5 things they should teach us in Business School

I have just submitted my last coursework. As of now, I am officially done with my University education (maybe). And, with the risk of sounding too boring on the wake of the past two posts on a similar topic, I wanted to write about Business school. Again. That, plus I don’t have anything else that’s interesting enough to write about.

It could be argued that not all universities are alike, and each offers a unique curriculum, however I feel there is common ground for improvement. This are the 5 things I believe every Business School should teach. In no particular order. And I promise this is the last post about University I write (maybe).

1) Another Language. How can we aspire to live in a global world without speaking at least 2 languages? Bocconi mandates a second european language other than English in the third year. However, while this effort is commendable, it is naive to think that one could possible learn another language in one year. I believe we should make studying another language (or even better, 2) compulsory for the entire 3 (or 4) years of tuition. And possibly not limit ourselves to European languages. How about some 汉语 or 日本語?

 

 

2) History of Finance. They say that history doesn’t repeat. However it does rhyme. Every financial crisis is different from the previous, however there are common points across them. Mostly just the fact that human beings are greedy, but also the fact that in the excitement of the moment you can loose track of what really matters. I believe that studying past mistakes could help us prevent future ones. That, and I’m biased because I love history.

 

 

3) Programming. I cannot stress this enough. We live in the day and age of the computer and most of us could not even start to explain how their laptop works. It is admittedly hard to teach programming, but then, isn’t it hard to teach almost anything? Some universities do offer courses in VBA. However, at least in my experience, they are terrible. True, you could always go and study on your own, which then begs the question, what is the point of going to University if you can study anything on your own?

 

 

4) International Culture. I don’t know if this makes sense to anyone else, but I feel like I tend to think I know everything about the world, while, to quote ASOIF, “You know nothing, Jon Snow”. This one might be impossible to teach, however I feel we should try to make the effort, and understand that no two people are equal, all the more if they come from different parts of the world.

 

 

 

5) Something else. This one is rather vague, but I think Business Schools should try and foster interest in things other than Finance and Management. I am not a big fan of overspecialisation, and consider myself somewhat of a “renaissance” person. I believe having interests other than business should be actively encouraged. Being it Art, Music, Sports or whatever else, I believe a well rounded education is better than a very specialised one. This might well be overly utopian, however if my Uni were to offer courses in things other than business, either directly or through partnerships, I know I would sign up (and I have in the past).

5 good things about Cass. And 5 bad ones.

As my year at Cass draws to a close, I thought I’d weigh in with a list of the 5 things I liked about my University. And 5 I hated. These are in no particular order and they are definitely my own thoughts on the matter, so you are perfectly free to disagree with me (but we all know you are wrong and I am right). So, here we go!

5 Bad Things

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1) the FT. Unless you were around Cass earlier than 9.00 am, you have probably never seen a paper copy of the FT. Okay, granted, we all have access to the electronic version of the newspaper, however sometimes I enjoy holding the actual paper in my hands, and only having around 20-30 copies available is a bit pathetic.

2) These things. I don’t think I need to elaborate. They are solely responsible for me looking like an idiot trying to swipe my damned card to get in the building. At a certain point I wanted to smash them to pieces. Good thing I didn’t, as they are probably very expensive.

3) The WiFi. It sometimes suddenly dropped the connection, especially downstairs in LG001, and sometimes even in the study rooms, making it hard to work and study effectively. This is compounded by the fact that there is no signal downstairs.

4) The exams. I am not complaining about their being too long or hard or anything like that. I am complaining because first of all they take a really really long time to grade them. And secondly, we are not allowed to see the exams themselves after they have been graded. How am I supposed to learn anything if I cannot look at the mistakes I made and understand what I did wrong so as not to repeat the same errors again? It almost makes it look like we are in Uni just to get a grade. Wrong, I am at Uni to learn. I do not particularly care to get a high grade. If I learn, the grade will follow, not the other way around.

5) The content. For some modules I found the content of the lectures to be, in one word, a joke. Some modules labelled as “Advanced” were definitely nothing of the sort, some others did not follow the syllabus at all, and the material actually covered was a lot more limited than what I assumed it to be by reading the syllabus. This usually happened when the lecturer was bad. I don’t know which one comes first, bad teacher or bad content.

Enough with the negatives. Let’s look at some of the things I actually liked at Cass.

5 Good Things

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1) The library. I’ll come out and say it. I am kind of a nerd, I enjoy reading books, although sadly, thanks to the massive amount of coursework inflicted on us during the course of the year, I was not able to read as much as I would have wanted to. Anyways, I especially appreciated the ability to check out books by yourself, to renew the leases online, to easily consult the catalogue (even though I have to admit I still don’t understand the way the library is organised) and to have access to a number of different databases without having to book a place beforehand. Although they should come up with a better way to return the books, other than that hideous box. Anyways, All hail the Library!

