Monthly Archives: October 2010

Writing without using “e”

About a month ago I said that on occasions you would find a post which original motivation would link to Plinky; a portal that throws away thoughts for blog posts… this is a post of that kind.

Plinky, calls for writing a small story of 100 words without using a non-consonant you saw in an old post that was just most common in this linguistic communication I am using in my blog. Now, I am at about four fifths of finishing this task; I just lack two strings of words to bring this post to a final and assuaging: This was tough!

… off to a following post :-).

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Filed under Miscellanea

Fomentar la Mentalidad Analítica vs. Fomentar la Creatividad

Ayer acudí a una jornada de Formación Continua dentro del ciclo “Management para Emprendedores” de la Escuela de Organización Industrial (EOI). La sesión trataba el asunto “Fomentar la Mentalidad Analítica vs. Fomentar la Creatividad”.

De esta jornada quería destacar el barrido funcional de una empresa que hizo el invitado Carlos Espinosa desde esta perspectiva. Intento aquí recuperar la tabla que expuso él:

 

Barrido funcional: Creativo vs. Analítico.

 

Por último, el profesor, Andrés Fernández Romero, terminó la clase explicando la “parálisis ante una respuesta esperada” de una forma apoteósica; usando el ejemplo de cómo medir la altura de un edificio con un barómetro…

Sir Ernest Rutherford, presidente de la Sociedad Real Británica y Premio Nobel de Química en 1908, contaba la siguiente anécdota: Hace algún tiempo, recibí la llamada de un colega. Estaba a punto de poner un cero a un estudiante por la respuesta que había dado en un problema de física, pese a que éste afirmaba con rotundidad que su respuesta era absolutamente acertada.

Profesores y estudiantes acordaron pedir arbitraje de alguien imparcial y fui elegido yo. Leo la pregunta del examen y decía: “Demuestre cómo es posible determinar la altura de un edificio con la ayuda de un barómetro”.

El estudiante había respondido: “Lleva el barómetro a la azotea del edificio y átale una cuerda muy larga. Descuélgalo hasta la base del edificio, marca y mide. La longitud de la cuerda es igual a la longitud del edificio”.

Realmente, el estudiante había planteado un serio problema con la resolución del ejercicio, porque había respondido a la pregunta correcta y completamente. Por otro lado, si se le concedía la máxima puntuación, podría alterar el promedio de sus de estudios, obtener una nota más alta y así certificar su alto nivel en física; pero la respuesta no confirmaba que el estudiante tuviera ese nivel.

Sugerí que se le diera al alumno otra oportunidad. Le concedí seis minutos para que me respondiera la misma pregunta pero esta vez con la advertencia de que en la respuesta debía demostrar sus conocimientos de física. Habían pasado cinco minutos y el estudiante no había escrito nada. Le pregunté si deseaba marcharse, pero me contesto que tenia muchas respuestas al problema. Su dificultad era elegir la mejor de todas. Me excuse por interrumpirle y le rogué que continuara.

En el minuto que le quedaba escribió la siguiente respuesta: “Coge el barometro y déjalo caer al suelo desde la azotea del edificio, calcula el tiempo de caída con un cronómetro. Después se aplica la formula altura = 0,5 por g por T al cuadrado. Y así obtenemos la altura del edificio”. En este punto le pregunté a mi colega si el estudiante se podía retirar. Le dió la nota más alta.

Tras abandonar el despacho, me reencontré con el estudiante y le pedí que me contara sus otras respuestas a la pregunta. Bueno, respondió, hay muchas maneras, por ejemplo, coges el barómetro en un día soleado y mides la altura del barómetro y la longitud de su sombra. Si medimos a continuación la longitud de la sombra del edificio y aplicamos una simple proporción, obtendremos también la altura del edificio.

Perfecto, le dije, ¿y de otra manera? Sí, contestó; éste es un procedimiento muy básico para medir un edificio, pero también sirve. En este método, coges el barómetro y te sitúas en las escaleras del edificio en la planta baja. Según subes las escaleras, vas marcando en la pared la altura del barómetro y cuentas el número de marcas hasta la azotea. Multiplicas al final la altura del barómetro por el número de marcas que has hecho y ya tienes la altura. Éste es un método muy directo. Por supuesto, si lo que quieres es un procedimiento más sofisticado, puedes atar el barómetro a una cuerda y moverlo como si fuera un péndulo. Dado que cuando el barómetro está a la altura de la azotea la velocidad es cero y si tenemos en cuenta la medida de la aceleración de la gravedad, al descender el barómetro en trayectoria circular al pasar por la perpendicular del edificio, de la diferencia de estos valores, y aplicando una sencilla formula trigonométrica, podríamos calcular, sin duda, la altura del edificio.

