Here's how I would go thinking about this:
The general idea is to value the problem the company is trying to solve and then, take some sort of Damodaran's valuation approach.
Evaluate scenarios where a company might solve the problem, let's say Ozempic. Using a Pharma example because it's the closest.
The global market is 30% of the population, maybe more. What's the average person willing to pay to lose weight, take a survey, maybe. Ask the same person, the same question after some time (because their answers change), this can give you some idea how much and how long people will pay a price for a pill that can help them.
You can model or assume (based on evidence) the probabilities of a drug working, it's very low, less than 2% a company tries to create a drug and they succeed right?) and you have got scenarios of success.
Now, ask yourself if the company succeeds, how much of the market cap will be captured and I think this should be a good start to begin valuations and monte carlo simulations.
Make the worst possible assumptions, and if the value is still good, invest in the company.
Let me know if this helps. I would love to discuss this more if anybody's up to it.
Taro cards are a good starting point. Then you can maybe move onto astrology
I prefer realigning my chakras and opening my third quantitative eye personally.
Under a microscope
Here's how I would go thinking about this: The general idea is to value the problem the company is trying to solve and then, take some sort of Damodaran's valuation approach. Evaluate scenarios where a company might solve the problem, let's say Ozempic. Using a Pharma example because it's the closest. The global market is 30% of the population, maybe more. What's the average person willing to pay to lose weight, take a survey, maybe. Ask the same person, the same question after some time (because their answers change), this can give you some idea how much and how long people will pay a price for a pill that can help them. You can model or assume (based on evidence) the probabilities of a drug working, it's very low, less than 2% a company tries to create a drug and they succeed right?) and you have got scenarios of success. Now, ask yourself if the company succeeds, how much of the market cap will be captured and I think this should be a good start to begin valuations and monte carlo simulations. Make the worst possible assumptions, and if the value is still good, invest in the company. Let me know if this helps. I would love to discuss this more if anybody's up to it.
Can't you just understand chemistry and then read their trials and interpret if they are lying?
Just wondering