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Between making Excel sing and a rolodex

John Duke — Tue, 16 Mar 2010 18:16:12 -0700

A friend of mine looking for work said to me today, "If you're 25, you can make Excel sing, and you can work 80 hours/week, you are set. If you are 40, have a big rolodex, or 10 years experience in one area, you are set. I feel like I am in the middle or neither."

Do you agree?

I suggested that's a narrow view, perhaps inspired by the current job market or maybe by his current search. I do know people between 25 and 40 who are finding jobs, and not just because of an Excel skill set or a rolodex. Deep experience does help, but even that can be overcome with some good networking and self-promotion.

If finance is your bag and you are trying to get into it and your base of experience is lacking, you could take a model-building class, which is what my friend did, or maybe take a crack at your own small advisory shop or independent research firm or provide stock analysis via your own blog. Perhaps even do some pro bono work for someone - I have a friend who did that for a small family office.

But don't limit yourself. Try some of the things Seth Godin suggests (whose blog you ought to read, by the way), like setting up and running an online store, writing a book or a blog or producing small films online. Start an online community for people facing the same plight as you.

Most important, don't give up.

Are you risk averse?

John Duke — Fri, 12 Mar 2010 13:40:14 -0700

Answering this question might help you determine whether investment banking is the career choice for you.

Do you think bankers are big risk takers? Some seem to think so, but they are not. In fact being a banker is sort of the antithesis to being an entrepreneur.

To be a successful banker, all you have to do is show up every day with a good attitude and sacrifice almost all of your time to do it. You'll tend to get out-sized paychecks and if you manage and save your money properly you might well retire in your 40s. Although you may look like you're 60 at that point from the stress and work hours.

There are unique industry dynamics that cause large layoffs from time to time, which is undoubtedly a risk. The industry, after all, is like one giant accordion. But once you're on Wall Street you can usually find another banking job if you're still motivated to do so.

That's not to say bankers can't become entrepreneurs. They do that all the time. But that's because they want to take more risks, and with that comes more upside. But a career banker is a risk averse person.

On doing corp dev

John Duke — Thu, 11 Mar 2010 22:15:50 -0700

Want to do corp dev? Do a stint in banking. That's a good way to get there - not the only way, but a good way. You could also have been a controller or an industry professional or perhaps some sort of renaissance man but the clearest path, if there is one, is banking.

But banking is a big sacrifice. And corp dev jobs can be hard to come by. But that's the way there.

Problem is, you probably won't know whether you want to do corp dev when you decide you want to be a banker. After all, most people who do banking have no idea what they want to do. Besides that, you probably won't know what corp dev is, even after you've been a banker.

Here's what corp dev is: M&A inside of a company (not a bank) where you actually have to understand the industry and the business and become relevant fairly quickly because corp dev groups tend to be relatively small. If you come from banking, that can be a big change.

But it's more fun, because you're doing the work from the inside and it helps build the business. And you develop an industry skill set. You also have better work hours, but lower pay. In my opinion, the latter is worth it in spades.

If you have corp dev (or banking) questions, email me. I'm happy to answer them.

On drafting a slide deck

John Duke — Wed, 10 Mar 2010 10:47:09 -0700

Bankers and other finance professionals use PowerPoint almost as much as they use Excel. Slide decks, after all, are their main tools of communication, their organizational weapons. But they could spend less time in PowerPoint than they probably do.

Here's how it tends to work at banks, for example. An associate will get some vague directions from a director to build a presentation that will ultimately contain valuation outputs and other content that will take hours to put together. The associate assembles the presentation using the resources at his disposal and shows a completed draft to the senior banker.

Then the pain begins. Your work output will inevitably not be what the banker wanted. The clean white pages you walked in with will become soaked in red ink. And you'll spend hours iterating on it.

Instead, story board it first. Take a pile of blank printer paper and sketch out what you think the banker will want to see. Flip the pages to see that the story make sense. Then show it to the banker to get a reaction. You'll get feedback up front and will have spent a fraction of the time you otherwise would have.

Few people do enough story boarding but it will save you time and help maintain your sanity.

