First Night Out in Prague, Parts 1 - 4

Part I

Although I’ve been in the Czech Republic for over two weeks now, the way my travel itinerary worked out and combined with the fact that I had a week long RBE course, I had yet to go out in Prague (or “Praha” as it’s called in Czech) on a Friday night. After wandering the streets of Prague, we decided to get a coffee at a local coffee shop, Segafredo, to warm up and get a little caffeine fix.

The waitress recommended what turned out to be quite a fantastic restaurant – a Cuban restaurant named “La Bodeguita del Medio.”

I opted for the lamb chilindrón or in Spanish "chilindrón de cordero", which featured spicy pieces of lamb in a red wine sauce and was served with Cuban baked potatoes - "mojo." I couldn’t resist a side order of their “Sleepy” black beans as an additional side dish. I ordered a great red Chilean wine, which I believe is called Syrah Rapel from the El Bosque Estate winery. To top off such a great meal, a couple of the guys, myself included, ordered Cohiba Siglo II Cuban cigars.

Of course, I can’t forget to mention the price – only 1200 Czech crowns (~$60 USD). What made it so authentic, besides the décor and blaring Caribbean tunes of Salsa, Merengue and Bachata was the fact that their cigar server was actually a Cubana!

I found it quite intriguing that a Cuban woman in her mid to late 50’s would be working in Prague of all places. I inquired about her story. She recanted that she had received work authorization in 1979 to work in the Czech Republic in the textile industry while Czechoslovakia was still under communist rule. Since she got married in 1982, the Cuban government granted her permission to leave the island. Although she still goes back to visit, she admitted that she was accustomed to her life in Prague. However, she certainly perked up when she was able to speak her mother tongue.

A couple of T-birds who lived right across the street from the restaurant met us outside to take us up to their fabulous apartment. On to part II…

Part II

It is very difficult to describe what the “Thunderbird Mystique” is all about in a succinct fashion. Instead of merely defining what it is, I find it may be easiest to put some words around it by telling a story. If you can imagine historic Prague architecture from the 1700’s, which is still quite intact, the apartment building we entered was a blast from the past. It featured the kind of old school elevators that you typically only see in the movies. We finally made it up to the third or fourth floor and we entered the apartment to see a live jazz quartet jamming out some of modern jazz’s finest tunes – “Blueberry Hill”, and “When the Saints Go Marching in” – in English. The lead was a 77 year-old, white-haired man who played the trombone and had a swollen upper lip from playing so passionately. I haven’t listened to such great jazz music since the days of my “History of Jazz” class as an undergraduate. The tenants of the apartment, Wake and Mike, were great hosts. They had a fridge stocked full of Budvar, a beer made by the original Budweiser brewery (more on the name confusion in a different post).

Of course, no party would be complete without two bottles of Absinth. Watch out for that stuff. It is 70% proof and burns all the way down! The living room (and whole apartment) was so expansive that a few of the guys would, after doing a running start, slide onto the floor as if they were stealing second base –classic frat boy behavior. After the band was clapped off from their final song, we jammed out to some songs that all of the Monterrey boys sang in unison, including “Pásame la botella.” Next on deck? Why clubbing of course.

Part III

The club we went to, Zlaty Strom Bar & Club, wasn’t my selection especially since our waiter from La Bodeguita del Medio had recommended several other places with a more “mature” crowd. However, we had a good time, save the lone T-bird (will remain unnamed) who vomited on the stairs by the entrance – definitely not a good look. I’d suggest putting the absinth bottle down. The music wasn’t great and the vibe didn’t possess any real ambiance that a great club in New York or London would feature. Nonetheless, one cool aspect of the club was that they had rotating hair stylists who cut the patrons’ hair – for free! I doubt I would trust my mop to a drunken 21 year-old bartender/hair stylist, but it was entertaining in any event. I forgot to mention that in Prague apparently it isn’t illegal to roam the streets or even the subways with an open beer bottle in hand. Not that I would do that, of course. I ended up meeting some Mexicans at the club who were also studying in Prague. Since the last train leaves Prague for Čelákovice at 12:10 am, we had to wait until morning to catch a morning train in a few hours.

Part IV

After roaming the streets of Prague in desperate search for a shawarma, we decided to head to Toby’s neighborhood, Andêl, which is located to the east side of Prague’s river, Vltava, the longest river in the Czech Republic. I respect his taste for apartments. Unlike the first apartment, which was huge and had great location, Toby’s was small, but had all of the finest amenities – nice furniture (a comfy couch to sleep on), flat screen TV, internet, and a fabulous bathroom with fixtures that would make many Manhattanites jealous. We had some good conversations until it was time to get a little shut eye.

Škoda

Today we toured the Škoda (pronounced SHKO-dah) car manufacturing plant in Mladá Boleslav, a city in the Central Bohemian Region of the Czech Republic, about an hour from where I'm staying in Čelákovice. It was a great opportunity to compare and contrast what I saw at the Volkswagen plant in Puebla, Mexico. Interestingly enough, in 2000 VW became the 100% shareholder of Škoda. They purchased Škoda in order to increase their presence in Central and Eastern Europe. Škoda approved the purchase as they were able to pursue synergies such as R&D breadth, as well as other partnering benefits such as capital infusion and technology transfer knowledge. Ironically, Škoda's sales are cannibalizing VW's profits in Western Europe.

