tag:blogger.com,1999:blog-37723330772709878912024-03-05T10:56:06.872+00:00Talks from TrumpingtonRandom musings on things that are dear to me. Interesting and not so interesting ones. A little bit of everything for everyone...Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.comBlogger162125tag:blogger.com,1999:blog-3772333077270987891.post-38665066053612302672016-07-14T06:40:00.002+01:002016-07-14T06:52:31.844+01:00Presentation Tips for Young (and Not so Young) Minds<br />
I'm in Korea teaching a summer course at SKKU in Korea. Today students are presenting their company valuations about a companies from all over the world.<br />
<br />
As presentations varied, here are some general tips I have from observing quite a few presentations in these years(and trying to improve my own!)<br />
<i><br /></i>
<i>1) Don't read from a script. Try to make your presentation as natural as you can.</i><br />
<br />
<i>2) Practice! Presenting is never easy, but the more you doubt the better you become.</i><br />
<br />
<i>3) Don't try to copy other people's presentation styles. Find your own!</i><br />
<br />
<i>4) When presenting numbers, don't use more than two (maybe even not more than one) decimal! It makes things easier to read and no one really think that discount rate of 9.3245% is better than 9.3%.</i><br />
<i><br /></i>
<i>5) Look at the audience as you present. This is a great way to engage with everyone and keep them focused on your talk and relaxed. Remember not to look at the same person too much.</i><br />
<br />
<i>6) Don't make your audience tired by spending too much time talking about details/numbers. You will often lose your audience if you start talking too much about calculations, although sometimes in academia people want to see those!</i>Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com2tag:blogger.com,1999:blog-3772333077270987891.post-23542163045755624662016-06-16T10:01:00.000+01:002016-06-16T10:01:02.819+01:00Equity Lending, Short Sales & Limits to ArbitrageWow. Can't believe it's been almost a year since my last post. Need to be more disciplined and write more often to please my 4 readers!<br />
<br />
Anyway, this week JBS's Insight has<a href="http://insight.jbs.cam.ac.uk/2016/new-limits-to-arbitrage/"> written a story</a> talking about my "<span style="font-family: inherit;"><span style="font-size: small;"><span style="font-weight: normal;">Ownership Structure, Limits to Arbitrage and Stock Returns: Evidence from Equity Lending Market</span></span></span>"paper (joint work with my amazing co-authors <a href="https://sites.google.com/site/melissaporrasprado/">Melissa Porras Prado</a> (Nova SBE) and <a href="http://www.jasonsturgess.com/">Jason Sturgess</a> (DePaul)).<br />
<br />
Here is the main summary:<br />
<br />
<blockquote class="tr_bq">
“Stocks with lower, more concentrated, short-term, and less passive
ownership exhibit lower lending supply, higher costs of shorting, and
higher arbitrage risk,” concludes the study of nearly 5,000 US stocks
over a four-year period (2006-2010) – forthcoming in the <em>Review of Financial Studies.</em><br />
<br />
In simple terms: suppose that someone told you that a glass is 50 per
cent full. While this is relevant information, it also matters whether
the glass contains water, milk or wine, its temperature and expiry date.
