Monthly Archives: April 2012

Junior Military Officer (JMO) Recruiting Companies

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Since I’ve been getting a lot of questions about JMO recruiting, I think it’s about time I shared my experiences working with Cameron Brooks.

The whole experience is a carefully scripted drama, they need you, you need them, they don’t want you to go to grad school, you are secretly applying to grad schools, etc. The bottom line is, firms like Cameron Brooks get paid (roughly $10,000 according to my sources) per candidate that they successfully source to Corporate America. So from purely an incentives point of view, they are financially incented to make sure that you go to one of the companies that recruit from them.

That being said, I still believe JMO recruiting companies provide significant value. Recently separated or transitioning veterans are no different from recent college grads, probably even worse. Recent college grads can afford to experiment with a few different jobs and career paths until they find the one they want. Transitioning veterans don’t have that luxury. That’s where the JMO recruiting companies come in. They point out a few books you should read and try to give you a general sense of what the major grouping of careers are like: sales, manufacturing, consulting, operations, etc.

In addition, as a veteran candidate, there are no other way you can possibly meet and interview with so many Fortune 500 (more often Fortune 100) companies within a 48 hour span. Companies like Cameron Brooks (CB) have been helping veterans get jobs for a long time and a lot of CB alumni come back to CB to hire other veterans. I really admire this business model as veteran candidates don’t have to actually pay for anything, besides the ticket and hotel to the hiring conference.

On the flip side, I don’t think most JMO recruiters can really articulate why you need or don’t need an MBA. Mostly, they just tell you not to do it for obvious reasons. In my opinion, getting an MBA (or other graduate degree) and getting a job through a JMO recruiter are equally good. It really depends on what you want to do. For example, if you want to get into finance (Wall Street finance, not Johnson and Johnson corporate finance), you definitely need to get a MBA from a top-10/15 business school. Also, some top companies don’t use JMO recruiters – like Amazon, Booz Allen Hamilton, Deloitte, etc. Some companies only hire MBAs – McKinsey, Boston Consulting Group, etc. You would have to apply directly to them. However, if your ambitions do not lie in entrepreneurship, finance, or a specific company like Amazon or McKinsey, then I wouldn’t even say you really need an MBA.

If all goes well, you find out that you really like the company you are in and you really like the work you are doing, then you can start building a reputation and move up the ranks. You can do an Executive MBA later on in your career. Statistically speaking (or more accurately, anecdotally speaking), the veterans that I have spoken to generally dislike their companies and/or industries. I believe this issue is systemic, and the problem lies with the fact that JMOs typically get more leadership experiences than a typical 25-30 year old would get, and there are few, if any, civilian jobs that can replicate that. Every JMO I have met, MBA or not, have complained about the decrease in executive leadership power. That is because true executive power lies more down the road, in higher positions.

The true issue at hand is veterans not acknowledging the gap between in their capabilities and the lack of jobs that require such capabilities post separation.    

In conclusion, going with a JMO recruiter vs. a MBA post-MBA isn’t going to materially alter your ultimate long-term plan. If anything, you can get a MBA after getting 1-2 years of experience, although this will probably lead into a discussion on how business schools view veterans with corporate experience. The hardest part of the whole transition process is figuring out what you really want to do in life. I’ve been out of the Army for 18 months and I’m still struggling with the “right” answer and my answer is that I think you should get away from it all for a month and do some serious self-reflection. The major issue with the increased op-tempo due to war is that company, battalion, and brigade commanders don’t have enough time to reflect upon what they did well and what they could improve on. Most veterans jump straight into an MBA or a corporate job after separation. I think it takes time to process what you have gone through, to figure out where you want to go, and how to get there.

Why I Withdrew My Offer from Ross

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The bottom line is that Ross isn’t compatible with my top two post-MBA career choices, which I narrowed down to entrepreneurship and finance.

 

For entrepreneurship, I’ve had candid discussions with current students focusing on entrepreneurship and the consensus was location, location, location – San Fran, Boston, or New York. San Fran is great for both pure tech-related startups as well as startups that require you to physically create something, say, Iron Man, since I just saw the movie. Boston is leading medical startups as well as strong physical creations and tech. New York is definitely up and coming but seems to be purely focused on technology startups, for now.

 

For finance, I spoke with investment banking recruiters from five of the top banks and they have all told me that they have decreased recruiting efforts at Ross simply due to the fact that Michigan is a little far to get to and they have to concentrate their budgets elsewhere.

 

Don’t get me wrong – Ross is a fantastic school and I’m sure I’ll get some death threats after this post, but I did notice that companies like Amazon, the consulting firms, and other customer product firms were huge recruiters at Ross. I just think that in this economy, banks have to pull back recruiting efforts and there are just a ton of great schools in the Northeast or West Coast to choose from without extensive travelling by recruiting teams. For entrepreneurship, the talent that you want to hire is probably going to be located in a big city like San Fran, Boston, or New York. I’m sure you can do something great at Ann Arbor too, but statistically, it is just better to be in a big city.

What I learned from NYU Stern EEX Annual Entrepreneurs’ Summit 2012

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You know you’ve been to a good conference when you leave with a giant headache, because too many neurons have been firing off in your brain. Listed below is the speakers and I’m going to write down some thoughts I learned from each speaker or panel. Before I start, I want to talk about what I absolutely HATE: <rant> people who say “Thanks for coming and speaking to us….” – Speakers are partially doing it out of the kindness of their own hearts but more likely they are doing it for media coverage, exposure, and what successful person doesn’t like talking about their own success? If 10 people spent 3-5 seconds with some lame introduction like that, that takes away 30-50 seconds for someone else who actually has a good question instead. </rant>

  • Opening Keynote by Dan Porter (OMGPOP) and Erick Schonfeld (formerly of TechCrunch)
  • Panel – Startup from your MBA Dorm Room; featuring David Teten (ff Venture, HBS Angels), Neil Blumenthal (Warby Parker), Alexa von Tobel (LearnVest), Kevin Nazemi (Done)
  • Panel – Accelerate Your Startup; featuring David Tisch (TechStars) and Jason Baptiste (OnSwipe) and Laurie Segall (CNNMoney)
  • Closing Keynote Speech by John Maloney (Tumblr)
Dan Porter (OMGPOP): 
Dan’s talk was interesting because the online gaming industry has a lot of similarities with other tech startups:
  • Having the resilience to endure multiple failures: I liked Dan because he acknowledges the tremendous power of luck. His company has been creating games for a long time and the gaming industry is much like the music industry, sometimes you have to just wait for a hit to come. Draw Something was actually a side project that made it big. He had 4 people working on it, including himself. He joked about a time when an investor asked what Dan’s “success plan” was when a game really makes it big and Dan had no answer. When Draw Something became huge, he started asking the same question to his team. Sometimes investors know what they are talking about. When OMGPOP wasn’t successful, it was still a fun place to work at.
  • Having the ability to scale when a product/service becomes popular: Apparently, one of the most significant metrics that got investors horny over Draw Something was when they noticed the metric that people played that game when they woke up in the morning. Kind of like how I check my gmail/linkedin/twitter when I first wake up. We have become attached to our smart phones.
  • Having the ability to create a broad appeal due to the low margins per customer: Dan talked about the broad appeal of Angry Birds, the birds aren’t cute enough to make it exclusively for children and the birds aren’t angry enough to make it exclusively for adults. It was also totally different than anything else out there. He spoke about Draw Something appealing to a segment of the population that doesn’t even play games. I never thought of it that way, usually you want to target a very specific market, but in the low-margin game, if you can convince people who normally wouldn’t even try the product/service you offer, then you’ve got gold.

On the Zynga acquisition:

  • In January, the financials weren’t looking to good for OMGPOP, Draw Something launched in February, OMGPOP acquired by Zynga in March.
  • The only person who had any mergers and acquisition experience on his team was someone in their early 20′s who worked for IBM. (Is this a hopeful sign for non-technical MBA grads?)
  • Mark Pincus was very aggressive in this acquisition, aggressive people don’t ask you for statistics, they already have it – they are ready to make the deal while the competition is still trying to acquire and analyze the data. Also take a look at who is showing up at the meetings, Zynga sent its top people and that definitely reflected their level of interest and seriousness. Speaking of Mark Pincus, I met him during Northwest Entrepreneur Network (NWEN)’s Entrepreneur University in 2008. It’s funny how small the entrepreneurship community is and how the same people keep showing up.
  • The CEO’s job is to harness the media frenzy and fury, the irrational and the rational, when your company does have a product/service that blows up.
  • Zynga was also buying OMGPOP’s ability to scale up, not just Draw Something.

