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Hi Teddies,

I am starting discussion on this forum again, as i would also like to know the answers to the questions asked by prabhakar earlier. I have some more questions to add to it:

1. What are the prospects of getting a job on the basis of CFA level 1, without any other background in Finance?

2. How much can a fresher expect in terms of salary?

 

hope that my questions will be answered soon, as always on TED

 

I believe that banks pay incentives

 

Salary is a very subjective issue and depends on the role and what do you bring to the table. Huge amount of the compensation is variable and annual hike on fixed part remains low. So a bad year in the market could throw some troubles if not managed well. in 2009 lots of ppl got almost no bonus/variable and it forms anything between 30-60% of your CTC. so come to the sector only if you think you can manage all these.

 

Working hrs too cross 12 hrs easily with good amount of pressure. Best thing to do is work in IT sector, go onsite for few yrs make some quick dollars and invest wisely which you can learn at TED and live peacefully. 

 

well said. IT sector, earn on onsite project and invest wisely.

 

That is if you dont have money. If you have money then invest in yourself. it will keep you going.

 

Originally posted by FutureBull I would say if you are happy with your job .. don't think about shifting to ER. this is very difficult from what lot of people think. It involves huge amount of mundane work and experience under your belt to become an analyst worth its name. CFA certification is the best thing one can do as far as investment in urself goes. But do not expect any return before you complete all levels and get Charter which comes with 4 yrs of relevant exp. CFA does make you marketable but at the end of  the day its all about how do you present yourself .    Salary is a very subjective issue and depends on the role and what do you bring to the table. Huge amount of the compensation is variable and annual hike on fixed part remains low. So a bad year in the market could throw some troubles if not managed well. in 2009 lots of ppl got almost no bonus/variable and it forms anything between 30-60% of your CTC. so come to the sector only if you think you can manage all these.   Working hrs too cross 12 hrs easily with good amount of pressure. Best thing to do is work in IT sector, go onsite for few yrs make some quick dollars and invest wisely which you can learn at TED and live peacefully.

Moreover investment is what fascinates me the most,not to say that I am not aware of all the struggle that you have mentioned about and i am ready to face it. 

 

having said that,

I would like to know what all needs to be done to get a job as ER and how difficult it would be for a person like me with no prior relevant experience in investing and only a CFA level 1 tag in the name of exposure to finance.

 

Hope to get the right guidance

 

@barla ji- yes i have cleared CFA level 1 and planning to appear for Level 2 in june 2012. 

 

Whoever is serious on this profession must read the book Fooled by randomness to better understand.

 

Hi,

 

To start off i'd like to mention that it's best to work on what interests you.....

 

However, please note that not all finance jobs are sexy, not all of them have high salaries and not all entry points have great upside...... There is mind numbing hard work involved and often not on your own original ideas and it's often mundane in nature.....

 

Offcourse, a lot depends upon the job description you land up with.....

 

However, it's best to stick to a discipline which interests you given that one's career is like a marathon.......do consider financial analyst type of jobs in software as well given your background and the new skills you've acquired

 

Amazing to see you take the trouble to post a trully insider perspective. Thank You

 

 

Anyway, for a finance industry aspirant i'd imagine a slogging a few months to clear CAT and join one of the IIMs will be extremely advisable .... at a min it will help land a good job since Bombay is a tough and expensive city to live in

 

Few or no IT services company has bargaining power with client today -Contracts are heavily one sided in favour of client adding to huge stress to the IT employee - a tiny example - 5 or 10 % productivity gain to be given to client per year come what may which many of these firms meet by moving out employees from that project.

 

I feel IT has the best thing that has happened to me. I am earnign decent money and getting international exposure and interacts and travels with differtent nationality. After IT only i realized that how national boundaries are diminishing.

 

I enjoyed well connected world better via phones, intenet and so on. I feel myself in a more mature position to see and benefit from recent technical happenings. Not all but many customers are asking and appreciating my developed solutions globally.

