December 22, 2014

Why Do Oil Prices Continue to Fall?

Those who drive their own cars surely must have noticed that the price of gas has gone down in the past few weeks. When I put gas in my car last week, the gas boy was happy to inform me that my timing was perfect because they had just rolled back prices that morning.

I am sure many consumers are happy with the reduced prices, but the question is why are prices falling and how long will this last?

Many people are quick to blame OPEC for the decline in prices. OPEC though is quick to deny that they are the direct reason. Although their refusal to cut their output in the face of excess supply is sure to have, at the very least, been the indirect reason.

Speculators point to political reasons why OPEC has refused to prop up the price of oil by limiting their output, and thus lowering supply. 

December 15, 2014

Dislike Button on Facebook Coming Soon?

Some recent news has Facebook founder Mark Zuckerberg discuss ways how Facebook is "thinking about" how to implement a way to dislike posts.

As a user, I think this sentiment is very consumer driven. Many of us share not just good news on our news feeds. And it has always been awkward to "like" a post wherein bad news is being shared. Facebook though has withheld implementing a dislike button for the possible negative connotation it can bring. Think about YouTube and how fanatical those who comment are on that platform. Does Facebook want to go down the same path and open up its users to more negativity on its platform? You can't blame them for being careful. Why mess with a good thing?

December 12, 2014

Uber has been valued at $40billion

Keeping in line with the theme of business valuation, the latest round of fund raising conducted by Uber has valued it at $40billion dollars.

Even when using either DCF or multiples method of valuation (or both), it is extremely difficult to put a finger on how such a massive figure has been placed on a company that is only 5 years old.

For one, it is almost impossible to use multiples given that Uber is a unique company. Who do you benchmark against?

December 8, 2014

Intrinsic vs Extrinsic Value

A recurring theme in our finance class this period is that of intrinsic vs extrinsic value. Intrinsic value is the value of the company from the eyes of insiders and includes the value of assets while extrinsic value is the value of the company from the point of view of outsiders and includes public perception.

It is particularly interesting concept, especially in the context of business valuation and the stock market. A lot of times, when valuing a business there are two schools of thought: using projections of future cash flows and using multiples. The first takes an intrinsic valuation approach while the second takes a extrinsic valuation approach.

The problem with the first method is that most casual observers do not have the capability or the resources to do it properly. The problem with the second method is that the stock market is volatile and extrinsic value as dictated by the market rarely matches a company's intrinsic value.

So where does this put us casual investors? I am not an expert, but in theory, it should be possible to use both methods hand in hand. Here are a few tips:
  1. Before investing in a company, review the basics financial statements like their balance sheet and income statement. Having a strong balance sheet and income statement is a good signal that the intrinsic value of the company is sound. What to look for? Aside from profit and income ratios, also take a look at the ratio of assets to liabilities.

December 3, 2014

Donating via Tweets

While browsing through the web, I stumbled upon this short feature by Fast Company on a new way to donate to charities.

It simplifies the act of donating by allowing people to donating in two steps. Just click on the link on the tweet or retweet, enter your credit card details and donation made! It looks to be particularly appealing to a younger demographic who will likely donate more impulsively but in smaller amounts (say $5-$10). 

November 24, 2014

Ad Free Future for the Internet?

Google just recently launched a project called Contributor which allows for users to pay to have access to particular websites without any advertising.

Traditionally, advertising has supported free access to content on the Internet for majority of websites. Google has taken a substantial share of the advertising spent on the internet not just via their search engine but also through their Google Display Network.

How does Contributor work?

Step 1: Users select their monthly contribution rate (between $1-$3).
Step 2: Visit the participating sites. Part of the contribution goes to the website and as a reminder of your support, a thank you message will appear, often accompanied by a pixel-pattern where ads normally appear.

Some websites who are already using this include Mashable, imgur, wikiHow and the Onion.

Again Google continues to innovate and push the boundaries of what is possible. Instead of milking the existing business model that works so well for them, Google continues to experiment and challenge the status quo.

November 18, 2014

The Participation Scale

I found this interesting graphic as I was browsing through the HBR website and reading through an article on new vs old power. It's called the Participation Scale and I thought it was a really interesting way to show the different levels of participation.

There is a very common marketing tool we call the path to purchase that marketers use to learn more about how consumers purchase their products. This participation scale actually takes a deeper dive into the part of the path wherein one has already converted and consumed a product or service and expounds on the different ways people now participate in a product's consumption. Gone are the days when consumption starts and ends with actual physical consumption.

