How Financial Modeling Errors in Real Estate and Biotech Cost Analysts Millions with Narek Grigorian

Answer, but it's impossible to follow and figure out. And then you've had the ones that look really nice but have wrong assumptions everywhere. And you know, you, what you, you want a, a model with good assumptions and good design at the end of the day.

Yep, I agree.

So tell us about your background, tell us a little bit about yourself and you know what you're doing today.

Yeah. So currently I work at US Capital Global which is a global investment banking firm, financial services firm headquartered out of San Francisco with offices in London and Dubai. We are able to provide credit and securities wealth management, so full services financial services firm. In short, I specifically concentrate on the real estate vertical within the firm and the energy vertical. I think that in the past few months there has been a lot of energy based project excitement within the US as there's a lot of capital inflow within certain states such as the Southern belt, mainly the the some belt states such as Texas, Louisiana to mention a few. And specifically within the LNG world there's a lot of excitement within the US So you know, we're in the lower middle market to middle market. We covered the space that J.P. morgan and the likes of Goldman Sachs don't really look at. So that's what US Capital Global does. It's a very nice and reputable firm, a FINRA licensed broker dealer and we are doing projects in the realm of 10 million to 200 million or higher globally and within the US depending on what sector and what field the projects are in. We are generalists, which that means is that we are sector agnostic and this gives us the leverage to adopt and adjust based on global market trends and financial flows where the capital is flowing from and it's worth where it's flowing to. Very interesting and exciting times globally.

No, it's definitely an exciting time. I mean, right?

Higher globally and within the US Depending on what sector and what field the projects are in. We are generalists, which that means is that we are sector agnostic and this gives us the leverage to adopt and adjust based on global market trends and financial flows where the capital is flowing from and it's worth where it's flowing to. So this global presence with my colleagues gives us that advantage to navigate the field of this very, very interesting and exciting times globally.

No, it's definitely an exciting time. I mean, right, you got a lot going on. We have interest rates that have risen, all the inflation concerns, tariffs, people saying hey, are we going to deal with stagflation? Are we in a recession? When will we be right? It's been a, it's been a weird market for five years. I think, you know, kind of from COVID sense, it's really, you know, we had historically low interest rates, money was free. And then the last five years we've had a ton of uncertainty and change. So it's definitely a time where models can help and understanding all these different things and trying to make the best assumptions you can is important because a lot of risk, a lot of uncertainty for sure.

I totally agree. And I think we are at the time where it's very, very consequential in terms of are we in a stackflation, is that coming? And so that is the doomsday scenario. And we had the first quarter results which was not too good for the GDP of the United States. So everyone's holding their breath for the second quarter and what the effects are going to be in that sense.

Yep. At least the inflation in April was lower than we expected. And you know, some of these tariffs have backed off. So hopefully, you know, we're not spiraling toward a major recession, but still hard.

To predict from what we see. There's a lot of excitement for foreign direct investments in the United States and there's a lot of excitement within the United States for specifically, let's say real estate developers and energy investors. And I think we're at a crucial time where if this tariffs are waived up or done in the right way, where deals are being made between the two countries, then we're really going to see record breaking numbers in the next few years for the economy if things can be adjusted and the supply shock can be mitigated from the tariffs within the last few weeks.

Yeah, it'll be exciting to watch. I know we've seen some big announcements on deals and so hopefully it all plays out well. So I have a question for you. I'm curious. You know, you're obviously in the US now, but you started your career in Armenia kind of what was, what was your path or thinking? How did you go from Armenia to deciding, you know, to kind of come.

Work in the U.S. yeah, so I did start my career in Armenia, but I think that the opportunities in US really drew me and a lot of people are drawn to the US obviously for the opportunities that this country presents. You know, United States is such a hub for innovation and growth. There are certain cities that I can single out, you know, San Francisco being one for the innovation that comes out of the, you know, San Francisco and the surrounding area, Silicon Valley obviously. And these are fields that I'm especially passionate about now, when it came to education, there's something special about the system and how it encourages curiosity. And there's something about the United States where it fosters creativity, again, depending on the institutional education that you get. So I came here. I also studied for university in the United states in the D.C. area, Georgetown University and the University of Maryland in College Park. So I think that United States gives you that challenge to solve real world global problems and it gives you this global perspective. So this is something that I found especially appealing. And the opportunities are very diverse here. So that's what I'm really passionate about, the US and it helps people advance their careers, have a good healthy life and kind of progress along and build a really nice environment around them and around their friends and families.