Valuation is made up

John Duke — Tue, 09 Mar 2010 23:14:18 -0700

This blog has meandered all over the place for coming up on the past two years. So, being a corp dev guy who practices finance and all, I'm going to focus on writing a series of short posts that cover financial and banking topics.

Topic 1? Valuation is made up. Sorry to take away your innocence if you didn't know that. But it's true. It's not rooted in science. There isn't a "best way" to do it. There may be better ways, and sensible ways, but it's made up.

Talk to a leveraged finance banker and he might swear that the EBITDA multiple is the gold standard. Talk to an investor and she might live and die by P/E multiples. There's a guy named Ken Fisher who claims to have "invented" the price-to-sales multiple - I won't dwell on the problems inherent with that but he made it up.

The first person I heard actually admit that valuation is made up was when I was attending my six-week training program at JPMorgan. We were learning about accounting, which is also made up but has a specific set of rules, when the professor casually tossed out the idea that valuation is nothing more than imagination. Heads turned, jaws dropped and people probably wondered why we, as future bankers, had to train for six weeks on something that is only fabricated.

Sorry, as Simon Cowell might say, but true. Which is why bankers and investors and corp dev guys like me look at comparables and DCF models and other metrics that helps us triangulate on what the right valuation might actually be. And even then, we still don't really know. In an M&A or investor context, valuation is just a guide that helps you get to your willingness to pay - an economic concept that, as you'd expect, is also made up.

Postage

John Duke — Thu, 14 Jan 2010 22:33:52 -0700

Cool postage on a letter I received the other day:

Happy holidays from my alma mater

John Duke — Wed, 16 Dec 2009 10:36:17 -0700

Deck the Halls from Claremont McKenna College on Vimeo.

The M&A market

John Duke — Wed, 25 Nov 2009 11:04:24 -0700

The M&A market is plagued by two things right now - sellers who have unrealistic value expectations and buyers who have unrealistic value expectations. There's a big gap. And it's true across corporate M&A, real estate, autos and the like. For those of you about to email me with the name of the latest deal that got done, I'm not saying there is no M&A activity - just that in general it's hard to reach a deal. One side has to give at some point. Which will it be?

A "V" or a "W"?

John Duke — Mon, 23 Nov 2009 10:34:11 -0700

Is the much-talked about "V"-shaped stock market recovery happening? Sure it is. Just take a look at the chart of the S&P 500 below. The "V" is obvious and has a long tail heading off to the right. Kind of like someone wrote a "V" on a piece of paper and then kind of dozed off and her pen kept going to the edge of the page.

Have investors dozed off also? Maybe. We're in midst of the largest shift in the political landscape since the 1930s. Not since then has government become so involved in the private sector, whether it's healthcare or financials or automobiles. We can argue about whether that's a good thing or bad thing, but this shift is going to result in massive wealth redistributions and economic dislocations and the stock market doesn't tend to like that. Which is why I'd argue for a "W" versus a "V". Is now still a good time to own stocks? Probably. But I'd be wary.

A random mash-up post

John Duke — Sat, 21 Nov 2009 13:34:44 -0700

This morning I went running for the fourth time this week. Not bad for my first week out running since before the summer began. Waterskiing is so much more fun to do in the mornings but so much more difficult when it is 30 degrees outside. Some may say that about running too but to them I say, nonsense.

I read an article the other day about the "activation energy" required to get outside and exercise in the winter months. The term is from chemistry and relates to the level of energy needed to start a reaction. Sometimes you need only a little, sometimes a lot. When it comes to exercise outside, generally you need less in the summer when it is warm and the days are long and more in the winter when it is cold and the days are short. I agree, but just like when I go waterskiing before work, I feel so much better after I've gone out there and run a few miles.

And it is so much better than belonging to a gym. I love not belonging to a gym. Everywhere I've ever lived I've always felt compelled to belong to one and so joined one when I lived in New York and again when I lived in San Francisco and again when I lived in Chicago. And I constantly felt like I HAD to use my membership because I was paying good money for it and inevitably didn't use it enough for the cost. That plus the gym is so artificial. I appreciate things like swimming and yoga and spinning and recognize that sometimes a gym membership is the only way to do those sorts of activities. In fact I used to do yoga a lot more than I do now and would like to get back to it. But at the same time there are clear, tangible upsides to not having a gym membership that I'm quite content.