November 17, 2014

Business Valuation, Warren Buffett and Duracell

I have always been curious about how one is able to valuate a business that is not publicly traded. This past weekend, in our Advanced Financial Management class, I finally got my first glimpse on some ways how it is done.

Quite coincidentally, over the weekend, news broke on Warren Buffett's latest acquisition: Duracell.

Berkshire Hathaway purchased Duracell from P&G in exchange for the roughly 53 million P&G shares that Berkshire held worth around $4.7 billion. It's a unique exchange that saves Berkshire millions in capital gains tax it would have paid had it sold the shares in cash and paid the cash to P&G. For P&G, they too gain some tax savings while being able to gain back a large part of their outstanding shares which they can either retire or reissue.

November 15, 2014

The Challenge with Twitter

Yesterday, Twitter's bonds have been classified as "junk" and a "speculative" BB-, three levels below investment grade. Why is this important? Credit ratings normally tell us about the capacity of the issuer to service its debt. Capacity to service debt is dependent on several things but is obviously heavily reliant on earnings.

It's always a challenge to monetize an idea. This is especially true for social network Twitter. Unlike Facebook, Twitter has yet to crack this problem of how to generate substantial revenue from its huge user base. 

Twitter is free to use for consumers and its revenue is generated mainly through advertising. The advertising model it uses is quite simple. It offers advertisers the opportunity to become a "promoted" account or have a promoted "post" that will be shown to the advertisers targeted users.  It's very similar to the Facebook advertising model. However, one key difference is the way the newsfeed works on both sites. Facebook has an algorithm that allows it to filter the posts shown to its users showing users the most relevant posts. Twitter works simply using a chronological algorithm showing users the most recent posts. 

November 13, 2014

YouTube Music Key

So this just happened. YouTube has now officially launched a paid premium service for music streaming. 

November 5, 2014

Spotify and Taylor Swift

Ever since the explosion of the internet and digital music, the music industry has struggled to keep pace and find ways to monetize their product. iTunes was ground breaking in that it flipped the business model for musicians (selling more singles at a cheaper price point than selling less number of whole albums) and provided an online distribution channel for musicians and labels that today brings in billions in revenue. Spotify and other music streaming services have brought a new dimension to online music distribution in a continuously evolving landscape.

Probably in a effort to gain more control over how her product will be monetized, Taylor Swift and her management team have pulled out her music catalog from Spotify. This was timed perfectly with the launch of her new album.

November 3, 2014

Wi-Fi for Everyone

I found this interesting article on (link here) talking about a report from wi-fi provider iPass saying that there is now one wi-fi hotspot for every 150 people worldwide. This is of course an average number as I imagine the ratio is probably much higher in the Philippines. But this just shows that when there are gaps in the market, people are quick to fill it in if it is a real need.

The research shows that majority of the hotspots are in homes as people have begun to turn home wi-fi routers into public hotspots. This works especially well in densely populated areas like Manila where the mobile networks cannot keep up with the growing demand for more bandwidth.

The market in the Philippines seems ripe for the entry an independent, 3rd party, wi-fi provider as many consumers have become disenchanted with the poor service (and high prices) being provided by the top telecom companies.

October 24, 2014

Mark Zuckerberg Does Q&A in Mandarin

An interesting piece of news I originally picked  up on Facebook (where else?) reported that Mark Zuckerberg recently did a Q&A session in full in Mandarin.

BBC picked up on the story too (link here) and dug a little deeper to see what people thought about it.

October 20, 2014

On Time Management

One of my objectives for taking my MBA is to build on what I know. With so many topics, classes, case studies, concepts, and tools taught, there is a tendency for one to get overwhelmed. The fast paced nature of an MBA is part of what makes it so challenging.

This part few weeks have been very, very challenging. Balancing work + school + family + business is a recipe for disaster if you don't know how to manage your time properly.

I've learned a few tricks for time management that helped me get through the past few months and weeks. Hopefully, they continue to keep me together up until graduation in a few more months!

Tip 1: Keep to your schedule, meaning, be on time
This is easier said than done given the many factors beyond our control. I'm not just talking about being on time to meetings (which is crucial and basic in my mind). I'm also talking about being "on time" for time that you set aside for each specific aspect of your life. For example, I set aside for myself at least one hour everyday (during lunch hour for example) to catch up on forum posts on IE Campus. Outside of this given time block, I will refrain from checking it. This keeps me sane as forum posts can get out of hand and contrary to what you might think, constantly checking (via the very accessible IE Campus App) doesn't really help.