No, it makes a lot of sense. There's a lot of great, great opportunities in the US And I kind of laugh when you said, you know, a lot of niche markets and innovation. My goal is to dominate the niche market of finance podcasts that don't have the title of CFO in them.

Yeah, I think, I think you're doing it. You know, I've been listening to your podcast and I've been following it for the past, I would say six to eight months. I came across it on LinkedIn organically. So I think that's the key. Organic growth is how the next sort of podcasts and this entertainments are coming along because people are stepping away from the TV and the traditional cable. And podcasts are educational and you can listen to them while you're driving, eating, doing whatever you want to do.

Content has changed the game and being recognized is more important than ever because with AI, it's so easy to create content. Right. You could share pretty much anything and often it can be valuable. And so I think, you know, as you talk about that as people recognize you and you build a, a presence that becomes so important when you combine that with content. In today's world, it's really interesting to watch. You know, when I started, there was no AI and now I use AI to help me be more efficient and effective. I couldn't do near as much as I do. But I also see a lot of people that all the content is just AI. And so it's so interesting to could you see how, you know, the content world has changed. But I agree with you, it's amazing what we can do now, right? Go to YouTube Podcasts. If you want to learn pretty much anything, you can go to your computer and find out about it.

Yeah, and I think not many people know that that was not a way that people could do some things back 30, 40 years ago or even, even 20 years ago. You know, it was not this easy. Now we're, we're, we, you know, everything accessible, whether you are in the nature, in the middle of nowhere, or you are inside the house with the WI fi or wherever you are, we are so connected and there's so much information on us that I think it's creating a lot of good things and a lot of chaos. So let's work and take away the good things and use the AI for things to help us progress along and learn and make our lives easier.

Right. It's like anything. It can be used for good and bad. It's, you know, it's just an instrument and we have to choose to use it for good. But I totally agree with you. I look at my, you know, my daughter and she's, she grew up with a touchscreen in her hand and I'm like, weren't even cell phones when I was a kid. First computer was when I was in high school. And so it's just such a different world. And it's pretty amazing. But I'm going to shift gears here a little bit and get more into modeling and talk about that. Since that is the show. I'm sure I could go in a different direction. We could have a great conversation. But my guests might be like, wait, what are they talking about? So I'm curious. I know you've worked in, you know, you've modeled for several different industries. You know, real estate, bio firm, and others. Do you have a favorite industry that you like to model? Is there one that you're like, oh, yeah, I get, you get really excited about.

I've done many, many different models across many different fields. As you mentioned, real estate, tech, bio, biotech and, you know, energy. I have to say that probably because it's, you know, easier and more straightforward. Energy models are definitely one of my favorites to build. And there's something about the structure of the energy models that keeps it very interesting. And you, you want to finish it before you walk away. I know it's a little tough and, you know, you get a little geeky with this, but you do want to sit down and kind of get through it. And I'll give you an example. Okay. I was building a model for a refinery. And you know, this applies to any kind of energy infrastructure in general. So there's a lot of moving parts for refinery specifically and any other energy infrastructure. You have capex operational Costs and most importantly, revenue assumptions. And a big part of this is all standing in the energy modeling offtake agreements, which often remain fixed but are also linked to spot trading prices. So this prices can actually be pulled directly from live data sources. And this adds a real time element to your model. And this, this makes it pretty unique compared to other industries otherwise. And the key assumptions evolve around things like planned utilization rates, the product yields, energy markets, future prices, outlook that you have. And of course you have to factor in regulations, shifts in policy and how it's going to perform long term, short term, you know, I would say one to 12 months. Long term, you have to start making adjustments.

You know, makes a lot of sense. Thank you for sharing that. You know, I haven't modeled energy, so I'm not familiar, you know, with that industry. And so it's always fascinating to hear what different people say. So I love, I love that because. Right. I hear a lot of people say they like energy models and I know they're very long. I know they can be complex. You know, there definitely are some challenges to them. But there's something that are big right now because we're all trying to figure out the next energy source and how we manage our energy for the planet going forward. So it's definitely something that a lot of money, a lot of time, a lot of capital is going into. But I want to step back. So I appreciate that. I want to switch gears a little bit and talk about real estate for a minute and reason why I do that is I really. We haven't talked real estate much on the show. Talk a little bit about energy and some of those models, but not a lot on real estate. So most of the real estate models you've built are commercial, residential. Maybe let's start there. Like kind of. What are the general models you've built in real estate?

