Sourcing, underwriting and constructing a portfolio of investments that produce attractive investor returns is tough and sloppy work. That is why I liked this quote from Michael Mauboussin on putting process around investing.
“We have no control over outcomes, but we can control the process. Of course, outcomes matter, but by focusing our attention on process, we maximize our chances of good outcomes.” — Michael J. Mauboussin
I recently came across the below life tips from Byron R. Wien, Vice Chairman, Multi-Asset Investing, at Blackstone. Good reminders to keep life heading in the right direction!
1. Concentrate on finding a big idea that will make an impact on the people you want to influence. The Ten Surprises, which I started doing in 1986, has been a defining product. People all over the world are aware of it and identify me with it. What they seem to like about it is that I put myself at risk by going on record with these events which I believe are probable and hold myself accountable at year-end. If you want to be successful and live a long, stimulating life, keep yourself at risk intellectually all the time.
2. Network intensely. Luck plays a big role in life, and there is no better way to increase your luck than by knowing as many people as possible. Nurture your network by (more…)
After 3+ years of hibernation due to the silence required by my technology investment banking role at Credit Suisse, I’m excited to be back to writing!
When I left off in 2012, my posts were getting increasingly long and complex, and as a result, more time consuming. I enjoyed long-form writing when I had a lot of free time. However, nowadays, I have less time for writing due to increased demands from work and a growing family. As a result, now that I’m back to writing, it may be more sporadic and it will certainly be more brief and less heavily edited. (more…)
As I continue to unwind from investment banking, I have been enjoying reading a lot again. I have already worked my way through more books in the past six months than I did during the the three years of working at Credit Suisse. At the same time, I have been back to writing more, too. My writings have mostly been investment memos at work, but I am beginning to consider posting on my blog again as well. Overall, I am feeling more reinvigorated than ever before.
At the same time, it feels like our little tech sector corner of the universe is reaching a turning point. It seems like the pendulum that has been swinging within the industry from fear to greed since 2005, (more…)
While analyzing stocks for buy/sell recommendations for the USC Student Investment Fund, I discovered one key factor that often flipped my valuation opinion from buy to sell. This factor is share-based compensation (accounting treatment, here). When it’s added back in a discounted cash flow analysis, cash flow goes up and a stock looks like a buy, yet when it’s subtracted out (like a cash expense), cash flow goes down, making a stock look like a sell.
Share-based compensation is the largest valuation issue that I see discussed the least. (more…)
This past week we held the USC Student Investment Fund (SIF) annual meeting. The annual meeting is an event that draws approximately 60 SIF alumni, during which each of the five student-run mutual funds presents its annual performance to the crowd. Based on last year’s interrogation of the students by the audience, which featured some tough questions about Netflix (among others), my classmates and I (pictured left) were a bit nervous leading up to the event. However, we did a great job – we effectively presented our performance, investment rationale and fiduciary duty.
Over the last twelve months I, along with my classmates Kai Wang and Abhinav Anand, managed the California Small Cap Fund (CSF), an approximately $1mm mutual fund which invests primarily in California-based small cap companies. Kai, Abhinav and I put a lot of work into managing the fund and the SIF coursework; however, it was work that paid off. We learned (more…)
As school comes to a close and I head off to do ibanking at Credit Suisse, keeping it all in balance seems to be a closing theme. During my TEC (The Executive Committee) meeting last week, I discussed this issue at length with my mentor, Pete. He reminded me that it’s great to be successful in business, however, it’s even better to be successful in business and life. Pete then told me the stories, lives, and careers of people he knows. Some sounded great, success in business, family and friends. Others sounded downright miserable, complete with family members suing each other. (more…)
A few weeks ago I got some timeless advice from a guest speaker in my TOC program, an on-campus forum for MBA students to interact with classmates and seasoned executives to better manage one’s business and career. The guest speaker, who requested no attribution for this post, gave me and my classmates the below advice. This is one of the best, succinct, lists of management principles I have come across, so I thought it would be nice to share it here for a broader audience. The italics are my own notes.
Lessons Learned Along the Way
The three critical elements of a company are: Market, Management and Money. You need all three for a good business. Never forget, growing companies need money. Growth is affected by external financing needs, margin, ROE, etc.
Know now your company’s value proposition (i.e. why customers should do business with you). (more…)