October 16, 2014

Good Behavior Tally Board

So my wife and I started a small experiment involving our two kids. We were looking for a way to reinforce good behavior while curbing bad behavior. We came up with the idea to have a tally board (photo of the tally board below). The mechanics were pretty simple: when the kids behave for the day, we give them a star. 

For the criteria, we defined "bad behavior" as three main things: throwing temper tantrums, not doing homework right away, and fighting with helpers or a sibling.

To give the kids a sense of ownership and responsibility, we put a twist. Instead of the authority figure serving as the judge, we put the kids in charge of policing their own behavior. We ask them at the end of each day whether or not they deserve to get a star.

October 8, 2014

Best Place to Live: Canberra

According to a report by the Organisation for Economic Cooperation and Development (OECD), Canberra is the best place to live in the world. The report uses a measure called "regional well-being" which is based on nine topics: income, jobs, health, access to services, environment, education, safety, civic engagement and housing. Each region or area is scored on a scale of 1 to 10 on each of the nine topics. 

Photo taken in 2011 at Cockington Green Gardens, Canberra

October 3, 2014

Subscription Based Social Networks?

There's a new player in the social networking space that is looking to position itself as the "anti-Facebook", that is, they claim they will never sell advertising on their platform.

Screenshot of

The social network is called Ello and currently they claim to receive 40,000 requests an hour from people wanting to sign up. Signing up is by invitation only at the moment.

Social Networks such as Facebook earn revenues by allowing advertisers to target their user base. Ello plans to earn revenue either via a subscription based model where users pay a fee to use the platform (like Netflix) or by asking users to pay to unlock more premium features (like LinkedIn and Spotify). 

September 30, 2014


So my son loves watching toy reviews, and in particular, loves watching toy reviews done by Evan. Apparently, Evan's channel on YouTube, EvanTUBEHD is so popular that he earns $1.3 million a year! He's eight years old folks.

This is pretty amazing. A great mix of fantastic content, lovable personality, great timing and quite frankly, a very sharp business sense.

User generated content has been around for quite some time now and Evan has found the perfect niche. Who knew kids loved to watch toy reviews right? This is a behavior that certainly didn't exist when I was a kid. But it's great to see Evan (and most likely his parents) identify this new behavior and be able to capitalize on it.

September 28, 2014

Smartphone Use During Meetings

An article from Dr Travis Bradberry which was posted on LinkedIn was shared with me in which he talks about "why successful never bring smartphones into meetings".

I must say, I couldn't agree more with the points he makes. As much as possible, I try to refrain from checking my mobile phone and using my laptop (or tablet) when I am in a meeting. I actually learned this the hard way earlier in my career when I was called out by the Managing Director of the company to stop using my phone while he was speaking. Yikes!

September 23, 2014

Come Visit the Philippines

The Philippines is indeed a very beautiful country.

Manila Traffic

Much has been said about how bad the traffic situation is in Manila. Having first hand experience myself, I can say that it gets pretty frustrating.

Being stuck in traffic is not only a waste of natural resources (think of all the fossil fuels being burned and the air pollution being created) but also a waste of human resources. So many productive workers waste so much time each and every day commuting to and from work. The problem is very real and it will not go away anytime soon. There is a very really and urgent need to come up with a concrete plan of action (short-term, medium-term and long-term) and the backbone and political clout to implement this plan of action properly.

September 21, 2014

Back to (Virtual) School

Over the weekend, the first official classes for the third period of my Global MBA at IE Business School kicked off. I often get asked how it is to take a distance-learning/blended/online format.

Here are my thoughts on this unique and innovative format:
1. It requires a lot of self discipline. In a face-to-face format, the professor is in front of you and can easily see you doze off or chat with your peers. In our video conferences, we're at home and cannot be seen by the professor unless we are asked to turn on our video. The same self discipline is required when studying and doing the required school work. Most of my classmates (myself included) are still employed full time so we need to squeeze in the studying at night and during the weekends.

September 19, 2014

Changes to Facebook's News Feed Once Again

Latest news from Facebook's newsroom is that the mysterious algorithm that determines what we see on our news feed is being adjusted once again to show more timely stories from friends and pages.

Unlike other social networking sites like Twitter and Instagram, Facebook's news feed algorithm has always been a mystery to casual users and business users. While Twitter and Instagram follow a purely time-based algorithm, you see what has been most recently posted, Facebook's vast database of users and the vast amount of information they share on the platform doesn't make it that simple for arguably the world's most popular social network.