Other interesting thoughts:

  • Each app is like a bookmark.
  • Mobile is where the growth is (This was general consensus amongst all speakers).
  • For games specifically (could apply to other businesses), build something on established behaviors. For example, Draw Something is like Pictionary, but it isn’t. However, people intuitively know how to play it.
  • For non-technical founders, the right approach isn’t to have “some guy” build an app or website for you. They need to be part of the team and part of the business. This provides an interesting parallel to the military. When I was in the Army, I noticed that the best units had the whole staff working as one: S1, S2, S3, S4, S6, Battalion XO, everybody. The Army is also great in rotating people from staff to command positions, which really fosters the camaraderie between line and staff officers. Apparently, this wasn’t always the case in the U.S. military, as I’m reading the second book in Edmund Morris’s trilogy about Theodore Roosevelt (a follow-on post on the good Colonel later).
  • Over-communicate with investors.
Startup from your MBA Dorm Room; featuring David Teten (ff Venture, HBS Angels), Neil Blumenthal (Warby Parker), Alexa von Tobel (LearnVest), Kevin Nazemi (Done):
Having David there was a blessing as he balanced out the overly-optimistic energy that was pervasive throughout the whole summit. I’m leading off with this point because I was just thinking about my upcoming CFA exam and one of the topics is about hedge funds survivorship bias. The hedge funds that report returns are the ones that are successful and still alive. Same thing with entrepreneurs, all the people you hear speaking at conferences are the winners, the people who have succeeded. You don’t get to hear about people who haven’t made it. Take Dan Porter for instance, he was rejected from a speaking engagement at the Game Developer’s Conference – before Draw Something made it big. If Draw Something never made it big, we would have never heard of Dan Porter. If Mayor Bloomberg never started Bloomberg, he would just be another finance guy with a couple of million bucks.
Hedging your bets:
  • This was a huge topic as the audience was full of MBA students. The basic concept was that entrepreneurship is rife with failure, so you better have some backup plans, i.e. still get the summer internship and full time offer. All of the founders on the panel had a backup plan. In fact, one got so lucky as to receive $250,000 in funding when he called to turn down his full time offer and pay back his sign-on bonus.
  • Going all in may seem glamorous and brave, but be aware that the top jobs that you could get immediately after an MBA might not be available to you afterwards, i.e. banking and consulting. Each failure decreases the other options available to you.
  • Most people fail. It’s easy to think that YOU won’t fail, but that is probably a systemic misconception that most Americans have. Another parallel to the military, I always thought that I wouldn’t die. I had no good basis for that thought, I just felt that I’ve always been lucky in my life so I should just stay optimistic. I just read a great quote by Sebastian Junger about death: “…try to really understand that you’re not risking your life, you’re risking the sorrow, and even the sanity of everyone you love. Because when you get killed, you’re the only person that won’t have a problem. Everyone else will suffer just extraordinarily. It’s easy to be cavalier about one’s own life, but it’s a little harder to be cavalier about the well-being of everyone you care about. And that is really what you’re playing poker with, and it’s hard to know that.”

How to use business school:

  • Be a maker, not a taker (quote courtesy of David). There are already a lot of things programmed into an MBA, but all MBA students should truly leverage their school’s brand and their time at business school to test something or do something new and unique. Don’t be an attendee, organize something.
  • Business school isn’t a product to consume, it is a platform for you to consume other things.
  • Think beyond just current students and alumni, non-alumni will probably know your school too, professors, etc.

Vetting your idea:

  • Have every smart person you know destroy your idea. If you still come out of it thinking that your idea has a good chance of success, then it probably actually does or you are really delusional.
  • Have a solid business plan and strategy up front because cash runs out fast, and you can’t afford it to ponder new scenarios on the fly.
  • The bar to getting funding has raised (for tech startups) because everyone is expected to have at least a splash site and in some cases a paying customer already. It costs almost nothing to start a company.
  • If fundraising is hard, it might be you.
  • Investors are more objective about your baby than you. Random thought – my daughter is awesome
  • Find something that you really hate, and then fix it
Other thoughts:

 

Accelerate Your Startup; featuring David Tisch (TechStars) and Jason Baptiste (OnSwipe) and Laurie Segall (CNNMoney):

  • You need the right founder, the right team, the right market, and the right idea
  • Outsourcing tech doesn’t really work because it only means that anybody with the same idea as you but with a local team can just devastate you with faster changes
  • Mentioned the Mark Susterblog post, “Invest in Lines, not Dots”: In a nutshell, don’t ask strangers (VC/angel investors) out to dinner when you don’t even know them. Read their blog, post a few comments, follow them on twitter, and slowly develop a relationship first.
  • Techstars application is a dialogue, a process. A number of current Techstars companies are re-applicants.
  • Desirable CEO traits: capacity to build a team, capacity to sell (a product, a service, or a vision)
  • Broadly networking doesn’t really help, it is better to have a targeted approach and to, for the lack of a better word, stalk people online (their blogs, twitter, etc) – figure out how they think, connect and build rapport with thought leaders.
  • Great entrepreneurs flip the investor – entrepreneur relationship. Make investors call you, make investors request a meeting with you. That only happens when you’ve built a really great product
  • Don’t focus on features, don’t do a feature walkthrough

John Maloney (Tumblr):
By the time it came to John’s talk, most of the wisdom and knowledge has been repeated more than a few times already.  John’s story is similar to everyone else’s that I’ve heard so far – serial entrepreneur who had to work years to finally “make it big.” In many ways, the tech startup community resembles the entertainment industry. People slowly work their way up and when they make it, their peers generally seem supportive of them.

CFA Financial Reporting and Analysis: Balance Sheet

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The balance sheet section is rather self-explanatory: know the various components and characteristics of assets, liabilities, and equity. The only things of note to mention are:

  • The differences between held-to-maturity securities (HTM), trading securities (TS), and available-for-sale securities (AFS)
  • Components of equity
  • Intangible assets

HTM vs TS vs AFS:

Example: Amazon invests in Google

Shares purchased 0-20% 20-50% 50%/50% 50%+
Type of investment Financial Investment Influence Joint Venture Control
Valuation Cost or market Equity Equity (GAAP), Proportionate consolidation (IFRS) Consolidation, purchase

FAS 115 provides definition of valuation of passive ownership (0-20%)

HTM: long term, passive (debt)

AFS: either (equity or debt, current or non-current)

TS: short term, speculative (equity or debt)

 

Example:

1/1/2012: Purchase 30 bonds with $1000 face value and 5% coupon

12/31/2012: Market price of bonds is 1010

HTM AFS TS
Income Statement $1,500 $1,500 $1,500 // 300 Unrealized Gain
Balance Sheet 30 x $1,000 30 x $1,010 // OCI 300 30 x $1,010 // RE 300

 

Equity: There are 6 components:

1)      Capital at par value, part of Contributed Capital

2)      Additional paid in capital (APIC), part of Contributed Capital

3)      Retained Earnings – undistributed NI, undistributed accounting income

4)      OCI

5)      Minority interest / NCI – if you have more than 50% ownership, account for 100% of income and then subtract out portion not owned in minority interest.

6)      Treasury Stock – contra account

 

Intangible Assets:

There’s a lot to write, but for now:

GAAP – Expense Research and Development

IFRS- Expense Research, Capitalize Development

Capitalizing = higher income, current earnings go up, smooth

Expensing = lower income now, higher income later

Exception: Software (GAAP) – It is possible to capitalize both Research and Development

 

————-

My Level 1 Status as of 4/30/2012:

Hours studied: 75.5

Practice questions taken: 640

Ethics:
-QBank- 23/30; 25/30; 44/60

QM:
-QBank- 38/60
-SchweserNotes: Technical Analysis- 6/9

Portfolio Management:
-QBank- Quiz 1: 26/30; 22/30
-SchweserNotes: 10/13; 10/13; 3/5; 2/6

Financial Reporting and Analysis:
-QBank – 39/60; 15/30
-SchweserNotes: 5/6; 7/8; 14/22; 11/14; 24/25; 14/18; 5/8; 6/10; 14/20; 4/7; 4/4; 5/8; 7/16; 10/24
-Other: 19/25;

Corporate Finance:
-QBank – 21/30;

Equity:
-QBank – 21/30;

My Fling with Tumblr…

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Tumblr is like a hot new co-worker you secretly have a crush on and she actually asks you out for coffee. She’s young, she’s sleek, she’s artsy. You’re married to WordPress, which is supposedly clunkier and less cool. However, after having some innocent or maybe not-so-innocent coffee dates with Tumblr, you quickly realize that your true love is still your wife – WordPress. WordPress may not be fancy, but at least it lets you paste tables inside. The decision not to allow you to paste tables in Tumblr cannot be for technical reasons, its too damned easy. It must be some Steve Jobesque reason why you can’t. Then you start to realize that all women are fickle creatures anyways and you are in way over your head. And wtf, Tumblr orders lobster during the second date?? So now I’m back with WordPress. It looks less glamorous, but hey, it works for me.

 

Things I’ve Learned:

  • The best way to get your posts from wordpress to tumblr is to import them into blogger, and then use this tool to import that to tumblr. Here is a good post that explains it more in detail.
  • HTML has gotten way more complex since the days when bluesnews was all the rage. That’s a pretty obvious fact but it is just interesting to see the evolution from 1995 when I first played with HTML and how it is integrated into everything now. Speaking of 1995 – damn I’m old.
  • Tumblr hates tables. Seriously, who writes tables from scratch anymore? Even though I tried, it still didn’t come out correctly.
  • Changing blogs changes all of your permanent links, which screws up google searches, if you care about that kind of stuff.

