Market Analysis Isnt Brain Surgery

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You start reacting without thinking clearly, you act impulsively and make the wrong trades. This is exactly like a person who wants to become a brain surgeon. He sees a specialist, someone who has been doing brain surgery for many years, and asks this person to teach him everything he knows.

The doctor takes him the hospital and lets him watch while he operates. He gives him a medical textbook about brain surgery and a model brain for him to practice on.

Allocating Capital Using LTV/CAC Analysis: It’s Not Brain Surgery – or Is It?

This person studies the tools, practices on the model brain and lo and behold, he can do brain surgery really well — every time he operates on the model the surgery is very successful and the model patient recuperates right away. Can this person now operate on a real patient?

Do you believe that after a few lessons and some practicing with a demo trading platform you can jump right into the market and start making lots of money right away? Trading in the capital markets and in future contracts is a vocation like all others. You really have to look at things from the right perspective. No profession lends itself to making lots of money before you study long and hard, practice a lot and train under the most experienced professionals. Before you start trading with real money you should spend many hours trading on the simulator.

Repeatedly enter into positions in many market situations. While trading on the simulator, do not allow yourself to lose money in even one position, and practice until you every entry and every exit is at precisely the right time. After opening a real account, check whether your transactions are earning the same as when you practiced with the simulator. If not, stop trading with real money immediately and go back to the simulator!

Make informed decisions with the FT.

The most important thing of all is to learn from your mistakes and not repeat them… We are allowed to make mistakes. We are all human, but repeating the same mistakes and hoping for different results is pure stupidity. Train to trade in future contracts!


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I invite you to take part in the future that is already here! Download the free 3D Trading guide. Logged in as Geva Gazit.

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You direct the body through strategy to take action. You also make sure the body parts have the right resources and focus time, talent, and money. Done right, the body grows and thrives.


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Done wrong, weakness, injury, and death await. Sometimes you have to be the brain and the surgeon: LTV is calculated for products that are still in a growth phase, to evaluate five different products side by side, and to find the CAC: LTV ratio for each product. Capital is the precious lifeblood of a company.

Just like in the human body, blood has to go where it is needed the most, e.

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The efficient allocation of capital is a lot like the efficient allocation of blood: It requires a lot of thoughtful planning and good information to be successful. If your company goal for capital allocation is to grow as opposed to making investors happy through other means, such as dividends or stock buy-backs , efficient capital allocation is key. And while definitions of capital efficiency can range widely, you can use a simple and customer-focused measure: Like good operating instruments, having sharp CAC and LTV figures on hand makes daring procedures possible more successful.

RELATED INSIGHTS

If LTV is how much money comes in from a customer, and CAC is how much it costs to get that customer, this ratio would tell you if you are making money or not. Apply it to different products and segments part of the body to get deep insights. It would seem that every company would be crystal clear on these figures.

CAC — To measure the specific costs of acquiring a new customer, be accurate and thorough. ABC is applying specific costs of an revenue-generating activity to those products, business units, or segments that are actually demanding the activity. For example, lead generation costs would only be allocated to the degree they drove revenue from a particular product or segment. To be thorough, look at all aspects of sales and marketing for each. Finally, allocate fixed costs the entire population of newly acquired customers. Then multiply that duration times the average annual customer spend.

For products that are subject to churn, or have substantial ongoing support costs, you should factor in the churn rate and cost to serve CTS. Still not sure how to do this?

Compare your strategy to the your target ratio of LTV: For SaaS companies, the generally accepted target is 3: How are you going achieve that target? For example, if your current ratio is 3: If Product A is at 2: Is that new product that was core to your strategy producing a lower LTV that you thought it would?