Free CFA Notes
Thursday, January 31, 2008
A Blog for CFA course
I started a blog to develop material for CFA Level 1. I started posting for the study session 18 Alternative Investments. It will take around 15 days to complete the initial lesson material. Then I have to think of practice questions and problems for topic. May be by June I shall post material for 5 to 6 topics.
http://www.nrao-cfal1.blogspot.com/
Saturday, January 26, 2008
Confessions of a Wall Street - Book
Book Description
What Eliot Spitzer never told you--here is the true story of a top Wall Street player's transformation from a straight-arrow believer to a jaded cynic who reveals how Wall Street's insider game is really played.
Dan Reingold was one of the top analysts on Wall Street for fourteen years and Salomon Smith Barney analyst Jack Grubman's chief competitor in the red hot sector of telecom. Reingold was part of the "Street" and believed in it.
But in this action-packed, highly personal memoir written with accomplished Fast Company senior writer Jennifer Reingold, the author describes how his enthusiasm gave way to disgust as he learned how deeply corrupted Wall Street and much of corporate America had become during the roaring stock market bubble of the 1990s. He shows how government prosecutors, even New York Attorney General Eliot Spitzer, never got to the heart of the ethical and legal transgressions of the era. And how they completely overlooked Wall Streeter's pervasive use of inside information, leaving investors--even sophisticated professionals--cheated.
Confessions of a Wall Street Analyst provides a front-row seat at one of the most dramatic--and ultimately tragic--periods in financial history. Reingold shares details of life on Wall Street that few can risk disclosing. He recounts his introduction to the world of Wall Street leaks and secret deal-making; his experiences with corporate fraud; and Wall Street's penchant for lavish spending and multimillion dollar pay packages.
Reingold spars with arch rival Grubman; fends off intense pressures from Wall Street bankers and corporate CEOs; and is wooed by Morgan Stanley's CEO, John Mack, and CSFB's convicted uber-banker Frank Quattrone.
Reingold describes instances in which confidential deals are whispered days before their official announcement. He recalls the moment he learns that Bernie Ebbers' WorldCom was massively cooking its books. And he is shocked to have been an unwitting catalyst for a series of sexually-explicit emails that would rock Wall Street, bring Jack Grubman to his knees, and contribute to the stepping aside of Grubman's boss, Citigroup CEO Sandy Weill.
Some of Reingold's stories are outrageous, others hilarious, and many are simply absurd. But, together, they provide a sobering expose' of Wall Street: a jungle of greed and ego, a place brimming with conflicts and inside information, and a business absurdly out of touch with the Main Street it claims to serve.
The book ends with a series of important policy recommendations to clean up the investing business. In the tradition of Liar's Poker and Den of Thieves, Confessions of a Wall Street Analyst is a no-holds-barred insiders' account that will open the eyes of anyone who invests in the stock market.
Table of Contents
CAST OF CHARACTERS
PROLOGUE: March 15, 2005
CHAPTER 1: THE PLUNGE: 1989-1991
This is the street where they fool people.
From consulting to communications: MCI
My first run-in with Jack Grubman
Street Smarts
Ed comes knocking
From the jetway to the attic
"…we do not make negative or controversial comments about our clients"
CHAPTER 2: AROUND THE WORLD IN SEVEN DAYS (OR LESS): 1992-1993.
Climbing Over the Wall
"You're the Only One"
"Hi, I'm John Mack…"
Privatization Pandemonium
The Perils of Papadam
Mississippi Madness
CHAPTER 3: RAINMAKER, DEALBREAKER: 1994-1996
Fraud 101
Tone and Notice
Jack's Knack
Afternoon Tryst
My Major Opinion Change: Upgrading the Bells, Downgrading AT&T
The Power of the Poll
"Just to make things interesting."
CHAPTER 4: INTIMIDATION: 1996-1997
M&A Mania
Nothing personal?
Internet Ignorance
Suffocation
My Failed Quest for Qwest
Fido Loves WorldCom
Irrational Exuberance
CHAPTER 5: MERGER MANIA: 1997-1998
The Case of the Secret Document
MCI/BT: the "Bloodbath"
Jack and Bernie: Inextricably Linked
Jack plays loose: I play banker
How I lost my bank $25 Million
CHAPTER 6: OXYGEN DEPRIVATION: 1998-1999
My Multi-billion Dollar Mistake: AT&T
"You're Missing the Fucking Boat on Level 3"
"You Know He Can't Keep his Mouth Shut"
The SEC's Deadly Mistake
"How can your best friends become your worst enemies?"
To Publish or Not?
CHAPTER 7: THE LEAK, THE AMBUSH AND THE DUPE: 1999-2000
"Shame on them"?
The $14 billion leak
The Ambush
A piece of the action at CSFB
Merrill: I'm outta there
"Any idea what the hell they were talking about?"