The Age-Old Question – “Why MBA for Entrepreneurs?” – with a Twist for Veterans

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As I reflect upon hitting my eighteenth-month anniversary out of the Army and thinking about post-MBA careers, I have boiled down the whole MBA/Entrepreneur debate into one question:

“Do you want to make the money-making machine or are you content with just making money for the machine?”

I’ve read thousands of websites, talked to hundreds of people, and attended dozens of conferences and the answer is pretty clear to me, at least from a veteran’s perspective. The consensus is that if you have a viable idea that you have seriously considered (have a solid business plan and have had a lot of smart people shoot down your idea, yet you still remain convinced), then you should consider forgoing the MBA completely or using the MBA as a launching pad for your success. From a no-regrets point of view, I think everyone should consider entrepreneurship at least once in their life but veterans specifically should consider four facts:

1)      You can be an entrepreneur without starting your own company, large companies need innovation too. Although, it may be understandably harder to change something you are a part of rather than changing something you create.

2)      The likelihood of failure is great and your chances of getting the dream job post-MBA is significantly more difficult.*

3)      It is unlikely that you have developed a base of knowledge beyond your military specialty. Having a good idea isn’t good enough; you need to know something very specific about the world or body of knowledge. The counterpoint to this argument is embodied in Fred Smith, the founder and CEO of Fedex, started his company based on witnessing the efficiency of the military logistics system during the Vietnam War.

4)      You have less “runway” to experiment than the “typical” MBA student or entrepreneur. Anything can happen in America, so I use the word “typical” loosely, but it is the case that most entrepreneurs and MBA students tend to be on the younger end of the spectrum. Most veterans separating have families to support and are typically older, especially if you have waited for a company command (if you were an officer). For the enlisted, after graduating from college, they are around the same age if not older than junior military officers who separate.

Therefore, my recommendation for aspiring veteran entrepreneurs is to attend and graduate from a top MBA program and compete for a “regular” job through the summer internship and/or typical recruiting process. Think of the MBA as two years to launch and run your business. If it is going exceptionally well, rescind the offer that you accepted.

Also note the fact that most angel investors and venture capital firms like to invest in technology-based startups due to the low cost of starting the company. I wouldn’t consider most veterans exceptionally qualified to start or run a tech startup. I would consider veterans very qualified to run startups that require managing a lot of non-skilled laborers, startups that require a lot of “operational” skills, or running a family business.

At this point, I’m going to categorize veteran entrepreneurs into four categories:

Category MBA Post-MBA
Run or expand family business (non-tech related) Useful Run or expand family business, potentially identify new area to start your own business
Have an idea and want to launch a tech startup Will definitely gain more knowledge by doing something like a General Assembly Summer Program. MBA network still useful, as your startup will have to hire locally through startup community and network. Statistically speaking, you will fail. At that point of time, you can either try again, work for another startup, or work for a “traditional” company. Having the MBA will definitely help in landing a job at a “traditional” company
Have an idea and want to launch a non-tech startup There is so much support and emphasis on tech-related startups in MBA programs, but if you have a great idea, you can certainly compete in the business plan competitions and see what comes of that I think you might have a better chance at launching a non-tech startup, because the very notion of a non-tech startup requires that you generate positive cash flow earlier on. Silly example, but if you wanted to start a vegan baked goods company, investors aren’t going to wait for years for positive net income. However, if you do fail, I see less lateral transfer opportunities compared to someone who failed a tech startup who just joins another tech startup.
No idea, but interested in entrepreneurship I definitely recommend going through the MBA program to figure out what you really want out of life. Are you interested in entrepreneurship because it’s glossy and cool? Do you really think you don’t have a boss? (investors) Etc. I would work for a few years, build up your network, and then consider launching anything. If you’ve proven yourself in an established company, I feel that returning back to industry is a possible option if you fail.

 

Making the money-making machine is hard and rife with failure. However, the siren call of glamour and opportunity at riches will undoubtedly strike at the hearts of many men. I’m not trying to disencourage entrepreneurship; I believe it is vital to economic growth. However, I do believe that most veterans, especially those of the combat-arms branches, tend to have an inflated self-view of themselves which is going to dramatically change as what they were excellent at in the military no longer applies directly in civilian life.

 

I highly recommend that veterans go get their MBA and spend those two years reflecting upon what they want to do in their lives, launching and running their businesses to see how successful they are, building a network of smart people, and/or finally going into their industry of choice for a few years and figure out what they are good at – so good that customers will pay them for their product or service.