 

So overall its very satisfying but on another note Money is not a sole criteria to judge the anything. Once one is in a job (Naukri) then one is by default a Naukar should be ready bear some job releated pains. One should not feel jealous and frustrated by others, on the note Mr Ambani, Mr Adani and so on didn't study much but now providing jobs to best brains of the India so if one is extremely money minded then better switch to having the business not any Naukri rest follows automatically.

 

Well said Anthro. To add to this there is a cost side pressure and push to use the junior members. That's the reason in one another post, I said that companies probably are reaching a stage where they don't know how to manage the mass.

Crazy Horse:

Thats an excellent write-up. Thanks.

Captures very well the demands, aspirations, conflicts inherent in the field.

 

 

 

 

Originally posted by Crazy Horse My 2 cents having been in ER for abt 8 years including sell side & buy side + PE. But mostly the descriptions are true of any other role in an investment bank as well. Caution: V long post with no original conclusion!! ..... If you are just looking for fast money, it will depend on how much you are currently earning and how good you do in your MBA (and how good your school is) and how good the economy is etc etc...i would advise against fast money! This is a field which attracts great minds but then burdens them with the most mundane tasks (sort of like a boot camp for armed forces). Not for everyone and certainly not purely for money or glamour (but then everyone including me goes there for the money n glamour) Hope this helps!!!

Crazy Horse : Thank you for this write up - for the great insights and for the mind to share this.

 

Anthro.

 

Originally posted by Crazy Horse My 2 cents having been in ER for abt 8 years including sell side & buy side + PE. But mostly the descriptions are true of any other role in an investment bank as well. Caution: V long post with no original conclusion!! Sell side You will be starting as an associate where you will be expected to bury yourself in excel models for about 2 years as someone's assistant. Serious grunt work...but thats same if you were in any other divisions in an investment bank. In 2- 5 years you will get some stocks to cover. The stocks (and sometimes even the industry) will however not be in your control. Then you will slowly start to realize that your job is 90% useless. Rarely, do your customers read your reports in full, and you will be covering the same stocks that are covered by atleast 10-15 other investment banks (basically banks are interested to cover only the largest and most liquid stocks unless there is investment banking fees involved). You will thus come to the conclusion that you are effectively a glorified salesman taking pressure from ur customers, companies you track and the i banking dept of your firm I worked for an MNC where some sort of chinese wall exists, but if you work for a tier 2 indian brokerage (tier 1 would be Kotak, IDFC, Enam etc) you are effectively selling investment banking. And if your research is for retail audience it is a fraud job! Buy side & PE If your passion is to really analyze stocks (esp with a long term, value oriented strategy) you may do better on the buy side. But here again you will be driven by the need of mutual funds to perform on a quarterly basis (an anti-thesis to the value oriented strategy). Most mutual funds and hedgies are extremely short term oriented (Franklin and HDFC are exceptions to an extent though) In PE, you will be able to do a bit more long term work, but 90% of your time will be spent making huge reports on companies just to reject those (the due process of making investment memo's), reading legal due diligence & other documentation etc etc all of which are mind-numbing experience! Money Generally sell side pays more than buy side. but even in sell side money made depends on whether you are in an MNC or a local firm (local firm pays much much less) and the hotness of your sector. I have known colleagues with abt 10 years of experience making more than 1 cr an year in the last bull run (some of the same guys made abt 20-30 lakhs 1-2 years later in the bear market) but also associates making less than 10 lakh (and this in Mumbai). Buy side gives you less money but then pressure in sell side is so much more. PE money is good...similar to sell side Other items Being in the industry, you (if you network hard enough) will become aware of hidden opportunities (legal ones i mean) before the rest of the world so you may be able to benefit from those You may also come to know illegal (insider/front trading) info but you take them at your own risk; if you are inclined in those. It is very rarely that you will be allowed to trade on the stocks that you are officially analyzing (policies vary from co to co but in general the classy firms have a very strict policies regarding this) Conclusion: ER is just like any other division in an investment bank involving mindless monotony in the first few years, attracting the most ambitious and smart minds for the payday that MAY come once you become a senior guy. It has nothing, REPEAT NOTHING, to do with serious long term value oriented investing approach. My personal experience: The work was mind-numbing in the initial few years but then became much better later on. You also get to be in close contact with some seriously brilliant minds (all frustrated but still v brilliant and ambitious) as well as the top management of companies. an un-paralleled experience i would say You actually learn to analyze a company (which you dont learn in the b schools), learn to understand that most of the so called experts and management are bullshitting through their nose. A dose of cynicism that can do wonders to your own personal investment. You also get a lot of information sources and contacts. I was also lucky to be in the right place at the right time (started out of college just as the bull market began) and received most of my compensation just as the bear market began. I also had a v frugal lifestyle which is extremely imp. i knew 30 year old colleagues of mine who bought BMW's thinking the good times will roll on. I was saving like 70% of my post tax income because i knew i would soon be leaving this place. I was also lucky because i made a job change in 2008 with a multi year guaranteed bonus (it happened before the shit hit the fan and my new company was still expanding!!!) that contract proved v handy when things did melt down in the second half of 2008!! The money in this field is extremely volatile so dont expand your lifestyle because you made so much last year. Next year you may make half or be jobless! Advice If you are just a B Tech with CFA level 1, and if you still want to enter this field, i would recommend an MBA (top 10) to get into the industry (at the MNC co's) meanwhile you can finish the CFA as well. If your intent is to learn how to seriously invest, you can do that by completing the CFA, reading some good books recommended elsewhere in the forum. You dont need to waste 2 years for an mba and then another 3-4 years of mind numbing work and pray for good times! If you hate your tech job and is looking for an industry change, then you may as well go for an MBA...mebbe you will get interested in finance or in marketing! But please do think twice..the grass always seems to be greener on the other side! If you are just looking for fast money, it will depend on how much you are currently earning and how good you do in your MBA (and how good your school is) and how good the economy is etc etc...i would advise against fast money! This is a field which attracts great minds but then burdens them with the most mundane tasks (sort of like a boot camp for armed forces). Not for everyone and certainly not purely for money or glamour (but then everyone including me goes there for the money n glamour) Hope this helps!!!

