A Good Site For Valuation Related Matters

Ok, so he doesn't format his excel spreadsheets very nicely, but hey I don't hold that against him. The guy wrote some of the most respected textbooks in the field of valuation/corporate finance. I'm talking about NYU professor Aswath Damodaran, and I'd like to suggest you take a look at his website sometime.

I don't know when he put this mission statement up, but I think it's fantastic:

"I am lucky enough to be in a field where a little knowledge and some experience goes a long way, and achieving guru status seems relatively simple. What I do know is neither profound nor earth shattering, but I would like to share it on this site. In that pursuit, I have attempted to keep almost the entire site open and accessible, with the only shut-off portions representing powerpoint slides used by instructors (who use my books). Everything that I learn, do or write in the field of finance will be on this site sooner or later. I hope that you find the content useful and that you will share it with others. Good luck! "

If that doesn't sum up what the Internet is all about (free sharing of information), I don't know what does.

The Taj Mahal Does Not Want Your US Dollars Anymore

Add Indian tourist sites to the list of places that won't accept dollars anymore. According to a recent ruling from the Indian Government, visitors will no longer be allowed to pay admission fees to places like the Taj Mahal in US Dollars. They must use Rupees instead. According to the BBC, "The ruling is aimed at safeguarding tourism revenues following the recent falls in the dollar."

The Taj Mahal joins the likes of model Gisele Bundchen and rapper Jay-Z as the latest object of public interest to snub the dollar.

Just tossing that out there.

By the way, im watching Bloomberg TV- Asian markets are open on Sunday nights in NYC. Did you know that the Pakistani government's 10-year bond is yielding 10.3% right now? I'm not sure how you could buy one of those and given the fact that the country is currently under emergency rule , I'm not sure you would want to buy one. How much do you trust a 10-year promise that Pakistan will pay you back? Actually, taking that a step further... why would you ever want to support such a government by loaning money to it?

Great Gifts for Finance Geeks - Part II

As promised, here are some more ideas (in no particular order) I had that I'm sure the financial analyst/hedge fund manager/business school student or other finance geek in your life would appreciate this holiday season. Ok well if it's a hedge fund manager you're buying for, you might want to stick with the items in Part I. These are more inexpensive than the extravagant items I had in Part I.

1) A subscription to the Harvard Business Review - I don't have one myself, but I try to get to the library once every couple of months to check out the review and see if there's anything in it that interests me. For those of you who don't know what it is, the Harvard Business Review is a thick, glossy magazine that comes out once a month and costs $99 for a one year subscription (yes, that's north of $8 an issue). It has a bunch of articles written by people, primarily academics and consultants, about general business and managment issues. I consider reading the HBR as a form of "continuing education" for people who work in the business field.

2) A way to get more out of Microsoft Excel - most finance geeks know their way around an Excel spreadsheet very well. In fact, if they call the office their home away from home, Excel is probably their home away from home away from home. Despite being so familiar with the program, many don't know the powerful programming language called VBA (VisualBasic for Applications) that they can use to get Excel to perform mind-bending tricks that save huge amounts of time for finance geeks and their companies alike. John Walkenbach is my favorite authority on the subject, and presents it with rigor and enthusiasm. Depending on which version of Excel the person has, you might want to check out one of the following:



4)The Office DVDs:



I didn't catch on to this show until season 3, so it was a real treat to buy the first couple of seasons on DVD and catch up with them all over the course of a couple of weekends. Ok, so it's not particularly finance-based, but I figured I better put something fun on here in case you wouldn't feel comfortable giving someone what amounts to and Excel textbook as a gift :).

5) The best medium-duty shredder I could find.




This thing still works like a charm for me, and I am still really glad I paid close to $100 for a good one rather than getting one of those cheap ones that can only handle one sheet at a time. If you know someone who could use a shredder or an upgrade, this is highly recommended. What finance geek worth his/her salt doesn't know the threat of identity theft and the importance of destroying sensitive documents. The link above the picture is a pretty lengthy review I did on this shredder a while ago. This thing still eats unopened junk mail (complete with fake credit card) for breakfast.

6) Pretty much anything from KlearGear.com. This site doesn't cater to finance geeks in particular, but it has plenty of items for the wider "geek" audience, ranging from the utilitarian laptop bed desk to the whimsical computer-controlled USB Missile Launcher.

So there you have my $0.02 on what to get a finance geek this holiday season.

Good Gifts for Finance Geeks Part 1 - Big Ticket Items

If you're shopping for an office worker, finance student, MBA, professor, or similar finance geek this holiday season, let me throw out a few suggestions. This first installment is going to be some more expensive gifts, and I'll follow with a list of cheaper items. My main criteria for these expensive gifts was that they had to be something a finance person would appreciate, and something that might be a collector's item or increase in value over time. I think I achieved this with everything except for the gold, which isn't super likely to increase in value substantially, but hey you never know.