BAML Fellowship Reminder, Toigo Fellowship Interview Notes, and BAML Investment Banking Call Notes

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1) Just a friendly reminder that the Bank of America Merrill Lynch Global Banking and Markets (GBAM) 2012 MBA Diversity Fellowship Program is due this Sunday, April 15.

 

2) Had my Toigo Fellowship interview this week and it was pretty interesting and different, as compared to my MBA interviews. There were three interviewers, two Toigo alums and current industry practitioners. I expected the “Why Toigo?” questions and I expected the industry practitioner to get into some detailed questions, for example, “What specific steps are you taking to address your lack of a quantitative background?” and “Why finance, investment banking, etc.”? I had a great interview experience, the interviewers were very professional, and in no way was the interview a give-a-way. You had to fight for it.

 

3) As I was an early applicant for the BAML Fellowship, I got to dial into four distinctly awesome calls: the first call was someone from the recruiting team, the second was with a first year Columbia student who is about to enter his summer internship, the third was with a current associate, and the final call today was with a vice president. Forgive me for noting the obvious, but it is interesting to see the evolution of how recruiting views you, how a first year MBA student is preparing for a summer internship, how a first year associate view his summer internship as well as prepare for this first year full-time, and how a VP views her experience from start to finish. It was interesting to note that the summer and first year associate focused on the technical aspects required of investment banking while the VP focused on the soft skills. You can see the evolution of skills required.

 

Top 3 “Hard” Skills Required/Useful for Investment Banking:

  • Accounting / Financial Statement Analysis: Basically how to interpret financial statements from an investor’s / investment banker’s point of view. “Mechanics” of accounting.
  • Excel and Modeling: Seems relatively straightforward – take the investment banking “boot camp” classes
  • General knowledge about the markets, i.e. current yields, big IPOs coming up, which banks are considered good in which markets (Read deal blog/wsj/ft/etc)

 

Top 3 “Soft” Skills Required/Useful for Investment Banking:

  • Energy (don’t know how to really categorize this one). Sleep a lot. Learn how to sleep. Travel or relax before business school.
  • Relationship building (internally and externally), become go-to-person
  • Dealing with the unknown

Top 3 Things to Do to Get Into Investment Banking:

  • Attend all informational interviews, networking events. There are too many qualified candidates for each position, it usually comes down to how many people know you and more importantly, like you. Set up informational interviews as early as you can. Utilize your business school alumni database.
  • While networking, at first, don’t focus on why you are qualified for investment banking, focus on building rapport, there will be plenty of time to demonstrate your competence later on. Be memorable.
  • Demonstrate interest for investment banking, feign interest if you have really good acting skills. Here are some good phrases to modify/repeat: “client interaction,” “diverse projects,” “fast-paced,” “like excel, modelling”
Unofficial BaML Fellowship Interview Structure:
  • Phone screen with “senior” person – talk about markets, test passion for markets, treasury yields, bond prices
  • 1st in person day: Meeting with VP/MD-level bankers
  • 2nd in person day: Reception to meet with others
  • Final day: meet others in bank – fit related questions, brain teasers, minor league technical questions
  • Confirm fellowship by June
Unofficial BaML Associate Daily Routine:
  • Analysts/Associates come in 8:15-9:00 AM. VPs get in by 9-930 AM. MDs come in when they want to.
  • Tasks are coming in by 10:00 AM
  • There is one major project and multiple smaller tasks per day
  • Work on smaller tasks (decks/mark ups) until 5-6 PM.
  • Work on major project after 5-6PM
  • Leave no earlier than 10:30 – 11:00 PM as an analyst/associate
  • Major projects include reading 150 page bond indentures, task is to critique the terms inside
Unorganized Comments:
  • BAML’s leveraged finance group is #1 on the street
  • You can prepare as much as you can, but it gets to a point where the only place you are really going to learn investment banking is by working in investment banking
  • Investment banking is an apprenticeship model, much like consulting; therefore, two ways to convince people who know how to do it to teach you is to either a) be really willing to learn to the point of exuding that feeling or b) being a cool person to hang out with
  • Top 5 banks are like top 10 MBA, the only difference is what they are #1 in and fit
  • Be prepared for unglamorous part of investment banking
  • Really try to figure out group dynamics, if you will be spending the prime of your life working long hours, might as well do it with people you like, rather than just tolerate
  • Depending on your knowledge of finance and accounting, it MAY be helpful to exempt from the 101 classes (and pass up on some free high grades) so you can get access to more advanced finance courses
  • On big teams, there isn’t time for group intros, you just work your way around and meet people as you hit the ground running
  • It’s easier to transition to a group that you “summered” in – it’s a benefit to know people

The Evolution of the Relationship between Military Veterans and the Finance Industry from 2011-2012

