Some general resume and interview tips for Entry Level People

With a plethora of resume and interview tips out there, I still want to give my two pence in advice to the entry level position seekers out there. We recently hired two interns for the position that I occupied a year-and-a-half ago. I personally went through around 60 resumes and was present at around 15 interviews.

Here are some of the obvious and ridiculous mistakes I came across:


· If you are recycling a cover letter, which I am sure you are, admit it, I did it too, please proof read it ten times and get someone to do it to. Do not send the resume addressed to Mr. X and starting with "Dear Mr. Y..." True story, by the way.

· I can't stress how necessary it is to get someone else to proof read your resume and CL. One of the obvious mistakes I came across is a person taking Marcoeconomics. That's MARCOeconomics!!!

· Make sure the resume is readable and does not irritate the reader by funky design/format. Make sure it is centered, margins are equal and your name is clearly mentioned at the top. Make sure the bullets are aligned for each workplace you were at and each activity you participated in. Also make sure that some of the apostrophes and comas do not turn into blank squares. I don't know exactly why it happens, but I suspect that if a foreign language is installed on the computer it may display these items incorrectly.

· Most importantly, buy/download/borrow Adobe Acrobat, not the reader, but the writer. PDF your resume and cover letter into two separate files. The advantage of pdf format is, I am sure you know, in it being small in size and that it appears exactly how you see it on any screen and operating system. Your resume may align perfectly on your screen in WORD, but my screen can show it completely screwed up. Make the body of the email short and mention that resume and the cover letter are attached. Do not make it too short like "See attached". That's just plain rude.

· Even though people say that sometimes adding stuff that did not really happen, but sounds cool is great for an entry level resume, do not lie!!! Lies are easy to check in today's googlable world and I dismissed a few people just because they said they won the Trading Contest at U of T and a different person was listed as the winner for that same contest and date! Really embarrassing!

· Sure, everyone is a member of Finance Organization, Trading Circle, Consulting Club, participated in Business Plan competitions. Right? Well, don't just mention it. Mention what you did there, what you got out of it and what was so different. Be prepared to talk about it in detail and with passion on the interview. Show that you are knowledgeable, yet different from other knowledgeable people out there. Show entrepreneurial spirit and drive.

This brings us to the interview portion:

· Be able to talk about the relevant books your read. If you read business magazines, frequent websites, attend shows and seminars, talk about them. Show that you can think outside the box. If you like math, which quite a few of our applicants did, tell the interviewer that you like its applications in real life, not just on paper or in the classroom. The best bet is to talk about fictional/historical finance books. Absolute must on your reading list should be Barbarians at the Gate, Liars Poker, When Genius Failed, House of Morgan, Bonfire of the Vanities. The last book is very true about the industry. Read them and even if you are not asked directly the question to talk about the books/publications, fill the silence by talking about it. Which makes another powerful statement:

· Do not let the conversation wind down. One of my bosses liked to stop talking and asking question to see how the person handles silence and how he/she fills it. Albeit mean, shows a lot about the person.

· Most importantly, be able to tell the interviewer why he or she should choose you and not one of twenty other applicants. Responsible, reliable, hard-working etc just does not do it anymore. Give some spice!

· Don’t be nervous. Easily said than done, I know, but it’s not like you’re on death row. The person at the other side of the table is also human and at some point in his/her career was in the same position you are now.

· There are a lot of points of advice to give, most of which are common sense. Treat your resume, cover letter and interview with common sense. Rarely do people ask numerical and tricky questions, at least that I know of. I am sure this happens if you are applying directly for an actuarial position. Investment banking is more social, however, know your shit, don’t lie, be confident and social.

When preparing for my first actuarial/finance interview, I came across one story that someone was asked yesterday’s S&P 500, DJ Industrials, NASDAQ and S&P/TSX Composite closing prices. I started paying a lot of attention to those numbers and, as you may have guessed it, no one really asked me about them. I actually still listen to the radio and memorize those numbers, out of habit, I guess.

I hope some of this helps. If you want to comment/add/critique these points, leave a comment for this post. If you want to drop off your resume at my company for a volunteering position, send me an email. We are always looking for volunteers and co-op students.

Update!
A few more things came to mind after I posted this:
1. If you speak any other languages other than English, make sure you mention this. Corp. fin. companies are always looking for people with this knowledge as most deal with international clients.
2. An almost absolute must is thorough knowledge of Microsoft Office. I know that everyone knows Word, but you also have to intimately know Excel and Powerpoint. If your boss tells you to do something he won't take "I can't do it" for an answer!

