[Advice] Important knowledge for FINC majors to have

Watch out where the huskies go, and don't you eat that yellow snow.

 

You might need to learn how to sell grandma annuities made up of mortgage backed securities.

 

Go for a CFA?

 

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How to hire prostitutes to amuse traders, and how to sniff cocaine.

On a bit more of a serious side, it never hurts to know a little bit more about law, psychology, politics, and economics, soft topics usually not covered as hard on finance majors as the numbers and valuation strategies.

This is especially relevant in the light of new Frank-Dodd regulations which will probably ensure a change in the way derivatives are managed amongst other things, the debt ceiling and QE3 fight etc. Baseline psychology is always useful in the markets (the Monday dump in stocks comes to mind), and hopefully you were listening in your basic economics classes.

I'm a student too---but I have a few friends either in FINE, or having graduated from it, and it seems to me that their "soft" knowledge of the factors behind the market was not as good as the hard knowledge of the valuation numbers etc.

 

I think for someone at your age and knowledge group it is important to have a solid grasp with regards to the big picture across the finance/accounting spectrum. Details are important, but without truly understanding big picture concepts, why they're important, how they work together, etc., details don't matter that much.

Which means, from an accounting perspective, be sure you really understand the big picture with regards to how GAAP works, what it's purpose is, how the financial statements relate to each other, how to read them and quickly get an overview for a company, division, project, etc. financial status.

With regards to finance, again, understand the major concepts. Specifically with regards to valuation, as pretty much everything ultimately comes back to that. How much is something worth, does it cost, will it return relative to investment, etc.

It's a very i-banker/corp. finance type project, but if you really have some time and are looking to learn, you could always create a case study for yourself. I'll create one for you if it helps. Pick a stock that you think is a prime target for a leveraged buyout (so your first step is figuring out how to find a good candidate). Once chosen, create an LBO and valuation model, using your own assumptions (the internet has plenty of help with regards to how to do this). Finally, after completing your analysis, create a presentation as if you were going to meet with an investor and are presenting him with the LBO opportunity and why it makes sense (so incorporate your financial analysis, industry analysis, competitor analysis, management analysis, etc, etc.).

If you are truly bored and interested in doing the above, email me through the board and I'd be happy to provide oversight and comments - it will be a good learning opportunity for you, but alternatively is a good amount of work...

Agreed. It's more of a economics focused finance degree, which is fine... and as you note, it all plays together, so even a pure corporate finance / valuation guy needs to understand economics intuitively.... though, that said the argument can certainly be made in reverse, and moreover I think there are plenty of professionals out there who understand it all... as best you can.

 

GAAP is so yesterday. IFRS is the new hotness.

 

I graduated a few years ago with my degree in finance.

It all depends on what you do. I'm an energy trader and I don't use much of what I learned at school.

You'll learn whatever you need to know during training for your job. If you want to succeed at your position, get some books on what you'll be doing and read as much as you can.