Monday, June 2, 2008

Harvard BA Indicator

"Thirteen young men and one woman meet in a drafty medieval-style room in a campus residence hall at Yale University. Think exposed beams cross the ceiling abouve a large fireplace. A stained-glass panel in the heavy wooden door is decorated with a cobalt 'Y'. 'Anyone interested in finance wants to join the Globalfund,' says Philip Uhde, 22, the group's founder and president. 'And the smartest of those people are here.' A cross between Yale's secretive Skull & Bones society and a young tycoons club, the Globalfund is one of a growing number of exclusive business clubs cropping up at elite colleges across the country. ... Once, merely graduating from an Ivy League college or similarly prestigious rival like Stanford or Swarthmore qualified students for a choice entry-level perch on Wall Street. No longer. ... Lance LaVergne, a vice-president ... at Goldman Sachs [said] 'Clubs are essential to preparation, especially for students who are not majoring in traditional disciplines like finance or accounting.' ... 'I have been hearing that a lot of these banks are only taking one student from Harvard,'; says Anthony Genello, a 21-year-old junior and president of operations of the Harvard Financial Analysts Club. ... 'As markets become more difficult and hiring needs are reduced, it will likely become more difficult for students to just wind up in our business,' Goldman's LaVergne says. ... As students sense tougher times setting in, many seek to 'front-run the process,' says Chris Borrero, president of the Yale College Student Investment Group. ... At Tufts, a school that ranks just below the Ivies, the formation of the finance club's investing arm has caused a stir. Membership has swelled to 200. ... Shortly after arriving at Stanford from her home in Houston, Connie Yu applied for admission to Stanford Finance, which helps undergrads find corporate and consulting firm internships. One of the most selective of the 25 undergrad business groups on the sunny Palo Alto (Calif.) campus, Stanford Finance gets about 200 applicants a year for only two dozen spots. ... The reward for getting into 20-member Stanford Consulting is the chance to do volunteer work 15 hours a week for a real consumer-products company", BusinessWeek, 26 May 2008.

Wow. Now BAs ape MBAs. We have a new contrary opinion indicator. Yu, you're lucky at Stanford. Why? Stanford has an Energy Resources Engineering major. Enroll. Now. Go to work for say Exxon, Chevron, Arch Coal, Newmont or Freeport-McMoran C&G when you graduate, spend 3-5 years there, go to work for a small oil and gas or mining company and get a bucket load of stock options to sign on. You'll be a multimillionaire by 35. When Wall Street comes calling, follow Nancy Reagan's advice, "Just say no". Yu, you're from Houston. Ask around. Talk to some graybeards who survived the 1981-86 oil bust. Learn. Forget Wall Street. See my 25 October 2007 and 20 January 2008 posts. Wall Street looks like a good short to me. Uh oh. I can expect a "Wells Notice" from Chris Cox any day for this. So sorry Cox. I won't apologize. Even if you intend to send me to a re-education camp for my thought crime, i.e., that Wall Street looks like a good short.


Anonymous said...

You many want to comment on Wall St.' "new math." Today's Bloomberg (Bradley Keoun) reports on i-banks' implementations of FASB Statement 159.


Independent Accountant said...

I read this article and similar criticisms of bank accounting. I am no fan of the banks. However, I am no FASB fan either. The problem here is the same one the FASB gave us with FASB 133 and "hedge" accounting, i.e., the failure to mark all things to the market.
If I short Treasury bonds and interest rates go up, the bonds fall in value. Why shouldn't accounting reflect this as opposed to the "completed transactions model"? This is crazy for marketable securities. The problem here is concepts like "comprehensive income". Total accounting nonsense. That banks take advantage of the FASB's cowardice is no surprise. The problem is with the FASB.