2) The classrooms. The seats are definitely a lot more comfortable compared to those I was used to in my undergrad, even too comfortable at times. I do solemnly swear I never dozed off in class, though (But I might be lying)

3) The Bloomberg room. And the Reuters one as well. Although they might afford to put in a better air conditioning system. It can get… sweaty when all computers are taken. I appreciate the chance to use Bloomberg without having to reserve your place beforehand, plus the room is prominently “featured” on the ground floor, lest you forget that that structured products coursework is due in 3 days and you haven’t started working on it yet.

4) The study rooms. The chairs could be more comfortable, and the booking website is oh-so-very-slow, but I usually never had problems reserving a room and getting stuff done while scribbling on the whiteboards. I like the whiteboards. And the black markers. Give me a marker and you’ll make me happy. I have witnesses to confirm this.

5) The professors (Although they admittedly do not look like the guy in the picture. Thank God). I won’t name names here, but some were very, and I mean VERY, good. A teacher that is able to keep me interested and paying attention for a whole of three hours deserves praise. And I always found them open to answering questions. And I usually ask a lot of questions, it’s a combination of me being very curious and liking to annoy people. Not as open as in the US, but definitely more than in Italy. On the flip side, I also have to note that some professors were terrible. I guess you can immediately tell whether somebody likes teaching or not…

So there you have it. The good and the not so good. I could probably have made this list a lot longer. But it gets boring and “ain’t nobody got time to read” these days.

Thanks for sticking with me and reading through to the end 🙂

6 places to visit in London. If you are into Finance

I always like to start by the numbers. Let’s go then:

• There are 8.3 million people living in London. No wonder it feels so crowded!
• The first tube station was opened in 1863
• The most expensive apartment in the world is n° 1 Hyde Park: 135.4£ million 
• at 310m, the Shard is the tallest skyscraper in Western Europe
• 40% of Greater London is green areas
• The tube network comprises 250 miles of tunnels
• There are 43 universities in London. More than any other city in the world
• They have gotten pretty rare, but there are still 15000 red phone booths in the city
• There are more than 3800 pubs in London. And all of them expensive XD
• The city counts 147 theaters
• 649 bus routes serve the biggest city in Europe
• An outstanding 16.8 million tourists visit London every year. 

During the 9 months I’ve been living here, I’ve been exploring the city’s every nook and cranny, trying to discover places shunned by the tourist masses that flock to the Big Ben and to Leicester Square. I have to say I’ve been fairly successful in my endeavour,  and I have to admit that I have grown quite fond of the city, especially after my long evening walks along the canals and the Thames. I thought I would share of the places I’ve discovered and particularly places that have something to do with Business and Finance (in some way or other). Click on the image to get a Google maps link. Hope you enjoy.

 

The Bank of England museum. One of the first museums I visited in London, mainly because I wanted to try and see if I could help myself to that shiny gold bar they have on display. Alas, that turned out to be impossible. But the museum was a pleasant surprise. It’s not big, but it is surprisingly informative and interesting. Plus it’s free and it teaches you about how to control inflation. What more do you want?

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Canary wharf. This is another easy one. But rather than get there by Tube, try walking on the opposite bank of the Thames, on the south side. The glass and metal skyscrapers will prove a formidable contrast to the bare sand hills. Seen from this side, Canary wharf (which by the way gets his name from the fact that the ships from the Canary Islands used to moor here) looks like an island removed from the rest of London. I don’t know whether that is a good thing or not.

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The silver vaults. Built in 1876 as a place where people could deposit and safeguard their household silver and documents, it’s now a sort of “shopping mall” for silver, with more than 30 shops who deal exclusively in the grey metal. It intrigues me to think what corporate secrets were once stored in the vaults deep below ground.

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LLoyds, the Strand. This branch used to be a restaurant when it opened in 1883. I am including it because it’s probably the bank with the best interior decor I have ever seen (so far). It is also interesting because it was the first building in London to have air conditioning. Specifically, two ladies would ride a bike in the basement that was connected to some giant bellows which would gently blow the air in the hall. Apparently they used to have the bike on display but they  sadly don’t anymore.

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The City. Okay, this one is fairly obvious. The old financial center is ever crowded, unless you go at night or during the weekend. Then it is eerily silent. And I actually like it best, especially when all the skyscrapers lit up after dusk and the visitor gets lost in the narrow streets in between the towering office buildings.  And sometimes you find hidden surprises in the alleys, such as an old “turkish” bath, huge horse statues or an abandoned church turned into a quiet park.

