It is interesting how everything in life is cyclical. You're born a disgusting, wrinkly ball akin to the stomach parasite from Alien, unable to speak or wipe your own bottom - and if lucky you end up that way again by your late-80's.
On the subject of cycles, do we truly learn from mistakes? Perhaps on a generational level, but surely not beyond that, which is why so many of the problems we are seeing now have happened before. It is the same point raised in the book 'The Millionaire Next Door', which observes how the wealth acquired by self-made millionaires through frugality is usually lost within a couple of generations, as their offspring piss it all away pursuing a materialistic utopia.
Anyway my point was actually around the whole Bernard Madoff fraud, and the absolute certainty that it will happen again in the future. I don't care what politicians and others in the press state about controls to prevent it, that is simply not the case. Wherever there are naive and/or lazy investors, there will be largely unregulated, opaque funds promising fabulous returns that seem too good to be true
In one sense everything is legal until you are caught - something that Enron illustrated impressively - although not a position I agree with, despite notions of 'right' and 'wrong' being grounded solely in perspective.
So it was with some interest that I got some perspective when I chanced upon a CMBS securitization dealer from another bank over at a Corney & Barrow champagne reception last Friday. It was completely random, at a wedding drinks bash: not mine, and sadly and not corporate - the days of charging everything back are sadly not yet there again.
I was most surprised to find out the trader worked for RBS, who having notched up losses to rival Citibank, and really are a basket case in the world of banking these days. My first question to him of course, apart from the standard piss-take "what's it like to work in the public sector these days?", was what he was still doing there with a job?
He confirmed my suspicions by admitting to being the only one left of a team of 25 a year ago. An interesting illustration of another factor reducing the CMBS transactions taking place, given the headcount reductions to support the transactions. In effect though, he is minding the shop with respect to their existing CMBS portfolio - but did add he is still an originator.
Obviously I had to bring up the subject of General Growth, more to see if he knew anything about it and the potential impact of the SPE ruling. He knew enough for me to have some fun ripping his industry apart, as I reminded him what a joke the previous contracts and sales processes had been.
He did not disagree, but gave the inside perspective - namely that it was really for the clients to complete the due diligence as they were the ones impacted. That is fair enough, but as I reminded him that is not really a valid view given the $50bn loss RBS took last year - it might just be arguable that they were impacted as well. He also confirmed the rumours I have heard that the industry is busy co-ordinating a complete re-structuring of SPE's and associated contracts that will supersede what is currently on the market.
Hardly a surprise, but what that does suggest is that when we finally receive a ruling it will not have nearly the ramifications that some would suggest. There is otherwise little news on the GGP front besides some minor legal applications ahead of future hearings.
Good news for me is that the functional spec will (at last!) be finished by the weekend. It has taken me about 2.5mths due to work, and after drafting up a high level technical spec next, I could in theory get it built in the next couple of weeks. However I will be moving onto the biggest job of all next - populating the site content. Rather more important at this stage, and given the site will provide industry grade investment research papers to registered users (for free), that is going to take time to get ready. I will be covering everything from corporate finance to investment products, market psychology and all trading products on the market, whether investors have access to them or not.
The key to successful investing, particularly for those aspiring to reach high net worth status, is building strong foundations - and that goes beyond simply building knowledge. Either way this site is going to be a more intelligent alternative to the main investment tabloids.
Showing posts with label entrepreneur. Show all posts
Showing posts with label entrepreneur. Show all posts
Wednesday, July 1, 2009
Monday, May 11, 2009
How Much Extra To Move Jobs?
That's the conundrum I have been faced with this morning, following another headhunter call. Of course, the salary levels they claim are usually best-case and designed to hook you into taking it further. This one dangled the prospect of an extra £50,000 increase in my base salary if I moved.
However after about 5mins deliberation, the answer is going to be 'no'. It is certainly tempting from one perspective, but one problem is that the bank in question is terrible: without naming names, one of those suffering from merger pains, combined with being incompetently run for years - hence is on government life support and has made huge losses.
Most of all though, there is more to this than just money. Let me just reassure you that there is no loyalty for the bank, or love for the 'unique team culture' - every bank spouts waffle about it being a giant family and that they are the best. Unfortunately the brutal culling of staff in the last year merely illustrated the fallacy to those corporate clones too stupid to see it before.
Working for yourself is the only place to aim for in life. So yes, an extra £50k now would be nice, but the cost is all of the hassle and risk of a new job. When I factor in work on my business ahead of the launch later this year, I realised what is much more important to me. At present I have got time to work on this almost daily, but that could easily change with a new boss on my shoulder, and needing to forge a reputation at a new place.
Anyway it's an interesting question, and highlights to me how my priorities have changed so significantly since I mentally made the jump towards my aspirations being out of the sector.