September 17, 2014

GIW Shanghai: Stepping Stones

Probably the most enriching experience of the Global Immersion Week in Shanghai was the NGO experience with Stepping Stones. Stepping Stones ( is an NGO that goes to migrant schools to teach children English.

Our students doing their pre-class eye exercises

September 16, 2014

Travelling to China

Photo taken during our trip to Guilin in 2011
While it was not my first time to travel to China, it was for several of my IE Business School colleagues and classmates. Below are some tips for first-time travelers to China:

  • Visa - for citizens of most countries, travel to China will require a visa. The requirements to apply for a visa actually vary from country to country. For example, for Filipinos who are applying for a Chinese visa for the first time, you will be required to submit an NBI clearance. Some more information on this can be found here.
  • Language - Unlike in Hong Kong, regular people in China (even in Shanghai) will speak very little English. Almost 100% of taxi drivers will not speak English. They will also not recognize or be able to read our characters (just as we are unable to read their's). In most instances, it is good to have key addresses written down in Chinese (like your hotel address) and to have the hotel concierge write down the address of your destination to be shown to the cab. If possible, also have the hotel staff speak to the driver before hand in case the driver needs to be given some directions.

September 15, 2014

GIW Shanghai: Company Visits

A major part of the Global Immersion Week are the scheduled company visits. I know that every GIW is slightly different, and for our trip we went to visit three kinds of companies.

Our first visit was to the Nokia factory in Shanghai. It was interesting to see how a Western company operates in China and how the plant fits into the new strategy and identity that Nokia has taken. As many people know, Nokia the consumer mobile handset company has been sold to Microsoft. Nokia now exists mainly as a producer of network systems and deals with corporate entities like mobile networks instead of end consumers like you and I.

September 14, 2014

Global Immersion Week: Shanghai

I just spent the past 8 days in Shanghai attending IE Business School's Global Immersion Week. The program is an optional part of the Global Management module I'm scheduled to participate in to wrap up the last third of my MBA program and I must say that the experience was well worth the price of admission.

September 4, 2014

What's Next for Gilas?

Photo from

Now that the FIBA World Cup journey has ended for Gilas, I am curious to see what happens next for the Philippine national men's basketball program. Going into the tournament, it was clear that the goal was to play competitive basketball against higher ranked teams (check!) and to win at least one game (check again!). Thus, it can be concluded that this was a successful outing for the national team and the men's basketball program.

If there were still any doubters, I think it can now safety be said that we have one of the strongest teams in Asia. Looking at the three teams from Asia that qualified for the tournament, we can say that we outperformed both Korea and Iran. Korea went win-less while Iran lost by an average margin on 19.25 points compared with Philippines loss margin of just 5.75 points. Iran also scored on average just 68.8 points while allowing opponents to score 81.2 points compared with Philippines which scored 76.7 points while allowing 80.8 points. Of course Philippines, Iran and Korea each faced a different set of opponents, so a direct comparison of just pure averages should be taken with a grain of salt.

W-ORD Channel 7 News With John Oliver & Cookie Monster

John Oliver + Cookie Monster. Need I say more? This is too funny. I would not mind watching this with my kids if it were a real show.

September 3, 2014

How Secure is the Cloud?

The recent attack on celebrity iCloud accounts has brought to the forefront the on-going debate on security of storing data online. According to the Apple's press release (link here), the attack was a "very targeted attack on user names, passwords and security questions" and not a particular breach of security of Apple's iCloud platform.

This type of very high profile security breach does not help build the case for companies and individuals to shift more of their own data from onsite servers and hard drives to the cloud and offsite servers. 

Many companies have started this shift using platforms such as Google Drive or Drop Box. Sometimes the cost savings generated are just too great that companies are willing to overlook the apparent risks involved. For smaller companies, the security provided by third party providers might even be better than the security they currently have. Also, as more companies become more global and look to be able to shift information quickly across teams, working and storing data on the cloud is very important.

September 1, 2014

Philippines the Tech Tiger?

I found an article from BBC with commentary on whether the Philippines can become Asia's "next tech tiger". It's dated May 30 so it's been some time since it was written and I'm surprised that such a positive article did not get more exposure on social media. We all know how we love to share news and commentary (whether positive or negative for that matter) written by foreign news outlets.

