The Vampire Squid

Welcome back to another episode of The Vampire Squid! Today, we’re going to be talking about trading options. For compliance reasons, please note that “Today’s episode does not condone or promote the trading of any single stock equities. The content in today’s episode are for educational purposes only and I am speaking on behalf of myself without further representation.”

Also, shout to Val and Geoff who contributed $100 and $20 per month respectively, you guys rock :)!

* What are options?

* Call Options

* Put Options

* What comprises the value of an option?

* Underlying stock value

* Time Value

* Including Volatility

* What are Strike Prices, Expiration dates, and premiums on Options

* Examples

* How to actually trade options

* Margin account

* Selling a naked call option

* Selling a covered call option

* Strangles, straddles, butterflies, etc. that we will cover in another episode

* Power of Options

* Trading option example vs. purchasing underlying stock

* Things I wish I knew before trading options

* People don’t usually exercise the option contract

* Trading options is really hard

* Getting direction correct but still losing money due to time decay

* Never trading over 5% of your portfolio in any single option

* Conclusions

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1. To support us check us out at Patreon https://www.patreon.com/thevampiresquid

Welcome to episode 17 of The Vampire Squid! Today, we will be talking about Banking vs. Consulting since I’ve been getting a lot of emails asking me about the differences between the two as well as my decision to pursue banking over consulting. Also, if you guys are interested in helping support The Vampire Squid, please check out my Patreon page here!

https://www.patreon.com/thevampiresquid

* Recruiting

* Recruiting for both banking and consulting

* How to make a decision between the two industries

* Going to the best firm that you can possibly get into regardless of banking or consulting

* Lifestyle

* Work hours differences

* Traveling differences

* Getting Business school paid for and the caveat that you should know!!

* Work

* Tools used in both banking and consulting

* Differences in financial modeling and operational analysis

* Exit Opportunities

* Fortune 500 companies

* Startups

* Private Equity Firms

* Starting your own business

* My decision between banking vs. consulting

* Upcoming episodes (venture capital) stay tuned 🙂

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1. To support us check us out at Patreon https://www.patreon.com/thevampiresquid

Hope everyone had a great labor day weekend! Today we are going to be talking about Leveraged Buy Outs, another form of valuation and modeling. As promised, please see a link to the actual model of an LBO, and a more detailed explanation in case you are interested.

LBO Model

LBO Detailed Overview

* LBO Drivers

* Purchase Price

* Debt Quantum

* Interest Rate

* Synergies

* Exit Price

* Dividend Recap 

* Walk through of an LBO

* Types of companies that are good LBO Candidates

* High Cash Flow Generating

* Stable and predictable business

* Companies where you can cut costs

* Low CapEx business

* How buying a home is similar to an LBO transaction

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

New York vs. San Francisco! Two of my favorite cities that I have ever lived in. In this episode, we will dive deep into the major differences between New York and San Francisco from a career perspective and a lifestyle perspective. Overall, I would say please don’t be nervous to move to a new city if you have a great opportunity to do so. It will be difficult at first but it will force you to step outside of your comfort zone but you will quickly adapt and make new friends and get to enjoy a completely new city!

Finimize – Great for digesting finance in a easy to understand way

* Career

* San Francisco vs. New York

* Technology

* Proximity to Silicon Valley

* Range of products from IPOs, Private placements, M&A, Financing

* Exit Opportunities

* Lifestyle

* Weather

* Bar and Clubs

* Weekend trips

* Food Scene

* Pace of both cities

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

Today’s episode will cover another one of the most common valuation techniques, Comparable Companies Analysis, which is an extrinsic form of valuation that people use for companies. Hope that you enjoy the episode and takeaway understanding how this method is used!

* Extrinsic Valuation

* Ratios

* Common Comps Multiples

* EV / Revenue

* EV / EBITDA

* Price / Earnings

* Drivers and lever that go into Comps

* If two companies are identical in terms of size, industry, technology, etc. but one grows quicker than the other, which company would you be more willing to pay for?

* Why are comparable companies analysis useful?

* Valuing private companies – Snapchat

* Determining valuation in an M&A situation

* Things to be careful about when performing this analysis

* Picking the right set of comparable companies

* Using the right multiples i.e. EV / Rev vs. Price / Earnings

* Pros and Cons of this type of analysis

* How can this be applied to everyday life?

