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Table of Content |
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1. Johnson & Johnson (JNJ): Time to Short the Stock – Psycholinguistic Analysis with Computer Intuition (7/11/11) |
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Background on Computer Intuition
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We predict stock prices of target corporations using Computer Intuition, our proprietary psycholinguistic program. Computer Intuition analyzes natural language and retrieves elements from the subconscious of investors. To start the analysis we collect everything we can find on a target corporation, including, articles, press releases, messages, blogs, interviews, etc. written in plain English. We than process the reports with the Computer Intuition program. The results highlight key elements in the subconscious of investors. Our experts use these elements in constructing the future demand for the stock of the target corporation, and the future price of the stock.
In short:
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We predict stock prices of target corporations using Computer Intuition, our proprietary psycholinguistic program |
Background On Computer Intuition
Wouldn’t you wish to have
Henry Ford, Warren Buffett, or Albert Einstein conducting a financial
analysis of your target corporation? Imagine someone with their ability in
choosing the right issues, their talent in recognizing meaningful
findings, their genius in leaping from conventional thinking to new and more promising
ideas. Think how much you will "see" with Henry Ford, Warren Buffett, or
Albert Einstein on your team.
We believe that the above proposition is not a mere wish. Our sophisticated
computer program, called Computer Intuition, was modeled to show the
characteristics of genius intuition, and therefore, to turn its users into “Fords,
Buffetts, or Einsteins.”
The basic premise of the Computer Intuition program is that every future event is preceded
by hints, and that the key to realizing these events is
recognizing the future significance of these hints.
In 1996, Dr. Hanan Polansky completed a prototype of a
computer program that analyzes text and assigns a rating to all
cognitive units (ideas) found in the text. The rating can be interpreted
as intuitive intensity, (or psychological intensity, hence, psytensity).
The higher the intuitive intensity, or psytensity, of a cognitive unit,
the more it hints on future events. Dr.
Polansky modeled the program after the intuition of the greatest minds in
business and science, such as Henry Ford, JP Morgan, Sam Walton, Lou
Gerstner, John D. Rockefeller, Bill Gates, Steve Jobs,
Warren
Buffett, Albert Einstein,
Isaac Newton, Thomas Alva Edison, Nikola Tesla, and many more, and
called it Computer Intuition.
Consider Figure 1.
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The red line marks the volume of information available to a community of decision makers on a certain subject, over time. The beginning of the line marks the "hints" period, and the end of the line the time where all the relevant information is known. The blue line marks the number of decision makers that understand the true significance of the available information, over time. An average decision maker will understand the true significance of the information when most of it is already known, see point 1. A brilliant decision maker will appreciate its true significance when a small portion of it is known, see point 2. A "Ford, Buffett, or Einstein" will grasp its significance when only a few hints are available. This difference between the "Fords/Buffetts/Einsteins" and the brilliant decision makers, when measured in time, can be translated into years, even decades. Like the Fords/Buffetts/Einsteins, the users of Computer Intuition grasp the true significance of the scarcely available information, or the hints, much faster than anybody else.
In the last fifteen years, we used Computer Intuition in numerous applications. In all applications, the users of the program were faster than all other decision makers in "seeing" the future.
Let's say that the Available Info in Figure 1 suggests that a certain corporation is facing financial difficulties. The blue line describes the number of investors, over time, who realize the implications of these difficulties. According to the blue line, as time passes, more and more investors understand that the price of the stock is too high, and direct their brokers to sell it (or short it, see below). The genius investor, and the users of Computer Intuition, are the first to realize and react. As a result, they get the highest price for their stocks, and suffer a minimum to no loss. The brilliant investors react next and suffer a small loss because of the small decrease in the price caused by the genius investors. The average investors sell even later, get a lower price, and suffer a higher loss. The clueless investors realize last, get the lowest price, and suffer the highest loss. In fact, according to the blue line, there is a strong inverse relationship between the financial "IQ" of the investors and their losses, the higher the "IQ," the lower the losses. We call this cascade of events, a psychological wave. It starts with the smartest, most insightful investors, and ends with the clueless investors. Of course, if we add short strategies to this description, bad news, like good news, can create a psychological wave of increasing profits.
In Summary:
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We identify emerging psychological waves in financial markets and use these waves to predict the future prices of stocks |
The future of GE Healthcare: an analysis of CEO Hogan’s subconscious
When we talk, when we write, what determines the words we use? Our emotions, our hopes and fears, our dreams and nightmares. Are we aware of these emotions? Not really. Can we use these words to recover the emotions they reflect? Absolutely.
The following section shows an example of the Computer Intuition analysis, the results it produces, the insights gleaned from these results, and some business advantages provided by these insights.