Although not yet announced, Pershing Square are about to submit a counter-offer on the DIP financing. It is unsurprising because without the innovative equity conversion option they had included as the DIP financier, they lose a valuable hedge against their significant existing holdings. This will be good news for GGP again, as any competition around terms of financing benefits the firm - I am just hoping to see the equity conversion option dropped, but matching the other loan terms with a lower interest rate is a more likely sweetener.
Otherwise Reuters reported last week that Simon Property Group have raised more capital in another significant stock offering. They cite the reason being for "general corporate purposes", but pointedly there is no longer a denial of interest in future acquisitions, just citing timing.
Due to the market saturation (in the US) of mall owners, all of the REIT's need to expand their market shares through acquisitions. As such, and despite denials, Westfield are also lining up to compete with Simon and Vornado (who have openly admitted interest) for any asset sales that GGP decide to put out there.
As with DIP financing, it is much better to have competition in a sale like this. On an unrelated rumour, the Court will reconvene tomorrow to review the DIP financing options and progress further. For now this is a side show to the bigger issue relating to creditors and the SPE inclusions discussed in my last post.
However after about 5mins deliberation, the answer is going to be 'no'. It is certainly tempting from one perspective, but one problem is that the bank in question is terrible: without naming names, one of those suffering from merger pains, combined with being incompetently run for years - hence is on government life support and has made huge losses.
Most of all though, there is more to this than just money. Let me just reassure you that there is no loyalty for the bank, or love for the 'unique team culture' - every bank spouts waffle about it being a giant family and that they are the best. Unfortunately the brutal culling of staff in the last year merely illustrated the fallacy to those corporate clones too stupid to see it before.
Working for yourself is the only place to aim for in life. So yes, an extra £50k now would be nice, but the cost is all of the hassle and risk of a new job. When I factor in work on my business ahead of the launch later this year, I realised what is much more important to me. At present I have got time to work on this almost daily, but that could easily change with a new boss on my shoulder, and needing to forge a reputation at a new place.
Anyway it's an interesting question, and highlights to me how my priorities have changed so significantly since I mentally made the jump towards my aspirations being out of the sector.
Although not yet announced, Pershing Square are about to submit a counter-offer on the DIP financing. It is unsurprising because without the innovative equity conversion option they had included as the DIP financier, they lose a valuable hedge against their significant existing holdings. This will be good news for GGP again, as any competition around terms of financing benefits the firm - I am just hoping to see the equity conversion option dropped, but matching the other loan terms with a lower interest rate is a more likely sweetener.
Otherwise Reuters reported last week that Simon Property Group have raised more capital in another significant stock offering. They cite the reason being for "general corporate purposes", but pointedly there is no longer a denial of interest in future acquisitions, just citing timing.
Due to the market saturation (in the US) of mall owners, all of the REIT's need to expand their market shares through acquisitions. As such, and despite denials, Westfield are also lining up to compete with Simon and Vornado (who have openly admitted interest) for any asset sales that GGP decide to put out there.
As with DIP financing, it is much better to have competition in a sale like this. On an unrelated rumour, the Court will reconvene tomorrow to review the DIP financing options and progress further. For now this is a side show to the bigger issue relating to creditors and the SPE inclusions discussed in my last post.
Saturday, May 2, 2009
A Change Of Perspective
"Woe betide thee, who has a desk move imposed upon them and loses a spectacular City window view and privacy, to face an office cupboard with a sign reading 'Restricted Access Area' while surrounded by irritating colleagues on all sides" The Emerging Investor
Having been pulled onto this tedious Hedge Fund confidence-boosting initiative at the bank, I was duly forced to move desks to sit with the new team this week. Quite why is beyond me, as I was only sitting about 20 yards away from them before, and in this digital age we mostly communicate through email, communicator and conference calls anyway.
The bank being as tight as it is, rather than paying for the desk/equipment movers to come in, they left it to me to spend 1.5hrs crawling around on my hands and knees to unplug and switch PC's - all while avoiding the mouse traps down under the desks (we have a problem with rodents - both human and otherwise).
I'm mostly not pleased because I was happily working on my site on the quiet at work as I haven't been too busy recently, and the wireframes for the Functional Spec are rather too visible to pass as financial work. Now I might even have to do some work for my money at this rate.
Anyway it's not all bad news, as the actual site design has been progressing very well, and I am confident that within the next week or so I will have it sufficiently completed to approach vendors. They are in for a grilling given that part of my daily job is managing incompetence, and I expect nothing less from them with the build.
There is nothing of interest happening yet regarding GGP, besides Vornado being confirmed as a major potential front runner in buying any GGP assets put up for sale, and having raised sufficient capital to make reasonable offers. Also following on from my last post regarding GGP including CMBS subsidiaries in its Chapter 11 filing, which has major ramifications for the credit markets; unsurprisingly a challenge is being mounted by one of the groups who would be adversely impacted.
The creditor meeting in a fortnight from now should prove interesting, but this is going to be a slow, lengthy process in which patience is the biggest strength any investor can show.
Next time I am going to move back to investing, which will be especially useful for those interested in shorting. It is a question I have been asked by several people recently, and is actually much easier than you would think. Anybody with a standard broker account can do it today, and I will outline how and some of the options.
Thursday, April 23, 2009
Analysis: GGP Declares Chapter 11
Well, the loss of my lunchtime bolt hole has proved a bit of a problem for me in finding time to post in the last couple of weeks. To be fair, I have been working on (and completed) a draft of the business plan, and have also selected a group of vendors to approach in the coming weeks for a build estimate.
Meantime my next major task is completing a functional spec for the site, as there's no way I trust the average coding monkey with the all-important design and usability. Overall it is going very well, and I am feeling really positive that I can create something unique, useful and commercially viable.
Of course the big news of the last fortnight was GGP finally filing for Chapter 11 bankruptcy protection.
The final straw was the combination of the bond solicitation process failing to persuade sufficient Rouse bondholders to extend, and the threat of action from disgruntled creditors ready to file a claim on certain malls - that meant GGP had little choice but to seek to protect its assets from being effectively raided.
GGP filed with $27.3 bln debt and $29.6 bln assets - figures that are of course disputed - and obtained $375 million in debtor-in-possession financing courtesy of Pershing Square.
Bill Ackman is a canny operator, and clearly used this to hedge Pershing's existing position (at 25% they are the third largest shareholder in GGP currently). By providing DIP financing, Pershing yields a healthy 12% annual return on the debt. Additionally Pershing gain warrants to buy 4.9% of the new equity when it emerges from bankruptcy, and most interestingly the potential to convert the $375m DIP into equity.
The latter option has to be admired, as it ensures Pershing Square will be guaranteed equity whichever way the firm emerges from bankruptcy. I am confident however that it remains strongly in Ackman's interests to maintain common shareholder value, although this does now raise the spectre of dilution. I have analysed this in some detail, and believe that dilution risk is a minimal factor: if the event occurs, that means GGP will have successfully restructured, emerged from bankruptcy and the huge upside potential to the shares will offset and limit any impact.
GGP President, Tom Nolan, gave several interviews subsequently, and placed the blame squarely on the frozen credit markets as the primary cause of GGP's current problems. It will clearly form the central crux when outlining the company's argument as to why a loan extension agreement is justified, and increases the likelihood of approval by the courts.
Certainly the fact that no major rivals who wanted to buy some of the best, revenue-generating properties put up for sale could secure funding is a powerful illustration of the wider market problems, and in favour of GGP.
Nolan also stated that GGP does not see an immediate need to tap DIP financing for 8 weeks, due to cash flow business running costs illustrates the relatively healthy position of the business model. Once again, GGP stands out as an unusual case. Bill Ackman also immediately went to the press to rubbish assumptions by many that GGP's weakness would be to the gain of rivals, by effectively meaning Chapter 11 meant liquidation and an eventual firesale of assets.
Today Fitch downgraded some of GGP's CMBS debt, citing that:
"If the properties remain in bankruptcy, General Growth could seek to load up the properties with additional debt to help repay their corporate unsecured debt."
So far, everything has progressed exactly as I had hoped with regards to the Chapter 11 filing, with the exception of Pershing's DIP equity conversion option. Liquidation and/or widescale share dilution remain the only scenarios in which being long in GGP would not produce significant returns.
It will be interesting finding out what the restructuring proposal submitted to the court contains. The above illustrates another mechanism by which GGP could pay off unsecured lenders and/or the bondholders without necessarily needing to sell properties. A key point mentioned here but not considered is that GGP are completing a strategic review, with a specific aim of only offering to liquidate lesser malls as part of the court proposal.
A combination of financial re-engineering, some limited asset sales, and a wider extension request for loans until the credit markets recover sufficiently to enable normal refinancing is the most likely right now.
Thursday, April 9, 2009
Speculation Drives GGP
I have been making some positive progress on the business plan for the financial website I am planning to create (sorry, will not be discussing specifics as you would expect on a blog!) A high level plan for its initial marketing and revenue generation has been completed, and since I have brain dumped most of the site ideas, I am going to formalise those along with specifics on the design and structure this weekend in a functional spec.
I have started to look into vendors that can build the site, but am so far fairly unimpressed with the package solutions on offer - not to mention all the bullshit extras thrown in like registering the domain name (and controlling it), that presumably appeal to the average lamer they are targeting. I will be telling them exactly what I want, and otherwise will need full control over the daily content management.
It will require some time and effort to assess what is on offer, but I am looking to approach around about 10 vendors for build estimates, options and support contract costs over the next week. I need that not least so that I can complete the financial component of the business plan, including necessary start-up capital and first year trading costs.
After my last entry on Saturday, discussing my increasing confidence in GGP's prospects - not least from Bill Ackman's recent comments - the share price on Monday underwent such an unusual increase (greater than 200% at one point), that the firm issued a statement on the trading activity to confirm there was no known basis.
