Gurley says average Silicon Valley financial literacy is two out of ten versus eight-and-a-half in New York.
“So this gets into some of the earlier stuff we talked about just about how deep you go on investing history and understanding But if there is a scale of financial sophistication between one and ten, and you would say a really smart person in New York is a eight and a half.”
Gurley walked Wall Street offices late at night to visualize his future as a senior analyst.
“I walked around the office late one night, about 10PM Park Avenue Plaza and the 63rd, 36th Floor and the corner offices were the most senior sell side analysts.”
Gurley says the IPO market has consolidated from the four horsemen to an oligopoly of three big banks.
“It's very common to see all three of the big banks on the cover. And so it's really become a oligopoly of sorts.”
Gurley was the only one among 40 Wall Street MBA hires not from Columbia or Wharton.
“the incoming group of of people from NBA programs that year, there were 40 of us, and I was the only one that wasn't Columbia, Wharton Right. You know, the ones you would expect.”
Gurley spotted Dell trading at six times earnings after laptop fire and hedging problems, then went positive on the stock.
“It this the company was in trouble. It was trading at six times earnings. Their laptop had caught on fire, and they had this option hedging strategy gone awry”
Gurley paused in front of senior offices at 10 PM asking if he wanted that career path.
“I don't even know why I did this in front of each of those four offices and said, is that gonna be me?”
Gurley's ROIC analysis showed Dell had a 10 to 1 advantage over Compaq in inventory and cash flow.
“And they had like a 10 to one advantage over Compaq and the other companies because of how they work their inventory and their positive cash flow cycle.”
Gurley used the thirty-year test again on Wall Street, walking through senior offices at 10PM.
“I paused in each one of them and said, do I want to be here thirty years from now, like in that office? Assume I do great, but I've done this my whole life.”
Gurley wrote a 20-page unsolicited report after three weeks to win the PC industry analyst role.
“I went back to my Brownstone apartment and spent the entire weekend writing a 20 page report to go in and tell the gentlemen stepping aside and Al Jackson, you guys should give me this category.”