En este mismo estilo de sistema, atas el barómetro a una cuerda y lo descuelgas desde la azotea a la calle. Usándolo como un péndulo puedes calcular la altura midiendo su período de precesión. En fin, concluyó, existen otras muchas maneras. Probablemente, siguió, la mejor sea coger el barómetro y golpear con él la puerta de la casa del conserje. Cuando abra, decirle: señor conserje, aquí tengo un bonito barómetro. Si usted me dice la altura de este edificio, se lo regalo.

En este momento de la conversación, le pregunté si no conocía la respuesta convencional al problema (la diferencia de presión marcada por un barómetro en dos lugares diferentes nos proporciona la diferencia de altura entre ambos lugares). Evidentemente, dijo que la conocía, pero que durante sus estudios sus profesores habían intentado enseñarle a pensar. El estudiante se llamaba Niels Bohr, físico danés, premio Nobel de Física en 1922, más conocido por ser el primero en proponer el modelo de átomo con protones y neutrones y los electrones que lo rodeaban. Fue fundamentalmente un innovador de la teoría cuántica. Al margen del personaje, lo divertido y curioso de la anécdota, lo esencial de esta historia, es que LE HABÍAN ENSEÑADO A PENSAR.”

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Filed under Education

Venture Capital & Crowdfunding

I started giving loans through Kiva almost two years ago. About at the same time, after gathering some savings, I started investing again in the stock market.

Last month, I attended TEDxMadrid, where Nicolás Alcalá explained how a movie he and his team are working on (“El Cosmonauta”) will be financed through crowdfunding. I then discussed with a friend that precisely I was looking for a similar approach, but applied to general businesses: a kind of Kiva for for-profit start-ups.

Subsequently, I first found Kickstarter about a month ago through Fred Wilson (@fredwilson). However, in Kickstarter the funders of projects are not entitled to equity in the venture nor a share of the future profits. The funders get some merchandising or recognition for the helping hand they have given, depending on the amount they have invested.

Then I found GrowVC.

From what I gathered, this is more or less what I was looking for: a way to invest some small amount of cash (~1,000$ a year) together with other funders into a larger pool that will act as a Venture Capital operation, sharing the future profits of the business that was funded.

With this post I wanted to share these initiatives with you and also to explain what I was looking for. Now, let me throw an open question to readers: anyone knows a similar concept that I may be interested in? If so, please, let me know.

(Bear in mind that I haven’t got, yet, hundreds of thousands of Euros to invest following this approach… the larger part is invested in a much more Graham-like defensive approach)

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Filed under Investing

My 2009 tax receipt

Some days ago, my friend Bruno tweeted a very interesting article about a proposal by the American think tank Third Way to enclose a kind of tax receipt detailing the taxpayer the use the administration had given to her funds (see the original receipt in the previous link).

Therefore, this post is not an original idea but the application of that proposal to the case of Spain and me as the taxpayer.

To build the “tax receipt” I used 2009 figures. The source I used for a detailed breakdown of Spain’s budget is the same one than a I used in a previous post: a good infographic from lainformacion.com.

 

My 2009 income tax and social security receipt.

 

Some curiosities:

  • I (and you too) paid more than double for unemployment subsidies (504 €) than to foster employment (195 €),
  • I spent 440 € to pay off public debt,
  • I paid 119 € for health… I consider that cheap; in 2009 I actually went to the doctor couple of times and got some vaccines partially subsidized.
  • I paid 201 € in defence and 37 € in defence-related R&D… taking into account that my salary partially comes from there, I wouldn’t mind more of it to be spent there.

One final remark: the government when decreased functionaries salaries in spring was looking with those measures to cut ~15.000 million € in about 1.5 years… this would mean about 220 € per inhabitant / year… where would you take those 220 € from my 2009 bill?

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Filed under Economy

The Snowball, Warren Buffett bio (book review)

Last Christmas, my brother gave me “The Snowball: Warren Buffett and the Business of Life“, by Alice Schroeder. He completely hit on the spot, though I only started reading it during last August holidays (Luca also started reading it to the point that she ended up buying her own Kindle version of it!).

