Another year begins!

European schools usually start their academic year about a month after US schools do. Tomorrow it 's my turn and I begin teaching the Capital Markets course to 1st MBA students. It is always exciting to meet a new class and get to know students.

For those of you visiting the blog for the first time, welcome! I hope you like what you read and keep coming back!

 

Tips on Lectures

One of my colleagues sent me this very interesting video with tips/comments on how to improve the quality of lectures. This link below contains the full list of videos at Harvard's Derek Bok Center for Teaching and Learning

http://isites.harvard.edu/icb/icb.do?keyword=k1985&topicid=icb.topic650252&panel=icb.topic650252%3Arwatch%248%3Fentry%3D18850%26watchfull%3Dt&state=popup&view=view.do#a_icb_topic650252

Hat tip to JCVD.

Exciting Day

Today I finally got the teach the first case study I've written:
  
Volkswagen AG: Valuation in 2009

This is a case on multiples valuation based on Volkswagen around on May 2009, right at the peak of the crisis.

I think the session went well and students enjoyed themselves. Hope I'm right!

Weak Dollar

At the beginning of each class of my first-year course this year we spend about 15 minutes discussing the major events in the Financial Times.

One of the "big stories" in recent weeks has been the weakening of the dollar relative to major currencies and, not surprisingly, it prompted many questions about the underlying reasons for it.

In class we discussed many things::

1.  Recent decreases in risk aversion reversed the "flight to quality" seen during the peak of the crisis.
2.  Bad monetary and fiscal policy by the Fed and the US Treasury relative to other countries (aka higher inflation).
3.  Sovereign governments diversifying their reserves to securities in other currencies.
   

The last time I was a serious student of macroeconomics was almost 10 years ago. Paul Krugman comes up with a sensible argument, but a smart guy like Barry Eichengreen (link here) is not so sure about the death of the dollar.

Teaching Duties...

Yesterday I began teaching the 1st year MBAs. The group I'm teaching this year has an even larger mix of nationalities, which really helps when talking about financial markets and what has been happening through the crisis. Everyone can contribute with how it affected their own countries and the measures taken by different governments.

We talked a lot about information asymmetry in markets and how regulation is required to prevent bad behavior to arise. There's been plenty of bad examples: sales teams giving mortgages to people that had no likelihood of repaying their loans, investors putting up their money in investments that promised huge returns with low risk (e.g. Madoff).

The scary bit is that even supposedly "smart" and informed investors made huge bad calls. I'm not really sure whether better regulation would really help these type of investors to avoid making stupid investment decisions.