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Amazon.com said that it will invest $2 billion to expand in India as competition for customers heats up in the fast-growing, South Asian e-commerce market.

#India #investment #Amazon

REPOST: Why you won’t fit into the investment bank of the future

Investment banking is not for everyone. Aside from the set of skills needed to excel in the workplace, bankers must also have the right attitude to stay on top of their game. This article outlines the areas that you need to improve to become a successful investment banker.

Do you have a place here? Image Source: news.efinancialcareer.com

Is your investment banking career for life, or just for an intense period of your mid-20s and early 30s? What are the signs that you should be preparing for a future adrift from the banking sector - if not now, then in five years’ time?

Banking has always been a turbulent career, but as the industry adapts to the kind of landscape laid out in Morgan Stanley’s report on the future of banking, positioning has never been more important. If you agree with any of the statements below, you may want to alter your orientation while you still can.

1. You won’t fit into the investment bank of the future if: You can’t code or are doing a job that could be done by an algorithm

If you want to endure in banking now, you need to know your technology. This is where the future lies.

Take Barclays: CEO Anthony Jenkins has said that banking is in the midst of a ‘technical revolution.’ Barclays is automating as many processes in the investment bank as possible. Along withHSBC and UBS, it’s also setting up its own financial technology (fintech) accelerator to sponsor the growing fintech sector. Unsurprisingly, fintech start-ups are thriving.

2. You won’t fit into the investment bank of the future if: You can’t build external relationships whilst playing internal politics

Banks have become more political. In the past, a tide of rising revenues lifted the careers of a lot of people. Now that revenues are increasing more slowly – if at all – success more often comes from politicking and playing the system.

“When growth goes out of the industry – as it has in the past seven years, you can’t elbow your way to the top table just by dint of your success,” says one investment banking headhunter, speaking on condition of anonymity. “You have to play the system and you have to work your way up through the bureaucracy.”

At the same time, in investment banking divisions (IBD) at least, relationships are still king. But those relationships are different to in the past – as a senior relationship person in an investment bank your primary responsibility is to sell the financing and advisory capabilities of the bank employing you – not to offer impartial advice to your clients. “It’s only about cross-selling, cross-selling and cross-selling,” says the headhunter. This is one reason why senior advisory bankers are still quitting for boutiques.

3. You won’t fit into the investment bank of the future if: You’re impatient for success

As we’ve noted before, VP and director jobs have become the worst places to be in a bank. Now that promotions are harder to come by, mid-level bankers are getting stuck in these positions for years. It’s increasingly likely that your banking career will stall, or end, in your mid-30s.

“It’s hard, only three or four people from director classes of 40 or 50 are getting promoted,” says the headhunter. “It’s worse for the mid-level people who put in the hard work as analysts and associates in the expectation that they’d make big money, and are now stuck,” observes one veteran equity researcher.

4. You won’t fit into the investment bank of the future if: You’re not 100% committed to a banking career

The MBA students who get jobs in banks now are, “committed,” says Richard Bland, head of employer engagement t London Business School. They know that they want to work in banking, know what it involves, and are prepared to work as hard as necessary, he adds. Many also have prior banking experience.

5. You won’t fit into the investment bank of the future if: You’re not a culture carrier

As Deutsche Bank’s big HR report confirmed yesterday, banking now is all about talking the talk. And the talk is all about changing the culture. Colin Fan, the co-chief executive of Deutsche’s investment bank has warned his staff against committing vulgarities. This is being backed up by HR: yesterday’s report says Deutsche is “living a new culture”, it’s effecting “cultural change” and senior staff must become “culture carriers,” who will propagate the new cultural values across the firm. In this environment, there’s less room for superstars.

6. You won’t fit into the investment bank of the future if: You’re a maverick

Whereas banks in the past were prepared to tolerate superstars if they brought in revenues, this is no longer the case. “The people who succeed now are a bit bland” says one headhunter. They keep their heads down. They don’t ruffle feathers. They play politics (see 2).

7. You won’t fit into the investment bank of the future if:You’re doing a job that could just as easily be done in a ‘low cost centre’ by a low cost person

Deutsche is shunting jobs to low cost centres. So is Goldman Sachs. In the new wave of off-shoring and near-shoring it’s not just technology jobs that are being moved away from the big financial cities. – Deutsche is creating a full 270 person trading floor in Britain’s Birmingham. From there, it will serve ‘low touch customers’ who don’t need a lot of maintenance. If you’re a sales trader who works with hedge funds, you should be fine. If you work with small corporate clients who are happy to access markets directly, your probably won’t be.

