“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!