11 posts tagged “switzerland”
So what did I learn today? Well even though the lesson was a little tough to get through and follow I did learn a lot about volatility and risk analysis. We also learned about Realized compound yield which used the coupon payment from a low yield bond to re-invest at a higher rate. This was an interesting concept indeed.
Next we looked in depth at Portfolio Theory and the risk associated with having many different types of stock. The best thing about the concept is the fact that through correlation the stocks can have a canceling out effect with regards to risk and minimizing the impact of it by choosing stock with opposite(non-related) correlations (correlation co-efficient).
Finally we learned with Sris a bit about Investment Management Process, but unfortunately since his information was proprietary we couldn't completely copy the slides we could only hear about such concepts like Strategic Asset Allocation and Tactical Asset Allocation. We looked at Active vs. Passive Strategy in regards to the Investment Management Process, the Timing and Selection of such companies, and the Simple Return over Several Periods.
I did enjoy the discussions on Risk and Portfolio Theory and look forward to more insights on this topic.
-Marcus
Today I learned so much with regards to M&A and watched a video with the CEO of Black Swan who offered his insights on the dollar, the Asian markets, and the spreads of carry trades.
However I feel like the majority of my learning experience happened when Sanjay took us through the accretion/dilution example in the evening time which outlined how a company derives value when it is either being bought or when it is acquiring.
-Marcus
M&A, M&A? Where for art thou M&A? The word of the day is M&A (Mergers & Acquistions) and that's what we learned about in depth today. I was confused with the reading last night pertaining to RJR-Nabisco case, but today in class it was clarified greatly. It would seem that just a little bit of explanation and example goes a long way in helping my learning process. We'll see if the same can be said for homeworks in the coming week...
This morning the lecture was pretty good starting out with an analysis of Marc Faber and his comments a couple weeks back on Bloomberg.com. It is interesting how the “big Fish” professional traders/investors like him and Jim Rogers often have opposing views as to what positions they will and will not take and what they think the economy will do in the future. We spoke about inflation and I learned how taxes are a form of revenue for the government as your individual income rises. It's pretty insidious to have inflation constant to increase tax revenue over time. It's also interesting how inflation could be correlated to morality and general economic emotion...that's a point I'll have to ponder on some more.
Last night was quite an interesting discussion with Sanjay leading the class through interview techniques and the like. The class was lively and had many questions for him. He told us that the best way to interview for a position in I-Banking is to walk the interviewer through your resume. This should be in the form of a well rehearsed anecdote that shows who you are, how you handle various situations and how you'd add value to the company without saying that line explicitly. I can't completely tie my life-story into investment-banking and why I'd like to do it for a career, but I am working on it. :)
-Marcus
What did I learn today... hmmm well, I learned that 50+ years of hard work, leadership, and insightful direction in a company can be squandered by one or two deviant persons at the executive levels of a corporation. What's even more incredible is that these two CEOs managed to almost bankrupt this great company in less than 2.5 years!!
In my Mergers and Acquisitions lessons we are learning about a company called Beatrice who actually started in 1890 and grew throughout the 20th century until it's untimely demise in 1986 or so. The details we are studying intimately are how companies such as this one can grow there value by acquisitions and then grow their value some more by divestitures (a fancy way for saying the sale of a division of a company to another company, group, bank, individual, etc.)
So, value can be created by management techniques, economies of scale, infrastructure, advertising, increased access to capital and so on. Value also can be created by favourable market conditions, sales of assets to others better suited to run them, announcements/news about assets that the market shows favour to, and a whole host of other ways which I am learning about now.
In other news, this week is shaping up to be pretty fun (compared to last week) as we watched several Bloomberg.com videos in class showing Jim Rogers and his amazing views on the market and what's taking place in it. In fact we watched him in a video shot last September and saw that most of his predictions were correct! He's quite an astounding guy and I hope we get to analyze more of his videos and what he forecasts in class.
We also watched a video from October 31st 1987 that was pretty controversial as it dealt with the ethics surrounding large mergers and acquisitions, and the people who prosper from them most. It will be interesting to see how Sris (our new teacher) puts it all into an investment banker's perspective.
-Marcus
Well, it's back to the grindstone after a wonderful trip to Milan yesterday. This week seems a little more relaxed with Sanjay opening up the morning with good and insightful anecdotes wrapped in the occasional joke or two. This week we'll be learning all about Mergers and Acquisitions, the likes of which I have no clue about so it should be interesting.
Our new teacher, Sris Chitterjee, definitely knows his stuff and will be quite a valuable resource for any questions we as a class may have regarding this new material. I guess what I really learned today was the magnitude of buyouts and mergers that actually take place around the globe. I really only thought the ones that were reported on the news were the only company takeovers that actually take place. The reality is that hundreds of mergers happen probably ever month by companies around the world that I have no idea about.
Lastly, we play soccer today as the SFA guys rallied and organized some teams for a little fun before dinner. It was awesome and our team won twice in a row, but lost the third game due to my absence :P Or at least that's what I'd like to think...
-Marcus
The first week, of lessons at least, has come and gone and with it, all trace of weakness in my body! Well not really, but I have pushed myself a lot harder than I ever thought possible. While I still believe the schedule is WAY TOO grueling for it's own good, it's a necessary step in the process of becoming an amazing corporate financial player.
