Everything you wanted to know about Investment Banking…

May 7, 2008

Scrib has this document that is basically a complete overview of Investment Banking. It was actually pretty interesting to read as it was pretty dead on. I wish I been able to read something like this when I first started out in banking. You can check it out here.


Canada: Telecommunications blackhole

January 23, 2008

It never ceases to amaze me how backwards the Canadian Telecommunications industry is. In other countries, the industry is being opened to more and more competition, while in Canada, there was actually serious talk about 2 of the top 3 players merging  (Bell and Telus). This would have resulted in only 2 players, meanwhile the UK has 5 MNOs and plenty of MVNOs. Not to mention how expensive wireless service is and the ridiculous 3 year contracts.

Now I just read on a blog by Larry Borsato that Rogers is bucking the trend of most of its contemporaries and actually increasing prices. Also see Mark Evan’s blog for a good piece on it.

Back in my banking days, I used to arrange financing for European cable cos such as NTL/Telewest (now Virgin Media), Liberty Global and Auna/Ono. The thing about cable was that while they required heavy capex investment, their EBITDA margins were always strong (~ 40%). I decided to take a look at Rogers Cable’s margins and compare them to US and European companies, to see if there was any justification for increasing prices, or if this was just a money grab.

Company                                            Q3/07 EBITDA margin
Rogers Cable                                              39.0%
Virgin Media Cable                                    39.5%
Liberty Global Int.                                    40.7%
Time Warner Cable                                   35.7%

Rogers margins look pretty healthy. They are doing better than Time Warner in the US and inline with Liberty Global and Virgin Media.

Notes: 
I stripped out Business Solutions and Retail (ie. DVD rentals) from Rogers for a better like-for-like comparison with the others. I wasn’t able to strip Business out of Virgin Media, but unlike Rogers, Virgin’s business unit has respectable margins and won’t skew the results as much.


Securitization caused the subprime crisis: Greenspan

October 2, 2007

The Globe and Mail has an article on the subprime crisis and how Greenspan blames it on the securitization of home loans rather than the poor credit quality of these loans. The problem being that the Rating Agencies didn’t rate these securitized assets appropriately and then when things started going bad, were very slow to react.

I actually almost joined the Fixed Income Securitization team at Citigroup over a year ago but turned down the offer as I decided to get out of banking entirely. Probably was a good decision regardless in the short run.


Canadian dollar reaches parity

September 22, 2007

There’s been alot of press as to what this means to the Canadian economy, some say it will hurt Canada’s exports. I personally agree with Canadian billionaire Jimmy Pattison that it will ultimately be good for Canada. The Jimmy says in this article in The Globe and Mail that it force Canadian businesses to be more competitive. I think Canada tends to rest on its laurels too often and as of late as been relying on its manufacturing and natural resources. I hope the new currency strength will make Canada’s economy more modern and competitive.


Updated property investment model

August 24, 2007

I sent my property investment model to a old investment banking colleague and he made a number of fixes and additions. The latest version can be found here.

Any comments and suggestions are appreciated.


What’s wrong with Balsillie?

June 23, 2007

I’m a big fan of RIM and the Blackberry but I think there is definitly something wrong with CEO Jim Balsillie. The Globe and Mail have done a number of articles showcasing his competiveness, the most recent one has an amusing little anctode about his poor gamemenship as well:

Just how much does Mr. Balsillie hate to lose? Not long ago, during a round of golf in Hamilton, Mr. Balsillie lost a bet to Mr. Foxcroft on the 18th hole.

When it came time to grudgingly hand over the money, the high-tech CEO, whose net worth has been estimated at more than $1.6-billion (U.S.), was visibly shaking.

“He said, ‘I’m not going for a drink. Here’s your $20,’ ” Mr. Foxcroft recalled. “I said, ‘It’s only $20.’ And he said, ‘No it isn’t. It’s all about pride.’

The fact that he can’t stand to lose has been directly linked to why RIM over paid NTP by about $400m dollars as it could have been settled much sooner. It also looks like his attempt to buy the Predators may have been botched as he jumped the gun and began to pre-sell season tickets in Hamilton, before the sale was final and before any decision to move the team was made. Doesn’t he have any tact?


Marketing 101

June 7, 2007

I found some amusing videos I helped make in University which were apart of an assignment in marketing class. We were supposed to demonstrated 3 different types of marketing/branding strategies using milk as a product. My group (well more myself and my friend Dan who stars in the videos) decided to be a bit funny with ours… they aren’t really acceptable advertisements!

Using seduction:

Using fantasy:

Using lifestyle: