Some of you have been following the Learning Corporate Finance saga on this blog for the last few months. It is a story that started in February of this year when I finally gave in and started uploading content we generate as part of my risk training practice online. Rather than doing video which is awkward, expensive and difficult, I just took my notes, cleaned them up a bit and dumped them online.

From February to June nothing happened.

Well to be fair in mid June 2010, visitors to Learning Corporate Finance blog crossed the monthly visitors to our primary 7 year old Alchemy Technologies website which was a big deal since total traffic across all the domains we owned had just doubled. But the expected few hundred thousand dollars a month in revenues didn’t materialize. In June I almost shut the business down since I had promised myself that if in the next three months the site didn’t start printing dollars while I slept, I would put the hosting charges to good use elsewhere. I had burnt enough money in the two years that had just gone by and in another life earlier that my threshold for new experiments had come all the way down the sub-100 dollar mark.

Then one fine day in June, traffic to the site doubled and kept on the monthly growth up trend all the way till mid October when the site crossed 7,500 visitors and 15,000 pageviews a month mark.

End September we experimented with our online finance course store when a reader asked for a downloadable pdf file and before we knew it we had our first sale before the first week for the online finance store was out. Within the next few weeks it became apparent that the content plus excel spread sheet approach was working. Slowly but still working. While the amount was only 4 dollars and 99 cents, to see a concept finally generate revenues after ten years of tweaking the business model was a personal first. Just like becoming an actuary after failing one exam after another for eleven years.

While we didn’t win at the Asia Pacific ICT Awards in Kula Lumpur, the event allowed me to finally spend some face time with Zafar and Badar Khushnood. Both suggested that it was time we moved the business from a subdomain on oilinsights.net to its own home at http://financetrainingcourse.com. The next three weeks were a painful exercise in discovering everything I didn’t know about redirecting a sub-domain to its new home. Traffic and advertising revenues plunged as the site went up and down all the time but surprisingly still content sales still held up and crossed a hundred dollars.

November then became our first month at the new home. Course inventory now included courses on Value at Risk, Interest Rate Models and Simulation, ICAAP, Asset Liability Management, Counterparty Limits and Treasury Profitability. Our biggest sale came in at 49 dollars and caused a minor celebration at work. While we were still not breaking even, the few sales a week kept spirits up. As expected the redirection slowed traffic down initially but as soon as the site was up Adsense revenues went through the stratosphere. In September just before the APICTA Awards we had crossed 24 dollars a month. October because of the redirection disruption as well as traffic generation efforts was a disappointment at 17 dollars a month. November just blew past all expectations and closed at 51 dollars. Gross content sales crossed 160 dollars. By end November we had started seeing multiple sales a week up from a single sale a week since the online finance course store went up in late September.

And now standing at the end of the first week of December traffic is finally back at the pre-redirection levels. Today we crossed yet another important milestone when Karachi was unseated as the city with the most visits in a week by London and New York and while at a national level domestic visitors fell to the 5^th place.

CTR is slowly climbing up as I experiment with the theme, ad placements and keywords and RPM is down to a dollar per 1,000 adsense views.

So here is why you start reading the post in the first place. I am not sure what has worked or not worked but somethings have certainly done better than others. Here is my list of suspects that I think have helped with traffic, adsense revenues as well as better and higher SERP results.

Depending on how much time I get over the next few weeks, I will try and cover some of these items on this blog. But till then think about the above factors. Would love to hear about what has worked for you or not. And if you could a similar post on how to go from 20,000 pageviews to a 100,000 pageviews in three months, I would love to read it.

Qualifiers. Everything I know about SEO I have learnt from two close friends over the last few months and I am not an SEO specialist by any stretch of my or your imagination. But the real lessons were learnt doing it with my own hands and trying to see what works or doesn’t work with Google. All of this was done with a team of three people working part time on content over the last 10 months or so.

The workshop is aimed at treasury, risk and fixed income investors who use interest rate forecasting tools for arbitrage, ALM, risk or credit policy decisions. Teaching methodology is based on intensive hands on model building and application cases.

The workshop covers four different families of interest rate models starting with the simplest CIR (Cox, Ingersoll & Ross) and finishing up with the multi-factor HJM model. We then look at applications of the same models in Asset Liability Management, Fixed Income Arbitrage, monetary policy announcements and predicting unexpected interest rate shocks. A final session extends the analysis to a macro economic model of the economy using core interest rate drivers and Monte Carlo simulation.

By the end of this workshop participants will be able to:

• Use models to identify fixed income arbitrage opportunities in treasury term structure
  
• Build basic and advance interest rate models in excel for forecasting and extrapolating interest rates across the full range of maturity tenors
  
• Review the impact of external shocks (such as oil prices) on domestic interest rate environment and monetary policy
  
• Review interest rate inputs for ALCO meetings as well as ALM models.
  

The packaged workshop represents an integrated skill building exercise that combines concepts with practical hands on application and is aimed at professionals who deal with pricing, valuation and portfolio management issues related to fixed income products in Pakistan. Please see the Interest Rate Models workshop announcement on Learning Corporate Finance for more details.

Ever since I started running risk management training workshops and teaching Executive MBA students, I had been looking for a textbook that walked the middle ground between plain English, as few mathematical equations as possible and exactly the right topics I needed to teach. It had to be concise and to the point yet cover the basics of quantifying risk, implementing risk policies, derivative pricing, product types and real life market applications. Easy to read but deep enough to be a handy desk reference, perhaps a cross between a HBS case and a customized text book.

The book that came closest to this was Paul Wilmot on Quantitative Finance. But the 3 volume Wilmot or the single volume Wilmost summarized text was beyond the price range of most of my students in the region.

Towards the end of 2008 we started work on a project that resulted in the product that became Risk Frameworks and Applications. Let me be honest and upfront, we had to let a few formulae in (Paul Petty will never forgive me) since the simplest pricing model also required elementary mathematics. But we compensated this failing by including as many rich cases as we could find that would help students understand and appreciate the world risk managers and derivative traders live in.

It was a book inspired by questions, not answers. While the first edition weighed in 195 pages and covered the basic essence of topics I taught while teaching derivative pricing, risk management and product application courses, it quickly became apparent that the list of topics need to be expanded. Work on Risk Frameworks and Applications started even before the first edition hit the printing press.

The second edition came out as an electronic edition this evening. New topics include multiple chapters on Asset Liability Management, Fixed Income Instruments and pricing. From the mundane Forward Rate Agreement to the exotic commodity linked note. Also a brand new chapter on building Monte Carlo simulators as well as on valuation of mortgage backed securities with multiple interest rate models. Once again the focus is on pricing and applications and building models in excel spreadsheets rather than complex derivations.

At almost 400 pages, the book is double the size of the first edition and possibly contains 70% of the content found on this site. Like all good book, this is a book that we wrote primarily for ourselves. We hope that you have as much fun reading it as we had putting it together. To buy your copies at the discounted introductory price please see the Online Finance Course Store. The book is listed under the Corporate Finance Section.

Ps. Here is the summarized table of content for those of you who would like a quick look see…

TABLE OF CONTENTS

PART 1: INTRODUCTION TO RISK MANAGEMENT FRAMEWORKS    

Chapter 1 – Framework    

Chapter Two – Applications    

Chapter Three – Calculating Value at Risk

PART 2: DERIVATIVES    

Chapter One – Terminology

Chapter Two – Products & Pricing

Chapter Three – Variations

PART 3: DERIVATIVE PRICING

PART 4: ADVANCED TOPICS    

Building Equities, Commodities, Currencies and Interest Rate Monte Carlo (MC) Simulators in Excel    

Monte Carlo Simulation Application: Forecasting the Monetary Policy Rate decision    

Advanced Fixed Income Securities    

Forward Rate Agreements    

Forward Contracts    

Swaps    

Caps and Floors    

Accrual Swaps    

Range Accrual Note    

Commodity Linked Note    

Asset Liability Management    

Duration and Convexity

ALM Risk Measurement Tools    

Applications    

Liquidity Management    

Liquidity Ratios and Analysis    

Liquidity Management    

The Treasury Function    

Trade Flows (FX desk)    

The Treasury Function Operations

Valuation of Mortgage Backed Security (MBS) Pools    

Valuation of Mortgage Backed Securities    

Factoring in Prepayments    

Annexure A – Modeling Defaults – The KMV structured approach    

Annexure B – Calculating Option Adjusted Spread    

Annexure C –Calibration of the Cox, Ingersoll and Ross (CIR) model    

Principal Component Analysis (PCA)    

PART 5: UNDERSTANDING COMMODITIES RISK    

The Crude Oil Price Debate    

Gold and the Australian Dollar    

Correlations between Crude Oil and Other Commodities    

Crude Palm Oil Futures    

Crude Oil and Inflation    

Historical Spreads in Bond Yields    

Volatility Trends in Commodity Prices    

Commodity Correlations    

PART 6: RISK METRICS    

Sometimes while going through an online course in addition to core training concepts it helps if we have a real life case to illustrate a core learning point. Here is a list of cases, walk through, numerical examples and samples of addressing a specific type of analysis available on Learning Corporate Finance. While the intended audience is business school students, analysts and associates, anyone with an interest in finance or the related finance risk and computational finance topic can benefit from the following list of detailed business cases.

Non numerical case studies

Finance Training Courses Case Studies: Marketing-New Markets Case Study: Entry and pricing strategy for UK, for a US insurance software firm

Finance Training Courses Case Studies: Online Education – The battle for online MBA – Strategy and Tactics

Finance Training Courses Case Studies: Corporate Finance Training – Advertising strategy for an e-education portal

Finance Training Courses Case Studies: Derivative Products: Course Guide

Finance Training Courses Case Studies: Middle Office review: Sample middle office gap analysis report

Finance Training Courses Case Studies: Risk Management: Sample Board Risk Policy document and Risk Policy table of content

Finance Training Courses Case Studies: Online Finance – Building a business case for risk management

Calculation case studies and walk through examples

Finance Training Courses Case Studies: A Risk framework for Crude Oil and Petrochemical industry: Course Guide

Finance Training Courses Case Studies: Asset Liability Management – Crash Course

Finance Training Courses Case Studies: Building a valuation model for an online education business

Finance Training Courses Case Studies: Forecasting the Monetary Policy decisions – will there be a rate cut or not

Finance Training Courses Case Studies: Calculating Value at Risk

Finance Training Courses Case Studies: Calculating Value at Risk (VaR): Course Guide

Company specific business case studies

Case Studies at Finance Training Courses: AMD: Valuation & Projections: Case Guide

Case Studies at Finance Training Courses: Office Depot: Ratio Analysis

Case Studies at Finance Training Courses: Electronic Arts (EA): Corporate Finance:

Case Studies at Finance Training Courses: ODP and Staples: Ratio Analysis

Case Studies at Finance Training Courses: ODP and Staples: Comparative Ratio Analysis

Case Studies at Finance Training Courses: Credit Process: Baldwin Piano

Case Studies at Finance Training Courses: Corporate Finance: Limited Liability (LLC) or C-Corp

Eight months ago I asked myself a simple question. Is it possible to make money online selling content and advertising to people I haven’t met with only Google as a facilitator. The general answer I had received over the past few years was yes but the details about “how” were missing.

Three friends held out their hands so that I could experiment and discover this brave new world. The first is the guru of SEO led businesses in Pakistan, none other than Zafar Khan of Sofizar. Zafar’s openness and willingness to lay threadbare the secrets of the magic sauce behind SEO was amazing as well as inspirational. The second was Badar Khushnood at Google who helped out multiple times in demystifying myths around Google, facilitated troubled waters around my Adsense account and also gave me the most clear headed future roadmap for Learning Corporate Finance. The third and final will unfortunately remain un-named for now but if it wasn’t for this gentleman the adventure would have never happened. For it was this mentor who actually sat me down patiently one Saturday afternoon, almost a year ago and walked me through the process of connecting the dots between dollars, pageviews, content and SEO.

So about a year later, here is what I have to report. After 8 painful months and a number of false starts and embarrassing mis-steps, the adventure that started as Learning Corporate Finance is now a full fledge business. No earth shattering numbers, mouth watering valuations, or printing press revenues as yet, but still a business.

In our first proper month with an online store in October 2010, 7 months after launch, Learning Corporate Finance booked US$160 in content sales an another US$17.6 in advertising revenues. So just under 180 dollars in revenue with about 7,000 unique visitors a month and 15,000 page views in our first month with an online store. And this despite the fact that from a contribution, growth and effort point of view October was a write off on account of my participation in the APICTA ICT Awards and our effort to find the business a new and permanent home at Finance Training Courses. The three months of my comical efforts (tragic from a personal point of view) to redirect the old site to the new one deserve a book rather than a post which I will write as soon as I have recovered from the trauma of the last two weeks.

So now the game is on in trying to move this forward as quickly as possible by adding as much traffic as quickly as possible before the year is out. The goal in October was to cross 30,000 visitors and 90,000 pageviews per month before the end of the year and I am open to any help, suggestion and ideas that will make that possible.

For now go give Finance Training Courses a peek at its new home.

This course focuses on an alternative method of implementing a two-dimensional binomial tree compared to the traditional method of building a binomial tree in excel presented in most option pricing text books.   The alternate approach is based on the techniques documented by Professor Mark Broadie at Columbia Business School as part of his coursework in Security Pricing and Computational Finance courses at Columbia University and allows us to extend a simple 3 step tree to a  50 – 100 step option pricing tree in a few minutes.

The course starts with pricing European calls and put options, followed by pricing american options and closes by reviewing option pricing for Knock out and Knock in (Sudden Death). We also review the special case of a down and in option.

Options pricing – Using binomial trees to price options in a spreadsheet

Options Pricing – Pricing Call Options – Option pricing spreadsheet – Binomial trees

Options Pricing – Pricing American Options – Calls and Puts – Spreadsheet implementation – Binomial trees

Options Pricing – Pricing Put Options – Option pricing spreadsheet – Binomial trees

Options pricing–Exotics Options–Pricing a Capped Call–Excel implementation – Binomial trees

Options pricing – Pricing Knockout exotic options – Sudden Death Options – Down and out call options

Options Pricing – Binomial Trees – Pricing Sudden death Options – Down and in call options

If you would like to purchase and download the excel examples covered in this course, please checkout our online finance course store for our pdf course download and example excel spreadsheets and templates.

Options Crash Course for dummies

Options & Derivatives Products

Advance Options & Derivatives Crash course

Options Pricing reference