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Museum of Brand and Advertising. If you are into packaging and marketing, this might just be the museum for you. It’s not very big and it’s divided into two parts. The first covers the history of british advertising, from the 1850’s to the present times. The Victorian ads are especially amusing. The second section explores how the packaging for some of the best known British brands has changed (or not) over the years.

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I am sure I have missed something, I will continue to explore the city and hope to find some other place I can add to the list.

Turn up the Beats! 3 reasons why Apple’s acquisition sounds right. And 3 why it does not.

Another day, another interesting (?) acquisition in the tech space. Why is Apple (supposedly) willing to spend some 3 billion of its hard earned cash on overpriced headphones and Hip-Hop artists? Let’s start, as usual, with a couple of numbers.

Beats

• 1.5 billion in revenues in 2013
• 20 million songs available on its music streaming service, the quite cleverly and originally named Beats Music
• 120$ a year to have the privilege to listen to Justin Bieber without being interrupted by ads
• 200 000 paying subscribers (contrast with Spotify’s 10 million… )
• 11 headphones models and 3 bluetooth speakers
• 64% of overpric- ehm, “luxury” headphones (>100$) sold in 2012 were Beats

Apple

• 90% of Apple’s cash is offshore
• $130 billion in dividends and share buybacks promised in the next two years
• $150 billion cash stockpile
• $3.2 billion the offer price for Beats
• 75% of revenues come from iPhone and iPad
• 45 billion revenue last quarter
• 800 million customer accounts

Those numbers should cover it. Let’s do some thinking now.

As I see it, there are three possible reasoning for Apple to be buying Beats.

1. Swagger. Beats is apparently cool with the kids. I wouldn’t know, I am definitely not part of the demographic (the cool part, I am definitely a kid) and I do not particularly like Hip-hop. Anyways, as evidenced by strong sales, and by the fact that if you walk around town you will have seen at least one person sporting a pair of Beats, folks love these earphones. This could serve to reinvigorate Apple’s appeal with the young crowd, who does not necessarily want to have the same mobile as their parents.
2. Streaming. For the first quarter ever, digital downloads have declined. As the FT recently titled, we are maybe on the verge of the death of the download. On the other hand, the rise of “the Stream” is apparently unstoppable. Have you used iTunes radio? Yes? You are part of the 8% of the (US) population who has elected Apple as their provider of choice.  iTunes radio is definitely a lot bigger than Beats music, however Beats has a cooler app, designed by hipsters for hipsters. And how can Apple not like that? Plus it’s innovative, in the sense that there is no free ad supported version and that all playlists are curated by real humans, not by dumb computers.
3. Connections. In the form of Dr. Dre and Mr. Iovine, veterans in the music industry, who bring contacts, network and know how probably not possessed by anybody at Apple.

Sounds reasonable right? To me personally, not really, Here’s why.

1. Let’s face, the Beats headphones are not that good. Admittedly, if you love you bass down low, you are going to have a field day with the Beats, in any other case, you are probably going to hate them. They are not especially comfortable, they tremble is drowned, and most of all they are ridiculously overpriced. Even Apple headphones in comparison look dirt cheap. And the big A could probably have designed great headphones without Dr. Dre advise. (better than those things they ship with iPhones nowadays…)
2. Is the streaming really that valuable? After all, it’s only 200 000 customers. To be fair, I have not tried the app (for two reasons: I don’t have 10$ and they don’t have Vocaloid music on there) but from various reviews posted online it doesn’t appear to be a particularly innovative concept not paying scheme. It’s gimmicky and playlists are not dynamic. Meaning they don’t change, they stay the same. Therefore you need to trust the curators have done a great job selecting the songs! I also have some qualms about streaming. Unlike movies, which you tend to only watch ones (with some exceptions -cough-start wars-cough-), you listen to music a lot more. I have listened to my favorite songs, which I am not going to name here for fear of sounding ridiculous, for more than 300 times. Having to find your favourites every time, and searching for them it’s a lot more cumbersome. Plus, and this might only be me, I am too much of a control freak to not have my music on my SD card at all time. Finally streaming doesn’t work on the subway, or when you have limited data. I don’t see the “download” death coming about anytime soon. Maybe if we all had 4g unlimited data, then I would reach a different conclusion. But then we would all be flying on dragons and watching unicorns running free in the grass.
3. Do people at Apple really have no music industry contacts? Are Dr. Dre and his acolytes that valuable to justify a 3.2B price? I doubt that.