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

Welcome to the first valuation episode! Today we will talk about Discounted Cash Flow (DCF) analysis, one of the most common types of valuation that people in finance use. As promised, please see attached links to an actual DCF model, in addition to more of the granularity of the formula in case you are interested.

DCF Model – http://macabacus.com/valuation/dcf/overview

Detailed DCF explanation – http://www.investopedia.com/university/dcf/

* Intrinsic Valuation of a company

* What is the time value of money?

* Would you rather have $1 today or $1 a year from now?

* Projecting out your cash flows

* What do you do for your terminal value?

* Perpetuity Growth Method

* Exit Multiples

* Why do you have to use a discount rate? What’s an easy to understand example?

* Cons of a DCF Valuation

* Assumptions

* Predictability of cash flows

* Pros of a DCF Valuation

* Intrinsic valuation of a company

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

Welcome back! As many of you know starting today, we will be releasing one episode per week on Sundays. First day of work tomorrow!

https://www.linkedin.com/in/shaun-mehra-842b9a47

Today we have a very special guest, Shaun Mehra. Shaun worked as a private equity analyst at Silver Lake Partners, a large cap private equity fund focused on technology investments. We go over Shaun’s day to day, investment thesis, and advice to break into the industry. Very fun episode, hope you enjoy!

* What’s your background story?

* Before Silver Lake Partners, what were your thoughts on our summer at GS?

* How was it helpful to your time at Silver Lake Partners?

* What does Silver Lake Partners do? What’s the high level overview?

* How did you get the job? What was the interview process like?

* What do you do on a day to day basis? From when you wake up to sleep?

* Walk me through your investment thought process.

* What skills have you acquired since working for Silver Lake Partners?

* What advice do you have for kids that are looking to break into private equity?

* Fun Questions

* What is your favorite book that you’ve read and why?

* Favorite restaurant in the city

* How do you stay motivated, or what motivates you?

* How can we improve on increasing transparency in finance?

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

Welcome back for the last episode of the three part series on investment banking recruiting, technicals! Before we begin, check out this recent article that was written about us in The Globe and Mail.

* Best Resources for preparing for Technicals

* Friends that have worked in investment banking

* Wall Street Oasis Prep Guide

* Rosenbaum and Pearl

* Sections for Investment Banking Technicals

* Financial Statements

* How they tie to one another

* Specific line items on the financial statements

* How changes affect the three financial statements

* $10 increase in depreciation

* Valuation

* Discounted Cash Flow Analysis

* Comparable Companies Analysis

* Precedent Transactions

* Leveraged Buyouts

* Resources

* Excel Models

* Brain Teasers

* Case Study Questions

* How many cigarettes are smoked in a day?

* How many ping pong balls can you fit in a 747

* How many customers enter the grocery store down the street

* How to answer questions that you don’t know the answer to

* General Closing Tips

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

Welcome to Part II of the Investment Banking Recruiting series. Today, we are talking about behavorial questions which are arguably more important than technicals. We also touch briefly on networking as I did not cover this subject as much in the first IB Recruiting Episode.

* Make sure to have a theme or message you want to convey across in the interview

* Prepare every line item on your resume so you can speak extensively to it

* Questions, answers, and why they are asking them

* Walk me through your resume, give me your background

* Why do you want to work at X investment bank

* Why do you want to work in investment banking

* Are you interviewing only with investment banks, or also consulting and other firms?

* Tell me about a time you had a conflict on a team and how did you resolve it?

* Tell me about a time you went against the grain or challenged the status quo

* Tell me about your greatest accomplishment

* Tell me your strengths and weaknesses

* Tell me about a time that you failed

* What do you do for fun?

* Ethical questions

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

Finally got around to jotting down some notes for the investment banking recruiting process that is up and coming for many of you! This series will be broken up into three parts: the overview, behavorials, and technicals, as it was too much to jam into one episode.

* Investment Banking Timeline

* New Goldman initiative for first round video interviews

* http://www.reuters.com/article/us-goldman-sachs-hiring-idUSKCN0Z929M

* Investment Banking Information Sessions

* To go or not to go

* Resume Screens

* Who screens your resumes?

* What do they look for?

* First Round Interviews

* Dress Code

* Picking interview time slots

* What are they looking for?

* Final Round Interviews (Superdays)

* How many interviews do you have?

* What to do if you are interviewing with a partner

* Tips I wish I knew

* Exploding Offers

* Random questions like, “Tell me your favorite joke”, “What do you do better than 99% of the world?” etc.

* Videotaping yourself for practice

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid