I am very fortunate to have Richard take me for a night at his dorm room. I was going to have to stay at a dingy Travelodge in Epping, which is miles away from the city. We end up singing Karaoke in his room with Charles and his friend from Japan after having a Bento box dinner at a Japanese Society Event.

This morning we grabbed tea and sandwich on our way to attend this morning Econometrics course at LSE. In class, I was truly impressed how well the professor explained sample estimation methodologies as part of the classical estimation approach. The teacher was particularly thorough in explaining the derivation of the variance-covariance matrix; superior to the explanation provided by the Applied Econometrics professor I had at Cornell. One hour flew by quickly and I enjoyed every bit of his lecture.  The mathematical rigor of the content triggered an alarm of my very inadequate math knowledge—so, acquiring higher math proficiency for the specific purpose of graduate level studies in finance will be one great challenge to overcome!

After class, a group of us gathered for a game of Ping Pong at the student lounge. Richard and I teamed up and won a game. And about time, I received a much needed call from Master Card to arrange for an emergency card to be sent to me. Its been very difficult to function without a card these days; I have been lucky to have joined HSBC Premier before leaving HK and before embarking this ad hoc journey; now I’ll have to wait to pick up that card before I can continue my trip. This will give me a week in London and I’ll have to plan how to make this coming days more productive. I’ll be visitng Cambridge tomorrow and very excited about it!

“I entered the investment business in 1968 with six hundred dollars in my pocket, and I left it in 1980, at the age of thirty-seven, with enough money to satisfy a life long yearning for adventure.  As the comanager of an offshore hedge fund, analyzing the worldwide flow of capital, raw material, goods, and information, I had invested where others did not, exploiting untapped markets around the globe, and it was a significant factor in my success.  But what I wanted out of Wall Street, and ultimately out of long-term investing, was not typical of the business.  I want to buy freedom to taste as much of life as possible-I wanted to see the world.  And I wanted to see the world that other travelers rarely see, the world that can be seen only from the ground up and truly understood only from that vantage point.  I wanted to see what I like to think of as the real world. ” Jim Rogers, Chapter 1, A Yellow Mercedes.

Today I joined Richard for the 2nd day of case study meeting and got a good review of basic corporate finance, the first chapter always seek to illustrate the point of pecking order in financing projects and the optimal mix of debt and equity of a firm.   So, today, meeting up at a cafe near LSE, we are finishing up on the spreadsheet that determines UST’s optimal capital structure—- increasing debt increases interest expense that generates tax shield but also increase the risk of equity at the other extreme and drags up WACC ; there is an inflection point where the marginal gain from tax shield decreases and is outweighted by the potential financial distress as a result of higher debt ratio—-which indicates the  optimal point base on MMII theorem.  So much fun for an afternoon of review, I was quite fond of the reminiscences of that Financial statement Analysis course I took as an undergraduate.  In general, it seems the LSE course slides are very condensed whereas at Cornell course slides are more thorough.  After group meeting, 2 group mates from India asked us to join the Diwali festival held in London, where it has the world’s second largest Indian residents; at the festival, there were a huge crowd and stage performance of traditional Indian dancing.  Richard has to go to a Catholic mass so I am in his dorm right now; we will be going to dinner tonight with Alek.

I will have to work on writing up my proposal tonight as well as keeping myself updated with some news!

I joined Richard to work on his group case study for his applied corporate finance course, where I met his group partners, and worked on the UST tobacco company case.  The case study illustrates how to determine optimal capital structure and financial analysis.  The group mates from India recommended places I should go, and supported my idea of joining Palace on Wheels for a tour of New Dehli and Arga.  We hangout at the LSE dorm lounge for a while after concluding the case project then proceed to a group dinner with Richard’s classmates friends at an Indian restaurant.  Alek, a dear friend I met together with Richard in summer session joined us for dinner; he is enrolled in the Ph.d program at Imperial in Finance and also working part time in the industry.  Alek, Richard and I remain in touch since 2005 summer; now they are giving me great advice on my application to some UK schools finance programs. For dinner, Richard and I shared lamb, chicken, and spinach dishes; I had a mango yogurt drink. After a rather confusing settlement with the bill, Alek, Richard and I had a night out; we started our night at a Lechester Square bar, where I  downed two cups of belgium  Leffe beer  (6.6%) on the high recommendation of Alek.  I have a very low tolerance for alcohol and generally prefer not to drink because I am allergic; but a great reunion calls for immoderate drinking.  Although we had to call it a night because the tube closes early, but I had so much fun tonight.   I am so thrilled to have our summer school reunion, 2 years flies by but we are all very well!!  Its absolute the best Saturday I have had so far!