I realized today that the majority of what I learn here will not really be as valuable right now as it will be if I keep up with it and practice/refer back to it at home. That's where the real value of this course will come to light. I am no superstar in Finance by any means, but I do believe that one day I can become a force to be reckoned with in the Financial sector if I stick with it.
Today specifically though, I really became frustrated with the fact that I couldn't figure out all of the questions to the homework last night. I worked furiously and could only make it to question number 24 before giving up and chalking it up to fate. I will study those concepts of WACC and probability of default on loans/cost of equity/cost of debt change the most before tomorrow night. It's not a heavily weighted test, but every percent counts and I have NO idea what we'll encounter next week.
Endurance. Resilience. Dedication. Hard work. Commitment. Passion. Diligence. True lessons learned this week indeed.
Well, another day finished, another crazy amount of lessons. I am slowly adapting to the lack of sleep I am getting during the week while trying to keep on my A game doing so. I am having some problems keeping up with the math and technical side of the Finance that we are learning, but I am willing to practice and get as much help from friends like Jason as I possibly can.
I really hope that I can get some good studying and reflection on the material before the test on Saturday night, as I want the best grade possible on this first test.
The challenge now is working through the process of each problem, understanding the concepts, implementing them and then remembering them to apply in the new Finance applications we will be learning next week from Sris Chitterjee/Sanjay.
Right now, we're learning what not to say in front of the career panel on Saturday. Sanjay's pretty funny and insightful. Hopefully I don't ask one of those questions he said NOT to say :)
-Marcus
Well it's the end of Day 3 and the time today has just flown by. The sun actually decided to show it's face today so the class is in good spirits and so are the lectures. We are still learning so much and although I have not connected to as many people socially as I would have liked, I found out today from Sanjay that Investment Banking is really, really quite a people person's kind of vocation. It's a salesman's type of job and that's exactly what I am: a veritable personal informal salesman/maven.
Today, while going over the lesson, I started to doubt my skills a little bit getting back into the Stocks and Bonds Valuation game. However, by the time the lesson ended I felt ready to take on the homework tonight. Last night the homework was mechanical, but it really helped reinforce some of the lessons I'd learned more than a year ago. Wow... has it really been that long since my first year in the MBA program? My how the time flies.
I am finally getting used to the pace and the time difference here at Franklin College with the SFA. There is a lot of material, but I think once you get used to the pace you can cope with it as long as you stay on top of things. It's quite important at this “Boot Camp” of sorts to make sure you manage your time the best way possible while getting as much sleep possible :P You won't get a lot of that if you really work hard though...
My financial calculator is so important!! I've learned so many functions and tricks with my calculator in the last two days that it astonishes me. I really think the Swiss Finance Academy needs to standardize the calculator that students bring to the campus for the program. Specifically, the ones that the CFA uses like the TI- BA II Plus Pro and the HP one. Either one should be required and then students should be taught to used them respectively. Calculator skills VERY IMPORTANT, but make sure that you understand the CONCEPTS first. :D
Until next time...
A review of the basics was good. Today we learned (or I re-learned) about the Time value of money. It was fun learning about how to discount cash flows once again as I have mostly departed from such calculations in my recent studies due to a focus at school on analysis and ratios that deal directly with those corporate evaluations / economic conditions.
Earlier this morning we learned about the internal structure of Investment Banks and why it is so important that the Selling and Trading of stocks/investing is kept separate from the mergers/acquisitions and non-public knowledge of the firm being worked on/invested in/being bought, etc.
The pace of the class is fast. It is so for a reason as the Investment Banking world is every bit as intense and probably much MUCH more stressful. I do wish we had one more week... three weeks seems so... short. I looked at the schedule for the previous years, and I think a month is a better time format to learn, grasp, practice, and internalize the great wealth of knowledge presented in front of us. Which brings me to my next point...
This schedule is rigorous. There is no time for rest. There is no time for games. There's barely any time for fun, which doesn't really matter anyway here since one can't really go outside because of the rain. I guess that Sanjay and this school are trying to teach us what life is really like as Investment Bankers as my brain was swiss cheese last night at 11:00pm, but that's when I still had to be at peak performance and “start” the homework. I still didn't manage to finish it.
Tonight, I am going to work on the homework BEFORE going to eat. Yesterday we didn't have a choice, nor did everywhere have Internet, so we were at a disadvantage from the get go. I'll only get partial credit for the last assignment, but then again, so will everyone else. No one was on their A game totally yesterday. No one human that is. :)
Today was one of the most exhausting days of my life. I learned that if I really want something bad enough, I'll do ANYTHING to get it. After missing the bus from Geneva Airport, traveling on the train all night in a foreign country not knowing any of its 3 languages, rolling my luggage through Lugano at 5:00am in the morning, and sleeping 3.5 hours total today - yet expected to perform, I now have a great story to tell in my own I-Banking interview. Not to toot my own horn, but I am one tenacious guy!
I learned that my skills in Finance are not nearly as competent or complete as I had once imagined. The assessment test whipped me into submission, the lectures by both Sanjay and James Linck were highly-sophisticated, and the general level of intelligence here by the other students rivals or supersedes my own. Talk about a lesson in humility!
The day has been a tough one and I am about to collapse. I can't finish this accounting work of balancing my Assets, Liabilities, and Equity, and I will not stoop to getting the answers off of someone. I've learned that working hard and possibly failing is better than looking like a poser who knows nothing, but got an “A” on the homeworks.
Oh, and one more thing -- It had better stop raining already!!
