One of my short term goals over the next few weeks is to conduct an informational interview with the Vice President of Strategy of Integer Holdings. During my preparation for this, I experienced a feeling that I have not experienced recently: fear.
I feel like fear is a natural part of any new experience. When going into something completely new, you don’t know what to expect, exactly how to act, or what you should prepare for. This fear, however, is not detrimental if it is correctly managed. Personally, fear is a mix of anxiety and excitement that I feel prior to these new experiences and allows me to succeed during many professional events.
The last time that I experienced this fear was during my interview with Yahoo Finance. I had never been in the public eye as a young investor, and this was my first experience being “introduced” into the world of professional investors. In addition, I had only been given two hours notice before my interview and had no time to prepare for the experience. Initially, I was fearful of the situation because of the many variables that were unknown and sudden exposure to the public eye. However, I was able to get over this fear by simply trusting the knowledge that I have. I believe that this is one of the most important lessons to learn for any young professional. After a certain point of collecting information, you must have the courage and confidence necessary to use that knowledge, make mistakes, and improve your skills. Thinking of this, I was able to harness my fear and turn it into excitement for my interview, ultimately allowing me to relax and give interesting and eloquent responses to the questions that they asked.
Overall, I will need to focus on taking all of my nervous energy for my interview with Integer and channel it into excitement in order to get the most out of my first interview with upper-level management.
Over this past week, I have been paying a lot of thought to the importance of a good network. As I move into college and yet another group of people and opportunities, I believe that the ISM program and my previous experience in the industry will help me make the most of what is given to me.
One of the ways that my previous experience will benefit me is through finding a part time job through college. Personally, I believe that concurrently learning and working throughout college will be the best experience for me simply because I already have experience in the area and the practice portion of investing is much more important than the process of learning it. However, by trying to take on a new job at the beginning of my freshman year, I will have to be very prepared and comfortable with my workload, which is why I will be reaching out to my mentors to find out if they have any contacts in Austin that are looking for interns during the school year.
Another place that I could find new opportunities for college is through the Berkshire Hathaway Annual Meeting. Since I now have a small network of people that I know in Omaha, I am able to get access to professional meetings and company events, which allow me to to connect to an even larger national and global network of dedicated value investors. Through this group of people, I will be able to brand myself as a possible intern for some prominent small hedge funds in many different areas of the country, then exposing myself to their network and building an even larger web of relationships.
Overall, over the next few months I will be looking for a new internship opportunity in Austin, where I will be attending college. My small network of talented investors at both Venable and the Berkshire Hathaway Annual Meeting will be able to help introduce me to various different opportunities, and I hope to continue building my network of connections far into the future to expose myself to a world of brilliant minds and innovative ideas.
Over the past two weeks, one major event has been looming over my mind: the 2018 Berkshire Hathaway Annual Meeting. This is not nearly the first time that I have talked about this topic in one of my weekly reports, but this event is so inspiring and integral to my business career that every year, it seems like a fresh new challenge. So, this week, I would like to focus on one of the people that make up this incredible company and that have inspired me to work like I do today.
The first person that I would like to talk about is Mrs. Rose Blumkin. Blumkin, or Mrs. B, was the founder of Nebraska Furniture Mart, a company that Berkshire acquired and is now one of the largest furniture stores in the country. This is a prime example of a “story” company, one with such an incredible story and valuable management that no value investor could pass up. Mrs. B was a fiercely competitive and business-minded individual that first came as an immigrant from Russia. Although she did not know how to read or write, her children taught her how to speak English, and soon, when the family hit hard times, she started Nebraska Furniture Mart from her home. Since the opening of the store, Mrs. B functioned on the mantra “Sell cheap, tell the truth, don’t cheat nobody”. This complete honesty and sincere desire to work is exactly what attracted Warren Buffett, and many other investors, to her. The deal closed in 1983 with a simple handshake between Mrs. B and Buffett because she couldn’t sign her own signature. From then until her death at 104 years old, she happily worked in the original Nebraska Furniture Mart in Omaha, zipping around on her scooter, helping customers make their houses into homes at affordable prices.
The story of Rose Blumkin has been one of my favorite ever since I have learned about Berkshire. Hers is a story of pure human resilience and honesty. It goes to show that no matter what level of education or experience you have, you can accomplish anything as long as you are passionate about what you do. The story of Mrs. B has guided me along through the beginning of my career, and will continue to inspire me throughout the rest of my life, not only in investing, but personally as well.
This week, I made significant changes and progress toward the completion of my final product. After working on the project for the past few weeks, I decided to narrow my focus and tackle one large industry that I have never felt ready for until now: insurance.
Insurance, as an industry, is entirely different from any other company. Generally, a company makes money by selling a product or service to a customer, getting immediate payment. Insurance, on the other hand, only takes the premiums and does not always have to pay the customer back. Because of this pay-now-get-later model, insurance must be valued in an entirely different way to that of other companies. The complexity of the insurance and reinsurance industries has always scared me off before, but I finally think that I have enough background knowledge necessary to understand and be able to successfully value an insurance company.
