Bidatzi.com

I'm doing this

2009-11-02T20:12:00.003+01:00

So, it seems that after thinking about it for a long time, I've finally decided that I need a challenge to keep my mind busy. I also want to keep my chances open. My dream of migrating to America will probably remain a only dream for the foreseeable future, but it won't be because I lack the preparation or the skills to be valuable over there.

I've been digging deeper and deeper into the world of finance during the last two years. I'm certain that I like the discipline enough to give it a few years of study. After researching several options I've chosen the CFA. Other options are either too light or require full-time classes. I already bought the complete curriculum for the CFA Level 1. My plan is going for the Level 1 exam in December 2010 (in Bilbao, I hope). This means about three years of 10-15 hours of study per week. I'll have to get my nerdy abilities back into shape :-)

The other thing that's been bugging me is my English. I view myself as a competent English speaker, but I lack any proper certification and improving my English-speaking skills could come in handy in the future. Thus, I've decided to go for the Cambridge CPE exam in May 2010.

As Kennedy said in that famous speech, I choose to do these things not because they are easy, but because they are hard, because these goals will serve to organize and measure the best of my energy and skills, because this challenge is one that I am willing to accept, one that I'm unwilling to postpone, and one which I intend to win.

ICE-2009 Conference

2009-06-23T15:43:00.003+02:00

This week I'm in Leiden (Netherlands) attending the 15th International Conference on Concurrent Enterprising. It's a somewhat peculiar conference, mixing some hardcore satellite communications stuff with all these new-agey open innovation and user involvement concepts. Some good opportunities for networking and establishing contacts useful for our own Living Lab. You can check my real time comments about the conference discussions in in this Twitter stream.

Tomorrow there's a visit to ESA headquarters but unfortunately I won't be able to attend, I'll be in a meeting.

Yesterday in the evening I had the chance to visit the town of Leiden and yes, as it's usually the case with the Netherlands, it's gorgeous:

Sanidad 2.0 conference

2009-06-11T12:09:00.004+02:00

Hi there! I'm alive. I'm in Bilbao today attending the Sanidad 2.0 conference, organized by the Basque Government and Deusto Business School. I just gave a presentation about the projects we have at IAVANTE related to collaborative innovation and social networks (I refuse to call this stuff "2.0").

Weather is great and the Botxo is getting more beautiful every year. We're in front of the beautiful and majestic Deusto University building:

This morning I met the Basque Regional Minister for Health, Rafael Bengoa. He's really impressed me with his open an humble approach toward health services reform and his statement that healthcare (organizational) innovation should be a multiple-approach effort led independently by the different health centers and his recognition that the traditional "one-size-fits-all" way of managing public health providers just doesn't work.

Back in Chicago

2009-04-06T04:13:00.002+02:00

If you had asked me a year ago I wouldn't have bet a lot of money that I would be back at the second city so soon. But here I am, lusting after my favorite giants: the NBC building, the Carbide and Carbon Building, 333 N. Michigan... what a place! The cracking of the rusty loop, the potholes in Wabash, the abandoned Post Office Building... I love even the defects of this mammoth monument to the twentieth century and to human achievement.

I'm at HIMSS 2009, along with something like 20 thousand colleagues at McCormick Place, and I'm loving every single minute of it.

Engineering challenges for the 21st century

2008-04-17T19:34:00.006+02:00

The National Academy of Engineering asked a panel of very interesting and thoughtful people to come up with a list of the most important engineering challenges for this century. The group is really impresive. Here are some of the members:

J. Craig Venter (human genome decoding, first artificial chromosome...).
Dean Kamen (mobile dialysis machine, insulin pumps, Segway...).
Ray Kurzweil (OCR, text-to-speech...)
Larry Page (Google)

So, this group of engineering titans produced a list of general technology fields instead of trying to ascertain the need for any particular specific devices. These are the fourteen challenges proposed with my comment for each:

Make solar energy economical: right, but economical in this context means reaching efficiencies above 70%
Provide energy from fusion: it'll be ready in 25 years! (as it's been the case during the last 40)
Develop carbon sequestration methods: here's my candidate! (biochar)
Manage the Nitrogen cycle: we're going to need a lot of Mr. Venter talent for this one; and a lot less of the European GMO fearmongering than we have right now
Provide access to clean water: the way I see it this is mainly an economic challenge
Restore and improve urban infraestructure: upwards, please!
Advance health informatics: yes, but it won't be the silver bullet many people expect
Engineer better medicines: this one, on the other hand...
Reverse-engineer the brain: I'm afraid we won't be able to
Prevent nuclear terror: yes, please. Or even better, prevent terror. Period
Secure cyberspace: from splits? from rogues? from thieves? from governments?
Enhance virtual reality: c'mon Ray, you had to sneak this one?
Advance personal learning: and this one too?
Engineer the tools of scientific discovery: this more of an ongoing concern than solving a specific incoming challenge

It's a good list, if only a bit too politically correct. However, I miss a very important challenge not addressed there that is much more pressing than a few of the ones that got into the list (like 2, 6, 11, 12 and 13): advance energy storage technology.

Visiting the Oracle of Omaha

2008-04-17T15:07:00.006+02:00

Now, this is something that could make me enroll in an MBA:
Some 15 times a year Berkshire CEO Warren Buffett invites a group of business students for an intensive day of learning. The students tour one or two of the company's businesses and then proceed to Berkshire (BRKA, Fortune 500) headquarters in downtown Omaha, where Buffett opens the floor to two hours of questions and answers.
This time, it was students from Wharton. The Wharton MBA is ranked as the best in the world by the Financial Times.

Buffett has repeatedly stated that he thinks he would make a lousy CEO and thus is happy to let the managers of the companies he buys for Berkshire keep their posts. Here's how he told the Wharton whizz kids:

But if you gave me the choice of being CEO of General Electric or IBM or General Motors, you name it, or delivering papers, I would deliver papers. I would. I enjoyed doing that. I can think about what I want to think. I don't have to do anything I don't want to do. It might be wonderful to be head of GE, and Jeff Immelt is a friend of mine. And he's a great guy. But think of all the things he has to do whether he wants to do them or not.

Lesson: do what you love.

Make yourself a favor and read the whole thing.

Healthcare systems comparison

2008-04-17T07:39:00.001+02:00

Over at healthcare-economist.com Jason Shafrin is doing a series of posts describing the healthcare systems of several developed nations. You can always learn about the different national approaches on your own, but it's useful to have these summaries all in one place.

The main lesson that the reader will pick up is that actually there are a lot of different models, contradicting the settled notion that the Americans do it one way and the rest of the developed nations do it the other way (namely, the good one).

So far, Jason has published the profiles for the healthcare systems of France, Italy, Spain and Japan. Of these, I think the French and Japanese ones make the most sense. The Japanese model is somewhat cheaper than the French one, but we have to take into account that many external factors also contribute to define a nation's healthcare expense (lifestyle and culture, legal frameworks...). I'm looking forward for the Switzerland installment.

If you are interested in this topic, I recommend this paper by Michael Tanner at the Cato Institute. After that, you can help yourself with the hundreds of posts about healthcare economics at Econlib. There you'll find, for example, this sound critic of the WHO health rankings by Arnold Kling:

Almost two-thirds of the weight in the WHO index goes to these distributional factors. They focus more on inequality than on the absolute level of care received by the poor. In fact, if you dig deeply, what WHO is really measuring is not even inequality in terms of health services but just plain income inequality. Just having very rich people per se is enough to lower the quality of our health care system, according to WHO's methodology.

Healthcare costs as a competitive (dis)advantage?

2008-03-24T21:03:00.016+01:00

The Council on Foreign Relations has published a much discussed backgrounder titled Healthcare costs and U.S. competitiveness. The main point of the article is that employer-funded healthcare (that covers around 175 million American workers), coupled with skyrocketting healthcare costs in the U.S. is becoming a significant competitive drag for American businesses, threatening millions and millions of workers with losing their jobs to offshore competitors (made competitive by their more efficient healthcare systems).