Computer Intuition Analysis
To illustrate Computer Intuition, we analyzed an in-depth interview conducted with Joe Hogan, the President and CEO of GE Healthcare. The transcript of the interview was published in Forbes on May 9, 2005. The interview was moderated by Senior Editor Penelope Patsuris.
The interview included 2,353 words in 54 paragraphs. The following figure was produced by the Computer Intuition program.
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According to graph, the analysis identified 33 different ideas, or cognitive units. Idea 29 and 31 received a psytensity level of more than 90%. The following section includes idea 29 (bold letters mark the segment with the highest psytensity in the entire interview):
“Golf2do: What is GE’s position with emerging telehealth technologies?
CEO Hogan: We feel that broadband and portable monitoring will allow more home and portable monitoring of patients' conditions. The key will be proving that these systems actually save money, and there are many trials going on in the U.S. and in different parts of the world to determine the extent of help these systems can provide. At this point in time, I don't see a technological hurdle. The equipment and systems exist. The key will be determining the efficacy versus the cost of these systems.”
Why did Mr. Hogan choose the words “the efficacy versus the cost?” Why is the phrase “the efficacy versus the cost?” so prominent in the subconscious of CEO Hogan? Why determining the efficacy versus the cost of medical systems is such an emotionally loaded subject at GE Healthcare?
The graph identified the ideas with the highest weight in the subconscious of CEO Hogan. To find the meaning of these ideas to GE, we need a human analyst (the same way a patient needs a radiologist to interpret his MRI, or CT scan images).
Interpretation
GE Healthcare is a division of General Electric Company with $16.6 billion in sales and 42,500 employees in 2006. GE Healthcare is a global leader in medical imaging. The company sells products such as Computed Tomography (CT), Magnetic Resonance Imaging (MRI), and Positron Emission Tomography (PET) scanners.
In 2003, a number of reports from insurance companies identified medical imaging as the main driver of medical costs. These reports have been extensively discussed in the general media.
For instance, the San Francisco Chronicle published an article entitled: Curbing Costs of Medical Scans Insurers Seek to Rein in Fast-Growing Use of Pricey High-Tech MRIs and CTs, on April 24, 2005 (a few days prior the interview with CEO Hogan).
“Imaging procedures such as CT scans and MRIs have been hailed as one of the miracles of modern medicine, letting doctors see inside the body to spot tumors and other abnormalities.
But these great advances in medicine do not come cheap. Medical imaging is one of the fast-growing pieces of the health care bill, with spending approaching $100 billion a year.
There is a growing movement among insurers and health care planners to try to rein in expenses associated with high-tech scans such as CTs, short for computerized tomography, and MRIs, or magnetic resonance imaging.
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Insurers and government payers say they have no choice. The use of outpatient imaging procedures increased 44 percent between 1999 and 2001, according to National Imaging Associates, a New Jersey firm that manages radiological benefits for about 14 million health plan members in about 30 states, including California.
Expenses can quickly spiral because the cost per procedure is high. Prices vary widely, but a typical PET, short for positron emission tomography, costs about $2,000. The number of PET scans conducted increased 58 percent from 2002 to 2003, according to IMV, a medical marketing research and consulting firm.
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"We're not talking about small amounts of money here. If you look at the high-end (scans) -- the CTs, the MRIs, the PET -- those are the ones that are growing astronomically," said Dr. James Borgstede, chairman of the board of chancellors of the American College of Radiology. "What the carriers want to do is get a grip on that as fast as possible."
The Boston Globe published an article entitled: Imaging Companies Aim to Make Worth Clear, on August 25, 2005 (a few months following the interview with CEO Hogan).
“Medical imaging companies want to give regulators a clearer picture of their work.
Stung by criticism from insurers and hospitals that costs are out of control for magnetic-resonance imaging and other scans, equipment makers including Siemens Medical Solutions USA Inc. and Philips Medical Systems of Andover are fighting back, saying that the techniques pay off in better healthcare overall.
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Lately the number of these procedures has soared. IMV Medical Information Division, an Illinois market researcher, found that 50.1 million CAT scan procedures were done at more than 7,350 US facilities in 2003, up 10 percent from 45.4 million procedures in 2002. The use of MRI procedures also rose 10 percent during those years, to 24.2 million in 2003 up from 21.9 million in 2002, the company found.
Spending is rising with usage. Diagnostic imaging services nationwide grew faster than any other type of physician service between 1999 and 2003, according to the Medicare Payment Advisory Commission, which makes recommendations about how much the federal program should pay for procedures.
Services rose 45 percent in those years compared to 22 percent on average for all services. In dollar terms, spending on imaging services rose to $9.3 billion in 2003 from $5.7 billion in 1999.
The commission reported the figures in March as it was urging rule changes to reduce the rate of growth. Some reforms were meant to reduce the financial incentives doctors have to order more procedures. Already some insurers are limiting how many imaging procedures they will pay for.”