Back and busier than ever!

Hello. I realize that I have not been the most loyal blogger over the past half a year. Now, I am on a mission to correct that. Surely I can dedicate an occasional half hour a week to post something interesting here, considering that apparently people read this blog! Surprise!

To start things off, I want to post a comment left on this blog. I hope the author, Joey, does not mind. I think it explains the situation clearly. I do not agree with Joey completely, but it still remains a great insight into the industry. Here goes and please comment!

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Hi! It's great that you made a blog for actuaries! I hope your blog gains more attention and gets some traffic from people on the Actuarial Outpost, and from those in finance who are curious about the actuarial profession or vice versa.

Ok I just wanted to give my 2 cents. I was in the same boat as you graduating from college. I majored in actuarial and finance. This is what I have to say. If I could do it all over again, I would not become an actuary. Being out of college and in the corporate world for 5 years, I realize, I think I made a mistake. Nothing against actuaries. It's just that, I decided not to work, and that honestly I just want to get wealthy. Becoming an actuary is not the best way to this goal. But if you want the best bang for your buck, you are going down the right path. If I could do it over again, I would have gone straight to wallstreet, into Ibanking, gotten my cfa, and get the big bonuses. After 5 years out of college, I kinda regret going down the actuarial path. The advantages were the high starting salary, the excellent, almost rediculous quantitative skills you acquire, and stabilty of the actuarial field/demand. Disadvantages: oh boy..there are a lot...you know in the last 4 years I have been pissed off and frustrated because I would be giving up my twenties, my precious youth to study for these focking exams..I live in Chicago..what a great city it is..I look around me. What are people my age doing? Partying, living it up, and of course all while trying to get themselves established..either taking their exams, getting thier JD, MD, ASOA/ACAS, CFA, MBA, etc...studying for exams in these years is NOT the way to live your life. It's sad because I saw a colleague from college, and she was studying for her course 5 at starbucks, like every Friday night...and I'm thinking..God, how sad is that?!!! And another thing is, right now, between SOA and CFA, I would have to say CFA is the much better bank for your buck. You get your CFA (3 years) and your salary pretty much doubles..60-80K maybe more if you have experience in the field. Could you double your salary in 3 years as an actuary? Possibly, but it's gonna be real hard..and you top out at around 100-200K. On the other hand..let's say you're a new CFA, you have 2 years Ibanking experience, and you're 28...by now you should be making 6 figures hopefully..versus if you were an actuary you might have 6-8 exams passed by now or fellowship. But here's the big difference, you're working as an analyst on wallstreet, and you're getting $250,000 - $1 million bonuses EVERY YEAR, ON TOP of your salary. How's that for salary comparison??? I'm 26 now, and the bottom line is, get out of actuarial and go into finance if you want to retire early. How many finance people do you know are loaded and are young, vs actuaries? Yes correct, finance. I know several people retired at 35 from working on wallstreet. I dont know any retired 35 yr old actuaries. Here's what I'm gonna do, and what I would suggest for you. Options trading. I trade options on the side, and my goal is to be a millionaire before I'm 30. I think trading options has the highest potential of getting butt rich in a short amount of time, next to working on wallstreet. But it requires much much education and experience. You have to trade on paper for at least 6 month first, or else I guarantee you will lose every dime the first 2 times you put big money into options. I'm down 60K in options trading as of today, but I'm not worried because I've acquired so much knowledge along the way that I'm confident that I'm close to attaining huge wealth. Being in the stock market day in and day out teaches you a TON about stocks, investing, trading, analysis, and wallstreet. I would recomment you take your first 4 actuarial exams, as this is your math/quant foundation. Then you can go into Wallstreet no problem. I am looking at CFA part 1 right now, I can answer half the questions correctly without even studying. Well, I am creating my own investing blogsite soon..it's gonna be called Followmymoney.com.

I will post my investment transactions in real time and I hopefully it will gain popularity. But I dont have time now..will be a huge project..have to make some money back in the market first...well, please comment back I'd love to hear responses to my post...I know I'm very opinionated..but trust me, my opinion is reality, and working in corporate America for the MAN is reality. Do you really want to see yourself working for 30 years as an actuary for the MAN, or would you rather work on wallstreet for 10 years and retire rich?