I was not entirely surprised to see speculation growing from institutions and others that GGP has significant potential for common shareholders. A 98% discount alone tells you that it is clearly not a fair reflection of value. The price as of today has predictably dropped back to around 85 cents since the highs of $1.35 earlier this week - since I was waiting at around 75 cents for falls to buy more, I am happy to hold and continue waiting for a better buying opportunity (ideally somewhere under 50 cents).
In the meantime, additional support for the notion that GGP will eventually complete negotiations with lenders and file for a prepackaged bankruptcy came in the form of real estate magnate Sam Zell, who commented:
The net impact of this would be a controlled bankruptcy application with a pre-agreed plan of restructuring - this would enable the firm to sort that out under Chapter 11 protection in much less time, and theoretically with less court interference. It would then emerge from this and should see a huge increase in share value.
At the same time, the existing evidence points to TALF funding continuing to trickle down through the system and have an increasingly positive impact on the credit markets throughout the remainder of 2009 and into 2010.
Everything right now seems to point towards GGP being an excellent long hold for anybody not risk averse. Consider this final point: the consensus view in and outside the US government now is that the commercial real estate sector is a huge and vital component of the US credit market that must be supported. As well as CRE being more viable than the multitude of small home owners in the domestic market, many have also commented on the devastating impact that a Chapter 7 (liquidation) of GGP would have - not just on the firm and its shareholders, but more importantly on the wider market.
Too big to fail? I think people are soon about to work out that this doesn't just apply to the banks, and that the major REIT's are also in that same boat.
I have started to look into vendors that can build the site, but am so far fairly unimpressed with the package solutions on offer - not to mention all the bullshit extras thrown in like registering the domain name (and controlling it), that presumably appeal to the average lamer they are targeting. I will be telling them exactly what I want, and otherwise will need full control over the daily content management.
It will require some time and effort to assess what is on offer, but I am looking to approach around about 10 vendors for build estimates, options and support contract costs over the next week. I need that not least so that I can complete the financial component of the business plan, including necessary start-up capital and first year trading costs.
After my last entry on Saturday, discussing my increasing confidence in GGP's prospects - not least from Bill Ackman's recent comments - the share price on Monday underwent such an unusual increase (greater than 200% at one point), that the firm issued a statement on the trading activity to confirm there was no known basis.
I was not entirely surprised to see speculation growing from institutions and others that GGP has significant potential for common shareholders. A 98% discount alone tells you that it is clearly not a fair reflection of value. The price as of today has predictably dropped back to around 85 cents since the highs of $1.35 earlier this week - since I was waiting at around 75 cents for falls to buy more, I am happy to hold and continue waiting for a better buying opportunity (ideally somewhere under 50 cents).
In the meantime, additional support for the notion that GGP will eventually complete negotiations with lenders and file for a prepackaged bankruptcy came in the form of real estate magnate Sam Zell, who commented:
"I do not believe GGP will be liquidated," Zell said at a recent New York University real estate investment trust conference. "I expect the company to file bankruptcy. It will do a prepackaged. It will be reorganized and it will be taken public."
The net impact of this would be a controlled bankruptcy application with a pre-agreed plan of restructuring - this would enable the firm to sort that out under Chapter 11 protection in much less time, and theoretically with less court interference. It would then emerge from this and should see a huge increase in share value.
At the same time, the existing evidence points to TALF funding continuing to trickle down through the system and have an increasingly positive impact on the credit markets throughout the remainder of 2009 and into 2010.
Everything right now seems to point towards GGP being an excellent long hold for anybody not risk averse. Consider this final point: the consensus view in and outside the US government now is that the commercial real estate sector is a huge and vital component of the US credit market that must be supported. As well as CRE being more viable than the multitude of small home owners in the domestic market, many have also commented on the devastating impact that a Chapter 7 (liquidation) of GGP would have - not just on the firm and its shareholders, but more importantly on the wider market.
Too big to fail? I think people are soon about to work out that this doesn't just apply to the banks, and that the major REIT's are also in that same boat.
Wednesday, March 25, 2009
Hard Dose of Reality
I think the blog stereotype would be to spend this entry whinging on about how unpleasant it is being back at work, and how I'd like to win the lottery. On the latter point I would, but getting up today and going in was fine - helped no end by allowing yesterday for recovery and catch-up.
Having carefully managed my inbox remotely, I have had a relaxing morning back, and found time to continue work on my business plan yesterday evening at long last. Working on the plan remains my absolute top priority; nothing else in my life right now provides a glimmer of hope from escaping the daily grind of commuting into the office like this. Work is stale, and I am yearning to inject change into my life once more - however in a controlled way, without impulsively quitting and costing myself dearly.
On the plus side, the holiday really has been inspirational after my chance meeting with Peter, as I mentioned previously. Even if my site does not take off as planned, I will persist with the venture and look at what needs to change to make it work.