Many other media outlets have published similar articles. These articles, and the public’s reaction to these articles, have caused GE top management to worry about the future sales of their high end medical imaging systems, the core business of GE Healthcare. This anxiety has caused CEO Hogan to assign (subconsciously) a high emotional intensity to the phrase “the efficacy versus the cost” during the interview with Forbes. This concern has caused CEO Hogan to choose the specific words and phrases that revealed his profound preoccupation with the public’s perception of the balance between the efficacy and cost of GE’s medical imaging equipment.
An interesting observation. The “the efficacy versus the cost” phrase surfaced in CEO Hogan’s answer addressing GE’s position on the emerging telehealth technologies. Yet, Computer Intuition was able to recognize the relevance of this phrase to the more central issue of GE’s medical imaging equipment, and to record the high emotional intensity it evokes in the more central context. This example illustrates the power of Computer Intuition to “see out of context,” or to “think out of the box,” a trait characteristic of human geniuses.
Insights
How can a decision maker use the insights gleaned from the Computer Intuition results to his advantage? He can use them to predict the future decisions of the speaker and the organization he represents and translate these predictions into a financial gain. For instance, in the case of CEO Hogan, the analysis suggests that GE Healthcare has realized that the market for the high end medical imaging systems might be cooling off. As a result, GE needs to diversify into the low end medical imaging systems to lower the average cost of its products. GE also needs to acquire procedures that improve the accuracy of its medical imaging machines to increase the perceived efficacy of its systems. As predicted, in January 2007, GE announced an agreement to buy Abbott’s in-vitro diagnostics and point-of-care diagnostics businesses (formerly known as i-STAT) for $8.13 billion in cash.
GE is currently developing molecular agents to improve the accuracy of their systems in diagnosing specific diseases. These agents are injected into the body to increase the sensitivity of the diagnostic imaging devices. The in-vitro diagnostics division of Abbott will provide GE with more opportunities to develop such agents.
The point-of-care diagnostic business sells the handheld i-STAT system, which performs a comprehensive panel of critical tests, such as testing for blood gases, electrolytes, chemistries, coagulation, hematology, glucose, and cardiac markers (cTnI). The list price of the i-STAT system is around $3,000. In contrast, the price of an MRI machine ranges between $500,000 and $2 million, depending on magnetic field strength and diagnostic capabilities.
The purchase of Abbott’s in-vitro diagnostics and point-of-care diagnostics businesses is consistent with the predictions made from the Computer Intuition analysis of CEO Hogan’s subconscious.
Summary
As the example shows, a Computer Intuition analysis of a speaker provides powerful insights on the future decisions of the speaker and the company he represents. These insights can be used by investors, competitors, vendors, customers, and other interested parties to gain an advantage in their relationships with this speaker.
First Prospective Application
The following is a description of a prospective application
of Computer Intuition. In 1995, Professor Frederiksen published a paper entitled: Diagnostic Imaging in Dental
Implantology in the scientific journal Oral Surgery, Oral Medicine,
Oral Pathology, Oral Radiology, and Endodontology. At the time,
Professor Frederiksen was regarded the world leading expert on the
subject. To test the power of Computer Intuition, Professor Dov Almog and
Professor Elliot Heisler from the University of Rochester devised the
following test. Professors Almog and Heisler conducted a Medline search
from 1980 to 1996 using relevant keywords. The search identified 34
papers.
The content of the papers were analyzed with Computer Intuition. The
analysis identified three ideas. Two ideas were identical to the main
conclusion in Frederiksen’s paper. The third idea suggested a new
technology, not to be found in Frederiksen’s paper. The three ideas were
published in 1996 by Professors Almog and Heisler in a paper entitled:
Computer Intuition: Guiding Scientific Research in Imaging and Oral
Implantology. The paper appeared in the Journal of Dental Research.
(Reference 1)
How ingenious were the results? First, using Computer Intuition,
Professors Almog and Heisler were able to duplicate the results by
Professor Frederiksen, the world expert in the field, quickly and
inexpensively. While it took
Professor Frederiksen's decades to build his expertise, Professors Almog
and Heisler became world experts on the subject within weeks.
Second, the Computer Intuition analysis
proposed a new technology. How ingenious was this proposal? In 2006,
Professor Almog, Professor Frederiksen, and four colleagues reviewed the
academic and commercial practice of diagnostic imaging in oral
implantology at the time. The review was published in the Journal of
Oral Implantology. (Reference 2) In their review, the authors pointed
to an interesting observation. Beginning in 2000,
four years after the publication
of the Computer Intuition study,
“numerous companies from
technology-transfer and commercial standpoint have introduced technology
platforms that offer planning and guidance systems to facilitate dental
implant placement procedures,” the
same exact technology proposed by the Computer Intuition analysis.
