Howard Marks & Charlie Munger: It’s [Investing is] Not Easy

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…)

On Hiatus

Thanks for visiting my website.  This used to be a forum for my business school lessons learned.  However, given the privacy requirements associated with my job, my website is on hiatus.

If you want to learn more about me, you can do so here, and I always enjoy an email, so don’t be shy about reaching out via the contact form (here).

Thanks again for stopping by.

Share-based Compensation: To Add Back or Not?

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…)

USC Student Investment Fund: Annual Performance

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…)

Remembering to Keep it All in Balance

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…)

Succinct and Timeless Business Advice

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.

The Market

  • Know now your company’s value proposition (i.e. why customers should do business with you). (more…)

A Note on Competition: Avoid the Obvious

“The more challenging and potentially lucrative the waters you fish in, the more likely they are to have attracted skilled fisherman.  Unless your skills render you fully competitive, you’re most likely to be prey than victor.” – Howard Marks

Which is better: Seizing the ripe opportunity in front of you, or hunting down a mediocre one on the fringe? I would argue the latter, which I want to demonstrate with something that has been a big part of my life – surfing. Yes, surfing. I realize this is a stretch for non-surfers, but with this story I think you will see the parallels to opportunities in your life, whether they are business or personal ones. (more…)

Interesting Start-ups: Pinterest, Ness, Everlane, Shaker

A v2.0 of Ma.gnolia and Del.icio.us, Pinterest is an interesting start-up.  And judging from the number of “new follower” e-mails I get daily, it’s interesting to a lot of my friends, too.  But I’m not totally sold on this one.  Do we need another source for content curation in addition to Twitter, Facebook, RSS, LinkedIn, and traditional media websites?  For the sake of the company’s impressive list of investors, I hope I’m wrong, but nevertheless it will be interesting to see the evolution of this site along with the cadre of recently launched competitors: Canv.as, Snip.it, Svpply.com, Nuji.com and Pearltrees.com.  UI and speed to scale are going to be the keys to success in this space – and in this regard Pinterest seems to be doing a great job. (more…)