Once married in October, I am seriously looking into travelling to Asia and Australia for 3-4mths next year with L, although the site might make that impractical. It's really quite simple though: if we don't do it now, we won't do it in the next 15-20yrs assuming a family, as logistics will simply prevent it. The cost is of course lost income, which is a big draw that works so effectively in preventing most of us - another reason why unexpected job losses in a recession can be a blessing.
Anyway the other fun event looming next week will be the G20 economic summit here in London. Given the sheer level of anger towards the City and Wall Street these days, not least over the various bonusgate scandals, I expect to see the kind of violent protests that haven't taken place in the City for a decade or more. Last time, I recall stories of traders coming back from lunch with a dozen eggs ready to pelt protesters from the office windows - and know several who got involved in fights out on the streets. Ideological conflict of the more direct kind, I suppose.
This time I suspect we'll see none of that. Given my bank is arguably the highest profile, we'll go to usual rear-door entry only procedures while the protesters waste everybody's time with this pointless nonsense. If anybody going believes they will actually change anything then they are naive.
"Down with capitalism!" they scream.
"And replace it with what precisely?" we reply.
"ANARCHY!" yells a lone teenager bunking school.
Silence from the hopefully more mature masses, because unless there is a manifesto I am yet to see, these protests are not sure what they want - only sure what they don't want.
When driving around the United States, the world's richest and most capitalist country, it seems inherent that there will always be significant wealth imbalances throughout the population. Some is hugely unfair, but some is quite right, even if those worse off cannot see it.
Governments need to ensure opportunities are provided for everybody and restore genuinely unfair imbalances. However it is critical to have a system where those who innovate, create and/or work hard - for example on a business plan and website - deserve to be much better off than the majority who choose to sit around watching TV or playing on their XBox 360's every evening.
Having carefully managed my inbox remotely, I have had a relaxing morning back, and found time to continue work on my business plan yesterday evening at long last. Working on the plan remains my absolute top priority; nothing else in my life right now provides a glimmer of hope from escaping the daily grind of commuting into the office like this. Work is stale, and I am yearning to inject change into my life once more - however in a controlled way, without impulsively quitting and costing myself dearly.
On the plus side, the holiday really has been inspirational after my chance meeting with Peter, as I mentioned previously. Even if my site does not take off as planned, I will persist with the venture and look at what needs to change to make it work.
Once married in October, I am seriously looking into travelling to Asia and Australia for 3-4mths next year with L, although the site might make that impractical. It's really quite simple though: if we don't do it now, we won't do it in the next 15-20yrs assuming a family, as logistics will simply prevent it. The cost is of course lost income, which is a big draw that works so effectively in preventing most of us - another reason why unexpected job losses in a recession can be a blessing.
Anyway the other fun event looming next week will be the G20 economic summit here in London. Given the sheer level of anger towards the City and Wall Street these days, not least over the various bonusgate scandals, I expect to see the kind of violent protests that haven't taken place in the City for a decade or more. Last time, I recall stories of traders coming back from lunch with a dozen eggs ready to pelt protesters from the office windows - and know several who got involved in fights out on the streets. Ideological conflict of the more direct kind, I suppose.
This time I suspect we'll see none of that. Given my bank is arguably the highest profile, we'll go to usual rear-door entry only procedures while the protesters waste everybody's time with this pointless nonsense. If anybody going believes they will actually change anything then they are naive.
"Down with capitalism!" they scream.
"And replace it with what precisely?" we reply.
"ANARCHY!" yells a lone teenager bunking school.
Silence from the hopefully more mature masses, because unless there is a manifesto I am yet to see, these protests are not sure what they want - only sure what they don't want.
When driving around the United States, the world's richest and most capitalist country, it seems inherent that there will always be significant wealth imbalances throughout the population. Some is hugely unfair, but some is quite right, even if those worse off cannot see it.
Governments need to ensure opportunities are provided for everybody and restore genuinely unfair imbalances. However it is critical to have a system where those who innovate, create and/or work hard - for example on a business plan and website - deserve to be much better off than the majority who choose to sit around watching TV or playing on their XBox 360's every evening.
Friday, March 20, 2009
Inspirational Example
Our holiday has been most pleasant, as is knowing I have another 5 days to go. I've been quickly logging into work occasionally to keep my inbox from overflowing - and to remind myself how much better life is away from the place.
The best part of the holiday was surprisingly spending some time flying elsewhere to meet up with L's cousin, who is currently managing a 2yr old baby girl with two 5mth old twins. It was a fantastic lesson in the benefits of birth control, and has convinced me there is no rush just yet to sign away my life. Just to illustrate the point, now that we are back in Sharm, I stayed in bed until 10am this morning.
What was most interesting and enjoyable for me however, was the chance to meet with the husband of L's cousin on the evening we stayed. Peter is actually an American from the south, so has a fantastic drawl in his accent, and as I was forewarned, was a 'serial entrepreneur' (a phrase he actually derided as ridiculous as in his opinion if you are an entrepreneur you will continuously set up businesses - he's right of course). In his case, he has set up all manner of businesses in the past, from a restaurant, real estate and haulier businesses, to his current bio-tech company, which is involved in stem cell research.