1)Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor. As the link shows, you can get this book for about $1,400, used. That's right, a $1,400 used book. I'm not going to go into the details of the book here because I haven't read it. But any value investor would be extremely happy to get a copy of this book for more reasons than one- in addition to supposedly having some great investing advice, it's also a collectors item and an investment in its own right. In fact, according to Business week, this out-of-print book was going for $700 a copy just about a year ago. Read the article and find out why former hedge fund manager Seth Klarman's book is in such high demand.

2) A framed one thousand dollar bill. That's right, a legal tender $1,000 federal reserve note. These things were never meant for circulation so the federal reserve retires them whenever it comes across one... which as you can imagine isn't too often. This thousand will set you back somewhere around $4,000, but hey, isn't it worth it? Well maybe not, but this is a gift-giving time of year.

3) Gold Coins. At somewhere around $850 a coin, five or ten of these make a great gift for the finance geek who might be starting to get sick of regular paper money backed by government promises. I recommend BlanchardOnline.com, which has great prices and service.

4) One share of Google. This will cost you like $1300, but it could be a great long-term purchase for a finance geek to hang on the wall.

The 4-Hour Workweek

I finally got around to reading The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich, by Timothy Ferriss. I have to say it was an interesting read. The basic premise of the book was that there is a class of "new rich" who can do what millionaires do without having a million dollars. They do this by automating their work so that they don't need to be present in order for their businesses to run, and by taking advantages of currency differences.

Ferriss seems to strongly advocate owning your own business, in particular some kind of an internet-based business. In my opinion, this isn't practical for most people. If you're considering doing this, the book might be even more valuable to you.

I did think he had a few interesting ideas though. For one, he has a pretty good chapter called "E is for Elimination" where he focused on streamlining your work life and time managment. None of it is really new stuff (the 80/20 principle etc...), but it will definitely make you think twice about the things you spend your time on, which is something we all need to do from time to time.

He also suggests going on a "one week media fast" where you don't read any newspapers, magazines, websites, or watch any news shows for a week. I think this has both its pros and cons. The main pro is that I think we all waste too much time reading news that we can't use and can spend the time doing more productive things. The cons are that for some jobs, especially more creative, higher-level business jobs, it's important to stay current on the happenings in your field and sometimes the media is the best source of information.

The chapter that intrigued me the most, and the one that really pushed me towards recommending this book, is "Outsourcing Life." In this he suggests getting a "remote personal assistant" from a company in India or elsewhere. He mentions Brickwork and Your Man In India as two potential companies to use. He says you can get a well qualified assistant to do some of your work for you, freeing up your time to do other things. Best of all- they can do it fairly inexpensively and they can work while you sleep. I actually tried this out with pretty good success, and I will hopefully write a post about that sometime in the future.

For now though, I'd say if you're the kind of person who's always looking to improve the way you work, and can overlook the rather drastic premise of this book, I think this is definitely worth spending some of your time (and a little of your money) on.

Final thought- can you achieve the four hour workweek by reading this book? I'd say the odds are very slim. I do think it might help you cut a few hours out of your work week though.

The State of the Markets

So what are the current key themes in the market? I'll tell you what I have my eye on lately:

1) The subprime mortgage fallout and its continued impact on the financial markets. Lately the big news is I-Bank writedowns. Merrill Lynch happened to report its earnings a little later than some of its peers, but I'm sure there are more Merrill-type announcements to come. Citigroup is getting rid of Chuck Prince, Merrill tossed Stan O'Neal (and paid him a ridiculous $160 million to leave), and there's more to come.

2) The decline of the dollar. I think it now costs about $1.05 to buy a Canadian Loonie (Canadian Dollar). It's still falling against the Euro and other major currencies as well.

3) The ridiculous performance of emerging markets. My emerging markets mutual fund is up over 50% this year, on top of gains in the 30% area for the past few years. These things are really overheating. China's stock market has also seen a tremendous rise and it really reminds me of NASDAQ 1999 (ie a bubble).

4) Commodity prices. Oil is somewhere around $95 a barrel now. It's gone up like a rocket in the past couple of years. Gold hit $810 an ounce this week, its highest level since 1980.

Financial stocks have been selling off lately. I don't recommend investing in individual stocks, but if you dabble in the market like I do, you might want to take a look at Moody's Corp. (NYSE: MCO), which has fallen to what I consider to be tantalizing levels in the low $40 per share range. For a long term investor, this might be one of those rare opportunities to pick up shares of a company that enjoys a unique, semi-monopoly position in its market. Of course, it has it's share of risks. Securities issuance has fallen dramatatically in certain segments of the market, and there's always a regulatory threat hanging over the company. I believe Warren Buffett's Berkshire Hathaway owns some MCO shares, based on some things I've read.