Joey T.
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I hope you enjoyed this comment as much as I did. Thanks for your input, Joey!

Pondering

One day one of your mentors might become your employer...

ERM in the news!

Good news for everyone going into Enterprise Risk Management, I am considering to be one of them as well. The Society of Actuaries issued a news release, approving a new ASA-level enterprise risk management designation. What this means in the short run -- nothing. I don't expect any changes be made within the next half a year. In the long run, the goal of the Society is to promote not only the need of the Enterprise Risk Managers, but also push actuaries as the top qualified professionals for the job. In my opinion, every organization needs to add a Chief Risk Officer to their "C" suite and there is no one better suited for the job than our good old actuaries.

I really hope the new ERM designation will be an equivalent of about 4-5 exams, will have the same travel-time as ASA and will rank better than GARP Financial Risk Managers. We will have to see.

About my two more mentorship sessions next time...

Mentorship cont'd

In the last post I said that I was contacted by three gentlemen for a possible meeting/advice session regarding mentorship. Well, make that five!

I met with one of them, John W. last Friday. John is an investment advisor at CIBC Wood Gundy and is an FSA, FCIA since 1970.

It was a very pleasant hour of conversation and he was very eager to share his experience with me.

Something about John first. He graduated with Bachelors in Electrical Engineering and was greatly disillusioned with the prospects of working in that field right after graduation. So he secured a position in the pensions field and went through all the exams while working there. He received his FSA in 1970 and was working with pensions for 35 years. After that he decided to retire and take a few years off. I am guessing retirement and passive existence was not for him so he ventured in the world of finance, which always attracted him. He became an investment advisor with Wood Gundy.

Here are some of the questions that I asked him and his answers (not direct quotes since I did not record the conversation):

Was the field of work that you are in right now your initial choice when you were taking the actuarial exams?
Obviously not, given his background above.

Do you have any other certifications besides FSA, FCIA?
No. He tried to get CFA, but decided that at that point and with the credentials of an actuary he did not really need it, given the fact that he works in the retail side of investment advising business. He did pass the first exam of the CFA 3 exam series and said that with his 10 actuarial exams (according to the old system) is was very easy for him. He did study and take the second one, but due to his ruptured appendix right before the exam, he did not pass it.

What good are the certification courses offered by the CSI (Canadian Securities Institute)?
He said that those courses are nothing, but a requirement for him with his actuarial credentials. Those courses are mostly required for people who are working with the brokerage companies or any other institutions that require licensing courses. He himself has CSC and Conduct and Practices Handbook Course.

After those questions I told him my story and asked for advice. I said that I am very much attracted with the financial industry, but am not ready to give up my efforts on the actuarial exams. He explained to me that if I were to work in finance, I would be better off with the CFA exams only and that I don't really need the actuarial ones. CFA exams are easier, when comparing with the actuarial ones. The first one (CFA) is like any one of the first SOA exams by difficulty. The two other ones are like each of the second five SOA exams. It will take me three years max to take CFA and over 5 years to take SOA exams.

However, there are fields within the actuarial profession, where finance and actuarial skills are paired. The newly emerging need for the Enterprise Risk Managers in any company and the continuing efforts by the Society of Actuaries to promote actuaries as the number one choice for ERM makes it a lucrative business to go to. John gave me a contact at AEGON Canada, who is a CRO there. He recommended that I should talk to him about ERM and how useful it is. I plan to do so right after my university exams are through.

We chatted for an hour and I managed to get a lot of useful information from John, not all of it is documented here. I also have two more meetings this week and two more after my exams. If you are reading this and like the advice that I got, I strongly urge you to do the same and find yourself a mentor, maybe more than one!

No Man is an Island

John Donne was right. It took me some time to realize this since I used to believe that I am capable of withstanding any winds by myself when it came to my career.

It all started with an email I received last week. It came from a student in U of Waterloo, who is a career changer. Bachelors degree in Applied Math from Moscow State University does not do much here in Canada. Heck, it is even useless if you get it from any local university. She is taking graduate studies in act. sci. at Waterloo. So she found my blog and emailed me with a question about the study manuals for Exam FM.

I was quite flattered that someone was asking me for advice, even though it was about study manuals. This also coincided with my puzzlement about what I want to do. On the one hand, I started actuarial exams and don't plan to give up on that. On the other hand, working in an insurance company does not appeal to me that much. Finance and investments is a much more attractive field to me, now that I have been exposed to it at my internship.

