This is the second edition of The Coffeehouse Investor. I had really liked the first edition and I dug this up to see what has changed.
This book is all about three lifelong principles:
1. Don't put all your eggs in one basket - Diversify your assets to maximize the chances of reaching your financial goals with minimum risk. (Asset Allocation)
2. There is no such thing as free lunch - Markets are efficient. If you find an investment with better returns, it comes with more risk. (Approximate market averages - indexing)
3. Save for rainy day - It's important to save more than rely on unusual investment returns.
The author stresses the importance of these principles and then advises you to ignore the Wall Street and get on with your life!
From Rags to Riches and back again - 7 Year Learning Experience with eLan
Cash Flow - Drug Delivery
Acquisitions - 22 companies in 2.5 years
Model - JV between Biotech and elan which will buy IP from elan using money from elan!
MS Tysabri Tlymphosites
reverse memory loss on cover of nature December 2000 (big achievement)
Perfect Storm brewing!
Enron, SEC investigation, Halt Trials Generic Threat, Critical WSJ Article
Share Price - $62 - $1.30 (Market cap 24 B to 400 mill) had 4B debt (looks okay for 24B company, but not for 400 mill company)
Debt Reduction - 2.4B from asset divesture, 1.2B LT convertible Debt
Headcount reduction - 5400 to 1800
Tysabri got FDA approval. filed MAA
Cox2 Congressional Hearings. Two adverse events.
Share Price: 29-3 11.5 - 2.6 Billion
Approval by EV and VS
AD - phase 3
Market Cap 11 B
1. Maximum Transparency - dispense all bad news at once
2. Delineate Facts from opinions
3. Select Data Setets? (Monitoring Board w/ease)
4. Don't look back - Address next 3 steps.
5. Don't look down
Today's speaker was Morgan Dene Oliver who is a CEO of OliverMcMillan, a real estate development and management firm. While his projector was getting fixed, he started by doing some show-of-hands about who in the audience:
1. believes "Art and Design" are essential for their future success ? (Many hands went up)
2. believes they are left brained ? (some - much less that I anticipated)
3. believes that people can use both left and right side of their brain ? (Huh ? almost all hands)
Then he offered some introduction about the left and right brain functions and recommended a book by Daniel Pink: A Whole New Mind which talks about how your right brain is going to help you achieve differentiation. Morgan also mentioned that Creativity, Tenacity as very important values for entrepreneurs. "You can always find someone who is more brilliant than you, but not someone who is more creative than you". With this theme, the presentation started. On the showcase were several of the stunningly beautiful and familiar buildings in La Jolla, UTC, Downtown area. He touched upon how they started to introduce complete community-in-a-building feeling to all their development, the importance of location for real-estate (I have yet to see any real-estate guy not utter location-location-location phrase in any talk), strategically buying properties in downturn and also some of the mistakes that they made and some of the unfortunate bad timings. Someone asked about Green Buildings (eco friendly) in San Diego downtown and his answer was that this was no longer a fad, but a requirement. Also mentioned about supporting the art tax bill from all commercial development. Had an interesting advice for real estate locations - buy properties near art galleries, gay communities!
This was the first professional seminar. Leo Spiegel is a managing partner with Mission Ventures, a hi-tech venture capital firm. Leo has been a president of Digital Island, CEO of Sandpiper Networks. He is also a member of Dean's advisory Council of Rady School of Management, UCSD.
This was an interesting and engaging presentation about Leadership Lessons (the subtitle was funny but I cannot remember it). One interesting thing was that all the slides were a single point followed by a cartoon describing that. Presentation Zen!
The actual message in the presentation was same-old. Good values, Vision, Choose Great People. Common sense (so uncommon in practice!). The anecdotes after each point were very interesting. The following question-answer session was also great - He talked about the startups in San Diego and Orange County area, the profiles of the companies they are currently "incubating" (Entropic, Slacker - which he was very enthusiastic about), his greatest investments so far...
All in all, a great kickoff to the seminar series.
John Mutch has been a CEO of HNC software and was appointed the CEO of Peregrine Systems by Federal Bankruptcy court. He took Peregrine Systems from bankruptcy condition to the price tag of $425 millions (HP was the buyer). Since then he started a MV Advisors, an "Activist hedge fund".
What is an Activist Hedge Fund ? The strategy is to find technology companies which are undervalued compared to peers because of corporate governance issues and organize shareholder activism to improve them and in the process create market value. They do this by establishing big stock positions (starting from 4.9 percent which keeps you under SEC radar!), bargaining for board seats and then improving matters by possibly restructuring products, reviewing executive compensation, spin-off, merge as necessary and kick away non-performing executives!
An interesting business model and a good conversation...