Well I still keep a personal blog but it’s not here anymore. So for those who want to check it out it’s at http://thebabblingintrovert.blogspot.com/. For you NBA fans out there you can also see me at www.nbaobsessed.com where I get paid to blog about the NBA and its players. NBA Obsessed is owned by b5media. You can check us b5′ers at b5media.com. Thanks.
Haven’t blogged in a long time. Have been playing World of Warcraft lately. Just had my birthday yesterday so I decided to update my blog.
While playing WoW (World of Warcraft) I’ve been meeting many people from abroad and made a lot of friends too. It’s nice to be able to interact with people from other countries and have fun kicking the ass of the enemy at the same time. It is definitley a nice experience to see people shout your name in text everytime I go online. =) Unfortunately, I have also been in the crossfire of many online arguments and fights that have severed many online ties. Such incidents sadden me since I believe in preserving peace and a friendly environment .
I hope to be able to make more friends and deepen my ties with the ones I have online.
Yes, I finally graduated a few weeks ago but I never did the Yay I finally graduated post. But no, I don’t have a job yet so I’ve bumming around the house playing World of Warcraft and watching TV. I did wake up early today to catch the NBA Draft 2005 live at 7 am today. Ithought it would be cool and exciting to see who would get drafted by which team… but after waiting so long just to get past the no 11 pick I got bored and decided to catch the draft result online while I was checking my mail. Anyway I was getting the results live (sort of) from my computer while checking the WoW forums, my mail, and other stuff at the same time.
In Finance, one of the methods to measure the cost of capital of a
certain project to be evaluated is to use the Capital Assets Pricing
Model or CAPM. It is used to evaluate riskiness as opposed to the rate
of return of a certain asset.
The CAPM equation goes as follows:
Kj= Krf + B(Km - Krf)
where:
Kj= rate of return
B= the beta (measures the riskiness of the asset)
Km= the market rate
Krf= the risk free rate
Do
not be intimidated by all this. You do not need to understand the CAPM.
I just want to focus your attention to the Krf or the risk free rate.
The risk free rate refers to the interest rate of government
securities, more often than not, the government T-Bills (Treasury Bills)
For
those who don’t know, risk refers to the chance that an investment on
an asset fails to give the appropriate returns or to give any at all. A
basic axiom of finance in fact states "low risk, low return and high
risk, high return"
Government securities are assumed to be risk
free because there should be no risk at all. Since one is dealing with
the government, he is assured to get returns. Now, do you really think
that is a safe assumption? How can you assume such universally when in
reality, most governments have a hard time paying off their debts? More
so, how can you safely assume that government securities are risk free
for countries that are currently experiencing fiscal crises such as the
Philippines?
Perhaps one can reconcile that an investor in such
government securities will get his return on investment. The question
is when? I’ve heard stories of people who were given such securities
many many years ago, some 20 years ago. Up to now they haven’t gotten
their returns. Doesn’t that look like risk to you?
I’m really curious how the person who formulated the CAPM won a nobel prize… oh well
I’m sure you’re familiar with the phrase "There are only 2 sure things
in life, death and taxes". In my Finance class, one of the first things
we learned how to compute for taxes given certain tax rate margins. We
learned from one of the basic axioms of finance that taxes bias
decision making. We saw how having larger revenues can be fatal.
Basically, the more you make, the more you are taxed!! Dang! This was
confirmed when I read quite long ago a book on variations of Murphy’s
Law. One variation states, "Every penny from heaven is shortly followed
by a tax collector from hell" Interesting…
What the hell is an egg omelette?!! I’ve seen this item in some
restaurants and it really makes me wonder. Don’t you think it’s stupid?
Merriam-Webster dictionary defines an omelette to be "beaten eggs
cooked without stirring until set and served folded in half". In other
words, it’s still egg! So an egg omelette is….? Egg with egg? So why
don’t they just call it egg or just omelette? I finally asked a
restaurant about it and they said it had mushrooms…Stupid! So call it
a mushroom omelette!!!
I have played enough video games to say this one thing, the economics
of video games are very unrealistic. Of course, I don’t expect it to be
too realistic since the variables that affect our economy are too many
and too complex to be simplified into something that could be
programmed into a game. What I am saying is that the economics in video
games should be at least sound in terms of basics like the law of
supply and demand and factors of production (labor and capital).
How
realistic is this? You play Ragnarok and pick up an expensive peice of
armor that you don’t want to use. First instinct would be to sell it.
Every time you try to sell a merchant something, he/she automatically
buys it. You earn money!. Questions that you might ponder about:
Did he/she really want that?
Everything in the game seemes to be perfectly inelastic and so highly
demanded that merchants would buy anything and everything that sell
them. Sometimes you wonder why a weapons merchant would buy a peice of
armor.
Did he/she have the capital to buy that?
These merchant never run out of money to pay you for stuff you sell them.
In
a real life situation, when a merchant goes into a buying spree most
likely he/she will lose money. This will force the merchant to raise
prices to make up for lost profits. You don’t see this happening
because the merchant doesn’t lose money from buying too much of your
stuff. How unrealistic!
