“There’s never lack of pretty women – only lack of alcohol”
~an anonymous man
This phenomenon is called "beer goggles." Actually,scientists at Manchester University conducted a special research to determine the extent of the “beer goggles" effect. The project was sponsored by the eye care firm Bausch & Lomb PureVision. (What for? I guess, they are working on special lenses that would protect drunk men from ugly women. )
First, they discovered that “beer goggles” affect men and women alike. Second, they found that the formula “more beer – more beauties around” works only to a certain limit. Third, additional factors include the level of light, smokiness and – what a revelation! - the subject's eyesight.
Thursday, December 27, 2007
Thursday, December 13, 2007
Ivanhoe Mines 1
Recent movements in the share prices of Ivanhoe Mines (IM) have been quite interesting. As an (aspiring) economist, I want to believe in market efficiency, but I doubt that the market was efficient when it comes to the IM share price in 2007.
The company owns the exploration license for a huge gold and copper deposit, Oyu Tolgoi, located in Southern Mongolia. The potential resources of Oyu Tolgoi, which includes 71 billion ounces of copper and 31.3 million ounces of gold, represent a total value between 60 billion dollars and 100 billion dollars. And the projected production of 1.6 million ounces of copper a year would represent roughly six billion dollars at four dollars per ounce price. And the production of 900,000 ounces of gold a year at 1,000 dollars per ounce price would represent a billion dollars. Therefore, that the mining project is extremely important for Mongolia because it has the potential to double, triple or even quadruple Mongolia’s GDP. On the other hand, the deposit is also the principal property of Ivanhoe Mines. In other words, the fate of Mongolia as well as the fate of IM depends on the mining project.
Among publicly traded company, IM is the most familiar to Mongolians. The company’s share is traded in the Toronto Exchange and New York Stock Exchange. So many Mongolian expatriates in North America bought its share just because it was the most familiar. As copper prices have soared, its share price has skyrocketed, rising four fold in the last four years. But this year, it has been extremely volatile.
There were two factors in the background of the movement. After the announcement that IM had reached a tentative agreement with the Mongolian government in June, shares price had soared. To me it seemed the investors were pretty naïve. The agreement was only preliminary and it needed parliament approval. More importantly, the details had been kept secret. So it was not clear that how the public would perceive and how the parliament members would vote. Some may have thought given the huge potential future profit, IM would just buy the parliament members. The ruling party is notoriously corrupt, so that is no entirely unjustified.
But since the legislators face an election in the next year, they cannot be indifferent to the public opinion. Also we have fiercely militant civil movements who are ready to stage public protest even could try to storm the government house if they see the parliament approved an unfair agreement. Since we have very weak and hugely unpopular government formed by razor-thin majority, a massive public protest could bring an early election. And the ruling party knew it. So it was not clear that the agreement would pass the parliament if public perception was negative.
However the investors were optimistic and the share price had increased by 30% in few months after the announcement.
Then the details of the agreement emerged as it was introduced to the parliament discussion. At the end of June, I read the agreement on the day they distributed copies to the MPs. I thought it was a daylight robbery. The terms of the agreement were totally unfair. Mongolia’s fraction from the project would be miniscule if copper price would stay at current level. But it did not matter what my opinion was. What mattered was how the public would react. So I tried to predict the public reaction.
The company owns the exploration license for a huge gold and copper deposit, Oyu Tolgoi, located in Southern Mongolia. The potential resources of Oyu Tolgoi, which includes 71 billion ounces of copper and 31.3 million ounces of gold, represent a total value between 60 billion dollars and 100 billion dollars. And the projected production of 1.6 million ounces of copper a year would represent roughly six billion dollars at four dollars per ounce price. And the production of 900,000 ounces of gold a year at 1,000 dollars per ounce price would represent a billion dollars. Therefore, that the mining project is extremely important for Mongolia because it has the potential to double, triple or even quadruple Mongolia’s GDP. On the other hand, the deposit is also the principal property of Ivanhoe Mines. In other words, the fate of Mongolia as well as the fate of IM depends on the mining project.
Among publicly traded company, IM is the most familiar to Mongolians. The company’s share is traded in the Toronto Exchange and New York Stock Exchange. So many Mongolian expatriates in North America bought its share just because it was the most familiar. As copper prices have soared, its share price has skyrocketed, rising four fold in the last four years. But this year, it has been extremely volatile.
There were two factors in the background of the movement. After the announcement that IM had reached a tentative agreement with the Mongolian government in June, shares price had soared. To me it seemed the investors were pretty naïve. The agreement was only preliminary and it needed parliament approval. More importantly, the details had been kept secret. So it was not clear that how the public would perceive and how the parliament members would vote. Some may have thought given the huge potential future profit, IM would just buy the parliament members. The ruling party is notoriously corrupt, so that is no entirely unjustified.
But since the legislators face an election in the next year, they cannot be indifferent to the public opinion. Also we have fiercely militant civil movements who are ready to stage public protest even could try to storm the government house if they see the parliament approved an unfair agreement. Since we have very weak and hugely unpopular government formed by razor-thin majority, a massive public protest could bring an early election. And the ruling party knew it. So it was not clear that the agreement would pass the parliament if public perception was negative.
However the investors were optimistic and the share price had increased by 30% in few months after the announcement.
Then the details of the agreement emerged as it was introduced to the parliament discussion. At the end of June, I read the agreement on the day they distributed copies to the MPs. I thought it was a daylight robbery. The terms of the agreement were totally unfair. Mongolia’s fraction from the project would be miniscule if copper price would stay at current level. But it did not matter what my opinion was. What mattered was how the public would react. So I tried to predict the public reaction.
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