Monday, July 07, 2008
This is not only the end of my MBA, but also the end of this blog. I want to keep writing, but since I now start my job I will want to have an anonymous blog so I can express my ideas freely without being associated with a specific bank - I would not be able to write what I really think. For the same reason, I have always maintained this blog rather than blogging on the official London business school blog - simply to write whatever I felt without feeling I need to censor my thoughts. I am starting my new job on Wednesday, starting with a training in New York, and then joining the trading floor in London in October, and therefore this is my last post.
Thank you all to those who have followed this blog and sent messages of support over the years. I wish you all the best in achieving your dreams. I close with my favourite quote by the Nigerian writer Ben Okri:
OUR FUTURE IS GREATER THAN OUR PAST
- Ben Okri -
All the best,
Saturday, July 05, 2008
Monday, June 02, 2008
Overall, you can see that I have managed to end the MBA without any debt. Actually the balance is higher than what I show because in reality my husband found a good job here after a while and we split the rent and other living expenses. So if you are coming to London Business School and want to make estimates, here's my recommendation for adapting the numbers to your situation:
- obviously, most of you won't be lucky enough to be paid by McKinsey without obligation to return ;-)
- if you have a partner, expect him/her to find a job after 3-6 months and enjoy :-)
- most banks and consultancies pay the sign on bonus tax free, somehow my bank refused to, so it was taxed which makes a big difference unfortunately
- Rent is one very big factor which will change the outcome. Even though I came here with my husband, we started off sharing, since he didn't have a job yet and we also didn't find studios that were cheap enough (we were willing to pay up to 230 pounds per week). I only knew one other couple that did that for the first year, and I think we were the only ones who did that for the two years. It's not easy of course, but that way we paid a rent of 837 pounds per month instead of 1200-1500 that we would have had to pay for a studio/1bedroom in this area. There were a lot of couples who had no income (and no McKinsey sponsorship and no scholarship) but opted for a 350 per week 1 bedroom. Of course it is more comfortable, but then I would have had about 15,000 pounds debt upon graduation, and now I am debt free, which feels great
So you see what to focus on: on the income side, internship salary, scholarships and bonuses are very important (I did two internships and obviously earned more than others), on the cost side, rent in London is the major factor (given that tuition fees are beyond your control).
I hope this helps. All numbers are given in GBP.
McKinsey living expenses 15,000
Scholarship for tuition 20,000
Internship salary (20 weeks) 22,000
Internship bonus (so far) 15,000
Second year project 2,500
Total income 74,500
(excludes around 7,000 GBP in outstanding summer bonus and relocation allowance)
Tuition fees 41,000
Living expenses 18,900
Bills, phone etc. 1,050
Tuesday, May 27, 2008
Walking on the Sea of Galilea
Hiking in the Negev desert
The Dead Sea
Sunday, May 11, 2008
I couldn't go this time, so thanks to Rusgirl for texting me from Paris. She won Rugby and Swimming, so congratulations to all the MBAs and Masters in Finance student who fought for the trophy once again! We are proud of you!!
Friday, May 09, 2008
After that, the dinner continued. I was sitting opposite an associate principal who I had actually known during my time there. She told me that she was pregnant and would probably going to stop working for a year when the baby came, because, after all, APs didn't earn that much and it wasn't worth it. Then suddenly I was just myself and told her that that was true, that I was very happy with my decision to become an investment banker, and that taking into account my bonus I would probably earn more than her as an Associate, hehehe.
Then I woke up, the sun was shining, and I was in London. I didn't have to fly away. I just took a long walk through Hyde Park, bought fresh juices at Wholefoods, came back home, read a book about 19th century explorers to Tibet, and then took a nap on my sofa. Life is good.