Yeah, yeah, happy to talk about it. I think the reason I didn't mention real estate because I do it too often and.

Yeah, no, I get it. Totally mentioning energy, that was great.

It just stands out. But look, with real estate, right, when it comes to real estate model, there's just such a wide range. And you touched upon them, Paul, talking about commercial, residential and all the different options we have. So I've done most of them. I think there's new things that pop up. There's the new models with the 3D printed houses and that requires new modeling skills and new assumptions. Like the one Lenard did with Icon, I think it was in Dallas, Texas, if I'm not mistaken. And that that has had a lot of success.

So have you modeled a 3D printing one yet? Have you done any of that? It would be fascinating to see the cost. And you got my brain thinking right now.

There's so many factors and variables in it with what, what's the cost of pouring out the cement from that needle and you know, if you spit out a little more cement, how that's going to change it and make the wall thinner, make the wall thicker? It's really crazy. But yeah, you know, I'll tell you about one that I've built specifically and I do this the most often. So building a subdivision land development model, right? Subdivision is when you buy raw land and then, you know, you're doing your wet utilities, dry utilities, putting roads and getting it vertical ready for the builder to come in to step up and build the house. So for building a model specifically for subdivision land development is complex because you're not just looking at construction costs right here. You're factoring in zoning regulations, permitting the overall market demand. Okay. And the first step is usually understanding the raw land costs and then projecting out the buildable units, whether it could be homes, it could be condos, or it's mixed use, right. A lot of this subdivisions are, majority of it is residential. And then the frontage where it's hitting the main road is, as you, we mentioned before, commercial spaces. So from there you calculate, you know, the infrastructure development costs again, roads, utilities, drainage systems, the environmental impact assessments if necessary. And there is even TIFF bonds sometimes that you get. So you have to calculate that and understand how you're going to factor those in. The key assumptions with this model that I'm specifically talking about revolve around the projected sales price per unit, the timing of the construction, the cost of financing and the construction loans. Also, of course, I would say very, very important one are interest rates and what is the timing of your construction? Because interest rates can be variable or can it can be fixed depending on basis. Right now is so far so secured. Overnight financing rate, so so far is adjust, is getting adjusted as the bonds, obviously. And the, the market's playing in, the feds, you know, deciding to cut rates or keep them steady. So what makes the subdivision model unique is that it's very cash flow intensive in the early stages, but when the payback comes, it's done very nicely and the units are sold over time, which this, this makes it crucial, right, to track everything from construction product progress, which is the beginning part, to sales velocity, which is the last part of it.

Yeah, of course they want to return on their money. That's what it's all about. And so I'm curious if you, I mean, not always, but you know what I mean. In general, that's what it's about. Sometimes people want to do the project for passion and other things and they want to return, but that may not be as, as important. There are definitely some of those get done. But I think in general for most people it's what's the return is what they're really focused on.

Right. The developer can do projects for what they have a passion for. But when the developer is attracting prep equity or equity investors, now the investors, what they are looking for is the payback. So if the developer has all of the equity lined up and he can, you know, the developer can borrow the credit, they're, they're good to go, they can build whatever they would like. To your point though, the passion is what really should drive anything that you do in life.

Well, my background is in FP&A. I am also passionate about financial modeling. Like many financial modelers, I was self taught. Then I discovered the Financial Modeling Institute, the organization that offers the Advanced Financial Modeler program. I am a proud holder of the afm. Preparing for the AFM exam made me a better modeler. If you want to improve your modeling skills, I recommend the AFM program. Podcast listeners save 15 on the AFM program. Just use code podcast. Yeah. And you know, hey, if, if you're passionate, you want to build something but it's not going to be profitable. You can only do that so long.

I agree, I agree.

You know, it's like I remember that we had a guy here, he's, he was the one of the richest people at the time in the state of Utah. And you know, he built a sports park because that was a passion of his and they eventually ended up closing it down. It was a big money pit. You know, he passed away and, but he loved it and he had a ton of fun with it. But at some point the company looked at it and said we're dumping 100 million a year into this. And you know, that's not sustainable long term or whatever the number was. It was a really big number. And so you know, have fun but generally you want both. If you can have fun and make money, that that's always a winning combination. So if you were to say with financial models, and I think you mentioned a few of these, the key assumptions, what are the most important assumptions with kind of your real estate models.

