Economics: Are People Always Rational?

Am I always rational?  Yes.  At least I would like to think the answer to this question is yes, but in reality, I’m guessing the answer to this question is somewhere closer to usually.  Presumably most people are in the same position (except for those who are irrational — yes Kim Jong-il, I’m looking at you).  I raise the issue of rationality because yesterday in Professor Eastin’s MicroEcon class we touched on a topic I have recently been interested in: behavioral economics.

For the non-econ members of the crowd, let’s quickly review the three tenets of economics: 1) people respond to incentives, 2) optimal decisions are made at the margin (e.g. marginal cost, marginal utility, etc.), and 3) people are rational.  I’m on board with (more…)

Readings: How to Lose Time and Money

How to Lose Time and Money: Paul Graham, co-founder of Y Combinator, a venture firm / incubator, provides a great piece of food for thought about time and money management (two very valuable skills in my opinion).  I’m working on managing my time, and I promise, if  I earn a fortune (operative word if) I will try to heed Paul’s words about the psychology of not losing a fortune.

Paul’s thoughts are a good segue into an upcoming post about rationality.  Stay tuned.

Readings: Bank Failures, Employee Equity, and AOL Kicking The Tires at TechCrunch

Banks Keep Failing, No End in Sight: Blood in the streets equals opportunity.  I guess this is why PE firms are busy buying banks.

Employee Equity: A good explanation by Fred Wilson from Union Square Ventures about the role and structures of employee equity at start-ups.  As Fred says, this stuff gets complicated quickly and can cause costly mistakes — seek counsel when pricing (because you don’t want to get burned by 409A) and structuring employee compensation.

Breaking: AOL Close to Buying TechCrunch: Wow, if this is true, what a coupe for Michael Arrington, et al.

Tom Barrack and Rob Lowe Speak at USC

Last week I attended a talk by Tom Barrack and Rob Lowe about “Making Movies, Making Deals, and Making it Big”, held at USC’s Bovard Auditorium (capacity approx. 1,000).  Tom Barrack is the CEO, Founder and Chairman of Colony Capital, a private equity real estate company based in Los Angeles; and Rob Lowe is an actor who is well known (in my mind) for his roles in Tommy Boy, The West Wing and Wayne’s World.  The talk, which was moderated by a USC professor, gave the opportunity for each man to give some interesting insights into their recently announced deal to acquire Miramax from Disney as well as their ethos toward life, investing and acting.

I took more away from the event in the form of life lessons than insights into their transaction, however, the advice each man offered was quite valuable.  The key points raised during the talk were: (more…)

Readings: Ramius Flexing Muscle, Wall Street the Sequal, iPad’s Success

Ramius Is Flexing Its Muscles

Gotta love activist investors.  As an accountant at PwC, I spent some time at Ramius — an impressive operation (and I love that Peter Cohen chews unlit cigars in his office/trading floor while holding court).

Printing on the iPad. A smashing success: The iPad is transforming media firms, and frustrating them

In-magazine interactive targeted advertising seems like a monumental opportunity; this combined with taking control of digital distribution (AAPL) are going to be big.

Wall Street, the sequel. Goldman whacked: Egged on by hedge funds, Oliver Stone turns on Goldman Sachs

I saw Wall Street: Money Never Sleeps on opening night in Marina Del Rey.  My vote: 4.5 out of 10.  Don’t expect anything close to the original.

Management Communication: Key Takeaways

My first business school course was Management Communication for Leaders. I was interested in the class for three reasons: 1) I can’t over emphasize the importance of good communication skills in the workplace, so any chance to improve is welcomed, 2) good public speaking skills are invaluable, but hard to acquire, and 3) feedback via a 360 review from subordinates, colleagues and bosses enhances self-awareness. This class did exactly that. Here are the key takeaways in the three categories cited above. (more…)

Introduction: An Ideas Book

As my MBA program at USC’s Marshall School of Business got underway, I quickly found myself writing interesting anecdotes related to my lectures in the margin of my notebooks.  I was extrapolating my professor’s teachings to my own life experiences in technology M&A, entrepreneurship, and investing.   Each idea helped me connect my academics to the “real world”.   My haphazard approach to writing my thoughts in the column of my notes initially worked well; however, after one month in my MBA program, I found a problem: my eight notebooks were littered with ideas in the margins.  I could no longer efficiently collate my ideas.

Just as my notebooks began to look like a disorganized mix of  notes and  musings, I had an “aha moment”.  While sitting in Professor Yaniv Konchitchki’s (great teacher) accounting class, a second-year MBA student gave (more…)