5 posts tagged “acquisition”
So what did I learn today? Well even though the lesson was a little tough to get through and follow I did learn a lot about volatility and risk analysis. We also learned about Realized compound yield which used the coupon payment from a low yield bond to re-invest at a higher rate. This was an interesting concept indeed.
Next we looked in depth at Portfolio Theory and the risk associated with having many different types of stock. The best thing about the concept is the fact that through correlation the stocks can have a canceling out effect with regards to risk and minimizing the impact of it by choosing stock with opposite(non-related) correlations (correlation co-efficient).
Finally we learned with Sris a bit about Investment Management Process, but unfortunately since his information was proprietary we couldn't completely copy the slides we could only hear about such concepts like Strategic Asset Allocation and Tactical Asset Allocation. We looked at Active vs. Passive Strategy in regards to the Investment Management Process, the Timing and Selection of such companies, and the Simple Return over Several Periods.
I did enjoy the discussions on Risk and Portfolio Theory and look forward to more insights on this topic.
-Marcus
Today I learned so much with regards to M&A and watched a video with the CEO of Black Swan who offered his insights on the dollar, the Asian markets, and the spreads of carry trades.
However I feel like the majority of my learning experience happened when Sanjay took us through the accretion/dilution example in the evening time which outlined how a company derives value when it is either being bought or when it is acquiring.
-Marcus
M&A, M&A? Where for art thou M&A? The word of the day is M&A (Mergers & Acquistions) and that's what we learned about in depth today. I was confused with the reading last night pertaining to RJR-Nabisco case, but today in class it was clarified greatly. It would seem that just a little bit of explanation and example goes a long way in helping my learning process. We'll see if the same can be said for homeworks in the coming week...
This morning the lecture was pretty good starting out with an analysis of Marc Faber and his comments a couple weeks back on Bloomberg.com. It is interesting how the “big Fish” professional traders/investors like him and Jim Rogers often have opposing views as to what positions they will and will not take and what they think the economy will do in the future. We spoke about inflation and I learned how taxes are a form of revenue for the government as your individual income rises. It's pretty insidious to have inflation constant to increase tax revenue over time. It's also interesting how inflation could be correlated to morality and general economic emotion...that's a point I'll have to ponder on some more.
Last night was quite an interesting discussion with Sanjay leading the class through interview techniques and the like. The class was lively and had many questions for him. He told us that the best way to interview for a position in I-Banking is to walk the interviewer through your resume. This should be in the form of a well rehearsed anecdote that shows who you are, how you handle various situations and how you'd add value to the company without saying that line explicitly. I can't completely tie my life-story into investment-banking and why I'd like to do it for a career, but I am working on it. :)
-Marcus
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
Well, it's back to the grindstone after a wonderful trip to Milan yesterday. This week seems a little more relaxed with Sanjay opening up the morning with good and insightful anecdotes wrapped in the occasional joke or two. This week we'll be learning all about Mergers and Acquisitions, the likes of which I have no clue about so it should be interesting.
Our new teacher, Sris Chitterjee, definitely knows his stuff and will be quite a valuable resource for any questions we as a class may have regarding this new material. I guess what I really learned today was the magnitude of buyouts and mergers that actually take place around the globe. I really only thought the ones that were reported on the news were the only company takeovers that actually take place. The reality is that hundreds of mergers happen probably ever month by companies around the world that I have no idea about.
Lastly, we play soccer today as the SFA guys rallied and organized some teams for a little fun before dinner. It was awesome and our team won twice in a row, but lost the third game due to my absence :P Or at least that's what I'd like to think...
-Marcus