Great question. I would Say, first is purchase price, right. Which includes the cost of land, property, transaction fees, closing costs, title fees, everything. And then from there, purchase price, we look at the construction costs or the renovation costs, whatever you're doing, right. Depending on if you're flipping or if you're going ground up. Next from there, right. Is the sales price or the rental rate if you are keeping them as rentals. These assumptions are based on market comps. The market comps and the demand projections within the area where you are conducting the development. Then there's the financing piece, which is again, in my opinion, one of the most, if not the most important part of this, where the interest rates and the loan terms are aligned, how much equity you'll need to put it all into a nice big role. And this shapes the cash flow, the projections. Another key assumption is obviously operating expenses. If, especially if you have rental units, there's property management costs even while you're building a subdivision, there's property management costs, there's utilities, there's maintenance. Right. Because you're not putting up 100 houses at once. You're going at a stage of 10 or five and you know, the other 10 and five.

So yeah, you're building it over six months, a year, two years, whatever it may be, depending on the size of.

The project, sometimes longer.

Yeah, five years, whatever. I mean, yeah.

So in real estate, you know, especially if you have rental market. Right. If you're dealing with rentals, real estate models, look at how the market will perform in the next five to 10 years, because you're really trying to get it into this condition of what we call stabilization, a stabilized product in order to sell it off to reit. And during COVID we saw a lot of those transactions where the modeling was done correctly and large REITs from areas like Miami came and picked it up for very, very large equity returns. The MO in the multiples of 3, 2, 6, 7x, which was unheard of. And so, you know, real estate models look at how the asset will perform in the next five to 10 years. The factor in trends and the overall economic conditions.

Yeah, yeah. No, it all makes a lot of sense to me. What would you say is the most common mistake you see in kind of real estate models? Where do you think they have kind of that highest risk of going wrong?

Yeah, I would say factors are market growth assumptions and tenant vacancy rates. So a lot of people do not calculate tenants vacancy rates correctly. And it is very important to estimate how many units might be vacant at any given time, which affects the rental income for Example somebody is, you know, you rent out a unit for 13 months. Right. People assume that after the individual in that unit or the family is gone after 13 months, it is immediately rented the next day. Wait, hold on a second. Let's, let's break down the costs day by day, right? So you have to go into the accounting and understand what is the daily cost of holding this unit vacant. And so you usually have a hold or a renovation period between tenants of 30 to 50 or 30 to 60 days. So again, vacancy tenant vacancy rates are really important to calculate with this given, with this given periods, right?

Sure. If you have an average of 6 month leases and have a hundred units and those are staggered, you know, every so often you're going to have maybe on average 4 units open constantly or whatever it might be. But understanding that assumption makes makes sense because that, that's can be a huge difference in that revenue. You know, if you're assuming 100% operation, of course it's going to look profitable, but it doesn't mean it's right.

It's a false motto.

Exactly. It's not a right answer.

Right, right.

All right. So you know, we've talked a little real estate. I know you've also done a little bit of biopharm. And when we chatted before this I made a comment and about one of my favorite quotes and you commented back with something and so I want to kind of talk a little bit about this. We've many of people that have listened to the show have heard me say all models are wrong. So some are useful. You know, quote by George Box. And I said that and you modified that for biopharm. What did you have to say when I said that?

Yeah, so George Box, right. A great statistician and it's, it's, it, we had a great conversation about it. What I said for biotech Biopharm is that all models are wrong end. So it's just all models are wrong full stop. I can go about it explaining why. Paul, would you like me to.

Yeah, that's why I'd love to go next is why is that so hard? Or why do you say all models are wrong?

