“The Evening of Opportunity” that could help you get into Finance Industry [12 Dec 09]

Good evening everybody, thanks for coming to support our event.

I am going to start by referring to a question from a student: 
“I have recently started doing CFA Level and also tried to apply for a few positions in the finance industry (including junior analyst positions), but I have had no interviews till date.  Is it true that one needs to complete all three levels of the CFA Program or Masters in Finance to stand a chance?”
My response to him is: It’s not a matter of number of certifications one has that decides whether one can join the investment industry, coz there are many people who have completed all three levels of CFA Program and also got Masters in Finance, and yet still can’t join the investment industry; there are also others who do not have any CFA certification/ masters program but are already in the finance industry.  The answer lies in my favourite slogan “Continue Learning and Keep On Networking”.

What does “Continue Learning” mean?
I understand most, if not all, of us have finished the CFA Program or are in the midst of doing the CFA Program.  Continue learning doesn’t necessarily mean getting more and more certifications/ degrees, e.g. FRM, CAIA, ACCA, MBA, MFE—the list is endless.  Learning is NOT a paper chase; it can be self-learning a new investment strategy/ perspective or simply deepening our understanding of a country/ sector/ industry.  For those of you who are not yet in the industry and trying to find a suitable opportunity, learning also means broadening your market knowledge and getting yourself prepared for interview questions.  The worst thing to happen is: when job market picks up, there are many opportunities, but one keeps failing at interviews coz one lacks competency in the areas required, as demonstrated by an inability to answer the technical questions that are frequently asked at interviews.  That’s why I keep saying competency building is so IMPT.

This morning, I was at the University Investment Research Competition (UIRC) organized by CFA Singapore, where university students were presenting on the research they have done on an assigned company.  We were impressed by some of those young undergraduates who were able to handle tough questions by the panel of judges, who are very senior people in the investment industry.  These are the questions asked by fund managers to sell-side analysts and are frequently asked at actual interviews for equity research positions.  Be aware that you are competing with these young undergraduates who have already demonstrated such a high level of competency in front of a demanding panel of judges.
Be sure you know how to walk thru the equity valuation process (top-down/ bottom-up); what are the key drivers of a company’s earnings; how do you derive the fair value of your favourite stock say Singapore Airlines or NAV of Capitaland?  If you don’t, then need to start thinking about it and also if you wish to invest some money to develop this kind of competency to better prepare yourself.

What does “Keep on Networking” mean?
We have found out for ourselves that many jobs in the finance industry are filled by referral or word of mouth, hence building strong networks is especially important.  This makes sense becoz an employer would probably derive greater assurance of the candidate’s competency (and also reliability) if he/she was recommended by an existing member of the team.  It is important to embrace the proper mindset in networking:  Networking is social, casual, and it’s about connecting with everyone you meet without expectation of “getting something in return”.   Things happen naturally after a relationship is built, as trust and credibility needs to be built over time.  Very often, I encounter people at networking events who, after just a 10-15min chat, will start asking me/ others for possible opportunity.  To these people I hardly know, I usually shake my head as I can’t imagine people can ask such questions when they haven’t even built any rapport or proper relationship.

Once we start having incorrect mindset of “What’s in it for me?”, it will subconsciously enter into our belief system and come out naturally when we interact with others, whether friends, colleagues, or even headhunters/ potential employers at interviews.  In the booklet by Robert Half on “Understanding the Dynamics of An Interview”, there is a page on “Negative Factors Evaluated by an Interviewer”.  The page lists some of the factors frequently considered by interviewers to eliminate candidates, and it is said that the employer will be evaluating candidates’ negative as well as positive attributes.  The line that caught my eye was: Persistent attitude of “what can you do for me?”.  Indeed, if we think about it at a deeper level, it makes sense: all else being equal, would employers prefer to select a candidate who thinks “How can I contribute?” or another candidate who thinks “What can you do for me?”.  I think the answer is obvious.

