Skydiving: the perfect weekend

Hope, mud, and sunburn. The three essentials of every truly perfect British weekend, and I experienced them on this one.

Up at Langar with Warwick University's staggeringly efficient Skydiving Club, and it's been great. I was running on empty after the Strategy & Practice module, but somehow 7 days of 3hrs sleep a night was do-able. A couple of jumps to build my RAPS static line experience, late in the day after winds on Sat, and a legendary set of twists in my canopy - TWICE. Once due to my over-nonchalance at exit ("Hey, all this training can't make THAT much of a difference; I think I'll just gently push off the aircraft this time - oops) and once due to the slipstream itself ("Great exit! The plane really pissed up the bag though.")

As befits a roomful of people doing rather extreme things all weekend, the party later is suitably magnificent: lasers and a sound system that wouldn't disgrace a London club, while the room fills with costumes: men in pants, even the Klan and Nazis put in an appearance. ('Inappropriate' is the theme.) Even I dance. And it takes a lot for me to dance. I head back to the tent about 4am, and plenty of people are still dancing. (Apparently until 6.15am. The beauty of a remote location is that the dancefloor and bar only close when there are no remaining customers.)

I love skydiving. And I love skydiving culture, too. On the edge.

WBS scavengers

Long after nightfall, in the darkened halls of the Business School, the denizens of the MBA programme go hunting.

At intervals impossible to predict, they emerge from their dens, often in packs. Hollow-cheeked and glassy of eye, they seek only one thing: sustenance to carry them through the night's project work.

This is their habitat. They know its every nook and cranny; they have made it their home. They work and play and sleep here. And at this hour, they know where food is to be found.

There's always a company event or presentation evening going on in one of WBS's lounges, and where these people gather, there is prey. The prey: leftover buffet. Sandwiches, cakes, and if you're lucky some of those yakitori things or the chicken pieces with pepper.

It may be in the upstairs lounge, where the central terrace glows eerily in the spring moonlight. Or the hall opposite, where the strange coven known as the Alumni meet for their lunar rituals. Sometimes the MBA wing itself, although in this area the hunters are many and the land overgrazed; but venturing further afield, to the smaller rooms of the 3rd or even 4th floors, can yield rich pickings for the alert hunter.

The prey has been found: a consulting company presenting in a meeting hall. Swiftly and silently, the MBAs take their prey without a struggle, and slink back into the syndicate rooms from whence they came.

Back to skool

Term 3 begins! After a couple of weeks out of the classroom (but still mostly on campus), the last few modules are on the calendar. And it's as if we'd never been away.

This term's modules are differently flavoured: intensive one-week crammers rather than a lecture a week all term, and us fulltimers share them with visiting Modular and Distance Learning MBAs, all of whom seem equally great people. But the format? FOUR shorter lectures a day and project work (case study writeups and a presentation) in the evening, all of which is due this week. Twelve-hour days are the norm this week, plus a couple more hours doing the 'further reading' at home. I'm whacked already.

Other life events are happening apace, too. A work project in from Madrid and another from Paris which is probably going to involve a week over there; I'm also catching lifts to (possibly) two skydiving events over various weekends, to get in a couple of jumps between Strategic Brand and Risk Management modules in May. Not to mention Dreamforce Europe down in town, which I may have to cancel if the French are cool with my day rate. A student can hardly turn that down.

Strategising, skydiving, working for Spain, trips to France, talking to recruiters and visiting technology shows. My life's coming back in a rush.

I'm good at camping, being always intense as a child

There are probably more sensible things to be doing on a Saturday afternoon than putting up a tent in one's college room, but at that moment I couldn't think of one. (There is a reason: I haven't used my tent in several years and may need it this weekend for skydiving.) Was gratified I can still get it up in less than ten minutes.

Warwick gets a new Chancellor

So Richard Lambert is the new Chancellor of the University of Warwick. An ex-FT journalist and Director-General of the Confederation of British Industry, he's perfectly in tune with the commercial focus that made Warwick Margaret Thatcher's favourite university.

