David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Machine Learning's "Amazing" Ability to Predict Chaos

    This article from quantamagazine.com may be of interest to subscribers. Here is a section:

    “This is really very good,” Holger Kantz, a chaos theorist at the Max Planck Institute for the Physics of Complex Systems in Dresden, Germany, said of the eight-Lyapunov-time prediction. “The machine-learning technique is almost as good as knowing the truth, so to say.”

    The algorithm knows nothing about the Kuramoto-Sivashinsky equation itself; it only sees data recorded about the evolving solution to the equation. This makes the machine-learning approach powerful; in many cases, the equations describing a chaotic system aren’t known, crippling dynamicists’ efforts to model and predict them. Ott and company’s results suggest you don’t need the equations — only data. “This paper suggests that one day we might be able perhaps to predict weather by machine-learning algorithms and not by sophisticated models of the atmosphere,” Kantz said.

    Besides weather forecasting, experts say the machine-learning technique could help with monitoring cardiac arrhythmias for signs of impending heart attacks and monitoring neuronal firing patterns in the brain for signs of neuron spikes. More speculatively, it might also help with predicting rogue waves, which endanger ships, and possibly even earthquakes.

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    How We Should Bust an Investing Myth

    This article by Jason Zweig for the Wall Street Journal may be of interest to subscribers. Here is a section:

    According to PitchBook Data, 66 companies valued at $1 billion or more have done initial public offerings from 2011 through mid-September 2019. A third of those IPOs came at prices below the value set in the companies’ last round of private funding. Bloom Energy Corp. , Cloudera Inc., Domo Inc., Reata Pharmaceuticals Inc., and Zynga Inc. all launched IPOs priced at least 40% lower than the valuation in their final private-funding round, according to PitchBook.

    Perhaps that’s because conventional valuation methods may overstate what private funds’ venture holdings are worth. Often, several share classes are valued equally even though they aren’t all entitled to the same payoffs.

    Or perhaps the brilliance of the private market is overstated. Consider a recent survey of nearly 900 venture capitalists.

    Asked whether they “often make a gut decision to invest” in a fledgling company rather than relying on analysis, 44% of venture-fund executives said yes.

    Which financial metrics do they use to analyze investments? “None,” admitted 9% of respondents. Only 11% quantitatively analyze past investment performance. A similar survey of private-equity executives found that they “do not frequently use” the methods that are standard among public investors for discounting the future cash their holdings might generate.

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    China Gives New Waivers for Tariff-Free U.S. Soybean Purchases

    This article from Bloomberg News may be of interest to subscribers. Here it is in full:

    The Chinese government has given new waivers to several domestic state and private companies to buy U.S. soybeans without being subject to retaliatory tariffs, according to people familiar with the situation.

    The companies received tariff waivers for between 2 million to 3 million tons of American soy, said the people, who asked not to be identified as the information is private. Some firms have already bought at least 20 cargoes, or about 1.2 million tons, of the commodity from the U.S. Pacific North West on Monday, the people said.

    Among the companies are state-owned buyers Cofco and Sinograin as well as five other crushers, the people said. China’s commerce ministry didn’t respond to a fax seeking comment.

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