The $1.5 million mistake
The Dupe: Jack's AT&T Upgrade
"I've never had a conversation like this."
CHAPTER 8: HUMPTY DUMPTY: 2000
Playing with the Devil
My Mountaintop Message
Who wants to be a millionaire?
Two Minutes to Midnight
The beginning of the end
The Guidedown Game
A week from hell
CHAPTER 9: CRASH AND BURN: 2001
The Crash
The Show Must Go On
Global's Insider Game
Nacchio's Wrath
The Analyst Plays the Villain
Jack, the all-knowing
Qwest and Global: The Swapstakes
Vindicated-but so what?
Outed: Qwest's Accounting Gimmicks
"How Do You Know This?"
CHAPTER 10: JACK FELL DOWN: 2002-2003
The Worm Turns
WorldCon
Hearings from Hell
"What's a Level 3?"
Sex, Lies and Videotape
So Long to the Street
EPILOGUE: WHERE ARE THEY NOW?
AFTERWORD: BACK TO THE FUTURE: SOME POLICY PRESCRIPTIONS
The Middleman's Dilemma
Why Spinning Off Research Won't Work
A Critique Of Actual And Proposed Reforms
What Needs To Be Done
NOTES
GLOSSARY
INDEX
What Eliot Spitzer never told you--here is the true story of a top Wall Street player's transformation from a straight-arrow believer to a jaded cynic who reveals how Wall Street's insider game is really played.
Dan Reingold was one of the top analysts on Wall Street for fourteen years and Salomon Smith Barney analyst Jack Grubman's chief competitor in the red hot sector of telecom. Reingold was part of the "Street" and believed in it.
But in this action-packed, highly personal memoir written with accomplished Fast Company senior writer Jennifer Reingold, the author describes how his enthusiasm gave way to disgust as he learned how deeply corrupted Wall Street and much of corporate America had become during the roaring stock market bubble of the 1990s. He shows how government prosecutors, even New York Attorney General Eliot Spitzer, never got to the heart of the ethical and legal transgressions of the era. And how they completely overlooked Wall Streeter's pervasive use of inside information, leaving investors--even sophisticated professionals--cheated.
Confessions of a Wall Street Analyst provides a front-row seat at one of the most dramatic--and ultimately tragic--periods in financial history. Reingold shares details of life on Wall Street that few can risk disclosing. He recounts his introduction to the world of Wall Street leaks and secret deal-making; his experiences with corporate fraud; and Wall Street's penchant for lavish spending and multimillion dollar pay packages.
Reingold spars with arch rival Grubman; fends off intense pressures from Wall Street bankers and corporate CEOs; and is wooed by Morgan Stanley's CEO, John Mack, and CSFB's convicted uber-banker Frank Quattrone.
Reingold describes instances in which confidential deals are whispered days before their official announcement. He recalls the moment he learns that Bernie Ebbers' WorldCom was massively cooking its books. And he is shocked to have been an unwitting catalyst for a series of sexually-explicit emails that would rock Wall Street, bring Jack Grubman to his knees, and contribute to the stepping aside of Grubman's boss, Citigroup CEO Sandy Weill.
Some of Reingold's stories are outrageous, others hilarious, and many are simply absurd. But, together, they provide a sobering expose' of Wall Street: a jungle of greed and ego, a place brimming with conflicts and inside information, and a business absurdly out of touch with the Main Street it claims to serve.
The book ends with a series of important policy recommendations to clean up the investing business. In the tradition of Liar's Poker and Den of Thieves, Confessions of a Wall Street Analyst is a no-holds-barred insiders' account that will open the eyes of anyone who invests in the stock market.
Table of Contents
CAST OF CHARACTERS
PROLOGUE: March 15, 2005
CHAPTER 1: THE PLUNGE: 1989-1991
This is the street where they fool people.
From consulting to communications: MCI
My first run-in with Jack Grubman
Street Smarts
Ed comes knocking
From the jetway to the attic
"…we do not make negative or controversial comments about our clients"
CHAPTER 2: AROUND THE WORLD IN SEVEN DAYS (OR LESS): 1992-1993.
Climbing Over the Wall
"You're the Only One"
"Hi, I'm John Mack…"
Privatization Pandemonium
The Perils of Papadam
Mississippi Madness
CHAPTER 3: RAINMAKER, DEALBREAKER: 1994-1996
Fraud 101
Tone and Notice
Jack's Knack
Afternoon Tryst
My Major Opinion Change: Upgrading the Bells, Downgrading AT&T
The Power of the Poll
"Just to make things interesting."
CHAPTER 4: INTIMIDATION: 1996-1997
M&A Mania
Nothing personal?
