Monday, February 27, 2006


This weekend, we finally moved to Berkeley. I love the new place, we already made friends with the neighbors. However, even as I lay exhausted from the move, I had to sit down to finish a take home exam for Corporate finance (talk about getting into the heat of things). The exam was fine, but I ended up taking longer time because I had to figure out the financial functions in Excel.

Thursday, February 16, 2006

MATLAB "why" function

Type why in MATLAB to see random stuff like this come up. Okay, I am a bit light on work today!!

>> why
A young kid told me to.
>> why
Bill insisted on it.
>> why
For the love of Jack.
>> why
The computer did it.
>> why
Some not very bald very rich system manager wanted it.
>> why
You told the rich system manager.
>> why
Some not excessively rich young and smart hamster obeyed some rich and not very good and good and bald kid.


CFA-2 syallabus contains significant content on Securitization- namely securtities that derive their value from other assets that are held as collateral. There is an incredible amount of jargon depending on the type of collateral and the various risks that come with them. The main types of securities in this area are MBS, ABS, and CDOs. Some like MBS, have little credit risk (but have prepayment risk) and others like credit card receivables based ABS have significant credit risk. The modeling and valuation of these products poses significant challenges best addressed by financial engineers.

Monday, February 13, 2006

World according to Mark Rubinstein

One of the fascinating aspect of MFE at UCB is the quality of faculty - each a leading expert in their fields. The foremost faculty member at Haas has got to be Prof. Rubinstein.

Derivatives Strategy - July'99: The World According to Mark Rubinstein

Interesting article based on interview with Mark Rubinstein. Prof. Rubinstein, apart from being an academic, was also the founder of LOR (alongwith Leland and O'Brien) associates. He is best known for his work on the binomial model (CRR model).

I had a chance to hear Prof. Rubinstein the other day, where he talked about great moments in financial economics - the development of some important ideas in finance. His new book based on these ideas is going to be released soon (I am sure some people will not like the book because it talks about some ideas in finance, commonly attributed to certain individuals, as being ideas that either predated the model/idea, or were independently discovered by others).

I look forward to learning Investments and Derivatives from the "Guru" himself.

Wednesday, February 08, 2006


I wanted to jot down a little bit about the Cottage industry that has sprung up which offers certification credentials in the finance industry. It appears that new designations keep popping up every few years and its amusing that people are spending a lot of money trying to secure these credentials.

While the idea of self-study for writing these exams is excellent, there is no doubt that in real world, it comes down to two things when we talk about career breaks:

1. Pedigree of education (correlated with raw intelligence.. maybe debatable but probably holds with a significance level of 80%??) (HARD SKILLS) [ It is interesting that people dont like the word "pedigree", almost sounds elitist, but just see the bios of team members of top venture capital firms - you will be hard pressed to find someone other than a HBS or Stanford MBA].

2. Contacts and "being in the right place at the right time" (SOFT SKILLS AND LUCK)

These certifications try to offer alternative 3, but in my opinion, they need to be combined with 1 and 2. I see a lot of people wasting a lot of resources of obtaining these certifications just for the letters to follow their name or trying to get that one promotion in their job. It is important to analyze the industry you are into and then talk to some people who have pursued these designations (and please, this doesnt include flashy literature on the society webpages). For example, FRM might suit somebody who wishes to work in core risk management role, while CAIA will appeal to someone in the alternative investments area. I wish, there was a study that compares all these designations and really lets people uderstand the nuances in each one of them.

Wednesday, February 01, 2006

Googling time-pass
Good site by another UCB alum - links and some option calculators.

Job Fair.. and classes

I had a chance to attend an MFE job fair in San Francisco. While this was held primarily for the current class, I was glad that I attended because it gave me a good chance to understand the different companies who recruit from UCB. There was a fair share of different types of companies - main groups broadly were - IBanks, Asset managers, Analytic software companies, and economic and financial consulting firms. I had a chance to interact with some recruiters and also current MFE students. The general consesus is that this was a great year to be in finance - hiring is up!! I do hope it stays that way.

Pre-term classes are going underway as well. I am really lagging behind in Corporate finance. When each lecture covers about 3-4 chapters of Brealy Myers book, it is very hard to keep up. However, I am finding that going through the lecture slides is more than sufficient to pick up on the basics and the book serves more as case study material.