The book is a thorough review of Buffett’s life, including relationships with family & friends and investment decisions. I had previously read other books about Buffett, but they were merely about his investment “strategy” so to say, nothing compared to this one. To complete the book, the author made over 250 interviews, so you can imagine the many insights contained in it.

There are many lessons or just ideas that can be taken from this book. Let me just point the few I can recall at the moment of writing this post:

  • The Inner Scorecard: the idea of acting and valuing yourself according to what you care about and not according to what others’ deem important.
  • The concept of margin of safety: from Benjamin Graham (recommended reading “The Intelligent Investor“).
  • Circle of competence: the idea of looking for simple business that have an enduring competitive advantage (technology companies are not that simple).
  • Cigar butts: companies which are worth more “death than alive” (looking for cheap price to book).
  • Snowball: the idea that compounding interest acts as a snowball falling down the hill, the sooner you start the larger the ball will be down the road (thinking about retirement here).
  • The story of the genie: or that you should invest in your own health as your body is the only one you are going to be given in this life.
  • The Ovarian lottery and the idea that philanthropy achieves more if exercised now and trying to maximize its impact.

Throughout the book you get to learn about many great entrepreneurial characters (e.g. Rose Blumkin, Bill Gates); about the workings of the board of directors of some companies (e.g. Coca Cola, Berkshire Hathaway); about some of the most impressive falls in corporate history (e.g. Solomon Brothers, Long Term Capital Management); about several depressions, recessions and crisis; and above all you learn about what were the thoughts and calculations behind some of Buffett’s investments decisions since the early 1940’s to date.

I definitely recommend this book (700+ pgs.).

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Filed under Books, Investing

Is talent really worth it? (Book review)

I am subscribed to The Economist since about 3 years ago. It not only provides with very interesting articles every week and lots of new ideas, but from time to time I am asked to take part in surveys. As a way to show appreciation they normally offer a study, a book, etc…

The latest book that I received from them and read is “Pay check. Are top earners really worth it?”, by David Bolchover.

The book is ferocious critique of CEO’s and finance workers’ pay. The average CEO in the USA earned in 1980 42 times the average blue-collar salary, while by 2000 this multiple increased to 531 times!

The book makes a clear difference between entrepreneurs, true generators of wealth, and the top management of multinational companies. He argues that there are three necessary conditions to award a high pay to the CEO:

  • Enough revenues available.
  • The CEO should have a measurable and substantially positive impact in the company (e.g. like one could defend the impact of a sports star within a team).
  • We would need to demonstrate beyond reasonable doubt that his abilities are extremely rare making him difficult to replace (could Jordan be replaced in Chicago Bulls?).

More often than not, this is not the case.

The favourite excuse being used to award exorbitant salaries is the scarcity of “talent”. The origin of the “talent” ideology seems to be the 1998 article from McKinsey “The War for Talent”.

Some of the extreme cases cited in the book…

  • Lehman Brothers CEO at the time of bankruptcy, Dick Fuld, who in his 15 years as CEO pocketed $466 million ($34M in 2007) before filing the largest bankruptcy in history (with $613 billion in debts), placing him as the worst CEO in American history according to Portfolio magazine.
  • Oil companies BP and Shell which both CEOs missed the objectives in 2008 yet still managed to be handed the undeserved bonus by the compensation committee from each company!

The author states that today, the main enemy of capital is… “talent”, those undeservingly taking the money away from shareholders and calls for shareholder activism to revert this situation and bring the money to whom it belongs (us, the shareholders… either directly or through investment and pension funds…).

I do recommend this book (~125 pgs.).

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Filed under Books, Economy, Investing, Personal development & HR

Where do they pay lower taxes?

A friend posted in Facebook yesterday’s Daily chart from The Economist; she was very disappointed of finding Hungary such high in the ranking.

The chart comes from KPMG’s “Individual Income Tax and Social Security Rate Survey 2010”. I found it very interesting:

  • it contains several charts of rates of income tax and social security rates for different levels of income (high ones by the way),
  • coloured maps of the different regions in the world according to their level of taxation,
  • for some countries you may find graphics with the evolution of taxation levels with income,
  • capital gains tax, and
  • some country-specific information for several ones.

 

Effective Income Tax and Social Security rates.

 

What if you could pay Social Security in Philippines (0.2%) and Income Tax in Romania (13.4%)?

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Filed under Economy