Students in Money Management's Round Table Discussion
Please comment on the discussion that took place at the Round Table or on any other student's response to the discussion. This post is going to be considered extra credit (1/2 pt. for the post, 1/2 pt. for attending).
The SIMM presentation touched on some great points. Sean asked a question on Gold, and how it has come into the market. Their response was based around the fact that clients now a days want to see some gold in their portfolio.
Another question asked was about how workers that deal with stock fluctuations every day. They said that it is definitely stressful, but clients have understood, over the crazy cycle the past couple years, that there is no reason to freak out when the DOW drops 400 points in a day. The big thing is to allow your investors to handle your money because that is what they are paid to do
One big point that was touched upon during the presentation was the lack of knowledge on how to evaluate risk/the improper methods of evaluating risk. Riskiness in investment has caused US corporations to hold onto their money in cash and assets instead of investing it. But no one (with half a brain) would invest in something that doesn't give a return. Money, therefore, is going overseas in options that although are risky, have a significant rate of return.
Another important thing to note is that the economic downturn that is currently happening isn't gonna go away over night. Even a 2-3 year recovery is very optimistic. But return-providing investments and a renewed confidence in the stock and bond market could get us back on the right track.
Can Bona grads compete with grads from “Ivy League” schools? The answer is definitely "Yes!", but it's different. It's different because:
1. It will be harder for you to open doors. Wall Street firms, Fortune 500 companies and top consulting firms actively recruit on the campuses of the top schools. Bonnies are going to have to actively search out opportunities. So use your connections including Bona Alums to help open those doors. And start early! It is a lot easier for an alum to put themselves out there for someone they've known for 2-3 years than for someone who contacted them just last month.
2. You'll need to stack the deck in your favor. Would you play poker if you knew you couldn't draw face cards and everyone else could? Give yourself access to the face cards by getting the best GPA you can and by getting strong internships and unusual experiences that make you stand out.
3. In the end, it’s going to be all about what you do once you get through the "door". Working hard is great but working hard and smart is much more important. You have access to learning everything the Ivy League MBA's learn; the question becomes who can apply what they've learned most effectively? So make the effort to learn as much as you can now so you can wow them on the job!
4. You're different. Bonnies are genuinely nice people. That is a HUGE advantage if you lead with it as a strength.
James, I am happy to see that you posted about risk. For awhile firms were not valuing risk properly, most likely because of how much the companies were making. Only when times are bad does management assess risk more cautiously. We also have to understand that the banks that we put all of our faith into were cheating the system and making very large profits by selling investments that would eventually go bust. I also agree with Dr. Peterson that we do not look at tail risk enough. There is a concept called the black swan event where an event would happen that no one could ever imagine being probable. That means that many people do not take in account the risk associated with these events since they believe they should never happen or could never happen.
Iggy, thanks for commenting on my comment. The issue I have with gold is that the price should not be driven so high. If I were to give you a karat a gold today, I can still get that same karat of gold from you tomorrow.. nothing has changed to that karat. Therefore, if instead of trading with gold, say I decide to give you money for that karat. Say a karat will cost me $10 today. If you want to buy it from me tomorrow it should be worth whatever the adjustment is in inflation. However, gold has taken off in value. This is where we have to ask ourselves if this is a behavioral finance issue. With the economic distress across the world and many people fearing certain currencies, many people have bought into gold since it is tangible. Basic economics tells us that an increase in demand will drive up the price when the amount supplied really doesn't change. However, my issue is when will this bubble burst? That is why I suggest if someone already has invested in gold, they should hold but be ready to sell. If you're looking for tangibility, I would look at other commodities. For anyone interested, you do not have to buy commodities straight up but can buy into ETFs (exchange traded funds) that pool money together to buy into commodities. If anyone has any questions, please let me know
I forgot to mention on Laurie's comment. As a recent graduate, I have seen first hand how important it is to get out and network with our alumni. The best part of this university is our Franciscan values. Once a Bonnie, always a Bonnie. The alumni are always willing to help a student out. Make sure you take full advantage of that. Not many other universities have an alumni that are so willing to help new students out.
On another note, I have already noticed how great of an education I have received here at Bonas. At Citigroup, we had a class of 26 interns from all universities around including even Cornell and Columbia. I must say, I felt more prepared and had a better understanding than most other interns. Most seemed lost a lot of the time. Laurie is right, it is more difficult for us to get the interview, but once we get one we are on the same playing field as everyone else! Use the alumni to help you get these interviews.
Some major topics covered in the discussion were about risk, job creation and the main goal of the company is to receive the best rate of return on their capital.
It was mentioned that companies have forgot to price risk. Those who don't have money are usually the ones taking risks and those who have money preserve capital and don't take as many risks.
The U.S is a consumer driven economy and the easiest thing to do is take a massive tax cut in order to solve the problem of the debt ceiling. If they keep raising it, what will happen to the economy in the future?
Companies have to be cautiously optimistic, they can expand internally, externally (buying other companies), or pay shareholders in the form of dividends. Make decisions to increase the value of your company and make a profit.
I thought the SIMM presentation was very interesting. One of the biggest points that took from it was that Bona grads look out for one another. I think its great that as we all enter a very difficult job market, we can look to other alumni for guidance. I also thought that it was interesting how the panal took such different views on things such as how the current economic environment impacts their job, and presumably makes it more stressful and difficult. Alex mentioned how he really enjoyed that part of the job because he is getting so much experience in such a short time.
In terms of the markets, the biggest thing that the panelist talked about was making sure that you properly account for potential risk in any investment. At first it was hard to believe that something that seems like such common sense would be so powerful but after hearing them talk about potential "bubbles" I realized that there is risk in every investment.
I thoroughly enjoyed attending my first SIMM Roundtable discussion. Listening to first hand knowledge is the best schooling you can get besides actually doing it yourself. That being said, I want to express my gratitude to Alex, Chris, Jeff, and Sean. They provided great insight about today's economic concerns and induced me to follow up on many key points of the discussion. As follows, these are the points that I want to articulate on. 1. I'll be honest I do not know much about banking, yet Chris spoke about rating agencies in the beginning of the discussion and I learned that a rating agency has no real power, but investors rely upon them for a specific assumed risk. His example was that high yield municipalities sold from '03 to '07 with 7-10 maturity were rated high. But today it is terrible and most need refinancing, because they are not solvent to pay back.
I learned about the characteristics of people investing. First is people who have money and want to protect it by staying away from risky investments. Second are people without it who want a quick return which is of higher risk.
I liked the part of the discussion where investing is like a bell curve and the 3% tails are either making a lot of money that day or going zero. The middle is staying even. I think it is smart to think about "Today I could go to zero and how can I hedge against this" to protect your investments by being smart and reading the fund's prospectus front to back and annual reports. Also staying up to date on what your investing in by thinking ahead of the game whether their strategy will perform well.
I thought the breakdown between the Euro and the dollar was good too. I learned the Euro has no central bank between 21 different countries and no tax policy like the US. The part that hurts the Euro is that Greece needs a bailout and Finland wants to help, but needs collateral because they don't want to take a huge hit and write off a ton of money.
Now for gold. I believe that since we are in a state of uncertainty the price of gold is destined to sky-rocket. Gold is what people look to when there is so much inflation and economic panic in the public's eye. I believe that when the current administration leaves office and we lift the noose's off corporations there will be more faith in the dollar. Therefore as the economy comes back in a few years gold will steadily decline and it will not bust.
To conclude this post I want to re-articulate that just being there and listening to the knowledge of current banking professionals is beneficial. Since going, I now know I need to read more about investing and banking in general. As a management major it is vital to know your companies finances and how to stay ahead of your competition with the main goal of increasing market share.
My favorite part about the presentation was when the person asked if people from Bonaventure could compete with people from other school that look better on paper. They emphasized that it may be easier from them to get an interview, but once you get an interview it is an even playing field. once you get into the interview it is important to sell yourself and if you are the most qualified for the position you will get the job regardless of what school you attend.
I believe the presentation was very informative about the current economy and showed that nobody really knows exactly what will come of it in the future.The speakers were very helpful with all of the questions and showed that they know exactly what they're talking about.
I was very happy to hear how bona students are respected by large companies. I'm sure it made everyone feel better about themselves knowing how they will be able to compete with students from such large and known schools.
I think the presentation was interesting and very informative. They provided a lots of information about economic concerns as well as useful advice and experiences on career paths. I want to talk a bit about gold price and the cause of it. Gold is making regular headlines these days as global economic uncertainty remains high. A resurgence in investment demand has fueled gold’s rally over the past decade. Investment demand for gold has grown. We should caution that this very aspect that provided support for gold over this time may result in its downfall going forward. Even a slowdown, let alone a decline, in net investment flows can have a materially negative impact on the gold price from current levels. So whether you are a gold bug bull or a gold bubble believer, one thing is for certain, there is no denying gold's captivating run. Therefore, in order to make good investing decisions, seeking for professional advice is very helpful.If you don’t know your bullion coins, you’d better know your bullion coin dealer to help you make responsible decisions.
I had zero intention of attending this meeting until the extra credit was offered. However at the conclusion of the program was very satisfied with my decision to attend it. I really enjoyed just listening to each of these men talk about their jobs and their experiences.
I ask the question what are your thoughts regarding attending graduate school and receiving your master's degree. Right now I am not leaning towards getting my master degree right after I finish my BA. And after listing to each of these men my feelings are only stronger towards the idea of work first, and then reanalyze the idea of getting my master's.
Uncertainty and adjusting for risk are keys to remember.
Cant go!
ReplyDeleteThe SIMM presentation touched on some great points. Sean asked a question on Gold, and how it has come into the market. Their response was based around the fact that clients now a days want to see some gold in their portfolio.
ReplyDeleteAnother question asked was about how workers that deal with stock fluctuations every day. They said that it is definitely stressful, but clients have understood, over the crazy cycle the past couple years, that there is no reason to freak out when the DOW drops 400 points in a day. The big thing is to allow your investors to handle your money because that is what they are paid to do
One big point that was touched upon during the presentation was the lack of knowledge on how to evaluate risk/the improper methods of evaluating risk. Riskiness in investment has caused US corporations to hold onto their money in cash and assets instead of investing it. But no one (with half a brain) would invest in something that doesn't give a return. Money, therefore, is going overseas in options that although are risky, have a significant rate of return.
ReplyDeleteAnother important thing to note is that the economic downturn that is currently happening isn't gonna go away over night. Even a 2-3 year recovery is very optimistic. But return-providing investments and a renewed confidence in the stock and bond market could get us back on the right track.
Can Bona grads compete with grads from “Ivy League” schools? The answer is definitely "Yes!", but it's different. It's different because:
ReplyDelete1. It will be harder for you to open doors. Wall Street firms, Fortune 500 companies and top consulting firms actively recruit on the campuses of the top schools. Bonnies are going to have to actively search out opportunities. So use your connections including Bona Alums to help open those doors. And start early! It is a lot easier for an alum to put themselves out there for someone they've known for 2-3 years than for someone who contacted them just last month.
2. You'll need to stack the deck in your favor. Would you play poker if you knew you couldn't draw face cards and everyone else could? Give yourself access to the face cards by getting the best GPA you can and by getting strong internships and unusual experiences that make you stand out.
3. In the end, it’s going to be all about what you do once you get through the "door". Working hard is great but working hard and smart is much more important. You have access to learning everything the Ivy League MBA's learn; the question becomes who can apply what they've learned most effectively? So make the effort to learn as much as you can now so you can wow them on the job!
4. You're different. Bonnies are genuinely nice people. That is a HUGE advantage if you lead with it as a strength.
James, I am happy to see that you posted about risk. For awhile firms were not valuing risk properly, most likely because of how much the companies were making. Only when times are bad does management assess risk more cautiously. We also have to understand that the banks that we put all of our faith into were cheating the system and making very large profits by selling investments that would eventually go bust. I also agree with Dr. Peterson that we do not look at tail risk enough. There is a concept called the black swan event where an event would happen that no one could ever imagine being probable. That means that many people do not take in account the risk associated with these events since they believe they should never happen or could never happen.
ReplyDeleteIggy, thanks for commenting on my comment. The issue I have with gold is that the price should not be driven so high. If I were to give you a karat a gold today, I can still get that same karat of gold from you tomorrow.. nothing has changed to that karat. Therefore, if instead of trading with gold, say I decide to give you money for that karat. Say a karat will cost me $10 today. If you want to buy it from me tomorrow it should be worth whatever the adjustment is in inflation. However, gold has taken off in value. This is where we have to ask ourselves if this is a behavioral finance issue. With the economic distress across the world and many people fearing certain currencies, many people have bought into gold since it is tangible. Basic economics tells us that an increase in demand will drive up the price when the amount supplied really doesn't change. However, my issue is when will this bubble burst? That is why I suggest if someone already has invested in gold, they should hold but be ready to sell. If you're looking for tangibility, I would look at other commodities. For anyone interested, you do not have to buy commodities straight up but can buy into ETFs (exchange traded funds) that pool money together to buy into commodities. If anyone has any questions, please let me know
I forgot to mention on Laurie's comment. As a recent graduate, I have seen first hand how important it is to get out and network with our alumni. The best part of this university is our Franciscan values. Once a Bonnie, always a Bonnie. The alumni are always willing to help a student out. Make sure you take full advantage of that. Not many other universities have an alumni that are so willing to help new students out.
ReplyDeleteOn another note, I have already noticed how great of an education I have received here at Bonas. At Citigroup, we had a class of 26 interns from all universities around including even Cornell and Columbia. I must say, I felt more prepared and had a better understanding than most other interns. Most seemed lost a lot of the time. Laurie is right, it is more difficult for us to get the interview, but once we get one we are on the same playing field as everyone else! Use the alumni to help you get these interviews.
Some major topics covered in the discussion were about risk, job creation and the main goal of the company is to receive the best rate of return on their capital.
ReplyDeleteIt was mentioned that companies have forgot to price risk. Those who don't have money are usually the ones taking risks and those who have money preserve capital and don't take as many risks.
The U.S is a consumer driven economy and the easiest thing to do is take a massive tax cut in order to solve the problem of the debt ceiling. If they keep raising it, what will happen to the economy in the future?
Companies have to be cautiously optimistic, they can expand internally, externally (buying other companies), or pay shareholders in the form of dividends. Make decisions to increase the value of your company and make a profit.
I thought the SIMM presentation was very interesting. One of the biggest points that took from it was that Bona grads look out for one another. I think its great that as we all enter a very difficult job market, we can look to other alumni for guidance. I also thought that it was interesting how the panal took such different views on things such as how the current economic environment impacts their job, and presumably makes it more stressful and difficult. Alex mentioned how he really enjoyed that part of the job because he is getting so much experience in such a short time.
ReplyDeleteIn terms of the markets, the biggest thing that the panelist talked about was making sure that you properly account for potential risk in any investment. At first it was hard to believe that something that seems like such common sense would be so powerful but after hearing them talk about potential "bubbles" I realized that there is risk in every investment.
Hello everyone,
ReplyDeleteI thoroughly enjoyed attending my first SIMM Roundtable discussion. Listening to first hand knowledge is the best schooling you can get besides actually doing it yourself. That being said, I want to express my gratitude to Alex, Chris, Jeff, and Sean. They provided great insight about today's economic concerns and induced me to follow up on many key points of the discussion.
