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We heard from Daniel that an Investment Competition was taking place inter Japanese Universities. Ken attented and noted down the following key points:

The idea is to form a team of 3 to 5 people (recommended to include a girl) to come up with a report on a company assigned for every team about the IR (Investor Relations) of the company. Last year, it was Kao(花王).

Each team has a mentor who gives some advice. The length of the time to talk to your mentor is limited to 6 hours. 

Schedule

June: They are going to decide which company we all need to write a report on.

July 27^th: Kick Off Meeting

Early August: Seminars on corporate ethics and ways to analyze the company

September 7^th: Analyst meeting

October 5^th: Deadline for the first draft

October 26^th: Deadline for the final draft

November 6^th: Results

November 27^th: Awarding ceremony and final result for Japan competition

You need really good Japanese proficiency to participate in this competition.  You are going to be talking to your mentor (Certified CFA) and write a report in Japanese.

Merits to participate in this competition

l         Get to know your mentor who actually works in the industry

l         Have a chance to cultivate your skills in financial analytical skill

l         If you win in Japan, you will get to go to Singapore to participate in Asian competition in May 2010.

[CFA Global Investment Research Challenge]

         Interviews are always stressful moments, especially when it comes to interviews in investment banking. The reason is that a lot is at stake, and, the CV is not anymore an asset to extol since the interview's essence does not rely on questions about your grades, internships or university, the interviewer already knows that after the CV screening process. The main goal of the interview is to check your communication skills. One of my co-worker told me that for JP Morgan, he had to go through 5 interviews, 3 were technical knowledge checks, one was a party with all the applicants to assess their/his sociability and the last interview was a dinner with the head of the department where no work-related topic was evoked. Social skills are definitely what interviewers try to evaluate since most of the IB jobs are network-related: networking skills are a necessity.

Not only technical, communication and social skills are appreciated during the interview, capacities to deal with the unknown is also required. The interviewer will ask you a question to which he knows you do not have the answer, though what he looks for is how you drag the unknown domain to your perimeter of knowledge.

Most of IB interviews end with finance enigmas, which are in fact common enigmas. My IT friend developing/testing the automaton's trading strategies in the trading room of the BNP Paribas Tokyo told me that after his 3^rd interview, his last questions were the two following riddles:

"You have a big cube, composed of little cubes, 10 on each edge, therefore 10^3 cubes in total. If the big cube is dipped into paint, how many little cubes are painted, regardless of the number a painted faces the small cube has ?"

The second riddle he was asked was:

"There are three 3 envelopes on the table, one contains your contract and two are empty. You do not know which envelopes are empty but I (interviewer) know, you have to find your contract. After you chose one envelope, I will remove one empty envelope from the table. I will then give you the choice to exchange your envelope with the one on the table or to keep your first choice. Will you chose to change or not?"

Some of the enigmas are famous, the one previously cited can be found in 21, the MIT blackjack-hacker's movie. An other IB riddle can be found in Die Hard 3:

"You have a jug of 3L and one of 5L. You need exactly 4L, how do you do it?"

Another famous riddle, frequently asked in IB interviews is:

"There are 9 balls: 8 having the same weight and 1 heavier than the others. How can you determine which is the heavy ball by using only twice a pair of scales?"

You can find more IB riddles in the attached e-book called Heard on the street: quantitative questions from Wall Street job interviews which Chapter 1 is full of. The rest of the book is very interesting but too more mathematical/statistical. 

So, if it is too late to work on your background to reach a top IB, you can still work on your riddle's skills ;)

Guillaume

Skip if familiar with financial terms. If you are not familiar with financial terms, read my short glossary of the key concepts I used in the article:
- Bear market: fall of the stock market as a long-term trend.
- Bull Market: rise of the stock market as a LT trend
- Secondary trend: opposite short-term trend within long-term trend
- Bear market rally: secondary trend in a bear market, meaning temporary recovery in a bear market.
- MSCI / S&P500: Morgan Stanley index and Standard and Poor's 500 index are both indices displaying a general trend of the equity market.
For a more detailed explanation
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Guillaume here. What is the current financial and economic situation? Is March-April a stabilizing recovery? Since the subprime crisis, recoveries have given the same hopes, however since the very end of October 2007, the MSCI World TR has declined by more than 57%, taking into account the latest recovery in the equity market (thanks to the global emerging market, +14,4% in march, the only positive equity market in YTD2009 with +0,9%) impacting S&P500 with a rise of 30% in six weeks. Even though this latest recovery seems like the end of recession, taking a look to previous recoveries might propose a second thought about the nature of the current recovery. Since October 2007, there have been four major recoveries:
- Mid March to mid May 2008: +14%
- End October to Beginning November2008: +21%
- End November to Beginning January 2009: +24%
- Beginning March to mid April 2009: +28%
The latest and actual recovery arises the hope of a long-term bull market when some believe in a bear market rally. However, the bull market requires features that are partially non visible for the moment. Indeed to talk about a bull market, once must acknowledge: market recovery, government policy, asset valuations, investor sentiment, credit extension, earnings growth and economic growth. The last three factors have not yet reached a level corresponding to a long-term recovery, for the actual recovery of April 2009. The shadow of recession still displays rising unemployment (nonfarm payrolls shed 663,000 workers in April, according to a Dow Jones Newswires survey) and decreasing consumption proportionally to increasing savings, credit uncertainty. Despite a positive approach of the 7 factors while still being negative, especially credits, growth and earnings, some of them are tagging along with the hope of a bull market such as the investor's propensity to invest. Not enough data has been gathered to state the trend but the present recovery might also be a secondary trend even though those bear market rallies can last for some time such as the one after the Tech bubble in 01-02. Another point that might comfort us in our secondary trend perspective is the unhealthiness of bonds besides high yields (impacted by the diminishing central banks' rates: US 0.25% - EU 1.25 - Japan 0.10% as of April 09) and property securities (which lost 30% last quarter). Indeed, if the bear market rally was a 3 stage process - where stage 1 would be the general depression feeling, stage 2 the acknowledgement of a bear market rally and stage 3 rush before the recovery ends - the chief investment strategist from Q1 publishing believes we are in stage 2: "It looks like we're in Stage 2. There are just too many non-believers out there right now, too much money on the sidelines yet to come back into the market, and there has been no build up of false confidence which precedes most market declines". Bear market rally or bull market, the impression of recovery is strengthen when even US Junk bonds gain 9.7% in April, investor's confidence is soaring. Only time will determine the trend, though some believe in a real recovery this time, as it can be denoted in this Interesting note quoted from Viewpoint magazine April 2009: " And finally, will the last bear that leave the building please switch off the lights - the bulls are quickest out of the blocks when the market is at its darkest ..."

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Sources:
www.imf.org/external/pubs/ft/weo/2009/01/index.htm
www.wsj.com: Global stock rally is the strongest since 1991, May 1st 2009
www.wsj.com: Stock start month with modest gain May 2nd 2009
Q1 Publishing, Three stages of stock bear market rally, April 20th 2009
Viewpoint Magazine, Focus - March 2009 Review, April 2009