Greetings from Glasgow, Scotland! I am now nested at the Belhaven Terrace hotel, a townhouse bed & breakfast away from the city centre that cost only 30 pounds. So far everything seems to work in Glasgow, people are friendly and helpful—and they seem more simple natured and straight forward. RBS advertisement “make it work” are everywhere; perhaps thats the Scottish way? In sharp contrast, London is inhospitable; people are generally rude, services are inadequate, and where you wouldn’t want to hail a cab because its forbidden expensive and you can’t order another entree even if you really want it—opps, nope, you can’t afford it. So I am a bit perplexed why London is striving on the top ranks of a globally competitive economy and that its 10 year plan to be a globally leading innovative knowledge economy by 2010 actually is working— the ’success’ is likely reflective of its high price level and strong currency but just how long can it all last before it yields to the boom and bust of the business cycle? Perhaps all this applies only to a small group of highly skilled individuals who earns a much higher income than the average. The average nominal annual income of Brits is 29,331 pounds and where FTSE 100 CEOs make 711,000 pounds. With pounds floating at 2.1 against the dollar, nominally, UKer makes a lot more money than Americans in dollar terms; of course, it is only fair to compare real income by purchasing power parity and on that measure, UKers’ purchasing power is eroded by higher CPI so their quality of living is not necessarily higher. Without a compelling reasons, I wouldn’t like to live in London—where Chocolate croissant can set you back 2 pounds, a metro ride cost 1.5 pounds, I rather not think about how much rent is going for.This morning, it wasn’t all that smooth when I was at London when I had to pick up the emerging credit card at the HSBC branch in 2 hours before catching that plane to Glasgow—I took the rail Gatwick to save 8 pounds compare to the express but that took 40 minutes to get to the airport—I was at security checkpoint by 5:10 to catch boarding plane at 5:20–and I absolutely freaked out and had to politely ask to cut the line to get to get through the security—being the the last person to get on that plane I was relieved. It was really my fault that I took 5 minutes to grab 15 pounds of sandwich, salad, fruit and water at Mark and Spenser’s! I am gaining more confidence from traveling alone; what I wish to have is the power to overcome some of my imperfections so I have the power to do better and more things in life.  I also miss my father dearly, I wish I could have shared with him my journey and adventure.

Finally arrived at London from Paris’ 2.5 hours EuroStar express train, right off to the streets I needed internet access to get the Naval and Military club address, I was lucky to locate a local library at Lamberth near the London Waterloo train station where internet is free. Across the street is a local diner, Steve’s, where I got my belated breakfast-lunch; I got into a conversation with the son of the diner owner, Chris, who lived in New York for a while. Later Chris friends (and their friends) walked in, his wife walked in, and in a few minutes a quite dinner erupted into a very loud lively chatter. Chris father owns a plot of land in Greece and with his friend developed properties on it, and it sold very well in London.  Afterwards, I took the tube to Piccadilly Circus, where the Naval Club is located at the St. James sq; the building is old and the patrons are all elderly man dressed in suit and speaks a very heavy accent. My reservation was never confirmed, I had to wait a bit and was later offered a twin bed room for 130 pounds a night! Thats 275 dollars!!!! I was of course devastated but given little alternatives and I was exhausted, I went ahead with it. After settling down at my dingy and odored room, I called up Richard, a dear friend of mine back in Summer School at Harvard 2005 and was invited to joined Richard with his friends at a Japanese restaurant near LSE at Holborn station. They are all part of the MSc Finance and Economics program, a highly selective program with very high standards; although I am told the professors do tend to overload students with very advance concepts without thorough explanations–make the academic journey rather a personal effort of self-revision. After dinner, I visited Richard’s room with Charles, and we all played pingpon and pool at the lounge downstairs. It was mega fun although I was a loser in both game, I did manage to unleash some of my natural talent (endowed by birth for being Chinese) in pingpon and served up a few impressive high spin shots. After staying up till 2am planning for my glasgow trip, I got my tickets and accommodation lined up and I am now heading to HSBC to get my emergency credit card, before heading to London Victoria to take the Garwick express to the Garwick airport for the 5pm flight to Glasgow!

One never get disappointed ordering medium rare steak; this idea originated from my heighten risk aversion for dinning disappointment ever since suffering from an appalling chicken entree for lunch. For dinner tonight, faced with much uncertainty, I gave up looking at the menu and just ordered another steak Entrecote. In four day, I have digested about >1000g of medium rare beef! According to my mom, my dad developed type 2 diabetic because of eating lots of steak in HK’s Jimmy’s Kitchen! Please save my life and stop me from odering more steaks!!

Being brought up as a relatively spoiled boy under the attentive care of helper’s’, traveling alone revealed many of my habitual flaws: this is a partial list so far: 1) in ability to keep valuable properties secured, 2) don’t do laundry, 3) eat at irregular hours, 4) sleep at irregular hours, 6) surf the web way way too long.  I am learning to cope and improve.