Wednesday, April 23, 2008
Right now, we have 40 HKU students in our second year at London Business School. Together with Masters in Finance and MBA students, this brings our class size to about 450. I would imagine that for the purpose of finding a job in London, the programme is not ideal, since the last term of the MBA is quite a late moment to apply for jobs. However, that for those who plan on staying in East or South East Asia, this is a great opportunity to build up a network in Hong Kong and also get to study a term in London or New York.
Since I have many readers from Asia, I thought you may be interested.
Monday, April 21, 2008
I started the day running in Regent's Park, and then doing readings for my International Finance class with professor Raman Uppal tomorrow. The first sessions will focus on the behaviour of exchange rates and hedging decisions of multinational firms. I have already taken a class on currency markets and on derivatives, as well as having worked in sales & trading last summer, so I am taking this class mainly because I heard the professor is brilliant and inspiring, and also to get a more qualitative high-level view of hedging and financial markets.
During spring break, I had the chance to read two of the books the professor had recommended to contemplate what is important to us in life (see previous post). I chose "Tuesdays with Morrie", a book on a wise college professor who chose to share advice and experience and spend time with all those who were close to him before his death, rather than hiding away in shame. The book deals with how much pain is caused by the taboo around death, and by the hypocrisy of people who live life pretending they will not die. The book shows how relieved relatives and friends are when someone puts the cards on the table and actively says goodbye before dying. It's a simple book, but a beautiful story nonetheless. The second book I chose was "Three Cups of Tea", about an American hiker in North Pakistan who was so touched by the hospitality of Balti villagers after an accident he suffered while climbing K2, that he dedicated his life to building free schools in remote mountain regions of Pakistan and Afghanistan, villages neglected by the central governments. The guy's dedication and his achievements in inspiring illiterate children are admirable, and I particularly enjoyed this book.
In the afternoon, I went to the library to do readings for my Credit Risk class, but bumped into too many people I hadn't talked to in a long time - people from my stream that I haven't seen since the first year, some friends who have just returned from exchange, some MBA 2010s that I know from my previous life as a McKinsey consultant and so on and so forth. No time to read in the end, but it was great to catch up with people, and it was a sunny day, so everybody was cheerful and happy. I also arranged for a Chinese lunch tomorrow with one of my great friends here who just returned from exchange in the US, I am happy she is back. I will be working with her and two other girls in a team for the International Finance class, it will be fun to have a group of four girls who are also close friends to work on the cases. We will disguise lunches and dinners as important working meetings and thus enjoy ourselves :-)).
Then I had the Credit Risk evening class. I chose the evening over the morning class so I can always go away on weekend trips without having to be back on Monday mornings :-). It's tough sitting in class till 9pm but what can you do... So far the class is very good and I am learning a lot. Credit Risk modeling is not easy, so you really need a teacher who explains well. I took the class because I heard Viral Acharya is one of the best finance professors, and was at first upset when I heard that the first three lectures would be taught by Professor Stephen Schaefer instead. After attending the first lecture, however, I am very happy, Professor Schaefer explains very well and goes step by step, we covered a lot of material but it seemed much more manageable than what I had feared after looking at the course materials, so I'm relieved.
On Wednesday, I will have my first Financial Engineering and Risk Management class with Professor Suleyman Basak, which I am also looking forward to, although the course material suggests it will be hard core. I learned a lot in his Fixed Income class though, so I expect that I will understand the material much better after attending the lectures. Lots of work ahead! It doesn't help that I am going on a 10-day trip again during term next month (I did the same last term and catching up was brutal!), it will be very tough to catch up with all the assignments afterwards, but I just had to take advantage of going abroad with friends once more, since I will start work straight after graduation.
With all this excitement, unfortunately it looks like time will race ahead even faster than before, and in no time the MBA will be over. At least I will know that I have thorougly enjoyed the experience, and that coming to London was the best decision I ever made. But it is still too early to talk like this, I am still a student :-).