Actuaries in Finance and Investments is not a new concept, but I can't clearly see the transition between the two fields. Yes, actuaries have the quantitative skills, but applied to insurance, reinsurance and risk. How does this translate to the world of finance?

Powered by my favorite search engine of the Society of Actuaries Members Directory, I decided to look for a mentor. I selected the qualifications that I though were applicable for an actuary working in finance and investments and sent 18 emails. Took me half and hour.

Guess what, I now have three gentlemen, a Portfolio Manager, an Investment Advisor and a Vice President, who agreed to meet and talk to me.

I will keep you posted on the result of the conversations, but for now, go get a mentor.

Due Diligence

Due diligence is the integral part of any financial transaction, be that acquisition, merger or merely an investment. In fact, every time you invest in a stock, you should conduct basic due diligence process.

Due diligence is the process, fundamental to any investment. It is also a reality test -- whether the deal you are involved in is worth it. The person, actually several of them most of the time, conducts a thorough legal, financial and strategic investigation of the company's documents, operating history, contractual relationships and organizational structure. "Mergers and Acquisitions from A to Z" by Andrew J. Sherman (ISBN 081440376X) is a great source of the basics of the due diligence process.

The key to a successful deal ultimately lies with good due diligence process. The person should not conduct the process with the objective in mind. If you do, then you fail automatically. If you are looking for bad stuff -- you will find it. If you are looking for only good stuff -- you will neglect the bad one. Given a sufficiently large context one can find anything he/she wants. You can find a prophecy of Bill Clinton/Monica Lewinsky affair in the Bible if you try really hard!

It is not the task of the person who is doing the research to make a judgement. His purpose is to present all the information "plain vanilla", so that the dealmaker makes that judgement.

Here is a sample list of due diligence items one should be looking for:

Due Diligence Overview


I. Background / General
A. Brief review of organization and operating history
B. Provide a description of major products or services offered
C. Short-term and long-term operating strategy
D. Discuss vulnerability of the current strategy to the economic cycle, regulatory changes, variances in the Company’s competitive situation, and industry trends
E. Provide current business plan
F. Provide corporate organizational chart

II. Financial Performance
A. Audited financial statements (last 5 years)
B. Review of financial history by division (last 5 years)
C. Review of interim financial results by division
D. Quarterly financials (last 3 years)
E. Projected monthly budget by division (1 year)
F. Review of actual versus budgeted results (last 3 years)
G. Outline fixed versus variable expenses
H. Detail historical growth (visual aid)
I. Research & development expenditures (last 3 years)
J. Discuss seasonality of business and impact on working capital needs
K. Plans for future financing arrangements
L. Inventory analysis by product line

IV. Customers/Contracts/Programs/Products
A. Revenue and EBITDA/profit for major customers/contracts/programs/products (last 3 years)
B. Customer/contract/program/product concentrations
C. Total revenue for top 10 (last 3 years)Total EBITDA/margin for top 10 (last 3 years)
D. Major customers/contracts/programs/products gained or lost (last 3 years)
E. Discuss any contracts performing at a loss
F. Revenue by international vs. domestic
G. Discuss pricing dynamics and trends

V. Industry / Competition
A. Discuss current industry specific trends and how these trends affect the Company/programs
B. Discuss Company’s market share in each market segment
C. List primary competitors by division or market segment and their respective market share
D. List Company’s strengths, weaknesses, opportunities, and threats

VI. Marketing
A. Outline strategy for each product line or division
B. Outline sales/marketing coverage model
C. Current and historical market research/customer surveys

VII. Ownership Structure
A. Current ownership structure
B. Reasoning for current management’s desire to divest/sell the business
C. Share repurchase strategy

VIII. Management
A. Review any recent management changes
B. Overview of management stock ownership and incentive programs
C. Summary biographies of officers and directors

IX. Employees
A. Provide number of employees and if possible their functional breakdown
B. Outline incentive compensation
C. Discuss use of workers to address seasonal demand

X. Technology
A. Assess impact of technology changes on business
B. Discuss Company’s technology/engineering capabilities
C. Discuss current research & development programs
D. Review any material patents and/or trademarks currently held or pending