American healthcare is, I agree, poorly efficient and has a distorted incentive structure that tends to push up costs (and care consumption). But all that can be stated without the fearmongering about millions of American workers about to lose their jobs because of health costs.

Let's get into a few details. The article provides several figures showing just how incredibly expensive American healthcare is. Yes, it is. I miss, though, a solid figure about what percentage of total worker compensation goes to pay for healthcare costs. This is the relevant figure in an article that argues that such cost makes American business uncompetitive and workers about to fall prey to outsourcing dynamics.

In fact, such a number could come in handy to make comparisons, now that we're talking about business environment and competitiveness. If we check for more general business costs, we get some interesting results. Let's look at some data from the OECD. For example, this just released report about total wage taxation that provides this useful and informative table of total tax wedge as a percentage of labour costs:

Belgium, 55%
Germany, 52.2%
France, 49.2%
Sweden, 45.4%
Spain, 38.9%
UK, 34.1%
USA, 30.0%
Japan, 29.3%

So, labour-related tax costs are around fifteen points lower in the U.S. than the average European country. It sure doesn't seem like a very labor-uncompetitive arrangement to me!

If, and it's a big if, healthcare costs amount to something like 20% of labour costs in American firms, then they're as labour competitive as France. France's healthcare system is reasonably efficient and, in a general sense, probably the best national healthcare system in the world. I say it's a big if because the aforementioned OECD report provides ppp-adjusted figures for unit-labour costs. For the American firms, that includes the cost of employer-provided health coverage. Let's see:

Germany: $59,526
UK: $56,612
France: $50,260
U.S.: $44,347

Really, how can a serious institution, in the face of such figures, contend that the argument for establishing a national health system in the U.S. is the uncompetitive labour costs that American firms face if it's not done? Factoring-in productivity figures makes the difference even starker.

You may be wondering why the American figure for total tax wedge as a percentage of labour is so low compared to many other developed nations. Their (somewhat lower) level of public spending as a share of GDP surely doesn't justify such a big diference. Well, it may seem paradoxical to some, but the American tax system is much more weighted towards corporate taxes than most European ones. Once state taxes are taken into account, the U.S., at 39.27%, has the second highest corporate tax in the world after Japan (that not surprisingly has a similar labour tax wedge). Spain's figure, for the sake of comparison, is 32.5%. Sweden's is 28%. The corporate tax rate in Ireland is 12.5%. How competitive is that for American businesses? Is no one at the CFR worried about it?

The CFR article quotes Michael Porter, who knows a thing or two about competitiveness, regarding the (sorry) state of competition in the American healthcare sector. I concur with that diagnosis, but that's an altogether different statement from affirming that healthcare costs make American employers (and workers) uncompetitive. Do not miss Porter's latest book addressing healthcare competition, it's excellent: Redefining Health Care.

The article is interesting but I find the argument blatantly disingenuous. Just a way of selling a national healthcare system to the enterprise-minded. National public healthcare systems should (and can) be argued for on their own merits, without this kind of spin.

Measuring Innovation

2008-03-24T14:19:00.008+01:00

Innovation is one of the basic foundations of any dynamic economy. The (current) problem with the concept of innovation is that its own relevancy has rendered the term almost meaningless. Innovation has become just another management (and government) buzz-word, a fad. It is thus essential, if we are to manage innovation efficiently and define sound policies to foster it, that we can agree on what we are talking about and, more to the point, how to measure it.

On the terminology side of that effort, we have initiatives like the Spanish UNE-166000 set of standards that aim to define concepts and approaches related to innovation, innovative projects and innovation management systems. The basic framework is closely related to that of other management standards like the ISO 9000 for quality management systems or the ISO 14000 for environmental management systems.