The article examines a wide list of institutional ownership
characteristics, and shows that stocks with lower, more concentrated,
short-term, and less passive institutional ownership exhibit lower
lending supply, higher costs of shorting, and higher arbitrage risk.<br />
<br />
Overall, it means that arbitrageurs will face higher costs to trade
and more uncertainty when trying to exploit market inefficiencies, which
in turn results in both less efficient prices and delays in
incorporating pessimistic investors’ opinions.</blockquote>
<br />
<br />
To download the paper, just click <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1787291">here</a>.<br />
<br />
<br />
Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-28286988878692234382015-08-07T11:56:00.003+01:002015-08-07T18:18:35.746+01:00Fighting the shortsToday, I saw this <a href="http://www.ft.com/cms/s/0/2505dc6a-3c5c-11e5-bbd1-b37bc06f590c.html#axzz3hrwGac2a">article on the FT</a> about short sellers and how companies try to prevent them from hitting share prices is very related to my academic work.<br />
<br />
The video is on the long side, but it explains what short sellers do, how they make money, and what companies do to fight short sellers.<br />
<br />
This part spells outs the <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1787291">main motivating story in my paper</a> with Melissa Prado and <a href="http://www.jasonsturgess.com/">Jason Sturgess:</a><br />
<blockquote class="tr_bq">
<i>"Coincidentally,
large investors in the company chose to withdraw some stock from the
pool available to borrow, leaving short sellers wary they would be
forced to close positions and brokers working to find stock to lend. The
share price swiftly rebounded."</i></blockquote>
<div style="text-align: center;">
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Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-37341580759393162862015-07-28T17:54:00.000+01:002015-07-28T17:54:12.156+01:00New Paper - Conglomerate Discount and Short SalesAn outstanding puzzle in Finance is why conglomerates are traded at a discount relative to focused firms. While some academics say that the discount doesn't even exist, we (hopefully!) bring a new angle to this discussion.<br />
<br />
We show that conglomerates have less dispersion of opinions than focused firms and face relatively fewer short sales constraints. These two effects partially explains why we observe a discount, being due to trading frictions. <br />
<br />
<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2636770">The first version of a paper</a> (together with Adam Reed and Ed van Wesep) is on SSRN: <br />
<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2636770">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2636770</a><br />
<br />
Any comments will be appreciated!
Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-38790082226658081612015-07-13T11:08:00.001+01:002015-07-13T11:08:35.683+01:00Greece and RealitySo Greece accepted all conditions from the creditors. Is that a surprise to anyone other than the dreamers from the left that think money grows in trees?
The EU made many mistakes and could have avoided lots of pain to everyone involved, but dealing with deluded politicians on the Greek side caused even greater harm.
while is totally democratic that Greek citizens might not want the deal they offer,citizens from other countries can also democratically chose not to throw away money to a country that doesn't want to implement the painful reformss that are needed.
As usual in life, there is no free lunch.Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-36986377559040717322015-07-06T19:35:00.000+01:002015-07-06T19:35:19.394+01:00US Housing Market ValueI <a href="http://metrocosm.com/the-housing-value-of-every-county-in-the-u-s/">read this post</a> with an interesting animated gif looking at US residential property values within each county in the US. Note how most of the value is concentrated in California and the Northeast. From what I read, this is an example of a cartogram. Cool.<br />
<br />
It starts with a standard map where yellow means relatively cheap residential area, while the more red, the higher the value.<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://metrocosm.com/web/map-property-values-usa.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://metrocosm.com/web/map-property-values-usa.gif" height="240" width="400" /></a></div>
<br />