8. You won’t fit into the investment bank of the future if: You require a lot of capital

Capital-intensive banking jobs are on the way out. Every firm is cutting the amount of capital devoted to its investment bank. If you work in a capital-intensive area of banking, you can expect to go the way of correlation traders past.

9. You won’t fit into the investment bank of the future if: You’re entitled

Generating big revenues, or even big profits, and being a star player are no longer passes to big money in banking. As banks spend more on regulation and controls, front office bankers must acknowledge the importance of the banks’ infrastructure in enabling their success. A sense of entitlement based upon individual P&L is no longer appropriate. Accept that now.

Follow this Doris Wiley blog for more discussions on banking and finance.

#investment banking #investment bankers #investment banks #investment banking tips

Dory Wiley has been in the investment banking and management industry for more than two decades now....

#Dory Wiley

In the eyes of investors, U.S. companies with solid finances look almost as safe as the U.S. government.

#investing #invest #finance

Dory Wiley is the president and CEO of Commerce Street Holdings, LLC, an investment banking firm that also runs Commerce Street Capital, LLC (CSC), a FINRA-regulated broker/dealer, and Commerce Street Investment Management, LLC (CSIM), an SEC-registered investment advisor.

#Dory Wiley

The difference between active and passive management

Investment pundits have often debated on what’s the best way to manage one’s investment portfolios. While some advocate active management, others prefer a more passive method. Each management type has its own set of pros and cons, but the main difference has to do with the target index. The index is a benchmark, usually a measure of the market’s performance determined by the performance of investments from a certain group of securities.

Image Source: portfoliomanagement101.com

Active management seeks to outperform the target index, and actively-managed funds are often run by professional investment managers. These managers use a variety of systems to capitalize from marketplace shortfalls (for example, managers may research company stock prices and compare them to the market). These methods are often heavy on analysis, and seeks to see a general picture of an investment’s future performance.

Image Source: investmentnews.com

Meanwhile,passive management is much simpler, as it only intends to match index returns. A passive management method is built around the perception of efficient markets, with little or no shortfalls. Passive funds usually use a sampling or replication method to track the target index. Because of its simplicity, passive management professionals often charge less than active managers.

Image Source: telegraph.co.uk

Dory Wiley is an investment management expert and current president and CEO of Commerce Street Holdings. For more references on various investment methods, follow this Google+ page.

#investment #investment management #passive management #active management

Robert Powell offers personal finance advice for USA WEEKEND

#personal finance tips #finance tips

REPOST: Why Stock Traders Should Want The U.S. To Stay Alive In The World Cup

Even U.S. stock traders are catching soccer mania as the world is tuned to the 2014 World Cup. Alexa Davis of Forbes.com notes the odd correlation between the World Cup and equity markets.

U.S. forward Clint Dempsey celebrating his goal against Portugal on June 22. Image source: Forbes.com

The U.S. Men’s National Team puts its World Cup life on the line against Germany Thursday, with a win or tie assuring the squad advances to the knockout round and a loss putting the American team at the mercy of tiebreakers with Ghana or Portugal. That may not seem to have much to do with stocks, but it turns out a loss in the World Cup has an odd relationship to equity markets.

According to research from Alex Edmans, an associate professor of finance at the University of Pennsylvania’s Wharton School of Business, stock markets of losing countries experience an “abnormal stock return” of negative 38 basis points (0.38%) the day after losses in the World Cup group stage, a figure that rises to negative 49 basis points (0.49%) following losses in the knockout stage, which the U.S. hopes to reach following Thursday’s match with Germany.

The effect is “stronger in small stocks and in more important games,” Edmans and his colleagues found and from here out the games only get more crucial for the Stars and Stripes. Thursday’s showdown comes after a stirring win over Ghana, thanks to a late goal by substitute defenseman John Brooks, and a tie snatched from the jaws of victory against Portugal when superstar Cristiano Ronaldo stole the win from the U.S. with a brilliant last-second assist.

The research by Edmans’ and his colleagues controls for other factors that can impact national markets, in order to achieve a “soccer-related return” that equals the average loss figures above. While most market participants would dismiss such statistics as mere quirks, the World Cup tendencies are just one example of the type of anomalies that make their way into investing legend. Like the others that follow, the likely impact of a Wall Street move based on a World Cup exit falls somewhere in the grey area between gospel and gimmick.