He inherits a university with strong finances, a top 10 UK rank, a world-class business school, and a well-equipped campus. As a 60s university Warwick will never have the dreaming spires and sterling history of Oxbridge, but as Britain's second wave of universities move towards their half-century it's obvious which ones have succeeded, and Warwick's firmly at the top of that group. Good luck to him in keeping the good stuff good.

Bill Maher on the the USA today

My word. I don't know who Bill Maher is, but I assume he's got something to do with Saturday Night Live or something: very little US television is this brave. "Fail to pay one mortgage and you're a deadbeat. Fail to pay a million mortgages and you're Bear Sterns and we all bail you out!"... (on the Pope visiting the US) "He also lives in a compound and many of his staff have been molesting children in their care!... the smart move was in having a billion followers rather than a few hundred!" Genius - of an acidity rarely seen in today's ultra-compliant US media.

XKCD

I think this XKCD comic sums up my basic take on life.

I really like a certain shade of rich red

I know it's not exactly an earth-shatteringly blogworthy event, but I just really like the way my new Warwick Business School USB key matches my iPod.

Financial realities

Here's an interesting idea. What if you tried to understand the economic muddle of the world today... not by separating into developed and developing world, but into the financial economy and the real one?

Corporate Finance teaches us about two kinds of assets, real and financial. House: real asset. Collateralised Debt Obligation secured against that house: financial asset. The two are connected, but different. And with modern finance layering in ever more separation between the real and the financial, that connection is getting weaker all the time.

Take junk bonds, for instance, which have quietly become a normal part of finance thanks to learnings gained after the disasters of the 1980s. (In a similar way, CDOs and CLOs will rise again post-subprime, but that's another story.) Junk bonds are, essentially, a financial asset with ZERO connection to the real world. All they're backed by is an idea: an idea that might be successfully executed by the people who dreamed it up, and might produce profitable real assets some years from now. Often they don't, which is why the coupon payments on such bonds tend to be high (reflecting the risk premium demanded by the financier.) But even in the absence of those real assets, the junk bond has a life of its own. It can be traded, gain value, lose value, or be destroyed like any real asset. To say financial assets occupy the same economy as real assets is missing the point.

Take the subprime mess. A single CDO paying 6% owned by an Australian pension fund was a perfectly valid investment until 2007. That CDO was part of a grab-bag of similar CDOs, paying different returns due to different levels of risk. Those CDOs rested on paperwork agglomerating sixteen billion-dollar tranches of residential debt, which themselves were supported by traded off-balance-sheet obligations collected together by four agencies acting for 200 banks in thirty US states, whose creditworthiness was rated by various other agencies from AA to B+, making home loans to a range of customers in social groups AB1 down to C2 and below. All of these bits of paper have an independent existence far from the real world.

Somewhere, at the bottom of the pyramid - where the paper chain's first page details a recurring 25-year stream of interest coupons at 4.5% plus a 3.5% risk premium - is the only link to the real economy, where Mr Williams from Alabama is trying to make the next payment on his pricey 8% mortgage.

That's it. That's the only link. And when certain circumstances exist in that real economy - for example, house prices rising steadily for a decade - that real economy doesn't affect the financial economy at all.

In fact, that link is now so weak you can disregard it, as many bankers already do. The real, asset-backed economy and the floaty, financial economy are two different worlds; they have different KPIs, different interest rates, different inflation levels, unemployment rates, and measures of money. In fact, they're as different as it's possible to get.

Yet all our economic indicators - inflation (just 2.5% in the UK today? Don't make me laugh), interest rates, tax - are gained from glomming the separate economies together, and are therefore completely WRONG. Let's treat these two worlds as what they are - separate - and start understanding our world a little better.

That's not the point, Gords...

Gordon Brown says he's 'toiling every day' to fix the UK economy. But don't you see, Gordon, that's precisely the problem?

We know you're toiling. We accept that. The problem is how you work, now how hard you work. You had more luck than any Chancellor in British history: you inherited a growing economy where you had every chance to make Britain's public finances the most well-ordered in the world. And you blew it.