<br />
This is the static picture (with labels):<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://metrocosm.com/web/usa-housing-value.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://metrocosm.com/web/usa-housing-value.png" height="240" width="400" /></a></div>
<br />
<br />
Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-90964912393274552922015-06-29T10:13:00.001+01:002015-06-29T10:13:45.913+01:00The Iron PricePeople should realize that Brazil's 02-08 growth was in spite of Lula and PT. The current recession is because of him and his party.<br />
<br />
Brazil is now paying the price of PT's cronysm and their outdated economic ideas.<br />
<br />
It is sad to say but it will take a long time to get out of this mess.Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-5286439725263837892015-05-22T00:01:00.005+01:002015-05-22T00:01:42.983+01:00Don't Be a Jerk<div class="_5pbx userContent" data-ft="{"tn":"K"}" id="js_5u">
Very <a href="http://www.theatlantic.com/magazine/archive/2015/06/why-it-pays-to-be-a-jerk/392066/?fb_ref=Default">nice (and long) article</a>. I liked this passage above all:<br />
<br />
<blockquote class="tr_bq">
"To summarize: being a jerk is likely to fail you, at least in the long
run, if it brings no spillover benefits to the group; if your
professional transactions involve people you’ll have to deal with over
and over again; if you stumble even once; and finally, if you lack the
powerful charismatic aura of a Steve Jobs. (It’s also marginally more
likely to fail you, several studies suggest, if you’re a woman.) Which
is to say: being a jerk will fail most people most of the time."</blockquote>
<br />
<br />
There you go. Don't be a jerk!<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://cdn.theatlantic.com/assets/media/img/posts/2015/05/jerk03/90e8645aa.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://cdn.theatlantic.com/assets/media/img/posts/2015/05/jerk03/90e8645aa.jpg" width="313" /></a></div>
</div>
Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-17120823080606678842015-05-15T13:46:00.000+01:002015-05-15T13:46:37.048+01:00Shame on you BrazilReally embarrassed to be a Brazilian these days.<br />
<br />
So many economic mistakes were made and we are now paying dearly for them. It will be a while until we get back on track...<br />
<a href="http://next.ft.com/fc43ddc6-f94f-11e4-be7b-00144feab7de"><br /></a>
<a href="http://next.ft.com/fc43ddc6-f94f-11e4-be7b-00144feab7de">http://next.ft.com/fc43ddc6-f94f-11e4-be7b-00144feab7de </a>Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-2761408320248959902015-04-03T22:18:00.001+01:002015-04-03T22:18:16.684+01:00Me and Dior and I<div class="separator" style="clear: both; text-align: center;">
<a href="http://static.squarespace.com/static/54901da3e4b0bae84b436008/t/5492c278e4b02a19b7c8dc91/1418904184323/quad_DIOR-4x3.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://static.squarespace.com/static/54901da3e4b0bae84b436008/t/5492c278e4b02a19b7c8dc91/1418904184323/quad_DIOR-4x3.jpg" height="246" width="320" /></a></div>
<br />
<br />
Today I went to the movies with myself to watch the <a href="http://www.diorandimovie.com/">Dior and I</a> movie, which I highly recommend everyone to see. I usually enjoy these documentaries regardless of whether it's the editing that convey all of the magic.<br />
<br />
Nonetheless, I particularly liked it for two reasons:<br />
<br />
i) It's always amazing to see geniuses working and the ups and downs of creative processes. You can almost see the sparkle in Ralf Simons' eyes when he has a good idea and the feeling of elation once he sees his creations finally being shown to the world.<br />
<br />
ii) At the same time, you can clearly see the pressure he goes through to deliver on his first collection and the tight deadline he's working on.<br />
<br />
All this made me think about the process of writing an academic paper. While no movie director could ever make the process of a research paper even remotely interesting, the sudden realization of a good idea or a good outcome of your statistical tests are amazing. The small pleasures that makes this profession rewarding. The feeling that you are probably the first person in the world to see those results is great. <br />
<br />