What was most heartening is that when talking to Peter was that I felt like a kindred spirit - we agreed on absolutely everything, and it made me realise how close my mindset is to that of an entrepreneur. I even outlined at a high level my business idea, which he thinks has a lot of potential - and I think he is the kind of person who would have picked holes and been honest rather than tip-toed around.
The best part of the holiday was surprisingly spending some time flying elsewhere to meet up with L's cousin, who is currently managing a 2yr old baby girl with two 5mth old twins. It was a fantastic lesson in the benefits of birth control, and has convinced me there is no rush just yet to sign away my life. Just to illustrate the point, now that we are back in Sharm, I stayed in bed until 10am this morning.
What was most interesting and enjoyable for me however, was the chance to meet with the husband of L's cousin on the evening we stayed. Peter is actually an American from the south, so has a fantastic drawl in his accent, and as I was forewarned, was a 'serial entrepreneur' (a phrase he actually derided as ridiculous as in his opinion if you are an entrepreneur you will continuously set up businesses - he's right of course). In his case, he has set up all manner of businesses in the past, from a restaurant, real estate and haulier businesses, to his current bio-tech company, which is involved in stem cell research.
What was most heartening is that when talking to Peter was that I felt like a kindred spirit - we agreed on absolutely everything, and it made me realise how close my mindset is to that of an entrepreneur. I even outlined at a high level my business idea, which he thinks has a lot of potential - and I think he is the kind of person who would have picked holes and been honest rather than tip-toed around.
As an entrepreneur he was very impressive, and it really was an inspirational, lightbulb discussion for me. Seeing somebody who has gone out there and done it - in his case without a college degree and no background in biochemistry, made me realise there and then that the only way I can avoid being my Boss in 10yrs time is to make this happen. I need to devote significant amounts of what little free time I have towards completing the business plan, I need to oversee the site development, build initial partnerships, revenue streams, and push all this forwards so that when we emerge from the recession I have a site ready to capitalise fully on an inherent need from investors.
Some other good news since I have been away was discovering that two people who were fired from my bank at various points last year have now picked up new jobs. It must be a huge relief for them both, and does illustrate how there are jobs out there, even in these tough times. One has moved out of London and finance, the other is a wily old fox unable to do anything else, who has picked up a role at one of the more successful fund management groups.
Otherwise the deadline regarding GGP and bonds was extended by a week until today to give them more time to confirm or reject the proposed extension to the year-end. Meantime Bill Ackman, head of the activist hedge fund Pershing Square has given another interview reaffirming his belief that controlled bankrupty is the best solution both for GGP and the REIT sector as a whole (given that liquidation would have disastrous ramifications for US commercial property prices).
It was heartening to see that Ackman is pushing to join the board of GGP, as his interests are well aligned with shareholders in increasing value. Here's to a profitable outcome, meantime patience on this prevails.
I'm off now to join L at the pool and then down to the beach. I'm not really a beach or sun person but do this occasionally for her - and have an interesting book called 'The Millionaire Next Door' that Peter left for me when we returned the next morning to say goodbye. It seems to be a detailed analysis of the mindset of the 'average' millionaires in society, who are anything but the flash, opulent 'well to do' living people most would expect - actually it comes as no surprise to me, but then I understand the importance of saving, investing and living below your means. Should help pass a few tedious hours as I try to avoid burning...
Wednesday, March 11, 2009
Work-Life Balance
Am I the only one to see the irony in a pub named 'The Golden Fleece' being just a couple of hundred yards from Bank on Queen Street?
If ever there were a phrase to sum up the activities of all banks then this has to be it - including the Old Lady of Threadneedle Street, for all her generosity with our cash these days.
Well this is more a sign-off for now: I am in one of the most delicious moments - the final day before L and I take a well-earned two week holiday. Yesterday was hectic again, and a further illustration that the bank finds itself underresourced in many areas now. More importantly, the holiday will be a wonderful respite from the daily grind - and let's face it, getting away from blighted Blighty is practically a necessity for the soul in 2009.
As a nation, we appear to be revelling in bad news, as epitomised by the continuing, grotesque voyeurism of the tabloids tracking Jade Goody's decline from terminal cancer.
My only resolution while away? Well, I'm sure the odd entry, but most importantly to find a little time to work on the business plan. It has great merit, and I am convinced that I can translate words into a pilot site quite quickly. Not least because I set up a (failed) consultancy business many years ago.
By a cruel quirk of fate, the critical deadline for GGP (Mar 16) will also be reached during my vacation, but as I invested with the understanding it could all be lost, I have no intention of letting that spoil my party should something particularly bad happen (unlikely). At present GGP are in a solicitation process with the Rouse bondholders, to suspend all payments due on Mar 16 without action on their part until the end of this year. Interest will continue to accrue meantime.
