Saturday, December 13, 2008

The recursive cycle

I had my London Business School Masters in Finance interview few days back. It was conducted in my city by a LBS MiF alumni. Though the time specified for the interview by the school is from 45 min to 2 hrs, my interview got over in 30 min. The main reason for this was that the alum was extremely busy that day. I dont know if even otherwise it would have ended 30 min.
Somehow I tried to put my stand with respect to how I have tried hard to make my mark in finance, despite having no formal background.
The interview actually revolved around, if I was sure what I was getting into. He tried to downplay the MiF, considering the fact that 1. we are in a recession 2. the MBA gets a preferential treatment against the MiF 3. i dont have a lot of experience in finance. These reasons could lead to me not getting a great(high paying) job after graduation. I tried to tell him how I had thought about all of this; was planning on doing some sort of internship prior to the course, was ok with getting through a smaller company etc.
He asked me how I was planning to fund my studies. I talked about possible loans, scholarship opportunities etc. He asked about areas that I wanted to target. I had an answer for that.
Finally, how I would contribute to the class, considering lack of experience. I tried putting forward all that I had, but I guess, it was a little insufficient.
Finally, he mentioned that the one negative in my favor was the lack of experience. Otherwise, it was great and credentials etc were fine.
I dont know the outcome of the decision. I really hope it turns out in my favor, coz i was really banking on this as my first choice.
The cycle is funny. Companies dont give you a job because you dont have a relevant degree in finance. If courses stop giving you admissions because you dont have relevant experience, then where do I go???

Wednesday, December 10, 2008

CFA Level 1 Experience

I took the CFA Level 1 on 7th Decemeber 2008 at Singapore. Thanks to the "great Indian tamasha" associated with our ever-irrational educational laws as well as the never-ending legal timelines, the exam could not be conducted in India. So, we had thousands of Indian hopefuls travel to Thailand, Singapore, Nepal and Hong Kong to name a few centres.

On my flight to Singapore itself, we had over 90% CFA candidates. With the Schweser notes open and the official CFA course books, the waiting lobby of the Mumbai airport resembled a chaotic exam centre. Not just that, we had some dedicated students forgo their hours of sleep and revise those last few formulae under the seat lights on the flight. Thanks to Air India, there wasnt much of in-flight entertainment to tempt me otherwise; yet, I preferred to take rest rather than slog out the last few hours of my life.

Reaching Singapore one day before the exam was a sensible idea, since it took some time to settle in. Finding the hotel and checking out the exam centre was top priority for the day. Singapore Expo, which was the exam centre was close to the Airport and was easy to find. Singapore is an amazing country to be connected so well by rail transport. Built on the underground Tube at London, the Mass Rail Transport(MRT) is one the best experiences I have had at Singapore. Coming back to the hotel, read up on some Economics and Financial Statement Analysis and Ethics.

The exam was extremely well organized. With over 4200 students at the centre, it never seemed that there was any chaos. The halls openend 1 hr in advance and everything proceeded smoothly. Now coming to the exam:

Morning paper: The morning paper was fairly straight-forward to begin with. Not much of complicated questions. All sections are equally weighted... though FSA and ethics form the core of the paper. Economics comes next.

Afternoon paper: This one was tricky. Questions needed some thinking. Especially FSA. But it could also be a case of lethargy creeping in after 3 hrs of the morning exam, as well as the lunch effect.

More or less, not a very complicated exam. Not much of heavy duty quant calculations. But fundamentals are rigorously tested. So are concepts of ethics. So, make sure your basics are fine, and the exam should go fine.

Results expected on 28th Jan 2009. Till then, fingers crossed :)

Monday, December 1, 2008

Oxford MFE Interview Experience

One of my top choices for postgraduation in finance is the MSc in Financial Economics course at Oxford's Said Business School. The Business school is top-ranked, especially as an International school and the Oxford brand name, in some ways is iconic for the leaders( though more political, than busines ) it has produced. The 9 month course has another speciality: its underlying theme of economics that runs through all the courses. I believe this differentiates it from other courses. The average age group also matches mine and the avg work ex is 2.5 years, which makes it a more professional course than a academic one.

I applied to the school in late October 2008 and got an interview invite on 14th November. Since, I could not travel to Oxford within the short time frame, I opted for a telephonic interview.

I had my interview today with Celine Rochon, who is a Professor of Finance and teaches courses like Financial Risk management, Derivatives and Continuous Time Finance at the MBA and MFE courses. I knew this mapping was probably a result of my FRM background. The mail mentioned that technical questions could be expected. I had to go through my FRM material!!!

The interview started with Celine talking about what the interview expects to measure: my background, my future interests, fit with the course and my questions.

1. So.. was the usual.. please explain ur current work at Lehman/Nomura
Me: spoke about my profile at Valuations control and the work I did.

2. You dont have undergrad background in finance... u have a more "scientific" background..., so will u be able to cope up with the program?
Me: Of course, spoke about my FRM learning and CFA planning.

3. So, how will you contribute to the class?
Me: real-world experiences... matching theoretical learning with practical examples... crisis experience etc..

4. What do you want to do after course?
Me: corp fin, private equity, VC.. areas to explore..spoke a little on this

5. Do u want to do phD after this course?
Me: no..roles want to get into are not research oriented... more industry specific

Then started "technical questions"...
6. If you had to explain VAR to a non-professional wud u explain?
Me: if u had 100 pounds to invest, you wud def want to know how much u wud lose in worst case... so VAR helps u do that... but must be taken with pinch of salt... other measures of risk measurement...stress testing, back testing etc...

7. Considering current crisis, what went wrong with these risk measures? Do we need more regulation? Can regulation replace these risk calculations?
Me: these are tools, if not used correctly, of no use... need more regulation... but firms wud need to manage internal risk too.. cant rely only on regulations.

8. Do you expect structured products to be traded soon?
Me: (I hope so.. else Valuation control wud have no work haha)... yes, they wud be back probably mid next yr

9. When the trading starts for these products, do u expect that old models will be used as it is?
Me: they will be used.. but liquidity and risk weighted premium would be added considering lack of liquidity in mkt

10. Considering mkt scenario, do u think its a risk to go for this course now?
Me: no.. by 2010 things shud improve... and shudnt base career choices on business cycles.. in a recession best time to study

11. What do u want to do 5 yrs from now?
Me: start my financial consulting firm

12. Would Nomura.. want to sponsor you?
Me: dont know...will approach them when the time comes..

13. Would you want to come back to India?
Me: Ya.. probably in the future.

Any questions: asked something abt career placements wrt mbas and do mfe s get a place in traditional mba kind of jobs...

Thank you...nice talking to you.. we will get back to you in early jan..when results are announced..

Overall, a nice experience... did not grill too much... they just want to know your thought process and whether your application matches with your experiences.
Results to be declared on 9th Jan 2009... so keeping fingers crossed till then.