Showing posts from May, 2012

On the Other Side of the Desk

Occasionally, someone will ask me to give them my number one piece of advice for becoming a better teacher. Teaching is such a complex art that I really think that is close to impossible. However, I do think there is one thing that every teacher (and I do mean every teacher) should do that will help them immediately to become a better teacher. Can you believe it? I’m almost guaranteeing you success with just one piece of advice. Every teacher should get a reality check by enrolling as a student each year in a class in something about which they have no real knowledge. In other words, they should walk around to the other side of the desk and put themselves into the student role just as a reminder of how it feels to be the struggling one. I don’t mean for a history teacher to take another history class. There’s no benefit. I don’t mean for an English teacher to take a class in poetry. I mean for a history teacher or an English teacher to take a class in quantum mechanics. Two weeks ago,

Department of "What Were They Thinking?"

I'm back. Unknown University has a new initiative.  They want to encourage more "interdisciplinary" research.  So, they're trying to hire in groups centered around "big" topics.   So what do they call this approach? " Cluster Hires" It's too easy.   I'm not going there.  

Web 2.0 Comes of Age..Or Does It? NASDAQ:FB fizzles.

It was supposed to be the golden moment of the new Internet Age. No tech bubble--we were going to get it right this time. Investors were more sensible now, and knew how to value web-based companies which had finally figured out how to monetize. The stage was set, and we would come out of the gates all guns blazing. Pffft . Seriously?  There are a few times that Wall St. drinks its own Kool-Aid on a macro level (re: housing crisis, tech bubble, S&L crisis, etc.), but by and large, it is good at weeding out singularly irrational events. Not this time. Even the lead up to IPO was suspect. After months of speculation that Facebook would have to settle below the psychological $100B mark, underwriters unexpectedly boosted the issuance by 85M shares to 420M, and raised the expected range to $34-$38, tipping the valuation into nine-figure land; it raised a few eyebrows that the decision was made in the middle of a roadshow, but the changes were pegged to increased interest by PMMs.  Then,

We Have Met The Enemy and He Is Us

My department chair (Darrell Walden) sent out the following link to an article from The Washington Post . You may have to register to read it but it is well worth your time. (If the link doesn’t work, just go to and search for “Is college too easy” as of May 21, 2012.) Darrell summarizes the story quite well in just a few words. “Over the past half-century, the amount of time college students actually study — read, write and otherwise prepare for class — has dwindled from 24 hours a week to about 15, survey data show. And that invites a question: Has college become too easy?” As I travel around the country talking about teaching, I very frequently hear faculty members complain that “college students are not like they used to be.” My feeling (after 41 years in this job) has always been that college students really do not change much o

Now, That Is a Very Good Question

A good friend of mine who teaches at a university in Texas wrote to me a few days ago and posed the following question. My guess is that all college teachers have felt this same way at times over the years. It is very difficult to get students to leap tall buildings with a single bound if you can’t get them to prepare for class. “For the past two semesters I have become so totally frustrated with the students in my classes. They do NOT come to class prepared AT ALL. They don't read the book. Some of them don't even get the book until the 3rd or 4th week of the semester. “Do you have a secret for getting students to read their textbook, especially in Intermediate? Do you threaten them with hanging at dawn? Do you give them a quiz every class? “I really want my fall Intermediate students to develop some better habits, so I'm looking for a way to facilitate that.” Okay, I think the first way to approach this quandary is to consider where most of the students are coming from in

The Prize Will Not Be Sent To You

I was going through some files this evening and discovered a quote that I received some years back from a person in India .  There's a lot to like about this quote but I especially appreciate the line:  "The man who grasps principles can successfully select his own methods."   I sometimes think in teaching (and maybe many other things in life) that we are too obsessed with finding the perfect method.  "Without ambition one starts nothing. Without work one finishes nothing. The prize will not be sent to you. You have to win it. The man who knows how will always have a job. The man who also knows why will always be his boss. As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble".      Ralph Waldo Emerson