Because of the addition of insurance as a part of my final product, however, I had to dramatically change my calendar. Now, I am spending about half of the total time on my original work on the insurance industry, and doing a smaller number of companies because of it.
Aside from all the technical work that I have been doing for final presentation night, I also have been preparing a list of people that I would like to invite to final presentation night. The process of making this list reminded me of all the support that I have gotten from the people in my life. They motivate me to work even harder to produce an ambitious and creative final product that not only proves to me what I can do, but shows the people that have supported me the things that they have enabled me to do. Without the help of those people, I would most definitely not be as successful as I am today, and I hope to continue this success far into the future.
Spring break was an incredibly productive week for me. In addition to catching up with all of the work that I had been rushing to complete due to my two weeks of travel in February, I was able to put in over 10 hours on my final product and gain some valuable experience by attending a meeting at the Dallas Petroleum Club during a mentor visit.
The progress that I have made on my final product was probably the most successful part of this week. Much of my time was spent on creating a new valuation model that I will be using in all of my valuations in of my final product. Previously, I had been using the model that Patrick had provided to me when I started at Venable. I decided to make my own valuation a bit more complicated and accurate than the one that I had been using. First, I modified the averaging system of earnings. Previously, two sets of three years in a ten-year period were averaged together, which required you to take an average of an average, compromising the accuracy of earnings growth. With my new valuation, I found the year over year (yoy) growth of earnings over ten years and averaged those percentages to come up with a final value. Next, I included worksheets for some things like return on invested capital (ROIC) so I personally could become more familiar with various accounting concepts and see my own work.
The second valuable experience I gained was attending a meeting at the Dallas Petroleum Club. I was able to gain experience talking to people and learn about the environment at a multidisciplinary industry club. The guest speaker gave a presentation on the work that their company does, which was putting together large amounts of data to make different tasks like oil mapping easier. Although I did not understand all of the intricacies of what he was explaining, the system strongly reminded me of the Bloomberg Terminal, which provides access to almost every piece of investment information that any investor could want. This talk also stressed the importance of having comprehensive and quick data, which, in this new digital age of business, makes things more accessible and consequently more competitive. The new accessibility of data will be one of the things that this generation of investors will have to work with in order to effectively invest.
Overall, this week was very successful and productive in giving me more experiences and time to work on my various projects, both in school and at Venable Royalty. I look forward to accomplishing more on this project and finding new investing opportunities.
This week, I attended the Business Professionals of America State Leadership Conference in Corpus Christi from Wednesday morning to early Sunday mornings. During this conference, I got to compete against other business-minded students in my two events: Banking and Finance and Economic Research Team. Although I have been competing in this competition throughout my high school career, this State Leadership Conference allowed me to learn the most out of all of the other conferences I have attended.
I believe that my most successful competition was Economic Research Team. My teammates (Anish Patel, Joseph Christopher, and Shawn Khetarpal) and I had been working on our presentation and solution for months, and with all of our combined strengths, we believed that we had a good chance of making it to the National Leadership Conference. The day before our preliminary competition, and later finals, we rehearsed our presentation in front of a few teachers and students. Later that night, thinking back on our earlier rehearsal, I realized how much that I have grown over the past three years and even through my few months in ISM. Before the experiences I have gone through today, presentations scared me. I was not confident in my abilities to teach a group of people about something that I am passionate about and got nervous every time I took the stage. Now, however, I have learned the invaluable skills of improvisation, control, and confidence, all of which have contributed in my ability to give a high quality presentation during our final round.
Ultimately, I placed 6th in Banking and Finance and 3rd in Economic Research Team, earning the spot for the first national alternate in both events. Although I did not progress to the next level of competition, I genuinely believe that nearly nothing could be done better in terms of our presentation. I am proud of all the growth that I have seen from my freshman year to now, and I know that this growth will only continue in the future to make me an even more successful business professional.
This week, I began serious work on my final product. During my day at the office, I decided on the first company that I am pursuing as part of my investment portfolio. This company, Integer Holdings, produces a wide range of medical equipment for use in various different areas of medical practices. They are not involved in shipping or distributing their own equipment. The primary reason that I chose Integer to invest in is because of their very specialized field in which they operate and the small nature of the company. Their field has high barriers to entry, which eliminates a lot of the intense competition that other industries face (such as technological disruptions from companies like Apple), and because of their small size, have an ability to easily and organically grow.
In addition to having good potential for being undervalued, Integer will also provide to me an opportunity that most high schoolers do not get: interviewing upper level management (ex. CEOs, COOs, CFOs) of a corporation. Integer is headquartered about fifteen minutes from where I live, allowing me to easily be able to visit their headquarters and learn about the company while also gaining valuable experience doing an essential part of an investor’s day to day job.
