Wednesday, October 14, 2009

Finance Industry Day - Group 1's first small victory

First some background:
Because I was very busy yesterday, I didn't get a chance to blog about our little finance prep team. We've split the team into two groups, the "advanced group" (Group 2: people with experience who just want to talk about the markets and current events) and the "beginner group" (Group 1: people with little or no experience).

Yesterday, we also had an intense speaker, CEO of Claymore Investments, Som Seif, give a fantastic talk, describing how correlations between different asset classes are increasing (even between international and geographic regions) because of increased globalization. He also described how asset allocation plays a major role in determining return and managing risk. One of his more poignant points was that weak fund managers who can't justify their performance fees in down markets will be quickly replaced by low cost ETFs (the philosophy that management fees are not necessarily supposed to provide amplification on the upside, but rather a sense of expertise and awareness to protect from the downside).

His talk was fairly technical at points, and I began to wonder about our "Group 1" members in the audience. I asked them after the talk, "Did you feel intimidated? Don't worry, the purpose of the group is that a someday (soon) you can have an intelligent conversation with Som with the same vocabulary and technical proficiency".

For Group 1, I've set a schedule of topics to supplement what we'll be learning in finance class, and began reviewing basics like Time Value of Money (TVM), NPV, IRR etc. It was a whirlwind class, but we took them from zero to being able to have the vocabulary and math to describe when perpetuity formulas fail, to how to select between multiple investment vehicles. We'll even be asking Group 2 members to lecture on topics for the Group 1 team as practice. While I am very happy with the result at the end of yesterday, it is also what happened today which made me smile:

Today was the Rotman Finance Industry day and we had a host of speakers in the afternoon from industry (recruiters and alumni) as well as current students and the CCC. So far there wasn't anything earth shatteringly new (mostly hearing the same message from different people: Finance is hard to get into, this is how you should prepare: read the Vault Guides, read the newspaper, be intense... etc)

My proudest moment was during the presentation from one of the industry speakers when he mentioned that you have to calculate IRR's for different projects as part of your job. Immediately, I saw a few heads turn around and catch eyes with me with a knowing smile on their face. If there was anyone who was living the message of "MBA school is great, but a large component of your success is what you do and who you are" it was those who turned around and knew they were doing the right thing by preparing early. These were the people who, less than 24 hours before, were intimidated by Finance TLAs (Three letter acronyms) were now getting a sense of confidence.

Word has spread also. While Group 2 membership is deliberately limited (not a "snobby thing" but rather a purely logistical issue - I've been helping other people put together their own "Group 2's"), the word has spread and Group 1 has picked up a couple more members.

Again, I don't know if people remember that I had promised in my GBC first year rep speech to help all the Rotman students "reach their maximum potential" and build more equity into the degree (and network) we all paid so much to have the opportunity to earn, but I hope I'm beginning to show active signs outside of the standard "job requirements" that there is a lot I can offer and that we can do together.

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