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Introduction to QuantLib Development with Luigi Ballabio - London, November 14 - 16th, 2016 - http://bit.ly/QuantLib-2016

Musings on Markets's Blog

The Ferrari IPO: A Price Premium for the Prancing Horse?

October 15, 2015 Comments (0)

I live in a prosperous suburb, sustained largely by financial service businesses, but as far I know, there is only one Ferrari in my town. Much of the week, the car sits in a garage which has its own security system, more secure than the one protecting its owner's house, and on a nice weekend, you see the owner drive it around town. It is a remarkably inefficient transportation mode, too fast for suburban roads, too expensive to be parked at a grocery story or pharmacy, and too cramped for...

On the Uber Rollercoaster: Narrative Tweaks, Twists and Turns!

October 12, 2015 Comments (0)

A slightly abbreviated version of this post appeared in TechCrunch on October 9, 2015, and it is the first of series of three on the ride sharing business. In the second post, I value Lyft, the other ride sharing company, and also look at how ride sharing companies globally are being priced. In the third and final post, I look at ride sharing as a business and at four possible scenarios for its evolution. Those posts will also appear in TechCrunch over the next two weeks and will be...

Putting a Price Tag on Scandal: Sturm und Drang at Volkswagen!

October 1, 2015 Comments (0)

My Vale missteps illuminated for me some of the risks of going where it is darkest, but I will not let them stop me from trying again. This time, my focus is Volkswagen, a company that has, over the course of a month, gone from being just another mature company in a bad business (automobiles) to one beset on all sides by governments, lawyers and investors. In this case, though, unlike Vale and Lukoil, much of the uncertainty comes from self-inflicted wounds and as its stock price drops, it is...

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September 27, 2015 Comments (0)


No Mas, No Mas! The Vale Chronicles (Continued)!

September 25, 2015 Comments (0)

I have used Vale as an illustrative example in my applied corporate finance book, and as a global mining company, with Brazilian roots, it allows me to talk about how financial decisions (on where to invest, how much to borrow and how dividend payout) are affected by the ups and downs of the commodity business and the government’s presence as the governance table. In November 2014, I used it as one of two companies (Lukoil was the other one) that were trapped in a risk trifecta, with...

What's in a name? Of Umlauts, The Alphabet and World Peace!

September 9, 2015 Comments (0)

As the title should forewarn you, this is a post that will meander from eating spots to basketball players to corporate name changes. So, if you get lost easily, you may want skip reading it. It is triggered by two events that occurred this summer. One is Google's widely publicized decision to rename itself Alphabet and to reorganize itself as a holding company. The other is the much less public news that the eating place across the street from the building where I teach will be reopening...

The Fed, Interest Rates and Stock Prices: Fighting the Fear Factor

September 4, 2015 Comments (0)

If it feels like you are reading last year’s business stories in today's paper, there is a simple reason. The Federal Reserve's Open Markets Committee (FOMC) meeting date is approaching, and in a replay of what we have seen ahead of previous meetings, we are being told that this is the one where the Fed will lower the boom on stock markets, by raising interest rates. While this navel gazing may keep market oracles, Fed watchers and CNBC pundits occupied, I think that the Fed’s role in setting...

Big Markets, Over Confidence and the Macro Delusion!

August 28, 2015 Comments (0)

In early October of 2013, I was sitting in the waiting room at CNBC, waiting to talk about Twitter, which had just filed its prospectus (for its initial public offering). I was sharing the room with an analyst who was very bullish on the company, and he asked me what I thought Twitter was worth. When I replied that I had not had a chance to value the company yet, he suggested that I should save myself the trouble, and that the stock was worth at least $60 a share. Curious, I asked him why,...

Another Market Crisis? My Survival Manual/Journal!

August 26, 2015 Comments (0)

I would be lying if I said that I like down markets more than up markets, but I have learned to accept the fact that markets that go up will come down, and that when they do so quickly, you have the makings of a crisis. I find myself getting more popular during these periods, as acquaintances, friends and relatives that I have not heard from in years seem to find me. They are  invariably disappointed by my inability to forecast the future and my unwillingness to tell them what to do...

My Valuation Class: The Fall 2015 Model Preview

August 24, 2015 Comments (0)

It is almost September and as the academic clock resets for a new year,  I get ready to teach a new valuation class. With three hundred registered students, it is about as diverse a class as any I have every taught, with a mix of full-time  and part-time MBA students, law and engineering graduate students and a few dozen undergraduates. And with a market meltdown framing discussions, it will be interesting to see how the class plays out. As always, I cannot wait for the class to...