Super-Powered Premier

I may officially be the only person left on the planet that has yet to see The Avengers after Disney reported the film took in $207 million in its opening weekend. But naturally, this number is once again going to be shattered when the Dark Knight Rises releases in a few months. See a trend here? Like clockwork, the blockbuster films of the year seems to "SHATTER" the hauls of past films. For a while, the opening weekend was a pretty stable affair, with Spiderman-2 being the benchmark of success. So what happened since then? For one, cinemas became these cash cows that doubled their ticket prices. I can't even watch a movie in New York without clearing 15 bucks, and even back home in Florida, 10-12 bucks for a ticket makes it twice as easy for a movie to take in these hauls compared to Spiderman-2 when movie tickets were $6-7. Second reason why these new movies are raking in the dough: 3-D and IMAX. Back in the day, when commercials said "in theaters and IMAX near yo

Monetizing Tumblr

                Tumblr, the place where memes turn viral, the place where we can find millions of Asians sleeping in university libraries (many of which are from NYU), and whatshouldwecallme—enough said. With 54 million registered users, people find it is a nice complement to Facebook as it is a channel for expression and Facebook is more of a channel for communication. With such a huge following, Tumblr has announced it would start monetizing the site. Instead of placing traditional advertisements in random places in each website, they will allow companies to promote pages and specific posts as it is a more subtle and integrated way of connected with users. The issue is, users have been commercial-free since 2007 so they need to figure out a way to advertise without annoying the consumers. While Tumblr is sort of walking on eggshells, I think this is a great decision and the only logical decisions after amassing such a huge audience. David Karp, Tumblr’s founder and CEO states that so

April’s Jobs Report: A Thorn In Obama’s side or A Thorn on the Rose of His Reelection?

Yesterday, the US bureau of labor gave a disappointing jobs report.  In April, only an additional 115,000 workers were added to nonfarm payrolls, making it the weakest gain in the last six months.  Additionally, the unemployment rate declined to 8.1% due to a significant number of people no longer seeking work.  In response to the poor report, the major indexes were in the red across the board with the S&P 500 dropping 1.6% for the day.  Also in response to the negative report, the yield on the 10-year Treasure note declined from 1.93% to 1.88%, and the price of oil dropped to its lowest level in almost six months.                 Obama’s 2012 campaign had been shaping up very well before yesterday with a cornerstone of his campaign being the recovery in the US economy since his election to office in ’08.  However, Friday has brought doubt on whether the United States really is in a recovery at all.  In response to the report, Roger Altman of Evercore Partners said, We need 200,000

Alternative IPOs: Rethinking Capital Raising

           With all of the news surrounding recent IPOs like Groupon, Yelp, and Facebook, it is easy for us to forget the larger picture:  There are significantly less IPOs now, then there were 10 years ago, and the market for initial public offerings has effectively been slow.  The IPO market has changed in the past decade for a number of reasons.  Most importantly, there are simply less IPO underwriters now than there were before.  Major players in the IPO space such as Hambrecht & Quist; Alex, Brown; Robertson Stephens and Montgomery Securities have either merged or been consolidated into larger banks than focus on larger deals.  This focus on larger deals means those underwriters are no longer interested in the smaller initial public offerings and do not bother doing investment research on small-cap companies.  We can see this shift to larger deals clearly.  In the 1990s, the average deal size for a NASDAQ IPO was $35 million, while in 2006, this figured ballooned to $115 milli

Playing the Prediction Markets

We have markets to trade thousands of stocks, bonds and derivatives, but Intrade is taking ‘market making’ to a whole new level. Intrade allows people to play the prediction markets, in which you buy or sell into hundreds of real world events. Instead of searching for a company’s intrinsic value, an investor in the prediction markets is simply finding the probability of an uncertain future events from occurring. Some examples of markets include Barack Obama being reelected or the Avengers grossing over $175M in its opening weekend. Markets are always defined on a yes or no basis, such that you buy shares of an event you believe is going to happen and sell otherwise. If the event does happen, then the market is settled at $10 and if it does not then it is settled at $0. The idea  for this range being that a market price of $4 indicates a 40% probability of the event actually occurring. The evolution of prediction markets brings the world of investing and trading to an entire different a

Spaniards in Search

While landing an internship here at Stern may be difficult for some, things aren’t as bad as they seem. The majority of us do find something post-graduation, somewhere in the U.S. However, the same cannot be said for people aged 25 and under in Spain. Statistics show that over 50% of this demographic are unemployed. The reason for this is the end of Spain’s construction boom, where many teenagers found and eventually lost their jobs. The major problem is that many people in this demographic had left school early to take advantage of the abundance of construction jobs so they are now left without an income and without a degree. Moreover, some are graduating with degrees but are still left unemployed. Companies also have little incentive to hire young workers as the older employees have more experience in the field. As a result, experts estimate that around 500,000 young laborers will leave the country every year until 2020 just to make a living. The most popular destination for new jobs