Anyway, watch the documentary. It's really good.Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-87313846165854601782015-03-08T21:22:00.002+00:002015-04-02T00:24:23.397+01:00Adam Tooze's "Wages of Destruction" Review and 21st century HyperpowersI just read <a href="http://equitablegrowth.org/2015/03/06/thoughts-david-frums-excellent-review-adam-toozes-superb-deluge-wages-destruction/">Brad DeLong's post on David Frum's review of the "Wages of Destruction".</a><br />
<br />
Two observations to be made.<br />
<br />
i) "<a href="http://www.amazon.co.uk/The-Wages-Destruction-Breaking-Economy/dp/0141003480">Wages of Destruction</a>" is an amazing book. I read it a few years ago and it has the best review of WW2 from an economic point of view I've read.<br />
<br />
ii) Frum and De Long's analysis of how the British transitioned from no longer being a hyper power and the parallels to how the US should adjust to the likely emergence of China/India in the next 20-50 years are very interesting.<br />
<br />
<br />Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-45057288446066134482014-12-14T20:50:00.005+00:002014-12-14T20:50:49.266+00:00Seminar in BrazilTomorrow I'll present a fresh paper, joint with Murillo Campello (Cornell) at PUC-RJ. It's so new that the paper hasn't even been uploaded to SSRN yet!<br />
<br />
Anyway, here are the details and short (and very tentative) abstract:<br />
<div class="mg-bottom-5px">
<h4>
<a href="http://www.econ.puc-rio.br/index.php/seminarios/show/id/199" title="Clique aqui para acessar ao seminário na íntegra">
Corporate Cash Holdings and the Market for Equity Lending </a>
</h4>
</div>
<ul class="laster last">
<li><b>Local:</b> Sala F200</li>
<li><b>Data:</b> 16/12/2014</li>
<li><b>Horário:</b> 17:00 hrs</li>
</ul>
<div style="text-align: justify;">
The precipitous growth of institutional ownership has changed the makeup of corporate equity ownership and trading activity. Institutions are the also the largest lenders in the equity lending market. Using quasi-experimental methods within a precautionary savings framework, we show that companies save more cash and repurchase more stocks when more stocks are available for shorting.A one-interquartile range (IQR) increase in lendable supply is associated with a 1.3% increase in cash holdings in the subsequent quarter, equivalent to 5.9% of the IQR variation observed for cash holding. </div>
Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com1tag:blogger.com,1999:blog-3772333077270987891.post-88757588607418795402014-10-25T12:34:00.002+01:002014-10-25T12:34:40.484+01:00Last presidential debate (in Portuguese)Acabo de assistir ao debate. Realmente foi a melhor performance do Aécio e a pior da Dilma. No púlpito ela demosntrava seu total desconforto em estar ali. Em termos de confiança e calma parece que o Aécio era o presidente e ela a que estava correndo atrás.<br />
<br />Pena que a esquerdas não tenham um candidato com o dom da fala e do raciocínio para que o debate sobre o futuro do país fosse mais racional e inteligente. A Dilma claramente não quer fazer campanha e tem aquela cara de asco ao ser contrariada.<br /><br />Assim como no começo ela só falava "Mais Médicos" e "no que se refere" agora ela só fala de "Pronatec" e "estarrecida". Parece que faz aula com o marketeiro e foca na palavra da semana que, então, passa a usar 400 vezes por hora.<br />
<br />Além das mentiradas (e confusões mentais) de sempre sobre economia, funcionamento do Congresso e vida da poupulação real, ficou claro a falta de propostas para o futuro e a humildade em reconhecer os problemas atuais para que mudanças sejam feitas. Realmente o pior momento foi dizer pra senhora economista fazer um curso técnico no SENAI. Lamentável.<br /><br />Como as intenções de voto estão muito próximas, conquistar os poucos indecisos pode fazer a diferença no final. Nisso acho que o Áecio deu um banho e creio que arrebatou mais que a Dilma.<br />
<br />
Espero que a escolha final sejapelo Aécio.Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-66901388557960435152014-10-20T00:00:00.001+01:002014-10-20T00:01:53.788+01:00The life of PhD in picturesInteresting visualization of a <a href="http://matt.might.net/articles/phd-school-in-pictures/">what doing a PhD</a> looks like:<br />
<br />
<pre>http://matt.might.net/articles/phd-school-in-pictures/ </pre>
Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-52330646355507300072014-10-14T22:01:00.000+01:002014-10-14T22:01:31.508+01:00A Call to Economic Rationality in BrazilIn a couple of weeks Brazilians will go to the polls in the last round of voting in the presidential elections.<br />