Which brings me back to the only key issue here, as with any M&A deal: valuation. With a price that is almost triple that of the most recent post money valuation, this deal will definitely put some wide smiles on Carlyle people’s faces, but I really do not see it being justified in a company who has 1.5billion in revenue but does not disclose whether it makes a profit or not.

At the end, I fear the only reason Apple is acquiring Beats is because they have become to big to be innovative, and to boring to risk something new. With incremental and marginal improvements on their product lines, and the only upcoming “surprises” in the pipeline being a iWatch and a “real” Apple TV (not the streaming box), it looks to me like one of my favourite companies has lost its hedge. Do not get me wrong, I am typing these on a Mac, and I would not be parted with it even under death threats, but I frankly believe Apple has become more a luxury brand rather than a technology one. And this acquisition only serves to reinforce my belief.

10 Great Business Podcasts

I have always been an avid podcast listener, and have been known to go on long walks just to listen to my daily dose of news. This is my top ten selection of what I think are the best business podcasts, carefully selected after years of searching. I score each one on a scale from 1 to 5, where 1 is “Great” and 5 is “This will Blow your Mind!”.  
Click on the image to subscribe on iTunes.

Planet Money

An informative, entertaining and interesting look at issues in Business and Economics. If you are looking for a different kind of business podcast, this is your best option.

Bi-Weekly, 20 to 30 mins
5/5

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La Versione di Oscar
Oscar Giannino may not have a degree, but he sure does know what he talks about. I have been a loyal listener for years now, and always look forward to the 20 minutes of discussions on economics, politics and law.

Daily, 20 to 30 mins
3/5

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APM Marketplace
General news on the state of the US economy. However some of the stories are not relevant and it appears this is targeted towards more of the general public. So do not expect it to blow your mind

Daily, 30-45 mins
2/5

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Market Foolery:
One of the three Motley Fool podcasts, the others being Motley Fool Money and Where the Money is, this one is probably my favorite, mostly because it is daily. A lively and entertaining discussion and report on the US economy and the stock market.

Daily, 15 to 20 mins
3/5

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JP Morgan Insights

I absolutely adore this one. I usually end up listening to the Guide to the Market twice since the quarterly economic review is packet with information. The podcast also explores relevant issues in finance, business and economy.

Irregular, 20 to 60 mins
5/5

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FT Money

Three to four stories per week, high production quality and interesting guest make this podcast one of the best designed on the list. Too bad it is only once a week

Weekly 15 to 20 minutes
4/5

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Freakonomics

I don’t think this one needs any introduction. “Exploring the Hidden side of Everything”, with an economist eye. It is a delight to listen to. Truly.

Weekly, 60 mins
5/5

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Focus Economia

Second Italian entry on this list. The daily radio show packs economics and finance news from all over Europe, with an obvious emphasis to Italy. High caliber guests are just another more reason to listen.

Daily, 60 plus minutes
3/5

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CFA take 15

Short conversations with leading economists, academics and practitioners exploring relevant issues. Sometimes the audio quality is not on par with the content, but it is overall a great little podcast.

Every two weeks, 15
3/5

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Banking Weekly

Another winner from the FT. More specifically targeted on Banking news, it’s the perfect weekly appointment to keep up with news on regulation, giant bonuses and finance scandals.

Weekly, 15 to 20 mins
5/5

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Have fun listening!

ps. for all the Android users, after having tried something like 5 different podcast apps, I have to say that Pocket Casts is the better one out there. Sorry DoggCatcher!

7 Reasons WhatsApp Acquisition makes sense for Facebook (and 7 Why it Doesn’t)

Numbers
Let’s start off easy with some numbers, shall we?

• 450 millions
• 70%
• 1 million
• 80%
• $40
• 55 people
• $19 billion
• 34 billion and 19 billions
• 600 million

What are these numbers for? Try guessing, the answers are at the end of the post.

7 Reasons Facebook Made the Right Call

1. Facebook messaging app is terrible
I don’t think anybody, not even the most die hard Facebook fan, would define the Facebook messaging system as “great”. It is of course one of the most popular messaging apps out there, but only because it is still Facebook. However, it fails to provide a reliable platform, not allowing easy file sharing on mobile and clogging users with useless (although extremely cute) stickers. And we shall not mention chatheads. Let’s not even go there.

2. Growth
With Facebook’s growth slowing down, and the supposed “teen escape” from the website, Facebook needs to enter a new space where potential growth is still great. With 1 million new users every 24 hours (although this number seems a bit large to me), WhatsApp appears to be the right choice.