Yelp Profits But Shares Drop

Yelp is down 8.% after being one of the best IPO performers this year. Even though the company beat revenue forecasts, it is clear that its operations are profitable. Analysts still aren’t’ convinced by Yelp, even though Yelp has had fourth straight quarter of revenue increases. Will Yelp be able to beat competition coming from Google? While its revenue is increasing, it is not profitable and the competition from other companies such as Google is increasing. Google recently bought Zagat, a fancier review competitor. And Yelp also gains most of its traffic from Google itself, so if Google heavily promotes Zagat, Yelp’s consumers group could be at risk. Yelp clearly needs to be able to innovate and set itself apart from the Google powerhouse in order to maintain its advantage of its competition. As the leader currently, they should be able to maintain their consumer base for a while because they are so heavily consumer focused, with their consumers providing reviews. While many tec

UK in Recession

Both UK manufacturing and UK service firms growth have slowed down in April. Export orders fell in the U.S., euro zone, and Asia for the UK manufacturing group, but employment for both the services industry and the manufacturing sector grew in April. The slowing of manufacturing growth will probably continue to slow even further with the infrastructure for their 2012 Olympic Games being completed and as the Olympics draw closer. However, not only the UK faltered though, as the Eurozone saw manufacturers decline throughout; Spain and Italy’s manufacturing are under the pressure of huge debts and decreasing orders. However, in Asia there has been increased production to meet growing demand, and the growth of U.S. manufacturing has increased as well, so it seems that the debt crisis in Europe is severely dampening its growth. India, South Korea, China, and Taiwan’s growth this month showed stronger manufacturing activity. The Bank of England says that this year Britain’s econ

Chinese GDP-Stocks Market Paradox

Everyone knows that China has one of the largest gross domestic product growth rates, but is everyone aware that the Chinese stocks actually do not match up with these rosy growth rates? The Chinese securities regulator announced new stock listing rules over the weekend as it tried to end a decade of lousy stock returns.  There seems to be paradox common to most emerging markets, that the high GDP growth often carries an underperforming equity market with it.  For example, China’s 2011 GDP was four times its figure in 2010; however, the Shanghai Composite Index only rose about 46% over the past decade.  Why is this happening? First, China’s stock market is not mature enough.  In fact, it was only established two decades ago, so we cannot expect it to behave like other long-established markets in developed countries.  Second, as with many developing countries, there is the problem of legal and political problem, i.e. corruption.  A 2002 study of China’s stock market by Dow Jones Indexes

Diminishing Hope for Sarkozy's Reelection

Sarkozy, the first incumbent not to win in the first round since 1958 must gain the support of over half of the radical right in order to win, while Hollande must make up for a generally poor showing for the left where communist Jean-Luc Melenchon only gained 11.1 percent of the vote. Surveys predict that Hollande will beat out Sarkozy by a 56 percent to 44 percent margin in the next round.  To secure the remaining votes which once belonged to Ms. Le Pen, the elections will have to veer to the right, reflected in Sarkozy’s repeated appeals to anti-immigration and France’s historically Christian values.  However, if projections are true and Holland wins by a ten point margin, it would signal the first Socialist president for France since 1995.  Hollande’s victory has already increased uncertainty in markets as he pledged to boost government spending and cut French debt along with a 75 percent tax on the wealthy.  Additionally, while German Chancellor Angela Merkel and Sarkozy have recen

Bright Food's Acquisition Spree

A $1.94 billion deal has allowed China’s state-owned Bright Food to have majority stake over British cereal maker Weetabix Food. Bright Food will buy a 60 percent stake in Weetabix from the private equity firm Lion Capital LLP while Lion Capital and Weetabix management keep the remaining 40 percent. Bright Food has previously attempted to expand overseas, but has failed many bids for major corporations such as Yoplait, United Biscuits, CSR’s sugar division, and GNC. This venture is its largest overseas deal yet and its second overseas acquisition this year, after its 75% stake in  Australian-focused Manassen Foods Australia purchased from Champ Private Equity in August . Bright Food had a focus on acquisitions even within China, and they plan to continue their growth through acquisitions abroad. Bright Food is China’s leading food group, and is aiming to acquire sugar, wine, and dairy assets abroad. Its goal to become the major global foodmaker is supported by