Graduation And More

I haven't posted in almost a year.

So since then what has happened to the class of'08?

May was graduation. A wonderful bittersweet experience. For someone who moved to NY for school and subsequently signed with a NY office of a bank, it was kind of a shock to see how much of my social network had become CBS contacts. I kept up with some Mercer people in Asia but not much beyond that. Although, there was a pretty strong defection to AON in Singapore benefit/HR consulting for Mercer so some of my contacts are there.

I headed into the bank for a 6 month rotational program. 1.5 months was classroom training (on swaps, derivatives, securitization, currency) and networking. 4.5 months was leave and on the job rotations in 4 desks one of which I joined. For those familiar with finance, I am in Global Prime Finance.

The placement process for a bank rotational program is worthy of a lot of discussion but is largely bank-specific. I'll just say that its a test in itself. As it should be in a Credit Crisis.

The Credit Crisis has been in full-force during my rotations. I was on an Emerging Markets desk when Argentina decided to nationalize its pension funds. So its been a harrowing experience to say the least and at the same time, incredible learning.

I'll just say from the viewpoint of a Sales and Trading hire that my view on the important skills at b-school may have shifted a little:

Accounting and Corporate Finance: This is more important than you think. Credit was heavily impacted in'08 so there weren't a lot of spots but these skills are core to Credit. Credit is an art not a science, but to get started it doesn't take a lot more (in some cases less) than the corporate finance we do at b-school. The trick is applying it with a degree of focus and specialization (High-yield vs investment grade or industry specialization) and getting the right opportunity when you start.

Networking, Marketing and Sales: This is incredibly important. The crazy networking and self-promotion you learn in b-school and recruiting is in my view a key differentiator for you in your career in an investment bank. Its integral to Sales and client relationships which are a part of almost all banking careers. Its integral to Trading because the initial challenge is to fit into the desk and learn from your peers and superiors.

Quantitative Finance: By this, I mean derivative modelling, gaussian copulas, arbitrage pricing theory, delivery options and all the other fun stuff. I focused a lot on this in school because I liked to know. However I have found in actual working life that this stuff matters less than you think.

The stuff is good for building serious Excel skills and more importantly Visual Basic for Applications. Why VBA as opposed to C++, Python or Matlab? Because its to late for you to acquire anything else if you don't already know it by the time you hit b-school.

A true Quant in wall-street is typically a PhD and usually a financial programmer of some kind with more than the normal communication skills. These are rare so there will always be room for MBA's.

An MBA with structured thinking and who knows at least one coding language is a significantly better communicator with IT and Quant people than anMBA who has never tried the hard stuff. Communicating with technical people is something that you will do a lot of. Whether you are trying to teach them something you've observed from your front-line client contact or learn something from them, this stuff can make or break a career.

Its also useful for preparing your brain for the kind of learning we do in Wall Street. You tend to be a specialized user of quant finance when working. You learn what you need to learn from a seminar by a Quant or some Research dude who is paid to be a full time thinker then apply it to your clients or your trades. Some of the nerdier markets people will read the odd academic paper. No one has the time to do development of pricing theory from first principles and that stuff is often done by published academics on consulting contracts working with PhD's anyway.
So the b-school experience of learning a little of a difficult concept without all the math is quite relevant.

No matter how much math you have, you will at some point have to learn from someone who knows math you don't know. Even if at the start of your career you are up to speed, you will eventually become a manager, salesman or trader and find that the time involved there conflicts with the time needed to be on or beyond the 'cutting edge'. At some point in the careers of financial greats like Soros, Buffett or Lynch - someone else runs the numbers.

Good luck to all current MBA candidates and applicants. As of Feb '09, its rough waters out there. I don't regret any of it.