 

Brilliant. Most of the 25 year olds lock themselves in buying a new car and a new home and spend the next several years paying back the cost of pre-poned luxory.

 

The investment nest should come first, a second hand car might do the trick and doesn't Buffett say that he would have been a bit more richer had he stayed on rent for his life time. I am not saying that one should not buy a home but maybe postpone it abit till you have made adecent amount of money locked away in good businesses.

 

Unlike say a decade back today's pvt sector companies does not allow you to "go slow" or work below your potential or "take it easy i do not want promotions i am happy as i am " . So unless you are in a clerical position or in a govt job or say a psu bank this is difficult if you are already in a senior position in private sector .At least in pvt sector the options seem to be either go up or go out ! Even if one lands up a stress free managerial job in pvt sector that demands 8 hours he will still need to allot 10 hours per day including commuting and with 8 hrs for sleep and 2 hrs for family ? ?

 

is it so easy to get a stress free 9 to 5 job in pvt sector that pays say 50000 per month ? I am  not sure. 

 

 

The brighter side of being in an engrossing job is that the urge to check stock quotes or to trade goes away fully since one can't indulge in the distraction.

 

While it reduces the time required to analyze stocks if you're one stock/year kind of guy it does not matter at all

 

When one is tense about not spending time with stocks one can take comfort from WB's saying that inactivity in the stock market creates wealth

 

It's ok to look at buying a stock as similar to buying a house....all stars need to align for a deal to go through

 

Let's not forget that we'll get a bear market every few years when all stocks will sell at a big discount

 

Basant Sir..I don't know about a house but a good car (the more expensive the merrier) is extremely important for extracurricular activities at this age

 

It's money well spent

 

Was unscucesful.

 

Such maturity and discipline. If only I could have been so at that age.

 

This shows how passionate about the profession he has selected and shown greater amount of conviction before he started earning anything.