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Tuesday, August 27, 2013

On why Finance must be combined with IB and political science..

or any other similar degree...

M&A used to be easier... the era of domestic deals is over. Nowadays many small and medium sized firms have a global footprint. This makes any deal very like to touch upon different legal and political systems.

Targets are ever more likely to be global. We now seem be in the era of "born global" firms. These are firms that from their inception have their "eyes" on foreign markets.

Consider Warren Buffet's (plus Brazilian Mr. Lemann) offer to take Heinz private. A recent article in the Financial Times shows how much red carpet needs to be covered from a number of countries to secure regulator's approval... In their case, they need Russia and China... Not easy

Don't know about you... I will be looking at GRE scores for law school

Tuesday, August 20, 2013

How hard should you work in an internship?

I am not one to post sketchy topics, but this very tragic one one caught my attention.

Apparently (cause not clear) an intern at BofA died after pulling one too many all nighters...
See article here

As a professor and supervisor of many internships I have to ask my self
Can this be true? I mean does this reflect a hidden trend?
Are students so desperate to impress that would risk their health?
What should companies do?
What should universities and professors do?

Tuesday, August 13, 2013

Adult Diapers

OK. I get it. Not precisely dinner table topic. Japan's largest diaper maker already sells more for adults than babies... I am not making this up...It gets worse... See this Huffington Post article if you don't believe me.

The World Bank estimates that fertility rate (births per woman) needs to be around 2.2 to simply "replace" the current population. Any number below means negative growth.

Highly correlated is the issue of age dependency*... Do you have a clue about what any of this means for the future?
All I know is that Japanese workers will have to work a lot harder

*Age dependency ratio is the ratio of dependents--people younger than 15 or older than 64--to the working-age population--those ages 15-64. Data are shown as the proportion of dependents per 100 working-age population.

Wednesday, August 7, 2013

Are living wages bad for companies (and investors)?

Feeding into the debate of living wages, a recent article from CNN money shows the great disparity in entry level wages at flagship companies. The contrast seems to be between miserly Wendy's & Walmart ($7.35 and $9.40 per hour respectively) versus generous Costco with almost $23 per hour on top of benefits.

Paying more than double for something can't be good. Can it?  If I pay double I expect double. Over the last five years Costco employees have been able to generate twice as much revenue than their Walmart counterparts. However, these higher sales have not translated into profits... What do investors think? Forward PE ratios seem to say that Costco will do just fine...

What do you think?