Link here to the original article from BBC

It's a shame that not more people are aware of the developing tech start-up scene in the Philippines. I myself only had my eyes open when I attended a IE Business School Masterclass held in Manila a few weeks back. The speaker, Liz Fleming, who is the associate director of the IE Venture Lab, spoke positively about how she was surprised to find a healthy start-up scene in Manila.

August 29, 2014

Google's Project Wing

Google does it again! Now they are pushing the envelop in finding new ways to distribute goods using unmanned drones.

Coming from a developing country with over 7,100 islands, I can say that this type of technology will definitely have a positive impact. At the basic level, imagine delivering emergency relief goods to areas affected by natural calamities possibly hours just after the said calamity has left the area. With roads and airports possibly not usable after severe calamities, this technology will be life saving.

August 28, 2014

Is the iWatch Finally Here?

Invitations to their September 9 event were sent out yesterday by Apple to members of the press with the cryptic message "Wish we could say more" leading to speculation as to what they will be announcing.

Link to article from Forbes here
Plenty of people are expecting the announcement of the new iPhone 6 but quite a few are also speculating that Apple may finally be ready to unveil the much speculated and talked about Apple watch called "iWatch".

August 27, 2014

Facebook and Click-baiting

It was announced by Facebook last August 25 that they are taking steps to improve the News Feed of its users by reducing the number of headlines that trick users into clicking on them by having incomplete information or cliff-hanger type of headlines (also called click-baiting).

First off, why do websites do click-baiting? For one, some websites use this as a strategy to increase traffic count to their websites. The cliff-hanging and incomplete headlines normally encourage a user to want to read more. Increased traffic to the said website can translate to more advertising revenue if the user also ends up clicking on an ad unit while on the said website. Also, more clicks on Facebook meant the content is kept on the News Feed for a longer period of time, thus encouraging even more people to click on it. In a way, this type of click-baiting post exploited the existing Facebook algorithm by keeping a piece of news/content artificially relevant and in the News Feed without spending for advertising. 

Facebook is using a two pronged strategy to put an end to this practice.

August 26, 2014

Case Study Method

As I'm 2/3 done with my MBA from IE Business School (yey!), I thought it would be a good time to share some thoughts on the experience so far. I'd like to focus on the main method of teaching that the MBA course used: the case study method.

So far, I've really enjoyed the case study method of teaching. I'm not sure whether Philippine universities today use more of this method, but I don't recall having too many case studies when I was enrolled as an undergrad in Ateneo. If that's still the case, I hope that it changes in the near future.

Pope Francis, the CEO

I brought along the latest copy of Fortune while waiting in line at the US Embassy this morning and the cover story just so happened to be on Pope Francis.

Link to the original Fortune article here
Pope Francis has fascinated me since he became Pope in 2013. His charismatic and humble presence has renewed the faith of so many people. The article itself  talks mainly about how Pope Francis has changed the way the Vatican's finances are run. Like a great leader, he has led and inspired change within the Catholic Church. He has openly embraced and turned to outsiders and professionals instead of the traditional Church elites. He also does not micromanage them and instead has become a "inspirational leader".

August 21, 2014

Uber's The Corner Store

I stumbled upon the news of Uber's launch of a same-day grocery delivery service called The Corner Store (available only in Washington DC for now) and couldn't help but feel amazed at how this start-up, valued at $18B, continues to push the envelope and challenge conventional business models.

Link to the news article from BBC here

Trying Out Eric Kayser

We found ourselves in Greenhills this morning before most of the stores opened. We walked around and found ourselves trying the newly opened Eric Kayser Patisserie in Promenade.

We got the kids an eclair each, vanilla (P135) for Kyle and chocolate (P125) from Ashley. I'm not really a food expert, but judging from the way they "ravaged" through both eclairs and how Kyle wanted another piece (a request we declined), I have to say that it was pretty good.

Their breads looked good (you could point out and choose what you wanted while in line) and they also had sandwiches on their menu which could be ordered before paying. The place is quite small though so I can imagine that it can get easily filled during peak hours.

I look forward to visiting again soon to try their other goodies.

August 20, 2014

Play Time with Lego

My wife and I have always encouraged our kids to play using their imagination. At home, we limit their time spent watching TV. They also don't have any game consules or tablets.

The result? Our kids love playing with physical toys like Lego blocks. We started with Duplo blocks and then graduated to more and more complex Lego sets. My wife and I sit down with them to build the sets as it can get difficult for them to follow the instructions.


It's 2014. And I've decided to reboot this blog.

I've had a grand total of two posts in the past 32 months so there's not much to reboot anyway.

Many things have changed. Hopefully, this time this sticks.