It will be highly significant if the bondholders bite, as it will in effect be a vote in the future of GGP, and significantly reduce the chances of GGP filing for Chapter 11 next week. On the other hand, if they do then I will also be very pleased as it will resolve the financial limbo - either result ought to start the move back upwards towards the $5-10 range that GGP would more realistically be priced at were it not for bankruptcy fears in these risk-averse times.
For those of you working tomorrow, I'll have a cocktail to toast absent friends when I land..
If ever there were a phrase to sum up the activities of all banks then this has to be it - including the Old Lady of Threadneedle Street, for all her generosity with our cash these days.
Well this is more a sign-off for now: I am in one of the most delicious moments - the final day before L and I take a well-earned two week holiday. Yesterday was hectic again, and a further illustration that the bank finds itself underresourced in many areas now. More importantly, the holiday will be a wonderful respite from the daily grind - and let's face it, getting away from blighted Blighty is practically a necessity for the soul in 2009.
As a nation, we appear to be revelling in bad news, as epitomised by the continuing, grotesque voyeurism of the tabloids tracking Jade Goody's decline from terminal cancer.
My only resolution while away? Well, I'm sure the odd entry, but most importantly to find a little time to work on the business plan. It has great merit, and I am convinced that I can translate words into a pilot site quite quickly. Not least because I set up a (failed) consultancy business many years ago.By a cruel quirk of fate, the critical deadline for GGP (Mar 16) will also be reached during my vacation, but as I invested with the understanding it could all be lost, I have no intention of letting that spoil my party should something particularly bad happen (unlikely). At present GGP are in a solicitation process with the Rouse bondholders, to suspend all payments due on Mar 16 without action on their part until the end of this year. Interest will continue to accrue meantime.
It will be highly significant if the bondholders bite, as it will in effect be a vote in the future of GGP, and significantly reduce the chances of GGP filing for Chapter 11 next week. On the other hand, if they do then I will also be very pleased as it will resolve the financial limbo - either result ought to start the move back upwards towards the $5-10 range that GGP would more realistically be priced at were it not for bankruptcy fears in these risk-averse times.
For those of you working tomorrow, I'll have a cocktail to toast absent friends when I land..
Tuesday, February 17, 2009
What's the Point?
As the howling chorus of public anger towards bankers for our crimes reaches a glorious epiphany, I have to question the underlying motives once again. I only wish that Gordon or David would learn to clasp their hands while they preach morality to the masses - just look to your great predecessor's display at Princess Diana's funeral for guidance.
"Be not too hasty to trust or admire the teachers of morality; they discourse like angels but they live like men."
Dr Johnson's quotes remain so timeless because they are pungent observations of human nature. On that note, as I restarted work on my business plan yesterday, on something which feels like it might have some genuinely positive purpose and meaning, I found myself musing over the question asked by even the most zealous androids of the corporate world: what's the point of all this?
Yes, my move away from key emerging markets last year was perfectly timed with hindsight. My role at the bank continues to develop, is interesting enough to pass the days, and compensates well enough. However work here has ceased to be about innovation and revenue generation, and is largely focused on the bank's amusingly desperate struggle to recover confidence and reignite core business again.
Some of the initatives proposed and to which banks are devoting significant resources now are just absurd. There seems to be a bizarre lack of awareness or willingness to believe that the deleveraging of the past year is continuing, and that those valuable hedge funds clients will not be returning in the shape and form of the past.
In fact, I've talked myself into it - time to get back onto the business plan this afternoon.
Thursday, February 12, 2009
Tough Times On The Milk Round
No sign of any movement today regarding job cuts, although a chap in Synthetics mentioned earlier that he has already cleared his desk and gone so far as to draft a goodbye letter to his team in readiness. Optimism seems to be but a distant memory, although with unemployment in the UK forecast to spiral upwards by 1 million in 2009, perhaps that is justified.
The spectre of unemployment is something all of us in the City are having to live with right now. I must admit, I am feeling a bit guilty about all the rumour spreading now. Oh well, I'm preparing them mentally for the big push when it happens - and I heard from another source just now that the cull has merely been postponed for a week. I suppose it partly depends on the firm, role and all manner of other factors. There is no harm in me divulging more interesting detail at some point - after all nobody is reading this anyway I expect.
To my surprise who should have wandered past me on the Desk this morning but Shriek herself. I've been lucky enough to never meet her before, and so it took somebody to point her out. In this world of globalisation, it is quite impressive how daily working relationships can be by voice alone, such that you can pass that person without even recognising them. Fortunately that worked both ways, as Shriek does not seem to know me either. She is a real oddity, with bright red (dyed) hair, and seems to have a botox habit judging by the size of her lips. In person, she seems quite different from the aggressive avatar I have known through various phone arguments, and appears to whisper rather than speak.
As such I made a sharp exit from the office before anybody noticed - the last thing I wanted to do was get dragged along to lunch with her. Obviously the 'dodgy dossier' being compiled against her can't be too serious if they've authorised travel expenses for her over to London this week.