Škoda's slogan is "simply clever", which I find pretty appealing to B class drivers (read below for more details). After the tour of the plant, one of the GM's of the company came back to our school to give us a presentation. I noticed he was a little apprehensive in his speech delivery (flashbacks to Public Speaking Class with Prof MacDonald came to mind). Although he used signposting, he tended to say "um" (or at least the Czech equivalent of "eh") quite a bit, which decreased his overall flow. However, I admire him for tackling such a technically challenging presentation in a foreign language.

Škoda is a very fascinating company. It has several models including the Favorit, Felicia, Octavia, Fabia, Superb and Roomster (in no particular order). He described car classes that range from A00 for city cars, A0 for supermini cars, A for compact cars, B for midsize cars, C for extended midsize cars, D for fullsize cars, E for SUVs, to T platform for vans. These letters, I found thanks to Wikipedia, refer to the VW platforms for which many of the Škoda cars possess. The Octavia A5 competes with cars such as the Audi A3 and VW Golf A5. The recently added line, the Superb, which is a B class sedan, is equivalent to the Passat and actually shares the same platform.

The leadership team have transformed Škoda with a three-phase strategy: Transformation ('94 - '00), Consolidation ('01 - '04) and Expansion ('05 - '08). Their marketing position is described as price-valued. Their designs are described as differentiated from VW's classical design. I think the design is quite appealing. They sold 555,000 units in 2006 and have plans to sell 600,000 by 2008 and 1,000,000 cars by 2015. Oh yeah, as Professor Moffett pointed out in class, many Europeans say "turnover" instead of sales or revenue, as did the Škoda GM.

After the tour we toured the "muzeum" as its spelled in Czech. They had classic cars dating back to as early as the 1920's. I was surprised to learn that their first car was made available for sale in 1905 (3 years before Ford rolled out their Model-T!). Their emblem features their "famous winged arrow."

As I listened to the manager deliver his speech I couldn't help but daydream that someday I would be in his position. Also, now I plan to pursue a PhD someday, maybe in strategy. Who knows...Dr. Lazo has a nice ring to it. For now, it's back to reading for RBE Europe...

Can you say Čelákovice?

Finally made it to Čelákovice, Czech Republic. Although I had signed up for the term abroad last semester, I hadn't really prepared myself mentally that I would actually and finally wind up here. So far it's been a blast. Besides the baggage scare due to a near miss on my connecting flight from London to Prague on CSA Czech Airlines via British Airways, I made it A-OK. I'm just a little upset that I forgot my camera.

Right now it's 5:20 am and I can't seem to sleep so I'm up doing a little reading for my first day of Regional Business Environment (RBE) Europe. Professor Babarinde (aka Professor B) chose two excellent and fascinating books on Europe. I have to admit that my knowledge of Europe is very limited and only to that of Western Europe. Tomorrow we have a geography quiz on the countries of Europe. How many do you think you can get right? Test yourself at the following page: http://www.mccollam.com/fun/geoquiz/


Some students say we have to know the capitals as well as bodies of water. If that's the case, I don't think I'll score perfectly. Well, back to more reading...

The Street

"I never knew how poor I was until I started making a little money."
- Bud Fox


What I most like about my Financial Management course is the macro-level perspective Professor Moffet provides in his lectures. Instead of reviewing the inner workings of how to calculate the cost of equity over and over again, he focuses on how to use financial information in the larger context of business.

In class, he played a couple of movie clips, one from "Other People's Money" starring Danny DeVito and another classic movie from 1956 called "Solid Gold Cadillac." The other night I was at Blockbuster hoping to rent "Other People's Money", but it turned out they didn't even carry it. So, I perused the shelves to see what other movies had some elements of finance. I was very happy with the selection I made - "Wall Street."

I couldn't believe how effective Charlie Sheen was for being so young - he was only 21 or 22 when he made the movie! The movie has many memorable quotes, mainly from the star of the movie, Gordon Gekko, the power and greed-hungry corporate raider (similar to Danny DeVito aka "Larry the Liquidator" in "Other People's Money"). However, the line that most struck me was the one stated at the top of this post. It's sort of a take on Socrates quote, "The more I learn, the more I learn how little I know."

The most important financial concept I'll take away from this movie is the understanding of what the term "cost to trade" means. There are actually three aspects of this concept: brokerage fees, the bid-ask spread and market-impact costs. Their book definitions are a little bit much to get into right now, but basically they go as follows:

• brokerage fee - the fees paid to a broker to execute a trade
• bid-ask spread - the money a specialist or market-maker makes on the two prices quoted (e.g., 100 - 1001/8) (buy and sell)
  
• market-impact costs - a specialist bears risk when buying shares because s/he may not know if the trader is selling stock b/c of a insider information, so to hedge agains the risk, the specialist may create a bigger spread thereby increasing the bid-ask price.
  

Well it's late and I'd better get some zzzz's so I can study some finance tomorrow....