So far so good but, more than delimiting which are the processes that we will refer to as innovations, what we really need to learn is how to measure their outcomes and results. This is in no way an easy task, because the innovative process permeates all the levels and sectors of a modern economy. Economists frequently use Total Factor Productivity (pdf) as the best measure to estimate the impact of innovation, but it hasn't been established in any meaningful way that every increment in TFP is attributable to innovation. Innovation diffusion, crucially, has an important effect in TFP without any new innovation taking place. Determining what are the subjacent causes for increases in worker productivity isn't exactly straightfoward.

Nonetheless, some efforts are being undertaken in this field. The most thorough one that I know of is this one: Measuring Innovation in the 21st Century Economy. It's been produced by the U.S. Department of Commerce and with the participation of some industry heavyweights (like the CEOs of Microsoft, IBM, Medtronics...). The report is really insightful and I strongly recommend reading it for anyone interested in innovation policies and metrics, but don't expect it to ultimately clear all the blurry parts of the innovation picture.

If what you want to measure is the volume and activities of the innovative process, instead of its ultimate efect on the economy, the best reference I know of is the OECD Oslo Manual. It's a must read.

(Thanks to orgtheory.net)

Match Day

2008-03-20T16:34:00.004+01:00

Today, March 20th, is a very special day for about fifteen thousand medical school graduating students in the U.S. (and for about ten thousand people from abroad, via the USMLE). Today is Match Day, when a computer system processes the preferences stated by these graduates regarding their desired medical specialty and hospital residency program and matches the data with the preferences submitted by the hospitals about the candidates. It's a somewhat complicated system but it works remarkably well and it's been in place since the fifties. Most of the students match to their desired options. From what I can gather from the advance data tables for 2008 published by the National Resident Matching Program about 85% of the graduates will go to one of their top three choices (about 45% for foreigners).

If you want a first person account of the process, check out this interview with Graham Walker, a medical student from Stanford. He's matched to his first choice :-)

This matching system is very different from the approach used in Spain, which is pretty straigthforward and fair: everybody does an exam whose grades serve to rank all of the candidates who will then choose residency program (hospital and medical specialty) based on their position in the ranking.

The main advantage that I see in the American matching program is that it gives the hospitals a (direct) say in what kind of residents they'll get. And if you look at the hard numbers, I think is fair to assume that more people go where they want than with the Spanish system of a single national exam.

Anyway, congratulations to everyone that matched today and get ready for those grueling 80-hour work weeks! Use the remaining 88 wisely (i.e. preparing for the boarding exams).

Personal Health Information Networks

2008-03-10T10:02:00.002+01:00

Personal Health Information Networks (PHIN) are the latest trend in the field of Electronic Health Records (EHR).

The concept itself is really simple: given that aligning all the interested parties in the healthcare process to come up with solid standard-based and portable electronic health records is going to take too long (see this and this), why not make it easier by skipping all those agents and having the patient be the manager of the system?

This idea is what underpins the development of several importan projects in the healthcare information sector. Big players from the technology sector (and I mean very big) are scrambling to get their systems ready:

Google Health, from Google Inc.
HealthVault, from Miscrosoft Corp.
Dossia, from Intel, WalMart and AT&T.

All of them share several important features like patient-controlled information submittal and retrieval, healthcare-provider search, health advice and information, etc.

I recommend this analysis of current and future efforts in PHINs by Vince Kuraitis and David C. Kibbe.

Chicago!

2008-03-06T23:09:00.006+01:00

Oh, how I miss you Windy City!

You really have to check out this thread of incredible pictures of that twentieth century masterpiece of architecture. Hundreds of them, all great!

(Click for the larger, glorious version)

The white-lighted building on the left of the image is the Shed Aquarium. Here's a picture of Lake Michigan and Chicago coast that I took from inside it.

John Doe(rr)

2008-03-06T22:15:00.004+01:00

As everybody who's been near a RSS reader today already knows, Apple has unveiled their SDK for the iPhone and a slew of Enterprise-oriented functionality.