Today when I went running I took a break on the north side of a body of water called Wonderland Lake. Sitting down on a clump of dried mud and grass, I admired the view of the Flatirons shooting skyward to the south and the crystalline water in front of me, gently lapping the muddy shoreline. The sun's more shallow angle this time of year caused its reflection off the water to be particularly blinding but I didn't mind. The barren foothill to my right looked like someone had momentarily taken a giant can of white spray paint to it and then run off in a hurry. But given the warmer temperatures today that snow will disappear shortly. As I sat there the almond-colored leaves on the trees behind me sounded brittle in the breeze, no longer soft and pliable like they were a few months ago.

I always have known this but as I rested there I realized again that the cool thing about being a writer is it makes you more aware. More in tune with what's going on around you and more observant. Because as a writer it's your job to look for inspiration so that you can put those things into words.

Down market?

John Duke — Fri, 20 Nov 2009 10:38:26 -0700

A colleague of mine said of another company's stock performance yesterday, "Not bad in a down market." A down market? The S&P 500 is up 62% from its low on March 9. Hardly a down market, but interesting how that perception lingers. Which means it is still a good time to buy stocks.

Mysterious figure

John Duke — Tue, 17 Nov 2009 15:20:58 -0700

I'm reading a book about Buddhism called Buddhism Plain & Simple by Steve Hagen. Say what you will about Buddhism or the book or whatever - this post isn't really about any of that. It's about an image on p.28 of the book that had me stalled for a week. Literally. Here is what the author says in the paragraphs preceding and following the image:

---

Truth or Reality is something vague, mysterious, or hidden. You don’t have no go to someone else to find it --- not to a teacher, or a Buddha, or your parents, or a priest or rabbi or shaman, or any authority whatsoever. Nor is it something you can look up in a book. Truth comes to us through seeing. To see is to know.

Seeing needs no further verification. It’s immediate and as one with Truth. But we’re usually not very skilled at seeing what is actually presented to us.

For a concrete example of what I’m referring to, look at the picture on the next page. Believe it or not, this is a near-photographic rendering of something very familiar, something you’ve seen (either in person or in pictures) countless times.

If you do not immediately recognize what it is, then notice your state of mind. Notice that it is, to some extent, confused.

Some people, when they first see this picture, say, “I think it might be a man lying down.” But they say it with uncertainty. They’re not quite sure. They believe it might be a man reclining. (That’s what I thought when I first saw the picture.) But there’s no sense of seeing, no conviction that you know what the picture depicts.

Keep looking at the picture. I assure you that when you actually see what it is, all your uncertainty will immediately vanish. You will know what the picture is. All beliefs and uneasiness about it will instantly cease.

If you haven’t yet seen what this picture is, keep looking at it for a while. Eventually you’ll get it. And when you do get it, notice the sudden shift that takes place in your mind. (If it begins to seem hopeless and you need help, you’ll find the solution in the text on page 114. But try to hold out until you do see what it is, so you can witness the shock of recognition and the profound shift in your mind.)

Did you notice how your mind relaxed when, suddenly, you saw, and knew you saw? You state of mind, which before was vague, mysterious, fuzzy, confused, and uncomfortable, was suddenly transformed the moment you saw. You had clarity and total conviction. And that clarity and conviction will remain with you each time you view this picture again. If somebody says to you, “It’s a picture of a man lying down,” you’ll know they’re off the mark --- and no amount of argument is going to influence you.

This is analogous to the difference between seeing and simply having a belief, an idea, a concept.

The buddha-dharma points the way to a similar, but more universal and profound, sense of “Aha!” It’s not about pondering some vague, faraway realm. It’s about here and now. About waking up to this moment, seeing this for what it is. And, just as your state mind changed once you saw what the picture was, when you suddenly see the situation you’re in, you experience certainty. Things clear up.

This is called enlightenment, or awakening.

This awakening is available to all of us, at every moment, without exception.
---
And, the image:

As I said above, it took me a week of picking up the book, staring at p.28 for a bit before going to bed, and putting the book down after having failed to see what it is. I refused to read on until I could see. Yesterday evening, after looking at it some more, I finally saw. When I exclaimed, "I see it!" my wife replied, "Wow. Now that's tenacity."
The reward for me was in trying and trying and not giving up and finally succeeding. If you don't immediately see what it is I'd suggest you return here and keep trying. Because it is fun once you finally do see it.
Just don't see it right away - otherwise you'll make me feel bad.