Internet Ignorance
Suffocation
My Failed Quest for Qwest
Fido Loves WorldCom
Irrational Exuberance
CHAPTER 5: MERGER MANIA: 1997-1998
The Case of the Secret Document
MCI/BT: the "Bloodbath"
Jack and Bernie: Inextricably Linked
Jack plays loose: I play banker
How I lost my bank $25 Million
CHAPTER 6: OXYGEN DEPRIVATION: 1998-1999
My Multi-billion Dollar Mistake: AT&T
"You're Missing the Fucking Boat on Level 3"
"You Know He Can't Keep his Mouth Shut"
The SEC's Deadly Mistake
"How can your best friends become your worst enemies?"
To Publish or Not?
CHAPTER 7: THE LEAK, THE AMBUSH AND THE DUPE: 1999-2000
"Shame on them"?
The $14 billion leak
The Ambush
A piece of the action at CSFB
Merrill: I'm outta there
"Any idea what the hell they were talking about?"
The $1.5 million mistake
The Dupe: Jack's AT&T Upgrade
"I've never had a conversation like this."
CHAPTER 8: HUMPTY DUMPTY: 2000
Playing with the Devil
My Mountaintop Message
Who wants to be a millionaire?
Two Minutes to Midnight
The beginning of the end
The Guidedown Game
A week from hell
CHAPTER 9: CRASH AND BURN: 2001
The Crash
The Show Must Go On
Global's Insider Game
Nacchio's Wrath
The Analyst Plays the Villain
Jack, the all-knowing
Qwest and Global: The Swapstakes
Vindicated-but so what?
Outed: Qwest's Accounting Gimmicks
"How Do You Know This?"
CHAPTER 10: JACK FELL DOWN: 2002-2003
The Worm Turns
WorldCon
Hearings from Hell
"What's a Level 3?"
Sex, Lies and Videotape
So Long to the Street
EPILOGUE: WHERE ARE THEY NOW?
AFTERWORD: BACK TO THE FUTURE: SOME POLICY PRESCRIPTIONS
The Middleman's Dilemma
Why Spinning Off Research Won't Work
A Critique Of Actual And Proposed Reforms
What Needs To Be Done
NOTES
GLOSSARY
INDEX
Friday, January 25, 2008
Dow's Editorials - Financial Criticism
This is an editorial of Dow included by Nelson in his book ABC of Speculation.
The editorial deals with the writings on stock market by various news papers and periodicals.
Dow cautioned the readers by writing that the press has all kinds of writers. There are ultraconservative and pessimistic writers in contrast to the majority who are inclined to optimism. There are honest and corrupt writers. The moral conditions of writers are governed by the individual and his environment.
Dow said the usual method employed in corrupting the writers is to promise them a call on the shares of a particular company. The method is to offer them to sell the shares of the company at a particular price so that the writer is benefitted if it goes above that price. The writers agree to "boom" or "apply the hot air" to the stock in their stories.
But Dow stands on the side of his men by saying majority of Wall Street financial writers are honest men and they sacrifice the financial incentives offered by manipulators in order to do an honest job.
The stock market reporter or critic's job is to find a reason or explanation for the day's fluctuation. He has to searc out the primary cause.
There are rumours always in the street. A financial writer reports a rumour if he believes there is likely to be some fact in it. But the speculator who uses the rumours for his trade should study the relative values of rumours and learn to take advanatage of their market effects, always remembering that 90 percent of them are not true, but that fiction as well as fact prevails in price making.
It is not the function of the financial writer to win or lose money in speculation for the reader. His duty is to discuss those factors which govern the financial and economic situation giving to each its proper place with even temper and mature judgment. He is not a doctor or a lawyer and does not prescribe.
But if he prescribes, similar to the lawyer or a doctor, he is not responsible for mistakes of judgment. The speculator pays the bill.
The editorial deals with the writings on stock market by various news papers and periodicals.
Dow cautioned the readers by writing that the press has all kinds of writers. There are ultraconservative and pessimistic writers in contrast to the majority who are inclined to optimism. There are honest and corrupt writers. The moral conditions of writers are governed by the individual and his environment.
Dow said the usual method employed in corrupting the writers is to promise them a call on the shares of a particular company. The method is to offer them to sell the shares of the company at a particular price so that the writer is benefitted if it goes above that price. The writers agree to "boom" or "apply the hot air" to the stock in their stories.
But Dow stands on the side of his men by saying majority of Wall Street financial writers are honest men and they sacrifice the financial incentives offered by manipulators in order to do an honest job.
The stock market reporter or critic's job is to find a reason or explanation for the day's fluctuation. He has to searc out the primary cause.
There are rumours always in the street. A financial writer reports a rumour if he believes there is likely to be some fact in it. But the speculator who uses the rumours for his trade should study the relative values of rumours and learn to take advanatage of their market effects, always remembering that 90 percent of them are not true, but that fiction as well as fact prevails in price making.