Success Story: How I helped someone join the finance industry in 2008
Last year, while I was still involved in a quant investment process, we got to know this guy who was providing technical support from our software supplier firm, and through a supplier-client relationship for few months, I found him competent (and helpful) in coming up with good quality programming solutions for our quant investment process.  When this guy decided to leave the software supplier firm, I referred him as intern into our team.  Without going too much into subsequent details that are deemed private and confidential, it is sufficient to say that the guy proved himself to be competent (and credible) and he is now engaged as quant analyst to help my teacher Albert take his quant investment process to the next level.

An example of unrealistic expectations
I was talking to someone who was helping me for abit in the equity research, and he shared about his career aspirations: “I wish to be a fund manager, but not be an analyst before that” [notice some people laughing] Some of you are laughing at this remark, which is tantamount to saying “I wish to go to university but I do not wish to go thru high school; I wish to be army general but do not wish to be an army recruit before”.  I use this example as I wish to dispel the glamour surrounding fund managers, whom many possibly regard as somebody with a large group of people working under them.  I have known this to be untrue most of the time because fund manager teams are usually very small with just 2-4 people, including the fund manager himself.  According to my former Level 2 student, everybody in his firm (including the partner) is an analyst, because even the partner performs analysis on the portfolio, risks surrounding his trades, etc.  A fund manager is responsible for the performance of his portfolio and shoulders that risk of underperformance.

How I am helping former students recently?
I have been fortunate to have the assistance of some very passionate students/ friends who have chosen to be part of my equity research effort.  These folks responded to my call for help few months ago when I wrote: “I have recently initiated research on some fundamental analysis and am glad to have got some of my students/ frens involved in the research effort too.  If you happen to have some spare time and wish to pick up a skill or two, do feel free to approach me.  In a nutshell, there’s some serious work to be done; no remuneration, but a learning opportunity for you.”

Over these past few months, I have got numerous responses and have more or less trained a small base of key individuals who are adding value to my research effort, and I am pleased to say that further downstream, I foresee those who have proven their competency + credibility (like the guy in 2008) can potentially be referred jobs by me, or have me as a reference when they apply for job.  Those of you who know me well will know that I tend to be more confident and comfortable with referring people whom I know well (esp people whom I have worked with).  There have been huge turnover too, and due to my high expectations on an individual’s level of passion (usually measured by turnaround time, quality of work and availability), I have also let people go.

The Deal Today…
Now that I have successfully got this going, I have recently “promoted” some people who have proven themselves to be team leads.  I have got three team leads now: General Team Lead, Technology Team Lead and Property Team Lead, and the first two are here with me today to support our event.  We hereby offer some more opportunity for passionate people who wish to be involved, and they will work under the existing team leads for a start.

Many recruitment job ads you have probably come across would write: “looking for enthusiastic and passionate people……”, “ability to meet deadlines….”, “can work independently under minimal supervision….”, “with xx years of relevant experience”, etc.  I am not much different from those job ad writers and wish to be upfront that, except for the relevant experience factor, I am extremely selective in picking people whom I deem are truly passionate.  To me, PASSION is the key ingredient that drives performance; all other kinds of commitment are a drag on performance.  It suffice to say that passion is a +ve word in my vocabulary; commitment is a -ve word in my dictionary.

Today, seeing such a strong turnout at our event, I wish to use CFA Level 2 candidature as a first level screening criteria.  We use CFA candidature as a filtering mechanism as we firmly believe that DISCIPLINE is a critical success factor when it comes to passing CFA exam, irrespective of what background you come from.  We also recognize that there are possibly many of you who are top performance students in some university courses or are well equipped with other finance certification courses, and you can still qualify for interview, if you sit for our quiz with 10 MCQs, and score 7 out of 10 —in line with CFA exam passing score.  (People with special industry knowledge, e.g. oil &gas, healthcare, shipping, utilities, etc are preferred for specialist track, if they prove themselves to be passionate and competent.)  Depending on capacity of myself and my team lead, we are likely to be just looking for around 5 people.

All CV submissions are be sent to enquiries@scholarsvillage.com, strictly by 20 Dec (Sun), 5pm Singapore Time.  We will then interview interested people via a chat over drink, from 21-30 Dec, and make a decision by first week of Jan 2010.

Thanks for coming, and have fun.

****Q&A session, including sharing of what the Team Leads have learnt past few months*****

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