Veterans Day

John Duke — Wed, 11 Nov 2009 13:39:37 -0700

I was going to write, "Happy Veterans Day" but I'm not sure that's the right way to think about it. Is it? Perhaps it should be more of a directive, like "Commemorate Veterans Day."

My generation of my family is really the first since World War II to not serve in the military. My grandfathers were colonels in the Marines and the Army. My father served in the Army and my uncles served in the Navy. And those are just a few examples.

Because they and others served, you and I can sit here today and do what we do.

Here is a commemoration of our veterans.

Snow day

John Duke — Wed, 28 Oct 2009 12:58:59 -0700

The most magnificent tree in our yard

Leaves with snow

Heavy branches

Twigs

Pine needles

Grammar

John Duke — Sun, 25 Oct 2009 21:30:25 -0700

The pet peeve that has annoyed me lately:

When people write about a company in an email and use the wrong pronoun. Let's say that company is Google and it has just reported its financials.

Most people will write, "They reported good numbers today."

They? We're talking about one company, not a bunch of companies. Correct grammar is, "It reported good numbers today."

Even if we're talking about the management team, that's singular. So you'd say, "It reported good numbers today."

Members of the management team? That would be, "They reported good numbers today."

Anyway - the use of "they" when talking about a company is so pervasive that it is used thoughtlessly by many smart people. Which makes you question whether they're smart. Just my two cents.

Wierd dreams

John Duke — Sat, 19 Sep 2009 04:00:00 -0700

Stu's View exclusive

Crazy? I think not

John Duke — Fri, 18 Sep 2009 13:13:33 -0700

As I looked around the lake this Friday morning at 7:00am I turned to my friend Dave and said, "There are no other boats on this lake right now, which means one of two things. Either we're crazy, or everyone else is."

We literally had the lake to ourselves and the water looked like glass. Our mutual friend Paul - a tournament-level skier who has been featured in the pages of Waterski Magazine - was making huge cuts behind the boat. Both of us admired his textbook-like form.

It's considered late in the season when you're skiing past Labor Day and you know it because when you get out of bed to go the stars are still out. That, plus my car's temperature gauge read a chilly 43 degrees as I sped down the road to meet Dave at 6:15.

After filling the boat with gas we put onto the water at roughly 6:50 with the sun just coming up. That didn't warm things up much because a string of clouds circled the horizon. Above us to the west, though, the mountains reflected the sunlight.

I had been first to ski and, as always, entering the water was the tough part. That, plus getting out of bed in the first place at such an early hour. But once you're in and used to the water you're glad to be out there. And the lake water remains warm, driven by the fact that 75+ degree days aren't uncommon in September and October in Colorado.

The boat pulled me out of the water and settled at 34mph. That's when you really feel the chilly air, especially on your ears and face which aren't protected by a wetsuit. But then after you make your first cut any concerns about the air, the water, work, school, life and and everything else, dissipate - you're too busy having fun, speeding across the wake at 50+mph to make another turn.

Paul went next, shortening the rope to 28 off. The longer we pulled him the more aggressive his turns got until his body was practically flat against the water. And then Dave, a long-time skier who I've skied with all summer, took his turn. Some skiers can make a handful of turns - enough to ski a course - before they become fatigued. Dave's endurance rivals anyone I've seen as he can make turns around the entire lake and then some.

Then, as is customary and almost required if you're going to get out of bed that early, we each skied a second time.

So are we crazy? Or is everyone else for not being out there? The latter for sure (even though if everyone else was out there they'd ruin our water). There are few better ways to start a morning. Surfers might say surfing is better. Fine - depends what you know. Runners may say running is better - I'm a runner and would disagree but it's better than nothing when the weather gets too cold for watersports.

It would be easy to let the weight of sleep or threat of cold keep me back. But I don't. And it makes me happier and in better spirits for the rest of the day because I've done it, even if it took a bit of a push to get there.

We're not crazy, we're just out there doing it and wondering why everyone else is so out of their minds.