Saturday, April 12, 2008
ABN’s structured credit traders were apparently told on Thursday that they should report to RBS’ London office in preparation for a move there on Monday. Terminals needed to be checked and such like. And when they got there… they were all fired (full story).
Luckily, the British have a great sense of humour, and I couldn't stop laughing at this economic assessment of London 2010 from the price of everything blog:
London, April 2010 – Wall Street firms have just announced their latest results for FY 2009;
300 million staff have been “written down”, leaving just two (Sid and Doris Bonkers) to manage the investment banks’ remaining worldwide debt, equity, merger and advisory, securitisation, syndication and prime brokerage businesses.
Marti Peeps, sole analyst at the last remaining research house, Teletext, welcomed the results as “a bold step in the face of ongoing bad debt provisioning,” though conceded that the City’s newly “rightsized” payroll might struggle to take on board the burgeoning supply of new issuance, namely the packet of Walkers Crisps rumoured to be hitting the primary market in late summer 2012.Hopes for a recovery in Wall Street earnings have for several quarters hinged on the prospects for the successful completion of a 40p private placement of a bag of Salt and Vinegar flavour crisps on behalf of the Walkers Crisps Company. Lead underwriters JPCitigroupMerrill, a subsidiary of the US government, and Northern Rock SocGen KFW Nomura, a wholly owned subsidiary of Tesco plc (Neasden branch), are rumoured to have “solid” interest for the underwriting, most notably from Asia, itself a subsidiary of Texas Pacific Group, but declined to go into further detail.
Wednesday, April 02, 2008
The good bye evenings are a great way of catching up with people - to be honest I have not been very sociable through the last term. On one hand, I simply read and thought a lot over Christmas and enjoyed staying at home reading rather than going out - probably I needed to relax. Then I traveled through Southeast Asia and Scotland for 3 weeks during term and struggled to catch up. And then I prepared for the Fixed Income Exam, which was quite something. It is only since a week that I have come out of this haze and am "reintegrating into society", and I must say, I like it :-). As I just said, the goodbye evenings are great, especially since I am not leaving. All my best friends are staying in London at least for the next 2 or 3 years anyway, so there is nothing to be sad about.
It will be worse in 3 years when people start leaving to their home countries to found families, because I do not have a home to go to in the sense that others do, who go abroad only to boost their credentials for a few years and then happily return home. It is wonderful how people from India or Italy are sure that in the end they will surely go back to their home countries. Although Hamburg is a great place with a high living standard, I feel too far removed now in terms of mentality to consider going back to Germany. Working at McKinsey already alienated me from the general discourse of the country, and since living in London I feel more and more estranged at the media and the opinions I encounter. I am so upset they do not fix the education system, among many other things that need to be fixed, and that the way the system was designed after the war makes any changes impossible. Anyway, I digress. The point is that for now, I am happy that all my friends are staying in London for the next years, and by the time some leave, I assume for all who leave there are more to come to London. That's the beauty of living in the greatest city in the world :-).
I have also realized over the last week how many great people I have come to know over the last 18 months. These days, people are especially nice because many are sentimental, and because some know they won't see each other anymore, so the conversations get less automized and more personal. Things are good. I am happy I am staying in school for another term!
Sunday, March 30, 2008
"What is the difference between a buy-side and a sell-side trader?"
"One says "f*** you" and hangs up the phone - the other hangs up the phone and then says "f*** u"
Tuesday, March 18, 2008
I have been teaching in business schools for about 20 years now, and about 10 years ago I decided that I wanted to do more than just teach "Course X" -- given how short life is, this was simply not sufficiently rewarding for me. And, after some contemplation, I realized that given the opportunity cost to you of being in school, you should also expect much more than just learning about finance, or accounting or some other subject while you are in school.
Due to popular request, I am adding the list of recommended books. I have bought "Three Cups of Tea" and "Tuesdays with Morrie" and will read them over spring break:
Wednesday, March 12, 2008
I have been traveling a lot this term, working on a consulting project in the Scottish highlands, and going to Southeast Asia with three friends, I absolutely love Thailand!! I have been reading a lot this term, something I used to do a lot when I was younger and almost gave up while I was working at McKinsey, and now I am getting into the habit again, which is great. I have also just spend a few lovely days with my family in Hamburg, enjoying the great food and spending time with my grandmother and parents. Hamburg is such a great place to live and so cheap compared to London. No wonder it has won 3rd place as one of the best places to invest in for 2008 (along with Moscow and Istanbul) :-).
Now there is one week left of the spring term. I am working hard to finish up the consulting project for the Scottish tourism venture that I have mentioned before, and other than that really need to get started with my take home exam for time series analysis due on Monday. It was handed out 1 or 2 weeks ago but I just haven't had any time to even look at it so far. I also need to prepare for the Fixed Income exam next week, and since this is a course I have enjoyed a lot, the outcome is much more important to me, so I will need to prioritise my fixed income preparation over the rest for the next week.
On the side, I have also joined a team of classmates for our inter-school Tennis league, and we have won the first round, yay!! Playing Tennis in Regent's Park on a Friday morning is just something I need to enjoy as much as possible while I'm not working.
That's it for today, I will keep writing once I get all the exams and papers out of the way!
Monday, February 25, 2008
(full version here)
I remember my thoughts when I read it: that probably it was true, but that hopefully the bubble would continue for another year or two and burst only then. Greed is what keep bubbles growing: you know it can't last, but if others had benefitted from the bubble, perhaps I could also have a little bit more before the party was over? Greed makes people grab for overpriced assets hoping they will appreciate further. But in the end it all ends the way it has to end. Probably this year the numbers will be down to below 30% (although for the class of MBA2008 at least at London Business School we will certainly be more than 30% going into finance I believe).
Talking of bubbles, the UK housing bubble is also bursting these weeks (finally!!). Today's FT has a very insightful commentary on the UK economy. I am quite happy about the bursting housing bubble (all else equal, obviously), as I am planning to move closer to the financial district, the City, in a few months, and the rental prices are just plummeting. Housing near the City is a big bubble, in recent years they are building housing like crazy for all the investment bankers supposed to move there, but this year most likely people will be moving out rather than in, and hundreds of new units will come onto the market.
I have watched the rental price of a 2 bedroom flat that I have my eye on in walking distance to my future job drop from $3,000 per month to $2,700 in the last 3 weeks, but I will wait another couple of months and am fairly sure things will go down - or DOWNTOWN!!!, as our fixed income professor likes to shout :-). The fixed income class is very heavy stuff by the way, first time I am doubting if interest rates are a good area to go in, it's complicated!! I'm a bit of a macro person I guess, I always think - what difference does it make if the interest rates are 4.17% or 4.21%? Really, it is so removed from reality. But the class is great, I am learning a lot, especially I am learning to be more humble about my intellectual abilities :-))). That's certainly a good thing.
Saturday, January 26, 2008
And if that wasn't exciting enough, summer recruiting is starting off next week and the first years are freaking out. It is very stressful, especially with markets as they are, banks seem to have less slots for the summer and some people are disappointed not to have many interviews lined up. I have done some mock interviews over the last week and am happy that some people are really well prepared, but I still feel that some people are overconfident and should prepare harder, this year it won't be easy to land a, investment banking internship. So please prepare as hard as you can!! You have been warned :-).
In the world of academic finance, I am enjoying my course in Fixed Income Securities immensely. The professor, Suleyman Basak, has set himself a very high standard of making sure we know more "than the average smart guy on Wall Street who has read Fabozzi". In fact, two alumni from my school who work as prop traders now both told me his course was the best course ever preparing them for landing jobs at the most desired trading desks, so I am hoping to get a lot out of the course. I enjoyed the first two lectures so much that I dropped an advanced financial analysis course that I had signed up for for next term, and have signed up for a Financial Engineering course with professor Basak instead.
