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Turn Noise into Insight
How to achieve an Information Edge
The world is drowning in information to the point where managers have reached
cognitive overload. Information has less value, so marketers of information
services have begun calling it intelligence whatever they mean by that. Because
of the abundance of information, an “information edge” can be realized only in
what is not known by the market. What the market does not know must be
inferred.
Inference: In Investment Contexts
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Inference is a process of “reading into” or
concluding from circumstantial evidence. An
inference closes a gap in understanding.
Assumptions are inferences that are based on
probabilistic contexts, and when people infer
incorrectly, they assume. When people infer
correctly, they create insight.
When an analyst infers, he or she is creating a
meaning by synthesizing. Synthesis means to
bring disparate parts together. Although
analysis is formally taught in academia,
inference by synthesis is not. Yet inference is
a powerful business tool that closes the gap in
understanding business situations.
With today’s information overload, decisions
have become harder, not easier. Analysts
struggle to find pieces of information that are
meaningful and market-moving. Careful
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reading of situations, contexts, and pieces of
information is a lost art. When analysts “read”
a situation, they either draw a conclusion or
make an inference. An investment thesis is a
narrative developed from evidence; the
conclusion is an inference based on what’s
known and given. What in the “read” makes it
worth reading this narrative?
In the fall of 2014, the price of oil dropped
precipitously. Analysts who have been closely
tracking the oil industry are reading the
situation so differently that, as of February
2015, the disparity in their reads of the oil
market varies by $20 per barrel or more. The
variance indicates a need for training in how to
infer correctly and when it is appropriate to
infer. Turning Noise Into Insight trains analysts
the disciplined process of inference.
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The Red Team
Red Team Your Investment Decisions
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The mismatch in applications of inference and
analysis is most acute in investment analysis
where seeing strategic foreground and
information edge are tactics for competitive
advantage. In the United States intelligence
community (military and civilian), a Red Team
is an independent group that challenges an
organization to improve its effectiveness. Red
teams explore alternative futures and write
articles as if they were foreign world leaders.
It is designed to challenge prevailing
assumptions and improve interpretations. Red
teaming the assumptions of investment
professionals and how they have composed
their investment thesis is a way to improve
win-loss ratios in investment portfolios. The
Red Team workshop offers a methodology that
predictably generates insights in business
contexts. The workshop walks through the
various steps in the process to produce an
insight in a variety of different settings and
purposes.
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Key questions the Turning Noise into Insight
workshop answers:
• Are you concerned that you are
potentially missing market opportunities
because the research your team produces is
not insightful as your competitors’ research?
• Are you concerned that what you
have is written banal?
• Do you think there is room for
improving your discovery processes?
• Has your team “looked over” what
has been researched and written and not
found the piece of information that can change
your client’s perspective?
• Are you confident that your read, your
inferences, is appropriate for the information
present in the market?
Turning Noise Into Insight is a two-hour
workshop designed to train investment
professionals on the discipline of the inference
process. The workshop includes the
presentations and a workbook of examples on
how to infer in investment contexts.
Red Team is a supplementary custom research
program that challenges the assumptions or
validates the inferences of a specific read on
the market. Red Team attempts to identify
bias by letting the information reveal what the
insight is.
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About Inference Partners:
Inference Partners, LLC is a research and
consulting firm specializing in seeing
unintended messages and alerting clients to
change in markets or competitors before
they disrupt business plans or diminish
opportunity share. Alerting clients can take
two forms: a workshop entitled Turning Noise
Into Insight and its companion service Red
Team. Turning Noise Into Insight trains
investment professionals on inference. Red
Team is a service that challenges
assumptions or validates inferences an
investment professional makes. In addition,
Inference Partners also generates industry
landscapes and corporate profiles.
Inference Partners has worked with public &
private companies, foundations, hedge funds
and governments.
About Andrew Schenkel:
A former strategic intelligence analyst,
Andrew Schenkel founded Inference
Partners, LLC, a research and consulting firm
specializing in analyzing competitive
behavior and offering its clients insights into
the structure of competition in an industry.
Mr. Schenkel works with the Academy of
Competitive Intelligence Onsite War Games
programs. A graduate of Hamilton College,
Mr. Schenkel was also a panelist at the Mid-
Atlantic Hedge Fund Association’s 10th
Annual Conference.
“Andrew is possibly the best business researcher I
ever worked with. I used him in several war games,
and his intelligence briefs were superb. The guy
understands the difference between useless minutia
and strategic view, which is the highest compliment
I can give any research professional.”
Dr. Ben Gilad, President The Academy of
Competitive Intelligence
For more information:
Email: [email protected]
Telephone: +1 610-247-4977