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Since time immemorial, military veterans, especially junior military officers, have been attending top MBA programs and then entering careers in finance- be it the less glamorous more stable careers in retail banking or the high-pressure, high-paying careers in investment banking or sales and trading. However, it was in June of 2011 that five of the top banks:

came together and organized themselves as an organization called “Veterans on Wall Street” (VOWS), which is dedicated to “honoring former military personnel and employees currently in the National Guard and Reserve by facilitating career and business opportunities in the financial services industry.” This effort was mainly focused on hiring veterans for the retail banking business for BoA, Citi, and back-office and middle-office functions for GS, CS, and DB. Note that no front-office job was being offered as a top-tier MBA was still a requirement to break into those fields. Conspicuously absent was JP Morgan and Morgan Stanley.

 

Five months later in November of 2011, JP Morgan Chase (JPMC) led an effort called the “100,000 Jobs Mission” to hire 100,000 veterans by 2020. Founding members of the 100,000 Jobs Mission appear to be mostly non-financial services related:

  • AT&T
  • Broadridge Financial Solutions, Inc.
  • Cisco Systems Inc.
  • Cushman & Wakefield Inc.
  • EMC Corporation
  • Iron Mountain Incorporated
  • JPMorgan Chase & Co.
  • Modis
  • NCR Corporation
  • Universal Health Services
  • Verizon Communications Inc.

It is unclear to me why JPMC did not just lump itself together in the VOWS campaign, however, I suspect that it had something related to do with the recently settled military mortgage scandal. Before we go into some of the motives of the campaigns to hire veterans, I want to highlight all the positive things that are happening.

 

In 2012, GS had its inaugural “Goldman Sachs Veterans Internship Program” which started this April. This is the first internship of its kind as its timeline is not connected to the traditional summer internship. It appears to be the first internship at a financial services company focused on training and eventually hiring veterans. Also, military veterans are now considered part of their “diversity” hiring which traditionally included women, minorities (minus Asians), and LGBT.

 

Also in 2012, CS initiated its inaugural “Credit Suisse MBA Military Boot Camp,” geared towards prior-military MBA candidates entering a full-time MBA program in Fall 2012.

 

JP Morgan, not to be confused with JPMC, has had a MBA Early Advantage program in place which has been open to “ is open to Black, Hispanic, Native American, female, LGBT” and recently, if not this year, “military and veteran students.”

 

Citi and BoA are the only two banks that I know of that offer pre-MBA fellowships, i.e. they guarantee accepted fellows a summer internship as well as payment for tuition or a stipend, before MBA students even start their first MBA class. Both have recently, if not this year, included veterans in their respective programs: Citi Pre-MBA Fellowship, Bank of America Merrill Lynch 2012 MBA Diversity Fellowship Program.

 

The obvious trend is including veterans in “diversity” recruiting and I have no major qualms about that. Although secretly, I must admit that most veterans would find it slightly distasteful as if veterans couldn’t get the job otherwise. After all, combat experience is earned, and all the other diversity categories one is born into. But hey, I’ll get off my pedestal – this obviously benefits veterans so I’m all for it.

 

I also want to touch briefly into why these banks are starting these veteran hiring initiatives, is it out of the kindness out of their hearts or is it more for PR reasons? Probably a touch of both, with a heavier weight on the latter.

 

Beyond the earlier link of JPMC’s recent settlement, JPMC was also involved in violating the Servicemembers Civil Relief Act (SCRA). The SCRA provides numerous protections, but the JPMC incident focused on the 6% clause, “Servicemembers may be able to reduce the interest rate on their pre-service credit cards, car loans, mortgages, installment contracts, interest charged by the IRS, secured debts under a confirmed bankruptcy plan, and other debts or obligations to 6% per year under the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. App. Section 527. However, federally insured guaranteed student loans are not eligible for this rate reduction under the Higher Education Act of 1965, 20 U.S.C.S. Section 1078(d). The SCRA specifically includes debt owed by the Servicemember individually or jointly with a spouse. Debt jointly owed by a Servicemember and individuals other than a spouse has also been eligible for the interest rate reduction. It does not matter which one of you initially incurred the debt.” Read more here. This is probably a good segway into student loans and how they seem to be impenetrable to anything…but we’ll deal with that in a later post.

 

In March 2011, units of Bank of America and Morgan Stanley have agreed to pay more than $22 million to settle charges that they improperly foreclosed on active-duty members of the U.S. military. The list goes on. Wells Fargo – here. Citi – here.

 

Obviously bad things have been done, I think you get the point by now. However, to balance out this picture, I do believe that in general, the mortgage departments were just incompetent and understaffed, so it wasn’t veterans who were specifically targeted but rather a lot of mortgages were just handled in an erroneous manner.