It is not the function of the financial writer to win or lose money in speculation for the reader. His duty is to discuss those factors which govern the financial and economic situation giving to each its proper place with even temper and mature judgment. He is not a doctor or a lawyer and does not prescribe.
But if he prescribes, similar to the lawyer or a doctor, he is not responsible for mistakes of judgment. The speculator pays the bill.
Wednesday, January 9, 2008
Cap Gemini Consulting - Investment Banking Area - Case Note
Capgemini - Services
New Technologies - Decision Making
The Capital Markets industry continues to be significantly impacted by:
A rapidly changing business environment,and The volume and rate of speed in which new technologies become available.
For organizations to remain competitive and profitable they must adapt to this changing business climate.
The selection of new technologies and industry-leading practices (“solutions”), in
conjunction with the timing of such solutions,will significantly effect an organizations competitive position.
The winners of tomorrow will have to answer the following questions:
Which solutions available today are most relevant to my current business needs?
Which solutions available today are most relevant to my long-term plans?
How adaptable are the solutions to my future requirements?
Whether it’s speed of execution, reduced time to market for new products and offerings or simply the horsepower required to create new products and services based on sophisticated near real-time analytics, speed is a prerequisite
to success.
When considering the following list of industry trends, speed becomes increasingly more important, but speed alone is not the answer.
To remain competitive, market participants must simplify and optimize processes,
adopt the best technologies, accelerate implementation time, remove or reduce the
complexity, remain flexible to changing needs and/or demands and realize financial savings and a greater return on investment dollars.
Capgemini handled an assignment to develop a global strategy for its retail asset management business, covering both mutual funds and defined contribution pensions of an European investment bank.
New Technologies - Decision Making
The Capital Markets industry continues to be significantly impacted by:
A rapidly changing business environment,and The volume and rate of speed in which new technologies become available.
For organizations to remain competitive and profitable they must adapt to this changing business climate.
The selection of new technologies and industry-leading practices (“solutions”), in
conjunction with the timing of such solutions,will significantly effect an organizations competitive position.
The winners of tomorrow will have to answer the following questions:
Which solutions available today are most relevant to my current business needs?
Which solutions available today are most relevant to my long-term plans?
How adaptable are the solutions to my future requirements?
Whether it’s speed of execution, reduced time to market for new products and offerings or simply the horsepower required to create new products and services based on sophisticated near real-time analytics, speed is a prerequisite
to success.
When considering the following list of industry trends, speed becomes increasingly more important, but speed alone is not the answer.
To remain competitive, market participants must simplify and optimize processes,
adopt the best technologies, accelerate implementation time, remove or reduce the
complexity, remain flexible to changing needs and/or demands and realize financial savings and a greater return on investment dollars.
Capgemini handled an assignment to develop a global strategy for its retail asset management business, covering both mutual funds and defined contribution pensions of an European investment bank.
Saturday, January 5, 2008
Dow Theory and Editorials of Dow -Nelson's Book
This topic was covered in detail in the post
http://nrao-sapm-handbook.blogspot.com/2007/12/technical-analysis-topic-1.html
http://nrao-sapm-handbook.blogspot.com/2007/12/technical-analysis-topic-1.html
Friday, January 4, 2008
Look at the Jockey - CEO and Value the Company
there is an article Smit Jalan, investment banker with CLSA in ET dated 12 Sep 2008 page 7
Tuesday, January 1, 2008
Pearls of Wisdom from Financial Wizards in 2007
In early July 2007, Chuck Prince, then chief executive of financial behemoth Citigroup Inc., rightly noted that “when the music stops, in terms of liquidity, things will get complicated.” At the time, he remained optimistic: “as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
William Conway, one of the founders of private equity firm Carlyle Group. In his annual letter to the firm’s staff earlier this year, he acknowledged that “this liquidity environment cannot go on forever […] the longer it lasts the worse it will be when it ends.”
William Conway, one of the founders of private equity firm Carlyle Group. In his annual letter to the firm’s staff earlier this year, he acknowledged that “this liquidity environment cannot go on forever […] the longer it lasts the worse it will be when it ends.”
Collapse of top companies - Sec. Analysis Dilemmas
“Forbes100” from 1917 to 1987:
39 members of the Class of ’17 were alive in ’87;
18 in ’87 F100;
18 F100 “survivors” underperformed the market by 20%;
just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.
S&P 500 from 1957 to 1997:
74 members of the Class of ’57 were alive in ’97;
12 (2.4%) of 500 outperformed the market from 1957 to 1997.
Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market
39 members of the Class of ’17 were alive in ’87;
18 in ’87 F100;
18 F100 “survivors” underperformed the market by 20%;
just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.
S&P 500 from 1957 to 1997:
74 members of the Class of ’57 were alive in ’97;
12 (2.4%) of 500 outperformed the market from 1957 to 1997.
Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market
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