XI. Manufacturing
A. Describe manufacturing process for each product line
B. Describe present usage of facilities and equipment
C. Summary of quality assurance programs/procedures

XII. Suppliers
A. Discuss relationships with primary suppliers
B. Supplier volumes and degree of concentration
C. Total purchases from top 10 suppliers by product category (last 3 years)
D. Major suppliers gained or lost (last 3 years)
E. Discuss material prices, pricing dynamics, and trends

XIII. Accounting Methods
A. Summary of significant accounting policies (including industry specific nuances)
B. Discussion of internal accounting controls
C. Review any adjustments required for GAAP
D. Outline revenue recognition methodology
E. Outline pension funding policy

XIV. Other Items
A. Review of environmental issues

Back again.

It is not that easy to write a blog, actually, it is not easy keep up with it. I finished my Actuarial Exam FM on May 26th and now it is June 14th. Let me catch up.

The exam went well, surprisingly well. I finished it in 1.5 hours out of two and had time to go over. (actually, as I was going over it I came a cross one problem that I skipped. Solving it, took another 20 minutes!!!!)

There is a very useful and very illegal thing, which is done by some people on the forum I frequent. It is called PAK, or Popular Answer Key. Society of Actuaries prohibits exam takers from taking the exam results from the examination room, but people program the answers into their calculators, so that they can participate in PAK. The name is self explanatory, the answer that was the most popular among the candidates is considered to be correct for any given question. People who usually compile PAK also include the probability of any given answer being correct.

Anyways, I got 22/25 correct according to PAK!!! Later that week the Society released the exam with the preliminary answers (the real result will be available on July 6th) -- and again I got 22/25. Should I be happy yet???

That same day, after the exam, I started my internship full time, after going to the bar (at noon!) alone!



Ever since then, I have been here, on the 37th floor in First Canadian Place, downtown Toronto, with occasional outings to see my girlfriend and sleep (weekends not included, thank God!!!). It has been just over two weeks and I have learned a bunch already, be that due diligence, legal statements, RTOs, accounting statements, transaction processes etc. Been to one shareholders' meeting, ate at a restaurant on their account and generally met tons of people, expanding my network of connections, which will come in handy when looking for full-time employment next year.

A bit later I will write a post about due diligence, for now, back to work...

Crunch time...

Two days left until the exam. I never thought that I am capable of being so nervous. I wasn't for the first exam. I don't remember ever ever having an anxiety attack, but I had one a week ago, during my first timed practice test.

I went to the free review session by Sam Broverman, who is an Actuarial Science professor at University of Toronto and he said that the test under the new redesigned system is nothing like SOA did before. Generally they tend to allocate 10 questions per hour, but this time, rumors have it, there will be 25 questions for two hours. This is quite a lot, need I say more!

Tomorrow I am taking a day off -- absolutely no studying, except for flash-cards review. I don't want to loose my head during the exam from anxiety and tiredness from overdoing the problems the night before. This seems to be the common habit on the actuarial forum.

I am looking forward to 12 pm on Thursday, which is after my exam.

Fill the void

I have half an hour left until the review/question session by professor Broverman for SOA/CAS Exam FM, so I thought I should update my abandoned blog.

Past few weeks have been uneventful, except for:

1. Finished last university exam. Done for the year.

2. Worked two days at my internship, then my boss left the town until the 16th. On the 16th he came back sick. I am grateful for all this, since I have a lot of exam prep to do until the 26th. Exam FM is easier than the first one, but I have significantly less time to study for it. Work, both days, was great. Wrote several reports, met a few new people, attended board meeting, had a conference call with Accounting Director of Toronto Stock Exchange (my friends, I apologize to all of you to whom I said he was Vice President) and generally had fun in the financial district of Toronto wearing a suit.

3. Attended a concert of my friends. It was their debut. Check my site for pictures.

4. Made US$50 by posting 3 links in the Sponsored Links section. The source of the revenue will stay hidden for selfish purposes.

5. ... I think this is it for fun. The rest of the time was spent in the library, crunching bonds, annuities, sinking funds and forces of interest. It is a potential candidate to the FUN section, but not yet.

Well, this is about it. I have neglected my Bloglines list of blogs to check. The only one I have been checking once in a while is Neville's. The guy is just too funny and street-smart. Highly recommend!

Well, must run now! Must get those questions answered.

Wish me luck on the 26th...

Exam High Time!