What you actually did during those years of growth... was what every Labour government does. In fact, the only thing Labour goverments are capable of: spend, spend, spend. And now it's coming back to haunt you.

Despite a growing economy, in barely a decade Brown turned a UK surplus of £23bn into a £45bn deficit. Hundreds of billions have been sluiced into public service with little effect, eaten up by red tape and the endless control-freak complexity that's a hallmark of New Labour. The tax take has risen as a percentage of average income, and Britain's middle class is disappearing: soaked, squeezed, and hassled to death.

I suppose it's too much to ask you to just say, 'Sorry'?

Look out, it's a twistor

Looked up Roger Penrose's Twistor Theory after seeing this beautiful diagram in the SNS newsletter.

SNS head honch Mark Anderson's brief is that three ideas - let's call them Shape, Wave, and Resonance - are all we need to explain reality: none of that tedious mucking about in 10, 11, or 12 dimensions that characterises string theory. He uses Penrose's Twistor Theory to illustrate how great life would be if we thought of things as patterns of interacting waves, rather than treating the waves as a side effect. (That picture's actually a wave, just viewed as the shape it makes over time rather than the peaks and troughs you see on a sine graph.)

Looking at things this way brings us to a theory of Shape - and how some shapes are better fitted to handle wave interactions than others. On one level, it's the difference between a jet's nosecone and a skydiver's canopy: shapes designed to interact with a medium (air.) On a deeper level, it's the physics of surface area and waveguides: already seen in dense wave-division multiplexing network switches, and ultimately we'll apply it to the atomic scale, carbon nanotubes used as capacitors and drug delivery mechanisms.

The trouble is, when I tried to get a grip on Twistor Theory to understand this stuff, I got sentences like "the mathematical theory which maps the geometric objects of the four dimensional space-time (Minkowski space) into the geometric objects in the 4-dimensional complex space with the metric signature". Which sounds less like a solid theory, and more like a mathematician having a laugh at my expense. And I thought Corporate Finance was hard...

How nice. The Thai girls down the corridor made me some Tom Yam Soup! And after I'd just got back from Varsity and a chance meeting with a couple of undergrad girls (one of whom's a skydiver.) How many miniskirts can a guy take in one evening?

Building my MBA dissertation literature review

I knew the second half of my MBA would be easier. Still several courses to go, but the main thing now is my consultancy project and dissertation, which I'm doing on the connection between book value and shareholder value - in other words, the part of a firm's value that can be vaguely attributed to 'marketing'. But while a big job of doing stuff then writing about it isn't the hardest thing in the world for me, it's not quite as easy as I first thought.

The reason: it's an academic piece, not an act of copywriting. Which means an important part of the work is finding where it fits into the broader intellectual universe: getting a grip on the landscape delineated by peer-reviewed journals and seeing where your ideas are best built.

It's what one OB lecturer calls a "heading the cricket ball" problem. If your idea of playing cricket is to HEAD the ball being bowled at you, you're unlikely to be regarded as as serious cricketer. Not only that, but your 'innovative approach' wouldn't score you any points, and the whole activity would just give you a headache.

Which for a non-academic raises the question: which papers? Which textbooks? How do I know, when building my reading list, that I'm reading the right stuff?

Fortunately, I've found a shortcut that makes it easy.

One of the resources at WBS (what did researchers ever do without the Internet?) is a comprehensive database with searchable full-text articles from several hundred journals... with the number of citations attached.

Citations, not keywords, are the key concept here. If a paper in my multitude of search terms has been cited a hundred times by other authors, it's a reasonable bet that paper is 'significant', a seminal work in the field. Following the trail of the papers cited in that paper make the method even stronger: most of the people citing that paper will also have read whatever papers it cites. By this process, I can quickly find the 'core' dozen or so papers relevant to the subject I was searching for. Which for a field like mine (brand valuation) tells me precisely where the needles are in the haystack.

In a way, this is doing a 'manual google' - the PageRank algorithm at the heart of Google uses precisely this principle to rank popularity of web pages. Who's linked to you, and how many links you've got. I'm just doing it by hand. Some more whittling down to be done, but in just a day I've got ten papers that seem to lie at the root of this branch of marketing.