But you don't come here to read what's been elsewhere for hours, do you? Venture capital firm Kleiner Perkins Caufield & Byers has announced the iFund:

(...) a $100M investment initiative that will fund market-changing ideas and products that extend the revolutionary new iPhone and iPod touch platform. The iFund is agnostic to size and stage of investment and will invest in companies building applications, services and components. Focus areas include location based services, social networking, mCommerce (including advertising and payments), communication, and entertainment. The iFund will back innovators pursuing transformative, high-impact ideas with an eye towards building independent durable companies atop the iPhone / iPod touch platform.

Legendary venture capitalist John Doerr is one of the partners that will manage the fund. He funded a few start-ups in the past. Ever heard of Netscape? Sun Microsystems? Compaq? Google?

This, my friends, is how innovation really happens: someone with guts, brains and money provides funds and oversight for a startup with a great business plan, an energized team and, hopefully, a little bit of luck.

Statistics: Spanish Innovation

2008-03-04T17:52:00.005+01:00

Failing grades. Let's look at four interesting indicators from the OECD and EuroStat:

Domestic expenditure on R&D (2006, % of total) financed by industry [pdf]:

Spain: 46.3%
EU-27: 54.1%
OECD average: 64.7% (that's an increase of 40% over Spain's figure).

Venture capital investments, early stage (% of GDP, 2006):

Spain: 0.027%
EU-15: 0.053% (almost double!)
UK: 0.224% (more than eightfold!!)

High tech exports (% of all exports, 2006):

Spain: 4.72%
EU-27: 16.67% (four times more)
USA: 26%13% (almost six times more)

Patent applications to the European Patent Office (2004):

Spain: 28,554
Denmark: 200,445
Luxembourg: 235,806
Netherlands: 243,342

The next time you're told about the great situation of R&D&i in Spain, keep these figures in mind.

Fun with chemistry!

2008-03-04T13:28:00.000+01:00

Derek Lowe (a top notch organic chemist that has worked for several pharma companies) has a great story about one of the most powerful oxidizers known to man, chlorine trifluoride:

There’s a report from the early 1950s (in this PDF) of a one-ton spill of the stuff. It burned its way through a foot of concrete floor and chewed up another meter of sand and gravel beneath, completing a day that I'm sure no one involved ever forgot. That process, I should add, would necessarily have been accompanied by copious amounts of horribly toxic and corrosive by-products: it’s bad enough when your reagent ignites wet sand, but the clouds of hot hydrofluoric acid are your special door prize if you’re foolhardy enough to hang around and watch the fireworks.

He includes this gem by famous rocketeer John D. Clark (from his book Ignition):

It is, of course, extremely toxic, but that's the least of the problem. It is hypergolic with every known fuel, and so rapidly hypergolic that no ignition delay has ever been measured. It is also hypergolic with such things as cloth, wood, and test engineers, not to mention asbestos, sand, and water-with which it reacts explosively. It can be kept in some of the ordinary structural metals-steel, copper, aluminium, etc.-because of the formation of a thin film of insoluble metal fluoride which protects the bulk of the metal, just as the invisible coat of oxide on aluminium keeps it from burning up in the atmosphere. If, however, this coat is melted or scrubbed off, and has no chance to reform, the operator is confronted with the problem of coping with a metal-fluorine fire. For dealing with this situation, I have always recommended a good pair of running shoes.

Wow, just wow :-)

What about the Spanish mortgage situation?

2008-03-03T22:49:00.009+01:00

These days, every other page in the financial media spells gloom and doom for the American housing market. Many banks and credit institutions are knee-deep in the mud of high delinquency and default rates within their mortgage portfolios. The mess is strongly compounded by the fact that American banks have heavily relied on the use of securitization. Thus, the risk of all those mortgages was distributed widely to many institutions (including, significantly, many important European banks). This situation was in large measure made possible by the credit ratings that the main credit rating agencies assigned to these RMBS (Residential Mortgage-Based Securities) and CDOs (Collateralized Debt Obligations). While the prices of homes in America kept going up everything was fine; but when the market turned down, default rates and delinquency soared and those fancy and complicated credit securities that were supposed to be super-safe, started defaulting. This is a very basic and rudimentary summary of the American mortgage crisis. The situation is akin to a sausage factory where you make sausage with every part of the animal but some great and solemn-sounding auditor (paid by you) states that what comes out of your factory is actually filet-mignon.