<br />
Two academic colleagues have written an economic manisfesto trying to deconstruct some of the fallacious arguments being used by the government during the campaign. It has been subscribed by many academic including myself.<br />
<br />
The opposition hasn't been this close to winning an election since 1998. Let's hope they do for the sake of the country.<br />
<br />
You can read it here (it's in Portuguese) and also the list of academics that have undersigned it:<br />
<a href="https://sites.google.com/site/manifestoeconomistas/">https://sites.google.com/site/manifestoeconomistas/</a>Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-23295546079230004362014-10-09T14:19:00.000+01:002014-10-09T14:19:07.554+01:00Surely that will improve teaching ratings!<!--[if gte mso 9]><xml>
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The <a href="http://on.ft.com/ZRxAg9">FT reports</a> that the UK government will start a randomized trial to see whether starting the school day later would improve teenagers' performance. </div>
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I'd wish I could have been part of such a trial when I was younger. Starting school at 7:10am (off-topic: never understood the :10 start) in Brazi wasn't nice. It made me have to wake-up at 6am.</div>
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Randomized trials such as this one are a great way to test the impact of the effects of proposed policy before they are rolled out to the rest of the country. Just like the idea behind testing the effectiveness of new medicines, here they randomize schools that will get the treatment (i.e. that will start the school-day earlier) and compare it to those with similar characteristics that will carry on as before (i.e. the control group).</div>
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Here are a couple of interesting links with more on randomized trials:</div>
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<a href="http://www.economist.com/blogs/freeexchange/2013/12/randomised-control-trials">http://www.economist.com/blogs/freeexchange/2013/12/randomised-control-trials</a></div>
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<a href="http://blogs.worldbank.org/africacan/can-randomized-control-trials-reduce-poverty">http://blogs.worldbank.org/africacan/can-randomized-control-trials-reduce-poverty</a></div>
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Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-11382112164697519252014-09-20T15:53:00.001+01:002014-09-21T09:34:52.247+01:00Transparency vs Market Impact: Oil Market ExampleThe <a href="http://www.ft.com/cms/s/0/4d8957a0-4015-11e4-a343-00144feabdc0.html#axzz3DrpRx6ce">FT has a story</a> today about a event that I'm sure will become an academic paper in no time.<br />
<br />
Mexico has been hedging their oil risk for quite a few years now. Basically they buy put options for a huge number of barrels, granting them the right to sell oil at a certain price at maturity (the story says they have set on $80/ barrel). Since PEMEX produces loads of barrels they are naturally hedged and guarantee their sale price per barrel in the future.<br />
<br />
While spot and futures oil markets are large and deep, options this big are not that liquid. This is why most of the times these options are written over-the-counter with an investment bank counterparytuy.<br />
<br />
This is an interesting example of the transparency vs market impact debate but incomplete. Maybe I'm missing something but I think they are making too much about it. The data is released with an obvious delay and the options are traded over-the-counter, so no big market impact. Maybe if the investment banks hedge their exposure by buying call options they could move markets, but they could also enter into OTC contracts themselves with other banks or use futures to pass the risk along.<br />
<br />
Anyway, this would make a nice case study for a derivatives course.Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-38252867520419427562014-09-05T12:35:00.000+01:002014-09-05T12:35:05.488+01:00Academic-kids problemsShould I feel bad for preferring to attend a Marketing seminar rather than a Corporate Finance happening at the same time?<br />
<br />
Seems to be an interesting seminar to attend:<br />
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<b><span style="font-size: 11.5pt;">THE SMALL BIG, how small changes can make a big difference to your influence</span></b></div>
