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True Success is Failing with Enthusiasm
Success is about failing in and out without losing enthusiasm. You need to be persistent. Hey, even outright crazy. The ability to fall, stand up, fall, stand up. It’s not taught in school. This is known. But even then we do so little to change it. I have struggled to build this muscle. Because most…
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Stress is a Stress
The source of our stress is knowing that we are stressed. Why are we constantly living in a world of stress? Because there is a lot around us. There is constant stimulation in the external world. Things “needing” our attention. And, knowing that there are things that need our attention creates stress. Knowing that we…
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Minute Markets 5/8/24
Key Events 👉 Reddit shares soar after first public earnings release Reddit shares climbed 11% at the open Wednesday after strong results and revenue guidance that surpassed expectations. The company posted a 48% increase in revenue y/y and loss per share came at ($8.20) versus the ($8.71) estimate. The earnings beat was driven by growth…
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Best Reads for Investment Banking
There are an abundance of books on finance that can help build and refine your financial understanding. This is a list of resources that we have recommended to our students as materials to supplement their learning in the past. Textbooks Frankly, most finance textbooks tend to be pretty dense and cannot be read like a…
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Question of the Day 5/7
Question Are the 3.71% – 4.36% notes under the Long-term Debt footnote of SpartanNash representative of the face value, book value, or market value of debt? A) Book Value B) Face ValueC) Market Value Answer Answer: B) Face Value Explanation: The total debt represents the face value of debt which is directly plugged into the…
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Minute Markets 5/6/24
Key Events 👉Chinese EV company Zeekr prepares for U.S. IPO Premium electric vehicle company and Chinese Tesla competitor Zeekr targets $5B valuation, marking the first significant IPO by a China-based company in the U.S. in over two years. The electric vehicle maker intends to raise $367M by offering 17.5M American depositary shares (ADS) priced at…
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Discounting Period Under Exit Multiple Approach
If the terminal year cash flow is discounted by 4.5 years, why would we discount the terminal value by 5 years? There are 2 ways to determine the terminal value of a company. In the first case, we are implicitly projecting the growing cash flow stream indefinitely. Then, finding the present value. In this case,…
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Reminiscing About The Past
Find something that lets you reminisce about the past and remember how far you have come. For me that thing is running. Whenever I come back home, I like to go for a run. I used to run a lot in high school. Cross country. Track and field. Recreationally. I vividly remember the school bell…
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Question of the Day 5/5
Question In January, DropoutEdu sold and delivered $100 worth of textbooks to customers. But, the customers only need to pay cash for the purchase in February. Assuming a 25% tax rate, how much would DropoutEdu report in earnings in February? Answer Answer: 0 Explanation: Cash is irrelevant to income statement earnings. The goods were transferred…
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Living in Sandbox Mode
We’re in sandbox mode. As young people, we have the benefit of being able to fail. And fail multiple times. We are only limited by the level of our ambition and effort. The beauty is that if we fail there is a lot less to lose. As we grow older the stakes rise. Friends. Family.…
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Minute Markets 5/3/24
Key Events 👉Sony and Apollo Offer Paramount $26B Sony and Apollo submitted a $26B joint bid to acquire Paramount Global on Wednesday. This development comes as Sony and Apollo seek to challenge the existing deal that Paramount has been negotiating with Skydance Media. Investors and analysts are closely watching this situation, as a successful bid…
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I Just Ran 10 Miles. Missing Something.
I just ran 10 miles. But, I didn’t get the dopamine I wanted. Today was my last day of exams. So, I wanted to get some fresh air. Decided to go on a run. Thought it would be 5-6 miles. But, my 3:30 and 4:30 chats got dropped. So I kept running. The run was…
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Minute Markets 5/1/24
It’s officially May! Key Events 👉The Fed holds rates and reduces treasury bond sales The Federal Reserve maintained its current interest rate levels, citing lack of further progress towards bringing down inflation levels. This decision comes after a disappointing inflation report in March, which prompted investors to lower their expectations of rate cuts, now expecting…
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Increasing Output Per Unit of Input
What happens if we increase the deviation in our work? No, not quality. What happens if we only work for free? Only work for ultra premium services? Recently, I was listening to a Tim Ferris interview. And one thing resonated with me– Tim only does things that are free or ultra-premium. No in between. If…
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How Would WeWork Debt Affect Apple?
If Apple had a massive investment in WeWork debt, what would happen? Given that WeWork just exited chapter 11. The underlying question– How do unrealized gains or losses affect the financial statements? Well, I would hope that Apple was more sophisticated than me. And did not get carried away in the WeWork hype. So, say,…
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Minute Markets 4/30/24
Key Events 👉 WeWork set to emerge from Chapter 11 bankruptcy WeWork has reached an agreement with its senior creditors to exit from bankruptcy after filing in November 2023. On Monday, the company and its major financial backers finalized a settlement plan that involves a cash infusion of $450M funded by SoftBank (a key backer…
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Imperfection Is Fine. Not Showing Up Is not.
If there is one thing that I’m going to be mad at, it’s not that I showed up each day with imperfect work, rather that I didn’t show up. A thought that I have frequently is– I wish I started this 5 years ago. I would be so far if I had. You know how…
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Another Bank Collapse (1 Year Later)
Republic First (not First Republic) collapsed last Friday. Does this mean that banks are investing too aggressively in speculative assets? Not exactly. The bank under normal circumstances would not collapse. The reason that the peer banks collapsed was because of multiple dominos falling. First, we need to understand the business model of banks. Borrow short,…
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Minute Markets 4/29/24
Key Events 👉 The 6th largest bank failure since 2010 The FDIC took control of Republic First Bancorp, selling its assets and liabilities to Fulton Financial. This is the first bank failure of the year. And the 6th largest failure since 2010. Shares had plummeted -88% over the past year. Republic First is not First…
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Doing Less is Doing More
A concept I have been toying with lately is abstraction. That is the less I do, the further I go. A world where doing less is doing more. In computer science, abstraction refers to removing the specific details and implementation, but keeping the general form and high-level concepts. Now, we might wonder how this is…
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Why Pay So Little in Effective Taxes?
What causes companies to pay less in effective taxes than the statutory tax rate? If the US tax rate is 21%, why do some companies report paying less than that? Considerably so. Well, the difference arises from permanent book-tax differences. That is transactions that permanently result in the book taxes differing from how much is…