I must apologize in advance, since I will not be able to write much for the next two weeks. Although I have only two exams this semester, one has 300 pages of in-class notes and the other is extremely tricky Corporate Finance. I don’t think that I will have much free time until it’s over. Even then, I will have one day shy of one month to study for the actuarial exam on May 26th, so no partying for me either.

On the bright note, I will start my summer internship after the school exams are over, at least on the part-time basis. Even though the job specifications mentioned part-time, I believe that after my actuarial exam I will be putting in way more hours than that.


Another issue have been researching lately is the Canadian Securities Course offered by the Canadian Securities Institute. I know very little about it, the only thing that really intrigues me is that the company is willing to pay for it, if I decide to take the two two-hour exams in the summer. I will post about the course later. Also, if someone took it and/or knows anything about the course and its benefits, could you please comment on that? I am interested in how long it takes to study for it, the level of difficulty for the person studying economics and finance and what can you do with just that course.


See you all soon.

"Ban the deed, not the breed."

As some of you might have heard, pit bulls are banned in Ontario, Canada. I am sure some of the states in US have the same law. Yes, pit bulls can be quite vicious and I partially agree with the ban. However I think that it is the owner of a vicious pit bull who should be "banned", i.e. heavily fined in case of an accident. This would not prevent the accidents from happening, but put a heavy liability on the owner in case they do happen, which would discourage people from having pit bulls or encourage them to have "leash all the time" policy with their dogs.

Another incentive for them would be denial of insurance coverage by PC/Life insurance carriers. This article is a clear example of this. Apparently Dobermans are deemed dangeous dogs as well, something that I did not know.

This practice of insurance companies is quite understandable. It is in fact risk they are trying to minimize and one in 10 (a number pulled out of a hat) doberman/pit bull owners are "risky policyholders". This is known as breed profiling and in my view is similar to racism. Next thing you know I will have higher life insurance premiums because I am Russian and all Russians are drunks.

While actuaries are doing their job, pooling the risky people together and trying to minimize the cumulative risk of the "portfolio", sometimes they refuse to "think outside the box". They rely heavily on mortality tables, contingency databases and other "hard" data, that they sometimes oversee the real-life facts. The 70 year old grandmother, who you denied insurance, has had dobermans for her whole life, she also runs the "underground" Doberman Training Facility in her basement for the dobermans of her friends. Her dogs are highly trained and completely peaceful. Shouldn't this be taken into consideration???

ING Direct + a Nifty Idea!

In the light of recent infatuation with ING Direct Saving Account, which is thoroughly discussed here, I decided to give it a shot. I applied on www.ingdirect.ca for a canadian account earning 2.40% Annual Percentage Rate (APR). Just today I mailed them a cheque with the initial deposit.

What do I see when I come home? I read here that ING in the States gives 3% APR, something that I overlooked. So I decided to make a little analysis, what would it cost me, were I to invest in the American ING account, exchange rate taken into account.

The data for the calculation:
American ING APR = 3% = .03
Canadian ING IPR = 2.40% = .024
Canadian/American exchange rate => US$ 1 = CAN$ 1.2178 as of April 5th closing by Bank of Canada.

APR = [(amount acumulated at time 1) - (initial investment at time 0)] / (initial investment at time 0)

If I were to invest in Canada, $1 at 2.4% APR will earn me CAN$1.024 at the end of the year.

If I were to buy US$ for that CAN$ 1, it would be $0.821153, and invest it in US at 3% APR, I would get US$0.845788 at the end of the year.

Here's the interesting part -- according to the Big Mac Index, discussed in my previous post, the target exchange rate between Canada and US should be 1.207547. Let's assume that, after one year, the exchange rate converges to its correct state, the one given by the Big Mac Index. So if converted back to Canadian currency, my ~84 cents US would be $1.02133 Canadian, which is less than what I would get at the end of the year investing in ING Canada.

Point proven, I did the right thing by opening a Canadian account!!!



Second order of business is the point made by my Corporate Finance professor.
Ideally, in a publicly traded corporation, one share gets you one vote as a shareholder (or equivalent proportion). She suggested a hypothetical idea that it should be the same way with voting in elections. The percentage of taxes you pay of total amount of taxes paid in the country, gives you the right to have the equivalent percentage of votes, when voting for the president, prime minister or whoever. Isn't that an idea worth investigating???

Market update and Internship first meetings!