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<b><span style="font-size: 11.5pt;">Robert Cialdini, Arizona State University</span></b></div>
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<b><span style="font-size: 11.5pt;">2.30pm, Friday 19th September, Castle Teaching Room</span></b></div>
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<span class="apple-style-span"><span style="font-size: 11.5pt;">Whatever
your role in life much of your success is dependent on your ability to
effectively influence and persuade others. But how? In his first ever
visit to the University of Cambridge world renowned and eminently
respected persuasion researcher Dr. Robert Cialdini will explore some of
the fundamental principles of the influence process, including insights
from his latest book THE SMALL BIG, co-authored with long time
collaborators Steve Martin and Noah Goldstein.</span></span>Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-47844664079922237632014-07-27T19:30:00.000+01:002014-07-27T19:30:07.357+01:00Brazil, Education and InequalityThis Sunday <a href="http://glo.bo/WZK2ZE">I gave a small interview</a> to Rio's largest newspaper about Brazil and the crucial role that proper investment on education will play in reducing inequality and long-term grown prospects.<br />
<br />
It is in Portuguese though. Sorry to my 6 English-only readers!<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_v3NYUnnio4aTnWgYuytBp3S66s52m9rClV8EuwV-jbo6Se48tX2995A-D3jq69APbtUl-wtHFLxja9QaVLAHtErdurWvmy7Y824-HmEU_Qh2GAahyqdRX3BLPR5XEiw6CPYU144kSyk/s1600/globo_interview_2014.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_v3NYUnnio4aTnWgYuytBp3S66s52m9rClV8EuwV-jbo6Se48tX2995A-D3jq69APbtUl-wtHFLxja9QaVLAHtErdurWvmy7Y824-HmEU_Qh2GAahyqdRX3BLPR5XEiw6CPYU144kSyk/s1600/globo_interview_2014.jpg" height="640" width="465" /></a></div>
<br />Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-75506454632234071722014-06-15T16:16:00.000+01:002014-06-15T16:16:40.347+01:00Academia vs PracticeI am at a practititioner oriented conference and a couple things spring to mind.<br />
<br />
I) Practitioners oftn have no idea what academic life in a Finance B-school looks like. They have no idea about the tenure system and that research is key to sucess.<br />
<br />
II) people have to be aware that if you are given 15mins to present, it is impossible to go over more than 10-12slides. People usually bring too much and run over time.<br />
<br />
Corffee breaks are usually very useful to test new ideas to see i they make sense in the real world and for potntial sources of new data.<br />
<br />
Looking forward to going back home!Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-10382256758013064452014-05-09T14:39:00.003+01:002014-05-09T14:39:36.223+01:00Should I Even Care?Today the <a href="http://www.ft.com/cms/s/2/e78d7e76-d602-11e3-a017-00144feabdc0.html#axzz31DZACyTx">FT has a long article</a> on the infamous Jérôme Kerviel, who made Soc Gen lose 4.9bi euros in 2008 due to cheating / forgery of trades.<br />
<br />
Reading the article I felt that the journalist (or Jerome) was trying to blame the "system" for what he did.<br />
<br />
Jerome says "Think
about my position. You have been condemned to pay €4.9bn, you have
jail, you have the justice system against you. You have no life, few
friends, no prospects. It’s difficult to rebuild any kind of real life
with all that hanging over you,..." <br />
Well, maybe you should have thought about that BEFORE doing you what you did. <br />
<br />
I feel no pity for those involved in this case. The trader cheated
hoping to make big bonuses, while his bosses probably knew and covered
him up while things were working well.Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-34521740521603011652014-04-04T16:42:00.002+01:002014-04-04T16:42:31.554+01:00Luck or Skill?Harvard has just signed up Sir Alex Ferguson to teach on their ExecEd programs:<br />
<br />
<a href="http://on.ft.com/1q0fjmw">http://on.ft.com/1q0fjmw</a> <br />
<br />
That reminded me of the eternal luck vs. skill debate in asset management... Although my dislike for Man Unt, probably biases my opinion!Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-32908062536399741102014-02-06T07:57:00.004+00:002014-02-06T07:57:40.820+00:00Don't Cry for my ArgentinaI usually joke to students that Brazilians are more creative than Argentinians. While in Brazil we are always inventing new ways to mess with our economy, in Argentina they always make the same mistakes over and over again.<br />