Look, obviously there's a little bit of irony here, but let me, let me kind of go through it and what I meant by that all models are wrong. And you know, that's that for this specific industry. And essentially what this means is that it Biopharma, Biotech, tech bio, however you would like to refer in the industry that we're talking about, there's so Many unpredictable factors at play from the basic regulatory changes that happen intraday clinical trial outcomes. Are you going to need to prove to the FDA something that you didn't in your first clinical trial for the second one to come up? Are they going to spot something, you know, patient responses to treatments when you're conducting the experiments, or the, the, the, you're going to conduct a specific study? Right. The clinical trials, these are all incredibly difficult to model. Now, when I say all models are wrong, they're not. I wasn't implying that they're useless. Right. Of course you need models. If you're going into this specific arena on the field without modeling, then you should just leave the field and not, not do have to do anything with it. And the key point is that while, you know, all models are going to be flawed, they can still provide incredible value, especially when used for decision making. A model in biopharma, for example, can forecast the potential market size for a new drug and estimate the timeline for that drug's regulatory approval. It could be based on historical data. There's always an inherent, you know, uncertainty. So the models might rely on assumptions about the, you know, rate of patient enrollment, likelihood of your clinical trial success, or the pricing of the drugs once approved. And I think the value here comes from recognizing the limitations of the model and continuously refining it as you progress as new data becomes available.

Yeah, you know, and I've had someone on the show talking about Biopharm, and I've talked to a few people, and they all express a similar thing. It's a very difficult area to model. It's a little bit portfolio in the sense of, okay, I got 10 different drugs, nine of them might fail, but if one hits, I can make good money as long as it, you know, hits big or whatever. And so. Right. You know, many of those models are going to be completely wrong, but in the whole, you can still make money. It's kind of like movies in some ways, a little bit different. But. Right. Movies is all about portfolio. It's not about every movie making money. They know when they start, they're gonna have big losers. Right. We've all seen the blockbusters they spend 300 million on, and it makes 80 million in the, in the movie theater. And it's like, oh, wow, we really lost a lot of money on this. But then you have the one that costs 40 million to make. It makes 500 million.

Yeah. And that's a, that's a, you know, that's a hit out of the park. So there you go.

Yeah, it's it's definitely interesting. I think those type of interests would be a little scary for me. I related to, you know, the people that, when I worked in FP&A, you know, one of the things I did is I calculated a lot of people sales incentives, their commissions, and every so often, I'd see the guy that made 80,000 in one month, and I'm like, man, I should be in sales. But then I'd look at the other five people that I'm paying zero to, and I'd be like, no, I'm good with this nice, steady paycheck.

Right. Right. Yeah, you're totally right. I get it. That's. That's the case. Yep.

So. All right, so I want to shift gears here a little bit. We have some kind of standard questions we ask each guest. And so the first one, what's your favorite Excel shortcut?

What do you use the most? You know, right off the bat, I have to say the. The most basic one that's used daily, and it's, you know, the favorite is the Control plus. You know, right arrow or left arrow or Control and down arrow. So it takes you to the last cell in the column with the data you're working with or, you know, makes you jump around large data sets pretty easily.

I. I agree. Control plus arrows are some fabulous, fabulous ones. I like it. All right, as you look back over your career, what's the number one lesson you've learned that's helped you the most?

I think the number one lesson always has been in my life, specifically the passion. So I'm passionate about what I'm doing. I think passion isn't just about being excited, but it's really believing in the work you do and feeling a deep connection with it and waking up and wanting to do it. So I think when you care about things that you're doing, it just doesn't feel like work anymore. It feels like you're contributing to something larger than life, and it provides you with an energy that helps you push through challenges, you know, embrace new opportunities and continuously grow.

I like it. Thank you for sharing that. All right, so this is a fun question we ask everybody. What's the most unique or funnest kind of thing you've used Excel for in your personal life?

I've listened to your podcast. I've been listening to it for the past few months, and I was waiting for this because I do have a little cork and essentia. So I'm a big water bottle drinker. I've bought a lot of water Bottles from different brands. Essential is my favorite. I have no equity ownership of Essentia. I just like the water or any other water company for that matter. You know what, I created a actual model for water bottles because I was spending a lot of money on various sizes, right? They come in various sizes, various shapes. They can be reused if it's glass. So I was curious on sort of how much I was spending with my family on water bottles. So I created this full fledged model to figure out the best deal and how there are sometimes deals in various stores, right. You know, whether you buy it from Whole Foods or Giant or Kroger's or wherever you are. You know, my model compared the cost per ounce and it sounds ridiculous. And then it turned into this whole analysis where sort of the cheap store brands to, you know, the premium water brand. It was just a fun little metric I used and I got a good laugh out of it with the family. But that was a fun model I made.