Sometimes, I could almost believe I'm smart.

Last of the BHBs

The last Big Honkin' Binder - Investments & Risk Management - has just joined my bookshelf. And that's it, complete in 14 volumes: The Warwick MBA on paper!

Technically, each of these binders has cost £1500 (or at least what they represent: the 14 courses making up the degree.) I wonder how fast the payback will be once I get back to the real world? Not that 'the real world' is a place I've ever spent much time in...

One Hundred Years of MBAitude

Yikes! The MBA qualification is 100 years old today! This calls for a celebration. What shall I do, my Strategic Brand pre-reading chapters or my Strategy & Practice case studies?

What I want to know is, did those first 33 guys at Harvard in 1908 (the class of 1910) have the same trouble with Corporate Finance? Probably yes, although I bet there was less Modelling & Analysis, Excel being somewhat pre-alpha at the time.

Wait a minute - they only studied THREE courses?!! What kind of sleepwalk-through, revise-on-the-bus, wing-it kind of degree is THAT?!!

Despite which, only eight completed the course, a 76% flunk rate. No wonder the Wall Street Crash happened just nine years after they graduated!

Taxi to Mongolia

Not content with jumping out of aeroplanes for fun, Warwick Skydiving Club buddies Nick Ellison and Tom Bristow are driving to Mongolia this summer. They're doing it to raise money for Save the Children - donate at Justgiving here.

Solving the shploink

Dear Innocent Smoothies,

We have to do something about the 'shploink'.

I refer to the chain of events set in motion by the reaction of a 1L Innocent carton on first being opened.

After shaking the carton as instructed (or even if not), it is impossible to open the plastic tab without initiating the 'shploink' sequence of occurences. This sequence consists of grasping the tab, twisting and pulling, the aforementioned 'shploink' sound, and inevitably a few drops of Innocent being cast in random directions around the kitchen.

Since most Innocents are consumed at breakfast time, please note that many of your customers will be wearing crisp white shirts in preparation for the working day. Furthermore, you may recall that the average Innocent Smoothie is brightly coloured, often requiring a change of shirt and concommitant expense of dry-cleaning and extra laundry cycles etc. (in my experience, you can just about get away with banana/coconut, but orange/mango is more problematic, and anything involving raspberries is completely out of the question.)

Given the proximity of the consumer to the carton, it's highly likely the 'shploink effect' is causing considerable lost productivity and frustration across the UK economy.

Please devote all possible resources to the solving of this serious problem, with immediate effect.

Best,

Chris Worth

She'll be back

Just back from a London trip, visiting my parents overnight. And got a bit of a shock. I mean, you can understand your Mum forgetting to mention she'd had a new haircut or bought a new three-piece-suite - but discovering that in your absence she's had her SKELETON upgraded?!!!

Yes, my Mum's a CYBORG! Can't leave that woman alone for five minutes! After being told her hip was on the way out, she decided to have a replacement hip put in (as if she was changing the fabric on the sofa) and didn't tell me because "You were under pressure doing exams."

I was under pressure? While she was having the bone from hip to knee sawn out by a surgeon and replaced with a steel girder?!! Did she think this was a MINOR thing? I mean, I've been moaning on the phone about how tough Corporate Finance was and how many hours I have to study. She was actually listening to this crap with HALF HER LEG ABOUT TO BE HACKED OFF?!!!

Whatever next? Next time I visit, will I be greeted at the door by a shiny-skulled metal monster, because she 'neglected to tell me' about the great special offer her insurance company was having on cranial implants? Will her arm spontaneously turn into a cutlass if I criticise her cheese on toast??!! Will her eyes glow an evil red while reading the Daily Mail? (Hang on, that's ANY Daily Mail reader.) And as for the Terminator 'It. Will. Never. Stop' characteristic - well, she's always been a bit tenacious about things.

I'm going to have to install a blast furnace in their garden shed in case she gets mad about anything. I just hope there's nobody in her village called Connor.