As follows, these are the points that I want to articulate on.
1. I'll be honest I do not know much about banking, yet Chris spoke about rating agencies in the beginning of the discussion and I learned that a rating agency has no real power, but investors rely upon them for a specific assumed risk. His example was that high yield municipalities sold from '03 to '07 with 7-10 maturity were rated high. But today it is terrible and most need refinancing, because they are not solvent to pay back.
I learned about the characteristics of people investing. First is people who have money and want to protect it by staying away from risky investments. Second are people without it who want a quick return which is of higher risk.
I liked the part of the discussion where investing is like a bell curve and the 3% tails are either making a lot of money that day or going zero. The middle is staying even. I think it is smart to think about "Today I could go to zero and how can I hedge against this" to protect your investments by being smart and reading the fund's prospectus front to back and annual reports. Also staying up to date on what your investing in by thinking ahead of the game whether their strategy will perform well.
I thought the breakdown between the Euro and the dollar was good too. I learned the Euro has no central bank between 21 different countries and no tax policy like the US. The part that hurts the Euro is that Greece needs a bailout and Finland wants to help, but needs collateral because they don't want to take a huge hit and write off a ton of money.
Now for gold. I believe that since we are in a state of uncertainty the price of gold is destined to sky-rocket. Gold is what people look to when there is so much inflation and economic panic in the public's eye. I believe that when the current administration leaves office and we lift the noose's off corporations there will be more faith in the dollar. Therefore as the economy comes back in a few years gold will steadily decline and it will not bust.
To conclude this post I want to re-articulate that just being there and listening to the knowledge of current banking professionals is beneficial. Since going, I now know I need to read more about investing and banking in general. As a management major it is vital to know your companies finances and how to stay ahead of your competition with the main goal of increasing market share.
DG
My favorite part about the presentation was when the person asked if people from Bonaventure could compete with people from other school that look better on paper. They emphasized that it may be easier from them to get an interview, but once you get an interview it is an even playing field. once you get into the interview it is important to sell yourself and if you are the most qualified for the position you will get the job regardless of what school you attend.
ReplyDeleteI believe the presentation was very informative about the current economy and showed that nobody really knows exactly what will come of it in the future.The speakers were very helpful with all of the questions and showed that they know exactly what they're talking about.
ReplyDeleteI was very happy to hear how bona students are respected by large companies. I'm sure it made everyone feel better about themselves knowing how they will be able to compete with students from such large and known schools.
I think the presentation was interesting and very informative. They provided a lots of information about economic concerns as well as useful advice and experiences on career paths.
ReplyDeleteI want to talk a bit about gold price and the cause of it. Gold is making regular headlines these days as global economic uncertainty remains high. A resurgence in investment demand has fueled gold’s rally over the past decade. Investment demand for gold has grown. We should caution that this very aspect that provided support for gold over this time may result in its downfall going forward. Even a slowdown, let alone a decline, in net investment flows can have a materially negative impact on the gold price from current levels. So whether you are a gold bug bull or a gold bubble believer, one thing is for certain, there is no denying gold's captivating run. Therefore, in order to make good investing decisions, seeking for professional advice is very helpful.If you don’t know your bullion coins, you’d better know your bullion coin dealer to help you make responsible decisions.
I had zero intention of attending this meeting until the extra credit was offered. However at the conclusion of the program was very satisfied with my decision to attend it. I really enjoyed just listening to each of these men talk about their jobs and their experiences.
ReplyDeleteI ask the question what are your thoughts regarding attending graduate school and receiving your master's degree. Right now I am not leaning towards getting my master degree right after I finish my BA. And after listing to each of these men my feelings are only stronger towards the idea of work first, and then reanalyze the idea of getting my master's.
Uncertainty and adjusting for risk are keys to remember.
-Mike Gargin's Post