What Jeff Bezos knows

John Duke — Thu, 23 Jul 2009 14:45:00 -0700

It's already old news that Amazon.com offered to buy Zappos for $850M today but what I think is more interesting is what Jeff Bezos says in the video below. He gets around to discussing the rationale for the deal near the end but spends more time talking about what he's learned running Amazon the past 15 years. I'll summarize for you so you can learn in 1 minute what will take 8 minutes in the video:

1. Obsess over customers

- Pay attention to competitors but start with customers and work backward - it will cover up lots of mistakes

2. Invent

- Customers won't tell you everything - invent on their behalf

- Never accept "either/or" thinking - you can accomplish both

- You can invent yourself out of any box if you believe you can

3. Think long term

- It is much rarer than you think

- Most initiatives take 5-7 years to pay off for a company

- Thinking long term not only requires, but allows a willingness to be misunderstood

4. It's always day #1

---

The art of selling cars

John Duke — Wed, 22 Jul 2009 09:55:51 -0700

Selling a car nowadays isn't as easy as it used to be. I recently posted one for sale and instead of receiving interest from sincere, would-be buyers I've been contacted exclusively by hacks and scam artists.

One email I received was from someone named Shameka and seemed relatively sincere. She's a bit concerned about my listing price and would like me to check my car's value at a site called new-car-value.com. I almost did so until I checked a second email. This person didn't even bother to include his name and told me I am "crazy" to sell at my listed price, which is "way off." I pushed back a bit to see if this person would quantify what "way off" means but instead he told me to check trade-in-value.com. Is it just me or do those site names resemble each other?

I visited the sites (by typing the addresses into my browser myself) and both require lots of personal information in order for you to be able to get to pricing information on your vehicle. But clearly there is more to these sites than providing a price - someone wants to sell you something else.

But that is beside the point. Wouldn't one think I've done a bit of my own research already? Such as scanning the listings on eBay Motors or AutoTrader (more on AutoTrader below) and checking Edmunds and Kelly Blue Book which are both legitimate and free?

Last year I posted the same vehicle I'm trying to sell now (I pulled it off the market for a variety of reasons) and used AutoTrader. No sooner had I posted my listing (which requires phone information) than I began receiving calls from third parties offering to help me sell my car. They didn't know a thing about me or the car - they just knew I had one for sale and wanted to sign me up for their service. They were so clueless, in fact, that they kept calling me months after the car was off the market and the listing taken down, and did this despite my requests to stop calling. This may not have been AutoTrader's fault but I don't care. I don't plan to use it again.

Selling a car online isn't cut-and-dried. It's no longer about posting facts about your vehicle and waiting for buyers to show up for a test drive. It requires some marketing savvy and instinct so you don't get ripped off and don't get caught in a scam. You have to sift through the crap to get to the good stuff.

Lead-generation sites are all over the web (mainly in places like insurance and financial products) and if this is the emerging version of lead-gen on the web it's a shame. But my guess is that there are just enough people out there selling cars who fall victim to the scams to make these particular endeavors worthwhile. I guess it goes without saying that if you're selling a car, seller beware.

UPDATE: An email from another spammer and, wouldn't you know it, the site is just like the two mentioned above. Someone named Chantelle Moore would like me to go to get-trade-value.com. Chantelle: perhaps you should consult with your spammer friends so that your approach isn't so obvious?

Square peg, round hole

John Duke — Tue, 21 Jul 2009 12:12:24 -0700

I have sat down to write lots of posts lately, only to delete them halfway through. In fact I have deleted various versions of the same post several times today already. Why? Lack of flow. Low inspiration. Just not feeling it. Lately it has felt like forcing a square peg through a round hole.

That goes for this blog, mind you. Generally it's easy to write on 2 and a half - my household of girls are always inspiring and generate an endless number of the things to write about. But here I'm a bit lost.

It's a good thing though. Filling up pages with crappy content would just detract from the quality of the site. Content for the sake of content isn't going to give me the creative outlet I need, nor is it going to give readers what they need.

So here I sit, writing this. And the point is to tell you to do the same thing. If what you're writing isn't good enough, don't publish it. It's not worth it. Only put your best stuff out there. Your readers will thank you and you'll thank yourself.