Tuesday, November 24, 2009

Things I Love about Work

There are many things I love about being an academic. One of the best is the chance to meet interesting people and take part in interesting discussions.

Today IESE hosted a workshop on Football Economics. The event was organized by Barcelona FC and IESE. and opened by Joan Laporta (Barca's president), who even stayed for the whole presentation of the first paper. Johan Cruyff was also in the audience (he's the current manager of Cataluña's national team) and many senior directors of Barcelona.

Papers talked about the market for broadcasting rights, differences between European and US sporting leagues and the labor market for football players.

Overall, a good day.

Tuesday, November 17, 2009

Stress is Bad for your Trading Account

I read this a couple of weeks ago in the FT and forgot to blog about it. Basically Phillips and ABN Amro are teaming up to develop a bracelet to be used by traders that displays a warning if their stress levels are too high. The idea here is that investors might follow irrational strategies if they cannot think properly and should take a brake if they get to stressed out before taking any decisions.

This reminds me of a paper by Andre Lo in which he measures physiological characteristics of traders (like blood pressure) during live real trading sessions and finds significant correlation between changes in cardiovascular variables and market volatility.

Here is a video of how it should work. It looks like really good sci-fi stuff. I wonder if it might help in other situations, like preparing to an interview, approaching girls, or right before some World Cup penalty shoot-out...

Saturday, November 14, 2009


I love to be reminded that we should always put things in perspective. This link here has a great  description of how tiny our cells are. Just slide the bar to go from a coffee bean to an atom.

One of the great mysteries of life is how molecules combined over and over again until it evolved to sentient life. If this isn't a good reason to believe in God, I don't know what else could be.

Wednesday, November 4, 2009

Chance Favors the Prepared Mind

Just read on the FT that "Traders at Goldman made more than $100m in profits on 36 of the 65 days of the third quarter".

I guess that with less competition, those prepared for it and quick to adapt to the new times are making huge tons of money...

Monday, November 2, 2009

Terminator and Real Options

The FT today has an article about the auction of rights to the Terminator movie franchise (a few weeks ago they had also auctioned the rights to the The Teenage Mutant Ninja Turtles for $60mi). The owner will be able to launch new movies, TV series and anything related to the last Terminator movie.

This story reminded me of the Arundel Partners case. The case asks students to apply option pricing theory to value the option to produce sequels to Hollywood blockbusters. They have to estimate the volatility, consider potential moral hazard problems and decide which movies to use when estimating parameters.

This term for the first time  I'll use it in the Corporate Finance course to talk about Real Options. I hope it goes  down well with students. Everyone gets scared the first time they see the Black-Scholes formula on the board...