But the question I want to address is, what about Spain? Why isn't something (remotely) similar happening here? Well, there are a few important differences. Most of those American (and European) banks that I've refered to in the previous paragraph used something called SIVs (Special Investment Vehicles) to offload massive amounts of mortgage paper out of their balances. This strategy allowed them to elude stringent reserve requirements as defined under the Basel I capital adequacy agreement. As this Financial Times article reveals, Spanish banks tried to start doing that a while ago but the Spanish Central Bank demanded that they put an 8% reserve against those SIVs. This made the business completely unattractive for the banks. In addition to that, Spanish banks have been much more conservative, nah, scratch that... much more diligent than their American counterparts in their lending practices. Consequently, the default rates in the Spanish mortgage market are nowhere near the levels of the American market. Now, as Felix Salmon states here, the situation might be quite different if the housing market goes down significantly and many Spanish homeowners start feeling the pain of negative equity.

I don't want it to seem as if securitization is something alien to the Spanish banking sector: It's been used, and used significantly. But it's been done in a much more sensible way than in other parts of the world. Read this great and detailed explanation by Francisco Torralba at EconWeekly.

As everyone that knows me can attest, I don't spare criticism for Spain, its economic situation and immature financial markets. But in this case, one can only compliment the robustness of the Spanish banking sector and, above that, the very high quality of banking regulation that the Bank of Spain has developed in the last years. Somewhere in a bland Washington D.C. office, Mr. Caruana is smiling discreetly. And the Basel II agreement (in whose development he had a pivotal role) can't arrive too soon to help avoid the over-use and abuse of SIV's and the perverse incentives that they entail.

Berkshire 2007 Newstletter

2008-02-29T22:45:00.000+01:00

Warren Buffett's anual letter to Berkshire Hathaway shareolders has been published. You can read it here (pdf). You can learn more about investing reading those letters than with any book that I can think of. Here are the previous letters since 1977.

The guy's made a ton of money with Amazon bonds. How's that for a dinosaur that was supposed to have no understanding of the internet revolution?

Can stock prices change if the market is closed?

2008-02-29T17:31:00.005+01:00

You bet they can!

Many people that become interested in stock markets wonder how is it possible for a particular stock to open at a price below the previous day's close. Well, it's actually very simple. When you check a stock quote, the price you see is the last one at wich a share of the stock was purchased. If the stock market has already closed for the day, that price will be the quoted price for that stock until the very next business day. But that doesn't mean that the first shares that will change hands when the market opens next day will do so at that same price. In fact is actually very common for a stock to have different close and open prices.

The basic point is that the price is, at any given moment, just the crossing point at which someone is willing to buy shares and someone is willing to sell them. And nothing precludes that point from varying a great deal from one day to the next one.

Google Health is coming

2008-02-28T19:42:00.007+01:00

We already knew that Google has partnered with the Cleveland Clinic to pilot their electronic health record platform. Now Google's chairman has presented their EHR system at the HIMSS08 conference. The official Google blog provides a few details about the product and a couple of (lame) screenshots. Ironically, the people at Techcrunch are not amused with this, er, gradual approach to the actual launch of a product. Sour grapes, anyone?

When offered for universal use, I'm afraid the direct impact of this product in the Spanish market is going to be close to zero. It can't be otherwise: Google's EHR is going to be HIPAA-compliant, but will not be in compliance with Spanish personal data protection rules. And I don't think Google will take the effort to do it.