Sorry for a delay, this is a post as of Friday, April 1st. I drafted it and forgot about it.
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As proposed, a weekly update of my virtual portfolio on VSE.

and a detailed layout here.

Today was my first serious meeting with my summer employer. He is a senior managing director of this company. As with the meeting before, I had to catch him, because he was meeting-hopping. After finally catching him on at BCE Place, wasting $7 on a cab from the office to this place, we had no time to talk and rushed to the meeting. I really appreciated him taking me to the meeting and listening in on their discussion, without even getting to sign a confidentiality agreement, which I was supposed to do at the beginning of my employment. The meeting lasted about 2 hours, quite informative, yet not exhaustive.

Then we rushed to the company's lawyer, thankfully only across the street. They had to send a response to a particularly nasty group email, which was sent to the whole team of people, working on the current project. That was fun, plus I got to know the lawyer, who is a down-to-earth guy in his 30's. Both of them told me that we will be spending lots of time working together during my summer internship.

Overall, the experience was great. I got to meet new people, see how they waste company time and compare their offices. This is just a joke, actually both of them seemed like two very hard-working individuals. Same said for my employer.

Time studied for actuarial exam -- 0 hours.
I will have to catch up next week after my stats exam.

Today's Bits and Pieces

Well, not a bad day, considering that yesterday THEY promised 15 degrees for today and it was in fact 10 and very windy. I don't know what those guys do there, but please don't tell me that they don't have a big enough sample size to predict the weather! (a little nerdy joke as a result of day-long stats prep :) )

Besides that, I found out:

1. ... that there is an insurance company that deals only with religious associations. The Waterloo-based Society was founded in 1972 as Lutheran Life Insurance Society of Canada.

2. ... the difference between Frequentist and Bayesian schools in statistics.

3. ... Laplace was able to use STATISTICS!!! to calculate the mass of Saturn.

4. ... that when asked by Napoleon about why he didn't mention God in his book on astronomy, Laplace said "I have no need of that hypothesis".


And I also put out a measly 1.5 hours of actuarial studying. What a joke... Those increasing annuities with payments increasing less often than interest in compounded make me sick.

Financial Mathematics Exam FM studying

Right now I am studying for Financial Mathematics Exam FM of Society of Actuaries. I will write it on May 26th. When I began studying for it in January I made a pact to finish my study manual by Sam Broverman by the end of March. Well, two days are left to the deadline and I’ve just defeated a half.

This means it’s time to make a plan and actually stick to it!

I have a Statistics mid-term/final on April 4th, final in Economic History on April 19th and a final in Corporate Finance on April 27th. If I manage to get up early every day and put in at least 2-3 hours of actuarial exam study time, it would be ideal.

Let’s see, I will only be able to do that five days a week, Thursday being a rehearsal day and Sunday being a day-off. I will have 22 days until April 27th of 2-3 hour/day studying and 24 days in May of 8 hours/day. So in total I will have: 3 x 22 + 8 x 24 = 258 hours of studying which is more than enough for a person who took some of the material on the exam in a course at the University of Toronto. However, this is a very optimistic view on things, since I would probably have to spend some time on my internship/job in May, because I told my employer that I would be available after school’s over.

Today, I managed to put out 2 hours of actuarial studying, besides some more of Stats prep for April 4th. Let’s see how I manage from now on…



P.S. Never type a blog entry in a browser window. It can always time out and you’ll lose the whole post. This is a second time I am writing the same thing, this time in Word.

New Feature: Portfolio Snapshot

As I have been browsing different finance-related blogs, some of which appear in my links section, I noticed that some of my fellow bloggers are investing their funds in a portfolio of stocks. Some do it with a significant starting capital, some with pocket change. I don't want to judge the ones who have quite a lot of money to invest, because as a beginning investor I have nothing to say on this matter. But the ones who are doing it with pocket change, playing the market just to get ecperience with it, are loosing money, not on stocks, but on trade costs.

Yes, most online investing companies, E*Trade, Sharebuilder and others offer a certain amount of free trades when you sign up. This goes pretty fast and most of the times they require you to be an active trader.

This is the reason I decided not to empty my penny jar and invest in the stock market. First of all, I don't have a penny jar, nor do I have any money to spare for this matter. Secondly, if I need to experience the look and feel of online trading, I can do so on game.marketwatch.com.
Let me tell you what it is. It is a Virtual Stock Exchange (VSE), which lets you set up your own portfolio with VIRTUAL money, so if you suck, you will not loose your kid's college savings. Neither will you gain if you win. But it surely lets you try investing.