<br />
This <a href="http://online.wsj.com/news/articles/SB10001424052702304851104579362530567845104?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304851104579362530567845104.html">WSJ article </a>has a quote that summarizes it all: "<span style="background-color: rgba(255, 255, 255, 0);">"Our cycles are almost biblical," </span><br />
<span style="background-color: rgba(255, 255, 255, 0);"><br /></span>
<span style="background-color: rgba(255, 255, 255, 0);">It is such a shame to see a country that has a well educated work force and decent infrastructure to keep suffering from the same type of mismanagement over and over again. Let 's see how long it will take for the bust to come this time. </span><br />
<br />Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-60825454280634947082013-11-30T00:43:00.002+00:002013-11-30T00:43:50.367+00:00Meanwhile in South America...Often students ask me about Brazil and where its economy is headed. Alas, I'm very bearish about the current government and their views on what needs to be done.<br />
<br />
<br />
<br />
<br />
<br />
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While the government remains in the fantasy-land and believe that all is well, the economy is sending many signs that it is reaching breaking point.<br />
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<br />
I particularly find the following graphs interesting:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLj2qkDvjgPR43_5LgjHbsMnRieuQlmvoW1ZomZHSG9mpQxJhS8JmiD54JZ9UDrCJ_7hYRdJXPiz4HPIx2NHOCgpawGD4pDMK3l2ghbm9FfcWNiss04BesGHfzTCocX1LEOazZBsQ4TBw/s1600/Brazil+labor+force.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLj2qkDvjgPR43_5LgjHbsMnRieuQlmvoW1ZomZHSG9mpQxJhS8JmiD54JZ9UDrCJ_7hYRdJXPiz4HPIx2NHOCgpawGD4pDMK3l2ghbm9FfcWNiss04BesGHfzTCocX1LEOazZBsQ4TBw/s400/Brazil+labor+force.png" width="400" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVH9kXfYAWfDUjm1AeI949viJwo3fBDXKiYfvKmwSAe-kVJV1LKIo5YY5PhvcQezgYcay6sXejnkyV7swmnhAmsIHFk67N8PwJjx-7AuFjRwGuh_vcPxc13ezVfNw25Bg0z3CQUX0BSDI/s400/real+wage+bill.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="287" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVH9kXfYAWfDUjm1AeI949viJwo3fBDXKiYfvKmwSAe-kVJV1LKIo5YY5PhvcQezgYcay6sXejnkyV7swmnhAmsIHFk67N8PwJjx-7AuFjRwGuh_vcPxc13ezVfNw25Bg0z3CQUX0BSDI/s400/real+wage+bill.png" width="400" /></a></div>
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What will happen in 2014 with the elections and the World Cup? We'll find out soon...Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0tag:blogger.com,1999:blog-3772333077270987891.post-23648766162166636472013-10-04T18:01:00.002+01:002013-10-04T18:01:49.822+01:00Twitter IPOA colleague just sent me this:<br />
<br />
"Twitter filed to go public yesterday, choosing the stock ticker TWTR.
Twitter shares are expected to start trading before Thanksgiving this
year.<br />
<br />
But it looks like some investors are a bit confused. A company called
<a href="https://www.google.co.uk/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1380916800000&chddm=391&chls=IntervalBasedLine&q=OTCMKTS:TWTRQ&ntsp=0&ei=sPNOUuKhFKiowAOovgE">TWTR Inc.</a>, which as far as we can tell has nothing to do with Twitter,
is up a whopping 1,500% today, but fluctuating wildly."<br />
<br />
I'm amazed by how many investors don't do even the most basic
research. C'mon people, at least check if what you are buying is really
what you want to buy. Then some complain that markets are like a casino...<br />
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<a href="http://static1.businessinsider.com/image/524ed7e6eab8ea05588b1681-1200-480/screen%20shot%202013-10-04%20at%2010.59.10%20am.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="248" src="http://static1.businessinsider.com/image/524ed7e6eab8ea05588b1681-1200-480/screen%20shot%202013-10-04%20at%2010.59.10%20am.png" width="640" /></a></div>
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Read more: <a href="http://www.businessinsider.com/twtr-stock-up-1500-percent-2013-10#ixzz2glzgyHNl" style="color: #003399;">http://www.businessinsider.com/twtr-stock-up-1500-percent-2013-10#ixzz2glzgyHNl</a><br />
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Pedro Saffihttp://www.blogger.com/profile/16812895858494683276noreply@blogger.com0