Bad financial models can lead to bad decisions or worse. So how do you minimize the risk of a bad model? You make sure the models you build are great. Financial Modeling Institute developed the Advanced Financial Modeler Accreditation program to help modelers like you. The AFM program offers a step by step approach to building world class financial models. The program ensures that you know the best practices in model design and structure and will help you brush up on your Excel and accounting skills too. Be the one on your team to build great models if you want to impress your boss and your clients. Get AFM accredited podcast listeners. Save 15% on the AFM program. Just use code podcast@fminstitute.com podcast. Yeah, so that's when you know you're a nerd when you build a model like that. We've all done it. I've had people. One guy, you know, kept taking his dog to the, you know, kind of dog hotel, one of those type places, and so he finally went back and calculated what, what does that look like? How much money could they make and you know, the whole business.

So.

So I appreciate you sharing that. So what did you determine? Are you spending too much on water? Did it save you money?

No, definitely spending too much. And I'm actually on the cusp of doing another calculation because I called the contractor over for putting a filter on the whole system of the house. It is costly up front, but I am about to run a model to understand what is the payback period for that filter. It is in the thousands. So, you know, I gotta understand the cost of, you know, the net Present. What's the present value of this? Was the future value. And so this will help me when.

You get all done, share that model with me. I want to see that one.

I would love to. Yes.

And we can put it up on the website. Anyone who needs a bottled water versus filter model. Here you go.

That, the comparison to that is, you know, making a model for solar panels or, you know, continuously using utilities that you're provided, so.

Yeah, yeah, exactly.

So it's actually stemming, actually largely going to stem from that. When I was modeling it in my head, it's going to stem from the same factors.

Yeah, I, I'm sure you thought of all that because you've done that type of that.

That's funny.

So let me, let me know what you decide. I'll be curious to see what the payback period is.

Of course.

All right, so now we're going to move into rapid fire. No, it depends. You get to say yes or no on each of them and then at the end you can elaborate. So I'm going to run through these quickly. First one, circular references and models. Yes or no?

No.

Vba. Yes or no?

Yes, vba.

Do you prefer horizontal, you know, one kind of sheet or vertical? Lots and a vertical, all on one sheet. Horizontal, lots of sheets. I'll get it right eventually.

I prefer vertical models.

All right. What about dynamic arrays in models? Yes or no?

Yes. I like, I like dynamic arrays. Yes.

How about fully dynamic array models where you're using lambda and different things to manage corkscrews? So the entire model is dynamic?

Yeah, I, I actually, yeah, I think I use it all the time for the most part.

Love it. All right. External workbook links, yes or no?

You know, they slow things down, but I, I prefer to keep it in one workbook, usually named ranges.

Yes or no?

Yeah, I use named ranges.

Alrighty. Do you follow a formal standard like FAST or SMART or any of these that, you know those formal boards out there that say, hey, model this way?

Yeah, I do, I do from time to time. I try to stay consistent and organized in that sense.

Okay. Should financial modelers learn Python in Excel, yes or no?

I think it's a great skill to have. I think Python can help with automation and, you know, a bunch of other things.

What about Power Query?

Power Query is incredibly useful as well.

I'm a huge Power query fan. What's Power bi?

Yeah, I think Power BI is also essential. I'm going to have to. For data visualization especially, so I like it.

Will Excel ever die?

That's A tough question, you know, right now I'll say no, but we can talk about it later.

All right, we'll, we'll elaborate on that one at the end. Do you think AI will build the models for us in the future?

In the near future?

No.

In the far future, Possibly, yes.

Okay, fair enough. Are financial models the number one corporate decision making tools?

I'll keep it simple for now. No.

So what do you think?

Is a great question. I think it's very important. I think that it should drive. It should be the number one factor. Okay. I have to say that, okay, if the model is not making sense, then stop what you're doing right away. If the model shows that you're not going to proceed with the assumptions that you want it to stop immediately and rethink about what you're doing. But I think that if the model, again, this, if this is a good model, it should have, you know, data driven insights. In a sense, it should stem from market research. So when I'm, when I'm saying no, I'm talking about simple models. Now if we have models that have data to back it up, that have market research and qualitative analysis, these are, if everything is contributed to the making of the model, then I believe that financial models are the number one corporate decision making tools. So that's what I meant by saying no.

Okay, I thank you for elaborating there. All right, what's your lookup function of choice? Which formula do you go to?

Yeah, it would have to be xlookup, because I think that it's, it's more flexible and handles a lot of things with more ease than Vlookup.