As a distraction from the world of finance and investment, I am working on a great paid second year consulting project for a tourism venture in the Scottish highlands, which we are very excited about. In a few weeks we will go up to the highlands for a week to check out everything on-site. From hedge fund internships to consulting projects in the Scottish highlands, Diwali parties and making friends from all over the world, I cannot believe how varied my MBA experience has been so far. Luckily it is still not over :-). Next week I'm setting off for a short holiday in South East Asia with three friends, followed by a trip to the Scottish highlands and then spring break! Life is good.
Tuesday, January 08, 2008
How are bond prices and yields related?
How do you price a bond?
How do you calculate implied forward rates?
How do you price an option?
What is a Credit Default Swap? How does it work?
What is a CDO? How does it work?
What happens to bond prices when interest rates rise? What happens to equity markets? What happens to currencies?
What is an inverted yield curve and how do you interpret it?
- What is a carry trade? How does it work?
Know the price of oil, gold, the level of the FTSE, S&P500, Nikkei, Dax, know FX rates USD/EUR, USD/Yen, EUR/GBP, what have these been doing over the last months?
Know central bank rates of US, Euro area, UK and Japan, what have they been doing over the last months, what does the term structure look like, why?
How would you invest $1million?
Have you ever invested money?
Tell me a trade idea?
What stocks do you like and why?
What do you think the Fed/Japanese Central bank etc. will do at their next meeting?
(A really good source of commentary on rates and currency markets is Daily FX)
Where do you think interest rates are going?
What happened in the markets yesterday?
Draw me the US yield curve. Draw me the UK yield curve. Why is it inverted?
(check Bloomberg rates for the graphs, much easier than looking up the yields in the Financial Times and drawing it yourself. Wow, the UK yield curve looks funky right now!)
What do you think about the current credit markets?
What's your view on the US economy?
What do you think is the next big investment opportunity in the markets that can offer spectacular returns?
etc. (all questions like that to check if you have an opinion and read the newspaper, answer can be short and concise, there is no right answer as long as it is logical and moderately well informed)
+ questions that you provoke -i.e.
If you say you are interested in emerging markets, they will ask you about which EM stock you like or what happened in Thailand last year,
if you say you are interested in oil they might ask what's going on in Venezuela or Kazakhstan,
if you say you come from financial engineering they might ask something more technical,
if you say you want to do sales they might say “sell me something now” and so on
Why do you want to do this?
Why do you want to leave your previous job?
We have invited 15 of your classmates for the final round. Why should we take you and not your classmates?
How will you decide between different offers?
What do you like about Deutsche Bank/Lehman Brothers etc.?
Why Sales & Trading and not Investment Banking?
Tell me about a time in your work when you really felt the power of a team and what a team can achieve
Wednesday, January 02, 2008
C++ for financial modeling
I intend to keep it as a sort of diary to document how to teach oneself programming, and to discuss the roadblocks on the way. I have wanted to learn programming for a long time and have realized that the main reason I never did it was lack of self confidence and doubts about lots of things. I think I have finally overcome these doubts and hope I can encourage others who have been shy or hesitant about learning programming. My main learning from today is that it is really nothing mysterious once you get started, so I cannot believe it has taken me so many years to get started. But I will keep all this in a separate blog, since it is of no interest to most of my readers.
Tuesday, January 01, 2008
But how can a responsible central bank cut interest rates and pursue an expansionary monetary policy when the stock market is close to an all time high and when it is faced with a weak currency and soaring food and commodity prices?
'Only in America' one should say because the US-infected IMF and World Bank would advise any country under these conditions to 'tighten' monetary policies and to raise interest rates. But since the Fed's only objective today is to 'inflate' asset markets further at the expense of totally debasing the currency we need to look at a new currency as a 'unit of account' and as a 'store of value'. (continue reading)