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Introduction to QuantLib Development with Luigi Ballabio - London, November 14 - 16th, 2016 -

Musings on Markets's Blog

Value and Taxes: Breaking down the Pfizer- Allergan Deal

November 18, 2015 Comments (0)

A week ago, I began my series of posts on the drug business, starting with my perspective on how the business is changing and then moving on to posts on Valeant's business model and the runaway story of Theranos. I am finishing this series with a post on Pfizer's plan to merge with Allergan and the economics of the merger. This deal, which will make one of the largest pharmaceutical companies in the world even larger has drawn attention not just because of its magnitude, but also for its...

Runaway Stories and Fairy Tale Endings: The Cautionary Tale of Theranos

November 12, 2015 Comments (0)

I saw the new Steve Jobs movie, with the screenplay by Aaron Sorkin, over the weekend. As a long-time Apple user and investor, I must confess that I was bothered by the way in which the film played fast and loose with the facts, but I also understand that this is a movie. Sorkin clearly saw the benefit of using the launches of the Macintosh in 1984 and the iMac in 1997 as the bookends of the movie and the tortured relationship between Jobs and his daughter to create an emotional impact, and...

Checkmate or Stalemate? Valeant's Fall from Investing Grace

November 11, 2015 Comments (0)

In my last post, I looked at how the pharmaceutical and biotechnology businesses have diverged, especially in the last decade, and the implications for earnings, R&D and market pricing of these companies. The pharmaceutical business, in particular, faces a new landscape with many companies still stuck with a business model that does not work in delivering value, as growth eases and margins come under pressure. It is no surprise therefore that investors are looking for a drug company with...

Divergence in the Drug Businesses: Pharmaceuticals and Biotechnology

November 9, 2015 Comments (0)

In the last two weeks, I have been tempted to write about Pfizer’s courting of Allergan, the epic fall of Valeant and the unraveling of the Theranos story, but I held back because all three stories have to be set against the backdrop of the changing health care business. While there are numerous stories being told about how this is changing, I decided, again from a position of relative ignorance, that it made sense to start this series by looking at the evolution of the health care...

Winning at a Loser's Game? Control, Synergy and the ABInBev/SABMiller Merger!

October 23, 2015 Comments (0)

I have been a long time investor in ABInBev, though I became one indirectly and accidentally, through a stake I took a long time ago in Brahma, a Brazilian beverage company . That company became Amber in 1999, which in turn was merged with Interbrew, the Belgian brewer, in 2004, and expanded to include Anheuser Busch, the US beer maker, in 2008 to become the largest beer manufacturer in the world.  I made the bulk of my money early in my holding life, but Amber has remained in my...

The Ride Sharing Business: Playing Pundit

October 21, 2015 Comments (0)

This is the third and final post in a series of three on the ride sharing business. In the first, I valued Uber and looked at the evolution of its business over the last 18 months. In the second, I valued Lyft and looked at pricing across ride sharing companies. In this one, I look at the future of the ride sharing business from the perspective of an outsider with no expertise in this business. In my last two posts, I first valued Uber, with its expansive narrative, and then looked at putting...

Dream Big or Stay Focused? Lyft's Counter to Uber!

October 19, 2015 Comments (0)

This is the second in a series of three posts on the ride sharing business. In my first, published in both TechCrunch and my blog, I valued Uber, trying to incorporate the news that has come out about the company and its competition in the last year. In this one, I first turn to valuing Lyft, which is telling a narrower, more focused story to investors than Uber and also look at how the pricing ladder in ride sharing companies has pushed up prices across the board. In the last post, due out...

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...