To conclude, if we define being a genius as being able to grasp the future
before everybody else, than Computer Intuition turned Professor Almog and
Professor Heisler into geniuses,
not merely world experts, but geniuses.
(Note that, by being a co-author of the 2006 paper, Frederiksen, the world
expert himself, seems to hint that he agrees with this assessment.)
Second Prospective Application
In another prospective application, Dr. Hanan Polansky used Computer Intuition to answer a fundamental question in biology. The answer was published in a book entitled: Microcompetition with Foreign DNA and the Origin of Chronic Disease." Since publication, several peer-reviewed journals have published glowing book reviews. The following is a selection of highlights from some of these reviews (the full text is posted, with permission from the journals, on the publisher’s website at http://www.cbcd.net/journals.htm):
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Marc Pouliot, PhD - Associate Professor, Department of Anatomy and Physiology, Faculty of Medicine, Université Laval, Canada
(Published in the scientific journal "Cell Cycle") |
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Elena N. Naumova, PhD - Professor of Public Health and Family Medicine, Director of the NIH-sponsored Tufts Imitative for Forecasting and Modeling of Infectious Diseases, Department of Family Medicine and Community Health, Tufts University School of Medicine
(Published in the scientific journal "Archive of Virology") |
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Raxit J. Jariwalla, PhD
, Laboratory of Viral, Immune and Malignant Diseases, California
Institute for Medical Research
(Published in the scientific journal "European Journal of Cancer") |
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Yvonne R. Thorstenson, PhD, Stanford Genome Technology Center, Stanford University
(Published in the scientific journal "BioEssay") |
John A. Pickrell, PhD, Associate Professor, Environmental Toxicology,
Kansas State University College of Veterinary Medicine
(Published in the scientific journal "Veterinary and Human Toxicology") |
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(Yurek)
Jerzy K. Kulski, PhD - Professor, Division of Molecular Life
Science, Department of Genetic Information, Tokai University School of
Medicine, Japan and Associate Professor, Centre for Bioinformatics and
Biological Computing, Murdoch University, Australia
(Published in the scientific journal "Infection Genetics and Evolution") |
In addition, many major universities around the world invited Dr. Hanan Polansky to present the discovery in seminars and workshops, including Stanford University, the University of California in San Francisco, and Rochester University. Recently, Dr. Polansky was invited to present his discovery in several seminars in Israel.
Central Virology Laboratory, Chaim Sheba Medical Center, Tel-Hashomer, Ramat Gan - Host:
Professor Ella Mendelson, PhD, Director of the Laboratory
Department of Virology, Hebrew University, Hadassah Medical Center, Ein Karem,
Jerusalem - Host: Professor Amos Panet, PhD, Department Head
Sharett Institute of Oncology, Hadassah University Hospital, Ein Karem, Jerusalem - Host:
Professor Tamar Peretz-Yablonski, Head of Institute
Cancer Research Center, Chaim Sheba Medical Center, Tel Hashomer, Ramat Gan - Host Professor Gideon Rechavi, Head of the Center
Also, the Polansky's scientific
discoveries have been repeatedly reported on television, radio, newspapers and magazines.
In addition, 2008, patent offices around the world, including the Australian Patent Office, the Israeli Patent Office,
and the United States Patent Office, possibly the patent office with the
highest standard of proof in the world, examined the science in patents
based on the discovery described in Polansky's book and decided to grant these patents.
Also, in 2008, polyDNA, LTD, an Israeli biotechnology company licensed these patents and developed
a dietary supplement called Gene-Eden that reverses the effects of the
disruption identified in the book.
This product started selling successfully in Israel and the US in June 2009.
Finally, the clinical results reported by the people who take the supplement confirm the
discoveries made by the Computer Intuition analysis in the Origin of Chronic Disease study.
Some of these clinical results were published in the journal Acta Oncologica.
This
prospective application of Computer Intuition
illustrates the power of the program. By knowing today what the
rest of the profession will know tomorrow, polyDNA were able to develop
patented, unique, and highly successful products.
Summary
Do you want to "see"
the financial future of certain corporations? Do you want to increase your
chances of profiting from your investments in these corporations? With the
Computer Intuition Newsletter you can.
Interested in receiving our free newsletters 24 hours before we publish them on the internet? Send us an email at info1@ComputerIntuition.com with the title Free Newsletters, and join our mailing list.
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References:
1. Almog DM, Heisler EM. Computer Intuition: guiding scientific research in imaging and oral implantology. J Dent Res. 1997 Oct;76(10):1684-9.
2. Almog DM, Benson BW, Wolfgang L, Frederiksen NL, Brooks SL. Computerized tomography-based imaging and surgical guidance in oral implantology. J Oral Implantol. 2006;32(1):14-8. Review.
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