’Reilly discusses the technology that often makes us go “WTF?”, and why we as a society, not the tech itself, are the ones with the power to decide how it will shape the future. I was pleased to see O’Reilly take an optimistic stance on the issue, since what’s often portrayed in the media is a future overrun by unfriendly AI that steals our jobs and ruins our lives. Personally, I don’t think we’ll have a future akin to I, Robot. I envision a society that harnesses the power of technology and artificial intelligence to enable us to be more productive and do more meaningful work, rather than be put out of work. O’Reilly’s opinion is similar. This post is a summary, of his book, WTF?, with a sentence per chapter.

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Enchantment by Guy Kawasaki [Book Review]

Guy Kawasaki was the chief technical evangelist for Apple back in 1983 (and returned to Apple in 1989 as an “Apple Fellow” to reward his contribution to the company). He was responsible for marketing the Macintosh in 1984. He was great at his job, clearly. He’s also responsible for the spread of the concepts of “technical evangelism” and “evangelism marketing.” He’s now an esteemed Silicon Valley venture capitalist, speaker, and author. When you see him speak or read his books, it’s clear that he practices what he preaches.

Guy (I use his first name since it feels like we’re already best friends) has written numerous books all on a similar topic. Think: How to Win Friends and Influence People, Guy style.

This is Guy’s 2011 Enchantment: The Art of Changing Hearts, Minds, and Actions in a nutshell.

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The Innovator’s Dilemma by Clayton Christensen [Book Review]

I’m trying to become more well read on the world of business. I found the Innovator’s Dilemma by Clayton M Christensen thanks to Data Elixr newsletter. I said to myself that any book recommended to a bunch of data enthusiasts should be good, and I love Data Exlir’s content, so I decided to give it a try. This post is mostly a summary of each chapter, with some comments mixed in.

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Blockchain: Blueprint for a New Economy by Melanie Swan [Book Review]

The other day I commented to a friend that while I understand the Bitcoin blockchain well, I don’t fully understand its value from a business standpoint. To be blunt, I get the tech and find it fun and fascinating, and while I know it’s useful, I don’t entirely see how it’s useful. My friend commented that this is a common problem with tech people- we understand the tech but don’t understand the business. Fair enough.

I came across the book Blockchain: Blueprint for a New Economy by Melanie Swan. It’s described as a book that “takes you beyond the currency (‘Blockchain 1.0’) and smart contracts (‘Blockchain 2.0’) to demonstrate how the blockchain is in position to become the fifth disruptive computing paradigm after mainframes, PCs, the Internet, and mobile/social networking.” It sounded good, and it’s an O’Reilly book, so I decided to give it a read.

This post is a summary and review of Blockchain, which is essentially a list of blockchain use cases, all discussed at a very high level. While the author doesn’t touch on the technical side of things or implementation, I found it a useful quick read.

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