Thursday, September 09, 2010

Meredith Whitney Interview

Lessons from Meredith Whitney:
  1. Keep it simple. Write and communicate in a way that even an art teacher or veterinarian could understand. When she famously made her Citi call, she looked at three key variables - leverage ratio, how much Citi needed to raise to reach similar leverage ratio as its peers, and dividend payout. She realized that in order for Citi to achieve similar ratio as its peers, it would need to raise $30billion in equity against $100billion in net assets. Therefore, Citi would need to stop paying dividend or else, go bust.
  2. Work hard. She "taps dance to work". Don't mind asking dump questions.
  3. Having high conviction after you have done your homework. It's ok to be the minority if you're right.
  4. Be a prolific reader. Leave no stone unturned.
Enjoy the interview,

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