Yeah, I, I prefer xlookup. I'm probably xlookup Index match vlookup.

Right.

I like.

That's actually a good order. That's actually a good order.

You know, put filter in there as well, depending on how my data is structured, you know. But yeah, I agree with you. I probably use xlookup the most. All right. You also wanted to elaborate, I think, on will Excel ever die?

You know, Excel is essential right now. Now, the same way that there are new programs and, you know, things happen. Right. Microsoft comes up with a new name, maybe for something that's based on Excel, but integrates maybe many, many AI components within this new framework. Right. So you can have Excel that is, for example, spitting out some form of Excel that's starting to spit out formulas and begin to, you know, fold out assumptions. So I can see something of a new innovative way where Excel can be integrated, but not again, not in the near future, but not in the far future. Also, I think we might be seeing something within the next four to eight years in that realm where it could be a new version of Excel or it could be a rebranding for marketing purposes.

Yeah, it'll be really interesting to watch. Everybody kind of has a different opinion on this. As I always say, in the long run, everything's dead. The question of how long do I think it's going to go away anytime soon? No, I think know the rebranding, going to a cloud, some of those type of things, but it's going to take time.

I agree.

I had a big debate about this on LinkedIn and I think the biggest thing that will take time is, you know, vba.

Yeah, right.

VBA doesn't work in the cloud. Microsoft hasn't really supported VBA for a while. They still allow it, but I mean, they're not developing new stuff for vba. I think if they had their choice, they would like it to go away in the sense of it's not easy to support in the cloud, there are better languages, but at the same time, you know, if they stop supporting vba tomorrow, the financial world would just about collapse.

I agree. I, I couldn't agree more. I couldn't.

So you know that that's a long journey. I mean, it's years from the day they say, hey, we're going to go to a platform that doesn't support it, to untangle everything and to move forward in whatever way they choose to move forward when they do. I think it's a matter of time, personally. Others think VBA will be here forever. We'll see.

Well, VBA is essential right now. I mean, you know, you automate repetitive tasks or you want to streamline some things, but you know, you keep it to a good amount, you keep it to a minimal. So you don't want to add too much complexity to what you're doing. That's unnecessary, but it is absolutely needed. I agree with you.

You know, I mean, I think you could do a lot, you could do a lot with Office scripts. If they open up Python, more Power Automate, they're putting the building blocks in place to allow you to do those things. Power Query replaced a lot of things you used to do in vba, but they're not fully there. I think anyone would acknowledge that.

Yeah, and that's what I mean. I think there's just so many things spread out within the industry, Paul, that a few things have to come together, whether it's the AI models merging, getting integrated into different software programs. I think there's, you know, there's going to be a lot of M and A coming in into this industry, generally speaking.

Oh, I think in the finance space, spreadsheet, other. I mean, there's so many AI tools being developed right now. Right. At some point we're going to have. Similar to a dot com.

Yes.

There's going to be a number of companies that the bubble bursts. There will be a lot of acquisition and a lot of change. There'll be some huge winners, there'll be some big losers. But I mean, what did I read recently? There's 75,000 native AI companies that have been created since, you know, ChatGPT was released. 3, 5.

I did not know that.

Yeah, that's the number I think I'd heard is 75,000. Right. Think how many that is a day, because we're only talking not even three years.

And how many went down the drain because Chat GPT was released? You know, how many did that kill?

You know, so we're seeing like a hundred new companies a day or whatever that are AI native. To me, that's not sustainable in the long run, but we'll see. So, last question for you before I let you go. Had a great time chatting. You know, if our audience wants to learn more about you or potentially get in touch with you, what's the best way for them to do that?

I think the best way is on LinkedIn. I have a LinkedIn presence. You can look me up. Narek Gregorian. Filter me with the workplace, US Capital Global or school I went to Georgetown University or University of Maryland, College Park. We would love to have a chat. I always like meeting new people and having exciting conversations. I know Paul does too. So, you know, it's a pleasure being on your podcast, Paul, and thanks for allowing me to have this, you know, amazing chat with you and I look forward to having more of these.

Yeah, no, thank you for joining me, Narek. I really enjoyed it. Like you said, I do love chatting with people and I'm sure you'll get some people reaching out to you and I'm excited to share this with my audience. So thank you again for joining me.

Thank you, Paul. Have a great day. You too.

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