Nov 24, 2012 – Reflections 101

1.) Perspective might be everything, but knowledge is power.

2.) You are constantly faced with decisions and there is always incomplete information.  This paralyzes most people.  Not you.  Make fast decisions and move forward knowing that at best 50% of decisions are going to be right.  Move the ball forward every day.  Be quick to spot  mistakes and correct.  Put the lid on what smells bad.

3.) The cost of failure is not high.  The cost of failure is calculated.

4.) Don’t celebrate when you’ve raised money.  Know that you’ve signed up for more obligation.

5.) Tap expertise of others in the organization or elsewhere.

6.) Be thorough, just like what an analyst needs to be.

7.) Be clear about what is opinion and what is fact.  Understand different types of investors and views on a particular idea.  See the macro as well as the micro.  Use technical analysis to augment fundamental work.  Be obsessive about managing time.  Focus on a few critical factors when analyzing and communicating a stock idea.

8.) Filter out the noise.  Easy to say, difficult to do.

9.)  Include perspective of others garnered in interviews and surveys.  Cite sources, make concise summaries of findings.  Seek out opinions and alternative ideas from readers/others to help in research.

10.) Have insatiable curiosity and intense focus on work.

11.) Do not confuse analysis paralysis with zero analysis.

12.) Attitude over Aptitude

13.) Entrepreneurship is Entrepreneurshit.  Reality versus Perception.

14.) In the end they’re usually just that – a story.  Sometimes a fantasy.

15.) Maybe they’ll be proved right some day.  Liquidity killed the cat.

16.) Execution proves your worth. Period.

17.) Don’t promise unrealistic things.

18.) It does require an absolute, singular commitment level.

19.) Wake up extra early (often before 6am) to get my runs in.

20.) Schedule runs with teammates and even with customers.

21.) The work pressure mounted, the food piled in, the sleep disappeared and the exercise was non existent.

22.) I am not “dieting.” No crazy plans for me.

23.) … being an entrepreneur is very unsexy. Long hours. Time away from family. Low salary. High risk. High stress. It only looks sexy when you read TechCrunch. There is no shame in being an exec at a company or whatever.” – Mark Suster

24.) what gets lost in reading about the glamor of Facebook, Twitter, Zynga, GroupOn and the like is that most startups fail.

25.) “wantrepreneurs”

26.) No deal is ever done until the ink is dry and the money is in your bank account.  Never take your win for granted.

27.) Losing sucks.  But it makes one a better competitor.

 

————and sometimes I’m just tired. But everyone else seems relentless.  Hate the fact that money never sleeps in other people’s minds.

 

*****

Fear of Missing Out Drives Deals

How much an acquirer will pay for a business is determined in the course of merger negotiations by reference to comparable companies trading in the public markets, comparable M&A transactions, and the projected discounted future cash flows of the target business, overlaid by the competitive dynamic of the sale process. At the end of the day, the acquirer pays what it decides owning the target business and its associated cash flows would be worth to it, moderated by what it has to and can afford to pay. The book value of assets on the target company’s balance sheet has nothing to do with it.

-FT.

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3 Responses to Nov 24, 2012 – Reflections 101

  1. Hi FT!

    There’s another side of entrepreneurship which doesn’t have to be “long hours.”
    Businesses require a lot of your time and effort definitely but there’s another side of the coin where you can establish a system, automate if you have to, so you can free yourself from the business and have more time for yourself. If you haven’t read Tim Ferris’ 4 hour work week I highly recommend it, might give you some great reflections as well. I’m not an expert on this but somehow I believe it’s doable.

    Talking about risk and taking action, I’ve come to realize that those who’ve been exposed to gambling early on have a higher tendency to take action even when they don’t know all the information. Somehow I’m starting to believe that a little gambling experience is actually beneficial for those who want to be successful in life – in essence, it can teach people to take action and not play it safe all the time. But of course, I still do not advocate gambling, I just noticed that some of the most successful businessmen I know now have engaged in some form of gambling early on in their lives.

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    • i dont like the term gambling because the truth is… taking risks and gambling are not the same thing. Someone who takes calculated risks (odds game really) isn’t really gambling his/her money (whether business or the stock markets etc), kasi if the person knows the value and how the market sentiment is, then he/she can find people who will buy companies at a cheap margin, and sell it higher. The better the company’s growth prospects, the more people find it being more valuable even as it goes higher (since EPS growth is growing anyway). Hence, its like that. As to automation etc, there’s no such thing as instant profits in the market, just like in the businesses. In a bull market, everyone seems a genius, but it wouldn’t last. I would think that the people who really manage their businesses on a day to day basis (whether trading or companies) somehow have professionals that really look at the books, check out the branch openings, talk to the investors relations etc. Other than the chart (which speaks much about supply and demand), tangible assets and earnings power propel stocks to rise (especially with liquidity and low interest rates). Well that’s just me. I’m not a believer kasi in Tim Ferris’ 4 hour workweek. I havent read that book, but believe me. Tim ferris doesnt just work 4 hours. That guy does so many things. He just never called it work.

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      • Got your points FT.

        When I referred to gambling I really meant gambling like betting on cockfights and playing in the casino.

        As for Tim Ferris, that’s true, I don’t think he really works just 4 hours a week as well. It’s part of his marketing scheme. The basic idea behind his book I believe is to do things more effectively so you can free up your time to do other things you want to do.

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