4 posts tagged “time value of money”

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

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. :)