World champs!

Spain has made it! After a vibrant game we beat a very, very disappointing Netherlands (Soccer owes Cruyff's Netherlands a trophy, but this year's team was far away from what Dutch soccer stands for).

We have been the best team in the World Cup and we have deserved it. The whole country has gone crazy and everyone was out in the street yesterday after the game and was out there again today, as the players have returned back home.

But if there is a way to summarize the passion of this moment, I'd go for the radio. Just go to this page of Spanish daily El Mundo and enjoy the narration of Iniesta's goal...speechless!

July 11, 2010: a day to remember

Google vs Facebook on social...again

Last February I wrote a couple of posts about how Google and Facebook were somehow challenging each other: Google was making a move into social with Buzz and Facebook was planning on creating @facebook email accounts. I did not expect much success of either and, five months later none of the initiatives has crystalized.

Now seems like Google is striking back with a social initiative, named Google Me. Apparently, according to Techrunch, it was Kevin Rose, Digg's CEO, who first mention this on his Twitter. A lot of comments have been made about this and Google is reportedly giving top priority to this venture. This is not Google's first move on "pure" social networks, since it already owns Orkut, which is very popular in very important markets such as Brazil.

I understand it if Google is worried about the Facebook effect. More and more people spend more and more time on Facebook (and on other social networks) and that means less time searching on Google and, in turn, fewer ad impressions and clicks on Google.  Btw, some sources are claiming that FB's 2009 turnover was around $800m, more than doubling that of FY 2008...impressive.

I have to admit that I am curious to see the new thing that Google will be offering. That said, I am doubtful about whether I will be signing up. If it is to offer the same thing Facebook does, what is the point? And at the end of the day I will only sign up if my friends do so. Or maybe someone will be coming up with an app that will sync FB and Google Me... but then again, what's the point if the offering is the same?

Wait and see...

Bankers and the World Cup

The World Cup semifinals are already here: Uruguay-Holland and Germany-Spain. If a month ago, at the time the tournament was kicking off, the three European squads were in the shortlists of favorites of many soccer fans and very few people, if any, had Uruguay in their heads. After the group-stage of the World Cup many voices claimed that the Latin American soccer was on top of the European one but after a couple of rounds it seems quite obvious that Europe has excelled.

But leaving fans aside, it was quite interesting to see that bankers themselves also made their predictions about who would be winning the Cup.

For instance, JP Morgan pulled together a model based on four metrics: (1) "valuation" ("market valuations of the teams and FIFA rankings), (2) "market & analyst sentiment" (result expectations and recent team shape), (3) "company fundamentals (consistency in market sentiment and JPM's success ratio), and (4) "price trend" (trend in probability to win and trend in FIFA ranking.

Based on the model, Brazil was the strongest team in the World followed by Spain, England and Holland. Germany and Uruguay trailed on the 12th and 18th spots of the rankings. In other words, we could say that JP Morgan's model accurately predicted two (Spain and Holland) of the four semi-finalists.

Goldman Sachs has issued a
World Cup report since France
1998 and it has been arguably
taken into consideration from
time to time in some countries
(such as the irritation in Brazil
 in 2002 following Goldman's
failure to include Brazil - the actual
winner - among the favorites). 
The model used by GS combines
FIFA rankings and odds from
a number of bookmakers, and
the teams are also penalized
according to how tough their
schedule is on average.

According to their probability
model, Brazil, Spain, Germany
and England - in this order - would
come out as favorites. Thus,
Goldman Sachs has two teams
right (Spain and Germany).




Finally, UBS has also produced a thorough report about the World Cup and about South Africa in general. According to UBS, Brazil, Germany, Italy and Holland were the countries more likely to win the Cup. That translates into UBS guessing right two (Germany and Holland) of the four semi-finalists.

All in all, this means a technical tie among the three investment banks, with each of them guessing two of the four semi-finalists, though the three of them provide different estimates. What it is obvious is that none of them got the right answer for their most likely winner, Brazil. Spain comes second in JPM's and GS' reports. Hope they are right!!