Investing for the long term

2008-02-27T12:00:00.014+01:00

This is a topic that will be frequently addressed here. I'm very interested in investing, not in playing games with the market. My admired Megan McArdle calls stock-picking and fund-picking "a very expensive hobby". Financial markets are generally very efficient and most of the existing information about any stock is already priced-in. That does not mean that it is impossible to beat the market. It's just terribly difficult. Warren Buffett famously said about the EMH:

I'd be a bum on the street with a tin cup if the markets were always efficient.
The professors who taught Efficient Market Theory said that someone throwing darts at the stock tables could select stock portfolio having prospects just as good as one selected by the brightest, most hard-working securities analyst. Observing correctly that the market was frequently efficient, they went on to conclude incorrectly that it was always efficient.

So, what's one to do? Should you try to cherry-pick a few very promising (for you, anyway) stocks and high-fee mutual funds? The answer, in my humble opinion is no. The important thing here is what Mr. Buffett actually compares: he mentions someone who is the brightest most hard-working securities analyst. Do you think he's talking about you and me? Security analysis and equity valuation require very hard work and long hours of study. Being really smart doesn't hurt either.

Mr. Buffett himself has repeatedly recommended low cost index funds as the best investment alternative for most of the people who don't have the time, the skills or the talent to perform market-beating analysis. Every now and then a study comes out pointing the ridiculously low percentage of professional money managers that consistently beat the markets (before fees!).

Here we reach a point were a few country-specific differences start to matter. Most of the investment advice you can find on the internet is specific for American investors, those lucky yanks, who have access to an incredibly broad and competitive market of financial products. When you talk about low cost index funds, for an American investor you're talking of TERs around 0.3% or lower (Vanguard Funds come to mind). Try to find that in Spain! The cheapest index funds that I've found available in Spain (from INGDirect) charge a whopping 0.99%. Taking into account the power of compounding, over a long time that difference makes for a big chunk of money (that you won't have). Besides, a portfolio of 50 (admitedly very important) companies like an EuroStoxx50 index fund has, is not what I would call buying the market. So for us poor Spaniards, the available index funds are few and expensive. Yikes.

Usually, in advanced and mature markets, there's an even cheaper (Vanguard's VTI has an expense ratio of 0.07%) alternative to index funds: ETFs. ETFs provide an easy way of diversifying a portfolio and gaining exposure to different markets, sectors and regions. But. You have to keep in mind an ETF trades like any other stock and that means that you'll need a broker. In Spain brokers are very expensive compared with the available alternatives in other countries. You have to pay, for example, something called "custody fees" (comisión de custodia), i.e. a percentage of the value of the stocks you purchased with your broker that you pay anually (or quarterly or even monthly). That's in addition to the buy/sale fees.

All this means that even taking the ETF route it is almost impossible to stay below the 1% level of expenses.

The good news: after a long time searching, I've found a broker that doesn't charge that custody fee and has a very rich offer of ETFs (INGDirect doesn't charge that fee either, but you can't purchase ETFs with them). SaxoBank is a Danish bank with an office in Marbella. The buy/sell fees are normal (for Spain) and you can check the available ETF's here (you may need to select the all regions option).

(Full disclosure: I don't receive any kind of commission from any of the companies mentioned in this post. I'm not even a customer of SaxoBank. Yet)

MBA TV

2008-02-27T06:10:00.005+01:00

If you are interested in learning about finance and business management, you could do worse than checking the resources offered by the Financial Times website. I'd like to point out these video series from New York University Stern School of Business.

If you want to get a grasp of trading dynamics without risking hard money, playing in prediction markets can be a cool alternative . You'll learn and have fun at the same time. InTrade is, of course, the big player in this field. They have a licensing agreement with the Financial Times, which offers a prediction market platform: FT Predict.