3. Use its cash
With seemingly scarce opportunities to invest its cash into its own business operations, Facebook has been looking into acquiring new companies. This is not the first big profile acquisition Facebook has made. A little less than a year and a half ago, it bought Instagram. Facebook’s deals comes hot on the heels of another similar acquisition by Japanese online retailer Rakuten (楽天), who bought the IM company Viber for 900 million dollars a week ago.

4. Information
Who would say no to 450 million phone numbers? Not certainly Facebook. In the age of the Web, where the most valuable good a company can obtain is information, the more users are willing to volunteer their data, the better it is. And a messaging app, where most communication is personal, can be as a goldmine for Facebook. The company could learn at what time we are most active, whether we tend to send pictures or video messages, and how often we check our mobile (although they cannot, thank God, see your messages: those are deleted as soon as the server sends them out to the recipient. And we have to thank WhatsApp founder Jan Koum for that). I expect WhatsApp terms of service to change very soon. And as usual, nobody will read them.

5. Protection
Facebook is scared of competitors, that is the reason why it bought Instagram, and it is also part of the reason why it decided to buy WhatsApp. Absorbing a powerful and fast growing competitor lets Facebook not only eliminate a threat but benefit from its former rival’s growth and user-base.

6. Portfolio of Apps
Ever heard of Paper? What about Poke? But surely you have heard of Instagram and Messenger, right? Breaking itself up, Facebook tries to conquer an entire home page on our smartphones, a decision I personally find extremely annoying, but that apparently some people like. With Facebook Home, the (obnoxious) Android launcher that pesters you with badly cropped friends’ pictures, and Chatheads, which appear and disappear at will (and sometimes refuse to render properly, at least on my phone) Facebook is truly trying hard to own your mobile device. Another app (and one that actually works for once) can be a great addition.

7. Ads (eventually)
They have sworn they will not add ads to the app, but I suspect that they will in the future. I still hope they won’t though. Including ads will considerably enlarge their mobile ad revenue, which reached 53% of the company’s total advertising income.

7 Reasons Facebook Made a Terrible Mistake

1. Price per User
Have they paid too much? Are WhatsApp users worth $40 each? Considering each of them pays $1 a year to use the service and there are no ads in the app? Some people have pointed out that Facebook users are valued (based on market cap) at $140, which is considerably more. However, Facebook is able to extract more than $7 of revenue out of each of them, that is double what WhatsApp is able to gain.

2. Size
With just 55 employees, but a valuation of 19 billion dollars, the company will come to represent 11% ca. of Facebook’s market value. Which is undoubtedly a lot. And considering this deal will be settle with stock, we can expect a non indifferent dilution effect, about 8% (considering that part of the deal will be settled in cash). We are not considering the increase in revenue this acquisition will bring to Facebook, but since WhatsApp doesn’t reveal its figures, we will have to wait and see.

3. No integration (at least not anytime soon)
They are going to operate as two separate companies, so no benefit of having a better messaging service to tie into Facebook (I don’t know how you feel, but that would make my life so much easier). Don’t expect to see a better Facebook chat anytime soon. Stickers and Chatheads are apparently here to stay.

4. Monetization
Cannot include ads, cannot increase subscription price, cannot diminish length of free trial. How are they going to make money off of this thing? Don’t get me wrong, I am perfectly happy with not having to pay for anything, and I am no Facebook shareholder (although I sometimes really want to be). This does trouble me though. Time will tell, I guess.

5. most users are already on Facebook
Of those “new” 450 million users, how many of them are already Facebook aficionados? I’d say most of them, they might not be active users, but judging from my (limited)(non indicative) sample, most smartphone users have both a blue F and a green phone icon on their home screen.

6. no US
Facebook is not getting US growth in this deal. Snapchat has taken over WhatsApp as the most used messaging service, and since we all know how social networks function (they only work is everybody is on there), there is little chance of Americans switching back to WhatsApp. However, I should point out that the most popular IM app in the US is still Facebook.

7. ?
I couldn’t think of a seventh reason, maybe you can?

Conclusion
Trying to pin a number or value a company like WhatsApp, with massive growth and massive potential (hopefully) is always a hit and miss exercise. I personally think that overall the acquisition makes sense for Facebook, and I am looking formward to see what the social network powerhouse can do for WhatsApp going forward.

Thanks for readings this :)!
And now that you patiently waited, here are the answers:

• 450 million: active WhatsApp users
• 70%: users who check WhatsApp daily
• 1 million: new users every 24 hours
• 80%: WhatsApp market penetration in Spain and Portugal
• $40: price per WhatsApp user
• 55 people: employees at WhatsApp, 32 of which are engineers
• $19 billion: price Facebook paid for WhatsApp
• 34 billion: messages sent by WhatsApp Users
• 600 million: photos shared by WhatsApp users