< The Finance Professionals' Post: July 2014

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10 posts from July 2014

07/30/2014

NYSSA Launches New Online Career Center

On August 1, 2014, the New York Society of Security Analysts (NYSSA) will launch an interactive job board, the NYSSA Career Center. With its focus on financial industry companies and professionals, the NYSSA Career Center offers members a highly targeted resource for online recruitment. 

Employers can use the NYSSA Job Center to reach qualified candidates. They can post jobs online, search for qualified candidates based on specific job criteria, and create an online resume agent to email qualified candidates daily. They also benefit from online reporting providing job activity statistics to track each job posting's ROI.

For members seeking jobs, the NYSSA Job Center is a free service providing access to employers and jobs in the finance industry. In addition to posting their resumes, members can browse or view jobs based on the criteria they find matches their goals best. Job seekers can also post confidentially with confidence or search anonymously by creating a Job Agent.  Job Agents notify job seekers via email when jobs matching their criteria are posted, eliminating the need to visit their online accounts daily to track new postings. 

More information available at http://www.nyssa.org/CareerCenter.aspx.

07/29/2014

CFA in 18 Months: 3 Crucial Mistakes You Must Avoid

Just starting out on your CFA preparations and looking for some guidance? 

Many candidates aspire to aim for passing the CFA® exams in 18 months, as detailed in my Level 1, Level 2, and Level 3 adventures just a few years ago. 

While hard work and effort are a prerequisite, here are a couple of mistakes I made but wished I knew beforehand during my CFA journey - I hope it helps  you avoid the usual pitfalls of taking on such a challenging qualification!

FAILING TO PLAN

You've heard of this old saying time and again, and it certainly applies to your CFA study preparation too. Many candidates fail because they just thought they could "wing it," and take their time studying the materials without sticking to some sort of a strict schedule. 

Or worse, some candidates even took time to do a simple study plan, but ignored them anyway during the revision and start to fall behind schedule. If you know you're behind, perhaps because you underestimated the work load or it took more time to understand a tricky concept, you need to make it up in your studies to ensure you catch up with your schedule.

Why? Because finishing on schedule, specifically one whole month before the exams (which I highly recommend), gives you ample time to do tons of practice papers, and contributes the other 50% to your learning and grasp of material. Yes, reading and covering the syllabus is just half of the work (and still very important), but the real test of your understanding of CFA concepts comes when you're tested under timed conditions. 

UNDERESTIMATING THE MATERIALS

I have a degree in Economics and when I first took December Level 1, I remember smirking when looking through the economics section of the materials. Guess what? I paid the least attention to that section and scored the lowest band for that topic. "Easy," eh?

Overconfidence can be a dangerous thing for the CFA exams. In fact, in a 2012 study, we found that candidates with no finance background (in prior education or work experience) significantly outperformed candidates who had prior finance education for the CFA exams. This tells us two things:

  • Complacency negatively affects your pass rates, which is common amongst candidates with prior finance education (but not working in finance currently). Skipping or "spotting" topics is not advisable, perhaps only when you're doing a last minute review (which shouldn't happen if you're learning from Mistake #1 above)!
  • Having no prior background in finance nor work is actually an advantage (yay engineers!)

Fail-CFA


Continue reading "CFA in 18 Months: 3 Crucial Mistakes You Must Avoid" »

07/28/2014

Recent Research: Highlights from July 2014

"Going for Broke: Restructuring Distressed Debt Portfolios"
The Journal of Fixed Income (Summer 2014
Sanjiv R. Das and Seoyoung Kim

This article discusses how to restructure a portfolio of distressed debt and what the gains are from doing so, and attributes these gains to restructuring and portfolio effects. This is an interesting and novel problem in fixed-income portfolio management that has received scant modeling attention. We show that debt restructuring is Pareto improving and lucrative for borrowers, lenders, and investors in distressed debt. First, the methodological contribution of the paper is a parsimonious model for the pricing and optimal restructuring of distressed debt, i.e., loans that are under-collateralized and are at risk of borrower default, where willingness to pay and ability to pay are at issue. Distressed-debt investing is a unique portfolio problem in that a) it requires optimization over all moments, not just mean and variance, and b) with debt restructuring, the investor can endogenously alter the return distribution of the candidate securities before subjecting them to portfolio construction. Second, economically, we show that post-restructuring return distributions of distressed debt portfolios are attractive to fixed-income investors, with risk-adjusted certainty equivalent yield pickups in the hundreds of basis points, suggesting the need for more efficient markets for distressed debt, and shedding light on the current policy debate regarding the use of eminent domain in mitigating real estate foreclosures.

Continue reading "Recent Research: Highlights from July 2014" »

Are You Too Paranoid to Report Mistakes on the Trading Floor?

