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Post Talk

My Williams talk was a fun time. There were 8 students in attendance. I kept my prepared comments to 9 minutes and then spent 30 minutes answering questions. I then let all those who had heard enough go, but spent another 45 minutes chatting with two students with very specific questions about their own plans.

Rahul Bahl ’09 took notes. See below. If anyone has questions, please ask them in the comments.

Thanks to the Purple Bull for the invitation. I hope to speak on campus again in January, during my annual recruitment trip.

Dave Kane Presentation: October 6, 2007

Agenda

Cool job in finance

-networking

-courses

-knowledge abnormal returns

– practice

Long/short

$

Cool job means one notch better than what we “could get”

-for people having trouble getting a finance job (no connections)

– skip two years of Hell

Do lots of networking

Meet as many people as possible

Useful in your finance career

Courses:

Prove that you can do math and computer

They care that you won’t flip out with spread sheets…enough math and computer to prove it

Majors like math and computer science give you a “leg up”

Take every stat course that you can at Williams

Build your knowledge base

Abnormal returns (links to finance stories)…has perfect taste in choosing stories relating to fianancial world) – teach you to talk the talk

Practice:

Prove that you want to do finance…you need to convey interest

Convince Morgan Stanley you want to do finance

Buying stocks…I can do this…show your employer that you can do it

Know your stocks and all about them

Great to talk about in an interview (they want to talk about this)

You need to know more about the stock than they do

This will set you apart from so many people at Williams

Kane Management

Dave started with the Marine Corp

Got a PHD

Works in quantitative equity

Market neutral (long and short)

Worked at Fidelity and another quant shop

Kane has been going for 3 years

How is the best way to get into a hedge fund

Any way you can!!!

What is your added value??? You can predict future prices, or you are a salesman?

Raise money or make money

Good books

Accidental Investment Banker

Monkey Business

Fiasco

When choosing a job

Take the job you can…it is a tough market

But if you have leverage…choose the job where you are closest to the boss making the shots…it will be the most exciting for you

Private Equity or Hedge Fund?

Private equity doesn’t get marked day to day…so it is more private

Whereas these guys are stuck with companies, can’t have the liquidity of a hedge fund

Hedge fund- you have to not care what other people think, you’re performance is always on your sleeve

Hedge Fund- you have faceless opponents, you don’t really screw any body

Private Equity – you have to be able to “screw people” …. You know the people you are affecting

Sales and Trading….very little trading, mostly sales

Brutal business….cutting people dramatically…hedge funds are taking over this corner of the market

Sales and Trading is the least desirable spot to go in a bank because you ARE NOT NEAR THE ONES MAKING THE DECISIONS

Not developing skills that hedge funds need…so less long term potential.

So where should you go?

THE MORE DIRTY UGLY FINANCE, THE BETTER OFF YOU WILL BE

Plans for Purple Bull:

We should talk with Dave about Purple Bull

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#1 Comment By AC On October 16, 2007 @ 2:32 pm

“Sales and Trading is the least desirable spot to go in a bank because you ARE NOT NEAR THE ONES MAKING THE DECISIONS”

that one caught my eye. I disagree with both setiments as a general matter, but am curious as to the context within which it was delivered. Certainly, some specific roles within the sales and trading universe on the sell-side (i-banks) are very worthwhile experiences (in terms of making the decisions) and others less so.

#2 Comment By David On October 16, 2007 @ 2:45 pm

Agreed.

1) One of the students I spoke with afterwards had an offer to come back to a sales and trading position at a big bank in derivatives. (He worked there last summer.) After chatting with him about the job and the people, it became clear that this was a great opportunity and he should accept immediately. So, I certainly don’t want diss all sales/trading positions.

2) But still, on average, the closer you are to someone with bottom-line P&L responsibility, the better off you are. Such positions do exist in sales and trading (the Eph I talked to was headed to just such a group) but they are less common than in other parts of the bank.

3) So, you are correct that what matters is the details of the specific group and your position in that group. Broad categories like sales and trading versus asset management are not that helpful.

#3 Comment By anon On October 16, 2007 @ 4:26 pm

Regarding the sales and trading:

I worked for a summer for a bulge bracket in S&T. Most banks take in about 50-100 “generalist” interns for S&T, and than a month before the internship, send them the questionnaire as to what their interests are and which department they want to work in.
I cannot stress enough how important this questionnaire is. When you get it, you should immediately call someone you know in the bank so that this person can advise you how to fill it out (i.e. what the “hot” positions are). If you fill it smartly, you’ll end up in derivatives; otherwise, you’ll end up crunching numbers in the back office.
During my internship, I spent a couple of weeks in the derivatives trading, and a couple of weeks with the “number cruncher” people. I cannot stress how different these 2 positions are. As David said, you want to be near the people with their own P&L.

#4 Comment By frank uible On October 16, 2007 @ 6:57 pm

Is addressing career in this trade school way inconsistent with a liberal arts education?

#5 Comment By anon On October 16, 2007 @ 10:16 pm

Frank, why should (say) those who end up going to law school or the med school look down upon those who go into finance (if this is what you are suggesting)?

It is a shame Williams does not offer more finance and financial math courses. It is an academic discipline as many other: people get Nobel prizes for it (Markowitz, Sholes, Sharpe, Merton, Modigliani, Miller, our very own Engle). Learning CAPM is more likely to teach you to think critically than most of the b/s fluff that Williams offers.

#6 Comment By frank uible On October 17, 2007 @ 2:01 am

That is not my point. If you care, try again.

#7 Comment By anon On October 17, 2007 @ 4:38 am

I don’t, really.
Good night and good luck.