The process of thinking through company strategy and their competitive advantages also made me think about how my own competitive advantage has developed over the four years that I have been seriously investing. Aside from my young age and more formal experience than most beginning investors do, I have also been attempting to target rare opportunities for someone like me, such as meeting with heads of management and investing real money. Of course, there is the customary feeling of doubt and trepidation with these new opportunities, but as long as I adequately prepare and continue to be passionate in my topic, I know that I can be successful and continuing to build up the durable competitive advantages that I have.
This week has probably been one of the most tiring weeks so far in ISM. Along with just starting my mentorship at Venable Royalty, Ltd., I took a five day trip to Beijing, packing my already busy week into just a few days.
Even with my packed schedule, I still managed to get some work done over my short trip. I finished reading my assigned chapters of The Intelligent Investor by Benjamin Graham, which was assigned to me by Mr. Patrick Van Ooteghem the last time that we met. Rereading these chapters helped me get a better idea of the guiding principles behind value investing, and even reevaluate some of the previous investment choices that I have made. This brought me back to the first stock I ever bought, PayPal, on its IPO date. Looking back on this decision, I have realized that the majority of it was influenced by speculation, and not actual careful analysis of the corporation. Although this investment did ultimately work out for me, I will need to take extra caution in the future to avoid emotionally-driven decisions like this.
In addition to some of the work that I have finished over my trip, I also received word that I have been accepted into NYU Shanghai and the Red McCombs School of Business at UT Austin. Over the coming weeks, I will have to decide whether to accept or decline my offer to NYU Shanghai and take the next steps in planning the next four years of my life.
Overall, this week was a very productive, however tiring week. Although I will be having weeks like this for the rest of the month, I look forward to all the work that I will be doing both in school and at Venable.
These past weeks have been extremely eventful for me. After a few meetings with my school administrators, I was finally given approval to start my mentorship at Venable Royalty, Ltd. under Mr. Patrick Van Ooteghem and Mr. Richard Rogers.
Venable Royalty, Ltd. is a Dallas-based oil and gas royalty company located in downtown Dallas. I will be working with both my mentors and their team of interns to find public investing opportunities for the company. The company makes investments using value investing, which means that they use some form of a discount cash flow statement. In this day and age, it is incredibly difficult to find true value investors because the interest rate is so low that many companies are either overvalued or accurately valued, so I am very lucky that I have found a company like Venable that is willing to work with me.
My first day at my mentor’s office was one of the best days that I have had all year. I had always dreamed of the life of a value investor where we simply get to read all day and learn as much as we can about anything that I am interested in, and I am glad to say that Venable allows their interns to do just that. Mr. Van Ooteghem assigned me to read some select passages out of the iconic book The Intelligent Investor by Benjamin Graham, Warren Buffett’s former mentor, for the entire day. Although I made significant progress on the chapters, I was ultimately sidetracked by Integer Holdings, a company that creates medical tools. I had seen the company somewhere recently, and decided to take a deeper look into it. At first glance of its Value Line report, it seemed like a company that is very similar to my own style of investing, so I decided to conduct a basic valuation on integer using the discount cash flow model that Mr. Van Ooteghem walked me through during our first mentor visit. I should have both of these assignments done by next Tuesday, February 20th.
Overall, these two weeks have been some of the most exciting weeks that I have had in ISM so far and I am glad to be starting a new journey with two new, supportive mentors and the group of extremely talented interns at Venable.
Time management has become one of my main concerns this week as I work out the logistics of my possible internship as well as the increased workload of all of my classes.
One of the major changes from the first to the second semester was the change in classes that I am taking. I had a few required classes that usually never had homework in the first semester, but the second semester has switched me into AP Government, which is one of my weaker subjects with a heavy workload. This was a very sharp transition for me, especially because I am now making time in my schedule to fit in my internship.
In order to make this workload a bit lighter on myself, I have been meticulously keeping track on my calendar and planning out bigger projects over weeks rather than just having one due date for all of my projects. This has helped me balance my light and heavy days, and especially has helped me with making time for investing for myself rather than just for my internship.
Even though I may not perfectly spread out my assignments throughout the week, I have found that even taking five minutes to plan my day in the morning helps me work faster after school. For example, I completed my research assessment last week in approximately 45 minutes from what would usually be an hour. The only reason I was able to do this is because I had planned what I was going to write about throughout the day, so that when it came time to write the assessment, I was able to write it fairly quickly.
Finally, the last change that I have made is getting up earlier. After reading an article in the Wall Street Journal, I was reminded of the schedule I had during sophomore year: finish as much homework as possible by 9 PM, read until 11 PM, and wake up at around 5 AM to finish any remaining work that I had. This forced me to work incredibly efficiently before 9 PM in an effort to get more sleep, and therefore allowed me to get more work done in a short amount of time. I will try to adopt this schedule throughout this week in an effort to increase my productivity. Hopefully all of my efforts to more effectively manage my time will pay off, and allow me to juggle all of the things that are happening in the second semester.