Swiss Finance Academy Journal Day 7
What did I learn today... hmmm well, I learned that 50+ years of hard work, leadership, and insightful direction in a company can be squandered by one or two deviant persons at the executive levels of a corporation. What's even more incredible is that these two CEOs managed to almost bankrupt this great company in less than 2.5 years!!
In my Mergers and Acquisitions lessons we are learning about a company called Beatrice who actually started in 1890 and grew throughout the 20th century until it's untimely demise in 1986 or so. The details we are studying intimately are how companies such as this one can grow there value by acquisitions and then grow their value some more by divestitures (a fancy way for saying the sale of a division of a company to another company, group, bank, individual, etc.)
So, value can be created by management techniques, economies of scale, infrastructure, advertising, increased access to capital and so on. Value also can be created by favourable market conditions, sales of assets to others better suited to run them, announcements/news about assets that the market shows favour to, and a whole host of other ways which I am learning about now.
In other news, this week is shaping up to be pretty fun (compared to last week) as we watched several Bloomberg.com videos in class showing Jim Rogers and his amazing views on the market and what's taking place in it. In fact we watched him in a video shot last September and saw that most of his predictions were correct! He's quite an astounding guy and I hope we get to analyze more of his videos and what he forecasts in class.
We also watched a video from October 31st 1987 that was pretty controversial as it dealt with the ethics surrounding large mergers and acquisitions, and the people who prosper from them most. It will be interesting to see how Sris (our new teacher) puts it all into an investment banker's perspective.
-Marcus
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