EfinancialCareers

Big blowouts start in small ways. Kweku Adoboli made a $400k loss on a trade in October 2008, which he opted to hide rather than to tell his manager about. Nick Leeson started out hiding his small losses in his error account and ended up taking down Barings. Bruno Iksil (who unlike the others, hasn’t been charged for wrongdoing) made $400m for JPMorgan in 2011 and only started coming unstuck in 2012, when his losses quietly started to inflate.

Continue reading "Are You Too Paranoid to Report Mistakes on the Trading Floor?" »

07/27/2014

Book Review: Wall Street Research

ABSTRACT

Sell-side research is often seen as a competition among analysts for top rankings in surveys of investors. From time to time, scandals cause the profession to be viewed through the prism of ethical standards. Even the celebrity culture now colors perceptions of the analytical profession. In Wall Street Research: Past, Present, and Future, Boris Groysberg and Paul M. Healy of the Harvard Business School adopt the market for sell-side research as their framework. Oddly, this perspective is rarely used by brokerage industry types, who are otherwise thoroughly immersed in markets.


Brokerage houses tend not to think of research as a service bought and sold in a market because their ambition is to sell securities, not security analysis. The firms must nevertheless recover the costs of producing research. Prior to the US SEC’s abolition of fixed commission rates on 1 May 1975, broker/dealers paid for their teams of industry-specialized security analysts by bundling research with execution services. That worked well under pre–“May Day” commissions of 20–30 cents a share but proved unviable when those rates declined precipitously in the late 1970s.

Continue reading "Book Review: Wall Street Research" »

07/16/2014

How To Write A Killer CV That Gets You Hired

I still recall my younger days applying for my first few jobs in finance. It was intense, quite some spraying (of my CV, that is), and learning loads on the way on how the whole recruitment process works. Now, a little older (and wiser), I'm lucky enough to be in a position to hire members for my own team - I certainly remembered the time where I first had the green light to hire an intern to work with me - oooh, such power!

We advertised the job and I received around 5-8 CVs, already pre-filtered by my HR colleague. I reviewed them and narrowed down to 3 for an interview. When I shared my final 3 with my French colleagues (I worked for a French company at that time), they were surprised and doubtful at one of my choices because he wasn't from a "good school" (when translated meant non Ivy-league). I scanned the CVs without any preconception of French schools and chose him based on relevant work experience. I got a sense of his determination and interest in finance through 4 various internships he had, although they were at smaller, less prestigious firms. 

Continue reading "How To Write A Killer CV That Gets You Hired" »

07/15/2014

Young, Fabulous, and Unemployed: Strategies for Survival, Part I

The graduation-party balloons are drooping, and so are your spirits. If you are among the thousands of recent college grads who haven’t landed a job yet, take heart. No, you did not waste time going to college. Research shows that, in the long run, more education translates to higher income.

And, yes, today’s job market is merciless and frustrating. Employers require on-the-job experience, but how are you going to get that experience if they won’t hire you? Plus, summer is here. Companies both large and small postpone hiring decisions from about mid-May until after Labor Day. Hiring managers take vacations. And as hard as it is for us Type-A Americans to admit it, business slows down a bit when the weather gets warmer and the days longer.

Continue reading "Young, Fabulous, and Unemployed: Strategies for Survival, Part I" »

07/14/2014

Book Review: Can China Lead?

ChinaChina is viewed as the only real competitor to U.S. economic and geopolitical position, and its future is one of the most timely and high priority economic issues here. Can China Lead?: Reaching the Limits of Power and Growth focuses on the issue by looking at the role of the Chinese Communist party. The authors are well qualified to evaluate China's future as a potential world leader: William C. Kirby and F. Warren McFarlan are on the faculty of Harvard Business School, which has done many case studies of Chinese companies (sixty-six are listed in the book's Appendix). Regina Abrami is at the Wharton School, and Director of the Global Program of the Lauder Institute. PMc Farlan is a guest professor at Tsinghua University, and codirector of the HBS China Business Case Center. Kirby is Chairman of the Harvard China Fund, and a honorary professor at several Chinese universities.

Continue reading "Book Review: Can China Lead?" »

07/11/2014

Is Friday Still the Best Day to Apply for a Job in Banking?

EfinancialCareers

Today’s the day. According to our own figures, Friday is the day of the week when the ratio of resume searches per job application is optimal: there are two searches per application, compared to 1.5 to 1.7 on other days. Recruiters appear to be comparatively busy on Fridays, while candidates appear to be comparatively slack. You therefore have a few more hours to send out your resume.

Continue reading "Is Friday Still the Best Day to Apply for a Job in Banking?" »

07/07/2014

Career Transition Is the New Normal

These days, given the accelerating rate of change in the world, in the economy, and in the workplace, we’re ALL either in a state of “career transition”—or we will be soon. Whether you are a CEO or executive, a manager, an individual contributor on the front lines, in business for yourself, just beginning your career, a seasoned professional, or re-inventing your career, you will be more effective, successful and happy in your work when you:

Continue reading "Career Transition Is the New Normal" »

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