The January Effect

In 1976, researchers Michael Rozeff and William Kinney Jr. found that equally-weighted indices of all stocks on the New York Stock Exchange had abnormally high returns in January as compared to other months, an impressive 3.5% while all other months averaged a measly 0.5%. Some theorize prices tend to swell in January because investors sell in December to lessen tax burdens through capital losses. Others say the trend may result from investors looking to spend cushy year-end bonuses on new investments. If you’re looking for the real January winners though, look to small caps. According to University of Pennsylvania professors Marshall Blume and Robert Stambaugh, small company stocks beat the market in January for 65 out of the 70 years between 1926 and 1995. But get over your New Year’s hangover quickly. Blume and Stambaugh’s colleague Donald Keim found that 50% of those excess returns occur in the first five trading days of the years.

The Weekend Effect

Studies by the Federal Reserve have shown markets see negative returns while investors are away from their desks over the weekend. Similar to the January Effect, the Weekend Effect has the most influence on smaller firms, which usually boast the highest returns among all-sized company stocks. This phenomenon can be explained by the tendency of investors to sell stocks on Friday afternoon to lock in gains or avoid the risk of an adverse development over the weekend. Richard Rogalski, professor at the Tuck School of Business, performed additional research on this effect and discovered weekend returns actually move in the opposite direction during the first month of the year.

The Hemline Index

Vogue may be creating more issues than they think. According to economist George Taylor’s Hemline Index, markets rise and fall with the length of skirts in women’s fashion. The theory is pretty simple — hemlines climb during periods when people feel free and easy about the economy, and descend when things get more uptight. Although this may seem utterly bizarre, there are examples. The micro-miniskirt trend of the 1960s coincided with notable economic expansion, which came to a screeching halt when both maxi skirts and stagflation became household terms in the 1970s. A similar pattern emerged in 1929 when flappers’ daringly short dresses disappeared from the pages of fashion magazines, sending hemlines and the stock market into a downward spiral. Don’t start flipping through the pages of your Macy’s catalog so quickly though, the theory is far from ironclad and is roundly criticized by market-watchers.

The Turn of the Month Effect

Take a pen and mark the turn of the month on your calendars. Studies of the stock market have shown there is a temporary price increase during the last and first three days of each month. In fact, this short four-day period has a higher combined return than all 30 days in a month. It is important to note returns during the second half of a month are negative, meaning that a significant portion of gains must occur during the first two weeks and turn of the month. Researchers have ascribed this strange price pattern to the timing of monthly reinvestments of pension fund distributions in the stock market.

The Holiday Effect

It’s never too early to start a holiday celebration. In studies replicated by many researchers, it has been determined that the Dow Jones industrial average has abnormally positive performance the day before national holidays. The economically and statistically significant trend is pretty shocking. For the 90 years preceding 1987, 51% of capital gains occurred during these few days. For an equal-weighted index of stocks, a mean return of 0.529% on “pre-holidays” is nine times greater than other days.

Rosh Hashanah and Yom Kippur Effects

University of California, Los Angeles professor Avanidhar Subrahmanyam believes market movements are in sync with the mood swings of Jewish traders, who are in good spirits when celebrating the Jewish New Year and solemn during Yom Kippur, a holiday of repentance. In a 2004 study, Subrahmanyam discovered the S&P 500’s daily return is 22 basis points higher than its 4 basis point average during the Jewish New Year, also known as Rosh Hashanah. Only 10 days later during Yom Kippur, the S&P 500 underperforms by an average of 29 basis points and new years’ cheers subside. In additional research, he did not find any significant patterns during other religious holidays when markets remain open.

Commerce Street Holdings' Dory Wiley is an investment banker and manager and is one of the most respected names in the financial industry. For more on him and his career achievements, visit this website.

#World Cup #stocks #stock trading #trends #unusual occurences

Some stick to conventions while others, like investment firm owner Ray Dalio, teach new tricks.

#Ray Dalio #Dory Wiley #finance

Congress no longer understands the value of science. Scientists need to speak up and remind political leaders that only by investing in research will we obtain cures for cancer, Alzheimer's, heart disease, and the many other diseases that affect us most. Instead of sending more dollars to Iraq and Afghanistan, who don't even want the U.S. there, let's invest in research here at home.

#invest #war #science

Facebook is the operating system for people's lives.

#invest #Facebook

Fidelity executive says that retirees need to invest in equities to outpace inflation.

#investment #retirement

Commerce Street Capital

#Dory Wiley #Commerce Street Holdings

Often SMBs omit any type of formal results-monitoring system to measure results against expectations. It’s a sadly common occurrence that the founder is not even aware what it is that he or she should be measuring to determine how successfully (or more frequently, unsuccessfully) they are realizing the goals of their plan.

#finance #business finance

#Dory Wiley #investment

#finance tips #Warren Buffett

The president and CEO of Commerce Street Holdings LLC, Dory Wiley has received widespread recognition for his unparalleled abilities in leading investments to some degrees of profitability even...

#Dory Wiley

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