Advice from Marshall Heinberg, Oppenheimer’s Head of Investment Banking

Some classmates and I had the chance to sit down with Marshall Heinberg, the head of Oppenheimer’s investment banking practice, for an overview of his firm and an outlook on the investment banking industry.  Mr. Heinberg’s insights were unique and bold; below are three general takeaways from our conversation.

  1. If you’re an MBA student looking to get into banking, he suggested that you consider industry versus product roles carefully.  He recommends finding a career that will provide you with a depth of non-commoditized intellectual knowledge.  I took this to mean select industry coverage over product investment banking, as industry coverage gives you the chance to develop a deep knowledge base of a particular industry, which brings me to the next great insight… (more…)

Operations: The Bullwhip Effect

Ever wonder why the semiconductor industry is cyclical?  I did.  Apparently the answer lies in a concept called the “Bullwhip Effect”, which is the notion that the standard deviation of demand is amplified up the supply chain.  In other words, if consumer demand has a standard deviation of 10, wholesaler demand standard deviation may be ~20, and manufacturer demand standard deviation may be ~30.  Below is a brief summary of the causes of the Bullwhip Effect and a few solutions to mitigate it.

Causes:

  • Order Synchronization – if many customers sync their ordering timing, volatility of supply chain increases (more…)

Interesting Startups: Flipboard, About.me, Airbnb, Greplin, Instragr.am

Call it an old habit, or an undying passion, but I constantly flip through GigaOM and TechCrunch articles in my RSS feed.  I peruse 100+ articles per week; and here are a few companies that have caught my eye over the past month: Flipboard, About.me, Airbnb.com, Greplin and Instagr.am.  I am particularly excited about Flipboard, genius, though I’m afraid that if my girlfriend sees this company it will further place me on the hook to buy her an iPad.  C’est la vie…

Guest Lecture by Sheldon Stone of Oaktree Capital Management

A self-proclaimed “credit geek”, Sheldon Stone, a co-founder and portfolio manager at Oaktree Capital Management, held a guest lecture in my finance class.  Mr. Stone, a guest of my professors Suh-Pyng Ku and Randolph Westerfield, provided an interesting overview of his firm, the high-yield debt market and his investing approach.  Mr. Stone manages approximately $16B in high-yield bonds and he is at the forefront of his industry, so I feel lucky to have had the chance to listen to one of the great investors in today’s high-yield bond market.  What follows is a summary of my notes, so please excuse any gaps, as Mr. Stone was covering a lot of topics at a quick pace.

To lead things off, Mr. Stone provided an overview of his firm, (more…)

Quote: An Investor on Investors

I came across a great quote from Howard Marks, the Chairman of Oaktree Capital Management.  In his memo titled Tell Me I’m Wrong, he states, “As I see it, every investor is either predominantly a worrier or predominantly a dreamer.”

I love this quote because it succinctly sums up the personality trait differences and the job function differences of debt versus equity holders.  Which one are you?

1st Place: USC Venture Capital Investment Competition

Today my teammates and I competed in the internal USC Venture Capital Investment Competition, an intra USC business school competition to determine which team will represent USC at next year’s official VCIC competition (a national case competition put on my UNC).  The basis of the competition is to act the part of a venture capitalist, listening to entrepreneur pitches, conducting due diligence, selecting a company to invest in, and structuring a deal.

Our 6-person team, including two VC(ish) guys, a marketing guru, a business development (more…)

Giants Win the World Series!

Giants fans, for the first time in 56 years and the first time in my life, we can proudly say, “The Giants Win the World Series!” Being in Los Angeles rather than San Francisco for this event has been a little bittersweet, but thanks to the Internet and a good friend I have been able to share in the celebration.  Below is a great video of the revelry from missionlocal.org and a photo of the intersection of Polk & Vallejo sent to me by a friend.  My heart is with you San Francisco.

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Marketing: The State of the Social Gaming Industry, October 2010

I just wrapped up a 20-page paper for my marketing class.  The project, called an “Integrated Strategic Marketing Plan”, required me analyze six aspects of a company of my choice, including an: Industry Analysis, Company Overview, Competitive Landscape Mapping , Customer Analysis, Value Chain Analysis, and a SWOT Analysis.  I chose to do my project for a friend who recently started a social gaming company which builds games for Facebook.  I selected his company rather than a publicly-traded firm (which would have made this project a lot easier!) because I wanted to not just get a grade in my class, but also help my friend analyze his business.  For obvious privacy reasons I can’t disclose the entire project on my blog; however, I am able to share my industry analysis.  Be prepared to learn about one of the fastest moving tech industry segments that I have researched during my five years of covering the technology industry. (more…)

Bing Gordon Speaks at USC

Better late than never.  Below is a week overdue summary of Bing Gordon’s speech at USC on October 14, 2010.  Bing was the Chief Creative Officer of Electronic Arts from 1998 to 2008 (after holding a myriad of other positions at EA since his involvement in its founding in 1982).  Today he is a Partner at Kleiner Perkins Caufield & Byers.  As a Kleiner Perkins Partner, he sits on the board of some impressive companies, including Zynga and Amazon. If you want to learn more about Bing, here is his CrunchBase profile.  Bing is a light-hearted, insightful person, so be ready for an entertaining yet powerful discussion.

Before I dive into Bing’s discussion, I want to thank my classmate Ashkun Zaker for putting together the outline that served as the backbone for this post, an outline which I have edited and expanded.  Thanks for the guidance Ashkun!

Bing led off the night with an age breakdown (more…)

Free Video Content and Cutting the Cord

The intersection of television and the Internet is quite interesting.  It has Hollywood shivering, fearing that its industry is going to head the way of the record industry; it has technology entrepreneurs giddy, excited by the prospect of using Internet-connected TVs to disrupt content providers by providing free video content; it spells trouble for cable providers; and it reads opportunity for streaming video services.

Here are a few great articles and thoughts on why this “inevitable” switch to free video content might not happen so quickly (or at all), and how Netflix is evolving to become a potential threat to cable operators, while at the same time it’s a slave to the very cable firms that it is disrupting. (more…)