I have been asked to take part in some graduate recruitment for the bank. As the Boss explained, this cannot impinge upon market hours, and so instead he seems to be looking for me to show enthusiasm by giving up free time on this. If the cull had already taken place, I might be tempted to show my true colours - instead I said I would be thrilled to make a positive contribution.. saracasm missed.
These are certainly tough times for graduates entering the job market for the first time in 2009. The cut back in graduate employment is in a range of sectors, and it goes without saying that banking is no exception. Many graduates interviewing with top firms now, who would have been a shoe-in for jobs in the past, are unfortunately going to get the 'small envelope' reply. That's the one which reads: 'Thank you for attending the interview, regrettably we will not be pursuing your application further at this time.'
Before feeling too sorry for graduates, they might just be the luckiest generation since the City 'talent drain' first began after Big Bang. They have a genuine chance to ask themselves that all-important question: 'what should I do in life?', without the financial opportunity cost that tempted so many of us to the devil's path.
"Why exactly do you want to go into finance?" is often my first question in interviews. I have interviewed many grads over the years, and the response is usually vague; at best recycling meangingless PR waffle from the corporate website, at worst you might get a grunt from the less communicative ones.
As somebody on the inside, I would suggest that graduates strongly consider other options. They will probably have no choice in many cases anyway - including L's little brother, who is actively looking now. Although financial services will undoubtedly recover, it is likely that compensation will take years to ever regain the levels previously seen, and a whole shake-up of the bonus culture is underway. As such, graduates today face working longer hours for less reward, which doesn't make sense to me.
As I mentioned in my first ever post, I am really looking to find a way out of this industry sooner rather than later and have always dreamed of setting up my own business. On that subject, I have a web-based business idea brewing that seems to be an excellent synergy between my skill set, experience and where there might be future demand. It's just finding the time to turn that into reality that is the biggest challenge right now.
The spectre of unemployment is something all of us in the City are having to live with right now. I must admit, I am feeling a bit guilty about all the rumour spreading now. Oh well, I'm preparing them mentally for the big push when it happens - and I heard from another source just now that the cull has merely been postponed for a week. I suppose it partly depends on the firm, role and all manner of other factors. There is no harm in me divulging more interesting detail at some point - after all nobody is reading this anyway I expect.
To my surprise who should have wandered past me on the Desk this morning but Shriek herself. I've been lucky enough to never meet her before, and so it took somebody to point her out. In this world of globalisation, it is quite impressive how daily working relationships can be by voice alone, such that you can pass that person without even recognising them. Fortunately that worked both ways, as Shriek does not seem to know me either. She is a real oddity, with bright red (dyed) hair, and seems to have a botox habit judging by the size of her lips. In person, she seems quite different from the aggressive avatar I have known through various phone arguments, and appears to whisper rather than speak.
As such I made a sharp exit from the office before anybody noticed - the last thing I wanted to do was get dragged along to lunch with her. Obviously the 'dodgy dossier' being compiled against her can't be too serious if they've authorised travel expenses for her over to London this week.
I have been asked to take part in some graduate recruitment for the bank. As the Boss explained, this cannot impinge upon market hours, and so instead he seems to be looking for me to show enthusiasm by giving up free time on this. If the cull had already taken place, I might be tempted to show my true colours - instead I said I would be thrilled to make a positive contribution.. saracasm missed.
These are certainly tough times for graduates entering the job market for the first time in 2009. The cut back in graduate employment is in a range of sectors, and it goes without saying that banking is no exception. Many graduates interviewing with top firms now, who would have been a shoe-in for jobs in the past, are unfortunately going to get the 'small envelope' reply. That's the one which reads: 'Thank you for attending the interview, regrettably we will not be pursuing your application further at this time.'
Before feeling too sorry for graduates, they might just be the luckiest generation since the City 'talent drain' first began after Big Bang. They have a genuine chance to ask themselves that all-important question: 'what should I do in life?', without the financial opportunity cost that tempted so many of us to the devil's path.
"Why exactly do you want to go into finance?" is often my first question in interviews. I have interviewed many grads over the years, and the response is usually vague; at best recycling meangingless PR waffle from the corporate website, at worst you might get a grunt from the less communicative ones.
As somebody on the inside, I would suggest that graduates strongly consider other options. They will probably have no choice in many cases anyway - including L's little brother, who is actively looking now. Although financial services will undoubtedly recover, it is likely that compensation will take years to ever regain the levels previously seen, and a whole shake-up of the bonus culture is underway. As such, graduates today face working longer hours for less reward, which doesn't make sense to me.
As I mentioned in my first ever post, I am really looking to find a way out of this industry sooner rather than later and have always dreamed of setting up my own business. On that subject, I have a web-based business idea brewing that seems to be an excellent synergy between my skill set, experience and where there might be future demand. It's just finding the time to turn that into reality that is the biggest challenge right now.
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