 

So from a historical point of view, one could definitely argue that the mortgage scandals could have been one of the motivators of the banks starting veteran hiring initiatives.

 

From a employment point of view, this is fantastic. It appears that the retail banking units are targeting enlisted soldiers and the more glamorous positions are still mainly being offered to officers who graduate from a top MBA.

Test Strategy and Approach, GMAT vs CFA

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Since I’ve been studying for both the GMAT and the CFA, I haven’t had a free weekend off in about two months, and it’s only going to get tougher as I approach both exams: June 1 (GMAT) and June 2 (CFA). Before we get any further, I’d like to just say that is is utterly a horrible idea to study for two major exams at the same time. I could probably make up some excuses about why I am doing so but it’s probably all BS just to make myself feel better.

 

What I have found interesting is the similarities and differences between the GMAT and the CFA. For both, brute force and cramming won’t do much good and no one has ever scored all 240 questions correctly on any level of the CFA and no one has ever reached a 60 raw score for both the quant and verbal section of the GMAT. However, people have received 800 GMAT scores, just not with 60 (perfect) raw scores. The Verbal and Quantitative scores range from 0 to 60. If you are a person who likes to score 100 on exams, then you are in for some pain.

 

For example, the GMAT is an adaptive test that adjusts to your ability as you answer more questions. If you operate at a 45 raw quant level, the test will give keep giving you questions and hone you down to 45, i.e. you will receive a 48 level question and if you fail, it will give you a 42 level question next. If you pass, it will jump up to 46, and if you fail, it will go down to 44, etc. That means high scorers on the GMAT can potentially be getting a lot of questions wrong. If you consistently score in a high raw score range, you will have a high GMAT. Since you are facing off a computer which has limitless capability in finding obscure math and verbal topics to stump you, your best approach is to study the best you can and build an approach that works for you. If your approach fails to get you an answer, move onto the next one.

 

The CFA has 240 questions and like the GMAT, it has so many topics to choose from that it prevents one from memorizing or knowing everything. Unlike the GMAT, you don’t get a grade, you just need to beat enough other people to get a pass as it is a pass/fail exam. For the CFA, having notes really helps because the most important thing to know is the concepts and then answer problems testing your knowledge of these concepts. Memorizing formulas (most) usually doesn’t help without knowing the background behind the formula.

 

I find the approach to the GMAT completely different as I don’t necessarily need to take any notes or memorize anything like accounting or derivatives. By doing a bunch of practice questions, I’m basically building up a library of techniques to approach different problems. You have known the basic math formulas since junior high school so it isn’t really taxing to just refresh your memory on those.

 

The most important thing of all that I have learned is to approach both exams as an opportunity to learn. The biggest part of the CFA is understanding how to analyze financial statements for business purposes (non-accounting). I’ve started some informational interviews with investment bankers and the #1 skill they keep emphasizing is to understand accounting from an investors perspective. For the GMAT, I’m building mental endurance and agility as I have to keep answering high-level questions for an extended duration of time. Your mind needs exercise too. If you approach both exams only in terms of just trying to “beat it” – and you may succeed – you won’t get the most out of the hours you put in. I feel that is is more worthwhile to approach both of these exams in terms of learning something new.

2012 Credit Suisse MBA Military Boot Camp

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Have you considered life on Wall Street after life in the Military? Do you have questions about the transition to corporate life? Are you concerned about how to transfer your military skills to investment banking?

Apply now for the Credit Suisse MBA Military Boot Camp, an educational outreach initiative for prior-military MBA candidates who are entering business school this fall and who are interested in a career in financial services. During this full day program you will learn about careers in Investment Banking, Sales and Trading and Private Banking. You will receive advice from previous Vets who have made the successful transition to Wall Street and will have time to network with members of the Credit Suisse Americas Veterans’ Network, the first such network on Wall Street.

Credit Suisse greatly values the military experience and is hoping to help prior-military MBA candidates develop an understanding of the different ways that the military experience can translate into a successful career in finance. We hope the boot camp is educational and helpful as you prepare for the fall semester recruiting effort.

Credit Suisse
11 Madison Avenue
New York NY 10010
Program is geared towards prior-military MBA candidates entering a full-time 2 year MBA program in Fall 2012.

Applications must be received by May 15th, 2012.

Application to this program is selective. Credit Suisse will contact you by June 1st with the outcome of your program application. Travel expenses will be covered up to $150 by Credit Suisse.

For additional information, please contact campus.diversity@credit-suisse.com.

15 May 2012

 

 

Check it out here