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Nikkei Index dropped to an all time low in five years…
What little money I have is falling into a critical condition.

The end of Present Value… Nikkei, a major economic newspaper in Japan, ran a column corresponding to the current financial meltdown. It argues that this financial crisis was caused by excessive reliance on the idea of Present Value. Investment bankers put illusory values on anything around the world. Even though an asset has no value on balance sheet, they can create substantial value by calculating present value of probable future returns brought by the asset.

But I don’t think Nikkei’s argument is appropriate. Nikkei missed an important point of present value theory, namely risks. Modern financial engineering put great emphasis on estimating and dealing with risks. According to the present value theory, risk is the most important factor that determines a discount rate.

It can be said that banks which bought subprime loans simply took risks to maximizing their profits. Who is to blame is not the present value theory, but the carelessness and negligence of the investors who underestimated risks and didn’t prepare for downside scenarios.

I believe in Present Value and other received financial theories, such as real option. If you deny Present Value, then what do you rely on? Only book-value? No kidding! What to do is not negating financial theories, but better understanding the theories.

Having some miserable days due to my last employer, I have, at long last, started moving forward. I left Anchor Technology, a privately held web integration and data centre company, and I am now working as an independent contractor on my own.

While doing some part-time consulting projects for some clients, I have started writing a business plan for my own start-up. Hope I can tell you what I am planning shortly.

In early April, I was travelling around Kii Mountains, a World Heritage site in Japan. It was a great diversion, so now I’m completely OK.

I bought a NIKE driver today. I can hardly wait for the next round.

Golf is just like a life. It’s never ever easy, but it’s wonderful if you want to enjoy it.

I downloaded Radiohead’s latest album ‘In Rainbows’ a day before. As you may know, you can download it on the official website at the price you set. You can get it for nothing if you like. (Though 0.45 pence transaction fee is inevitable…) I think this is the greatest step to reform digital contents distribution. I feel rights-holders have been overprotected in this business. Consumers should receive more benefits.

Well, talking about the music, Radiohead is still Radiohead. It doesn’t cheer you up, but it’s extremely beautiful. I love this new album and paid 20 pounds as a mark of respect both for the quality and for this brave attempt.

Here it is.

http://www.inrainbows.com/

It’s been a long long time since I last updated this blog. I guess some people think I have junked this blog, or others think there has been some trouble with me. But I am OK. It’s just been a busy since I changed jobs in Jun.

Any news?

Well… The new job is challenging and I enjoy it. I have been assigned to finance director of an IT solution company.

My wife is fine. She also changed jobs and now she’s working as a dispatched worker. More relaxing and more time to enjoy her life.

I am still enthusiastic about golf, but scores are still terrible…

Takashi has come back to Japan from UK and we had a small reunion with some MBAs.

I’ll keep you posted from now on.

Maybe…

If I can…

I went to my hometown this holiday. Yaotsu is a small town near my city. It was nice to vist there.
Also, I met some old friends enjoying golf and drinking. Good time always passes quickly.

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You look like a young executive or something, boy.

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OK, it’s adjusted for your tail.

I’ve just uploaded my paper on the “Livedoor scandal”.

Here are acknowledgement, abstract and Q&A.

Or you can just download the paper from the link below (PDF file, 850KB).
Livedoor and a New Wave in Japanese Corporate Governance
Written on 1st SEP 2006

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Hi there. Cherry blossoms have almost gone now, but I have a pleasure to come. Well, I’d been thinking whether or not going to the graduation ceremony at Cambridge on 12th May, but I have decided to go finally.

Hope I can see a lot of my classmates there.