Here's my portfolio, the one I started over one month ago. My reasoning behind picking the stocks was "Pick the companies in the news that day". I don't really think that this is the right strategy, but for the lack of a better one, I picked the following:



The detailed view of the stocks can be found here.

More on these stocks to follow. I will try to make this a weekly type of post for my portfolio.

Purchasing Power Parity in Big Macs

Yep, you read correctly. This is an index in the Economist magazine, which I saw quite a while ago, but dismissed it for some reason. Time to bring it back.

The index measures Purchasing Power Parity of different countries using Big Macs as the basket of goods. Purchasing power parity is the measure of relative purchasing power of different currencies.

The index table takes the price of a Big Mac as it is in United States as a base. The PPP of different countries is computed by taking a ratio of the price in, say Canadian Dollars in Toronto, to the price in US Dollars in New York.
Price of Big Mac in Toronto - 3.20
Price of Big Mac in New York - 2.65

PPP price = 1.22

Take the current exchange rate - 1.2093
Now compute the under/over valuation by taking the difference between the above PPP and the exchange rate and divide it by the exchange rate. Multiply it by 100 to get percentage!

U/O = [(1.22-1.2093)/1.2093]*100=.8848%
I.E. the canadian dollar is undervalued by .1151% agains the american dollar.

Now, don't go selling short you FX positions, because like everything else in the modern world, the PPP Big Mac index revolves around the US. ;)

For a most recent article about the Big Mac Index look here.


P.S. The prices of Big Macs in Toronto and New York were taken from the Economist data as of 2003, most likely it has changed since then. The exchange rate is of March 22, 2005.

Capital Pool Companies

Over the past week I was supposed to read two policy documents of Toronto Venture Exchange, Policy 2.4 and 4.1, for my summer internship at an Investment Banking Company.

Policy 2.4 talks about the Capital Pool Companiy and the procedures required to set one up. What is fails to mention is the purpose. So I had to look it up elsewhere. Here's what I found:

This CPC program, authorized in Québec and Ontario since the end of 2002, introduces investors, with financial market experience, to entrepreneurs whose development and growth stage companies require capital and management expertise.
The program enables seasoned directors and officers to form a CPC, with no assets other than cash and no commercial operation, to list on the TSX Venture Exchange and proceed with an initial public offering. The CPC will use these funds to seek out an investment opportunity.

:: Terms and Conditions (Summary) ::

1. An initial investment of $100,000.00 to $500,000.00 by directors and officers at a price generally varying between 5 cents and 20 cents per share.

2. Initial public offering by way of a prospectus approved by Securities Commissions at twice the initial share price to a minimum of 200 shareholders for total proceeds not exceeding $2,000,000.00 including the initial investment.

3. The CPC is listed on the Exchange for a maximum of 18 months.

4. During this 18 month period the only expenditures allowed are for the identification and evaluation of opportunities to complete a qualifying transaction.

5. he qualifying transaction is the acquisition, by the issuance of treasury shares, of a business, either an active company or assets which would result in the CPC meeting the regular listing requirements on the TSX Exchange.

At the meeting with my employer he told me that CPC was the most popular way of raising capital for a private placement in Canada, Ontario in particular. After I asked why, he said that it is the easiest to set up and proved to be quite effective.

Hello there!
Welcome to my blog, I guess. Never did I believe that I would be sucked into this cyber mess.
Let's see, what brought me to this?

Let me tell you about myself first. I am a student in University of Toronto, studying Economics and Statistics. I am also pursuing the career path of an actuary. I took the first Exam P (Probability) of Society of Actuaries last Spring and planning to take Exam MF (Mathematics of Finance) this time around.

To explain why I am writing all this down:

1. I was looking for work/internship/volunteering for this summer and looked all over the place for advice. I found some great stuff and would like to share all this, so that someone in my position would not be as lost as I was.

2. I have secured a position as a volunteer-intern in one of Toronto's Investment Banking companies. It's a small company with a finite number of projects and they do everything from M&A, IPOs, Corporate advisories etc. I am a complete newbie in all this. I'd like to document my learning curve for others to take note of.

3. I would like to document my progress in exam taking/passing of SOA, because I believe it will make me more organized.

For now that is all.