Technology adoption rates

2008-02-26T22:27:00.008+01:00

The ever interesting Visualizing Economics points to this NY Times article featuring a terrific graphic by Nicholas Felton that shows the rate of adoption for serveral mass-consumer (eventually, anyway) technologies along the twentieth century:

(Click on the image to view a larger version)

Oversized hospitals

2008-02-26T09:30:00.008+01:00

The latest issue of The Economist has an article about very big hospitals in mid-sized cities:

The most dramatic are Rochester, a medium-sized city where Mayo has long been a star business, and Cleveland, Ohio, a rustbelt city that has seen its hospitals boom and one, the Cleveland Clinic, become a new economic force. Each hospital is a behemoth: Mayo's revenues in 2006 totalled $6.3 billion, Cleveland's $4.4 billion.

Their success stems from medical innovations and excellent care. The Cleveland Clinic is America's best heart hospital; Mayo tops the rankings for neurology, digestive disorders and endocrinology. Cleveland and Mayo have also expanded through mergers with other hospitals to form regional health systems.

This is a very interesting topic: why is it generally assumed that a healthcare center has to be resource-constrained by the size of the place that hosts it? I mean, it's clear that from the point of view of providing easy access to quality healthcare for everyone in a region, healthcare centers should not be too far away and this access requirement goes against the idea of heavy concentration but as the cited examples prove, both approaches are perfectly compatible.

What is it that makes a mid-sized regional hospital grow and expand to become a world class mega-hospital? Is it management? Strategic Planning? Sheer luck? I had the opportunity to visit the Cleveland Clinic in 2006 (my fiancée was there as a visiting resident) and it really is an impressive place. The management quality and professional standards should serve as an example to everyone. The strive for improvement in every field that I saw there is not something usually found in your average hospital.

My Resume

2008-02-26T08:00:00.008+01:00

I obtained a BS in Electrical Engineering from the University of Malaga in 2001. I graduated as number 2 of that year's class.

After that, I earned a MS in Industrial Engineering, graduating as number 1 in the class of 2003.

Immediately after concluding my university studies in 2003, I started working for the national railway company, RENFE. During my time there I worked in the design, engineering and construction of two prototype freight locomotives. The project was a success and our facility was assigned a contract for building 26 locomotives more. I had the opportunity to apply my knowledge about concurrent engineering, project scheduling and quality management. The most important lessons I learned, though, were about team work.

In 2004 I collaborated with Airzone, a company that develops and manufactures innovative control systems for HVAC installations. Together with the manufacturing director and an external consultant, I was involved in generating a complete work time study for the company's two (at the time) factories. This project allowed me to put into practice my training in work measurement methodologies, systems engineering and efficiency analysis.

After that, I went to work with Premo, one of the biggest players in the automotive RFID market worldwide. I was a production engineer there, managing about 30 workers. I also led some purely technical projects related to machine vision systems. I learned many things about the highest and most thorough quality standards in the world and a lot of manufacturing engineering and production systems. It was also a good learning experience regarding people management and leadership.

Since 2006 I've been at the IAVANTE Foundation, a nonprofit fundation dedicated to highly specialised medical training. We use high-end cutting-edge medical simulators and innovative training methodologies. We also develop innovative ICT projects in the healthcare sector. I am involved as a project coordinator in the following projects:

Portal MIR is a collaborative portal and e-learning platform for all the medical residents of the Andalusia region (about four thousand).
Bank of Innovative Practices is a platform with the aim of fostering and improving innovation diffusion in the Andalusian health sector.
Informarse.es Salud is a multimedia service (available on the internet, mobile devices and in hospital TVs) with healthy living advice and basic medical education for the general population.

Hello World

2008-02-25T21:15:00.005+01:00

Hi there!

This is the first post of my new blog. Yeah, I know... big deal; been there, done that.

There are a few differences this time around. I intend to write only in English and I intend to make it useful in terms of my professional career and field of expertise. But there are a few similarities too: I'm going to have fun, meet a lot of really interesting people, learn, share and grow.

About the main topic of this blog... I'm afraid there's none. I'm too easily distracted by life's rich offerings to try and restrict the scope of this place.

I hope to make this interesting for you and me :-)