WolfOfMainStreet

That was what I was thinking going into Accounting. I wouldn't hire myself if I was a hedge fund manager either. I also think it has to be a good combination of what you know, who you know, and how creative you are. Most of the ivy league or networking boundaries are artificial if you really apply yourself. Just curious what majors do you guys have? Anyone do anything math and finance related?

Hello All, I've been kidnapped by school for a while but I finally have the time to make this post. Over the past couple of months I have lost a lot of sleep thinking about picking majors and a path into the business field. They say man plans and god laughs but it still doesn't hurt to have some kind of general plan for my near future. I started college as an accounting major. In high school I figured out a way to buy jewelry and flip it for about 5x the price. I realized at this point that business was for me. I barely knew anything about finance or accounting so I just picked the latter and stuck with it. The good part is that I am finishing up the general requirements for the business school in which I can either pick accounting or finance or a few other majors. I still have a good month or so to decide before I can apply for the business school. So far my research and thinking is pulling me hard toward finance. It looks like I will be picking this over accounting but I don't want just a plain vanilla path into finance. Let me explain some reasons for this. What is wrong with accounting for me: 1) Bachelor's in Accounting is fairly worthless unless I pursue a CPA which means a GMAT exam and another year. 2) Every single accounting class in my school is curved so that about 40% of the class (this percentage varies in some of the upper classes) has to fail. This means basically curves up in the introductory classes and often curves down in the intermediate classes. I know people with 80s on their exams in the intermediate courses who have a C because of the curve. Curves to me are completely worthless and a waste of time. 3) The hardest accounting course in my school is called "Cost Accounting" which mainly focuses on accounting in a manner that reduces costs in mostly factory based scenarios. According to an adviser about 50% of the students drop and change majors because the class is ridiculously hard. Graduated accountants I have spoken to tell me they never used anything learned in that class in any work. 4) I see accounting (at least the first couple of years) as being a very mundane profession. No offense to anyone reading this post. Again this is my personal opinion about me doing this type of work. Them methods make sense to me but I would rather be reading financial statements and making inferences than creating them. 5) Cost vs. benefit analysis. Accounting seems to be a "safer" choice but the potential upside can take years to happen and countless hours slaving away at source financial data. My opportunity cost would be going the less "safe" route for a better potential upside. This is why I am leaning toward finance. Why finance and the plan not to be vanilla: Things like hedge funds, value investing, and security analysis excite me. I like the idea of crunching a bunch of numbers and making investments based on inferences. I feel like I could do that for years and not get bored. Even now when I am reading some annual/quarterly reports or financials and make somewhat correct predictions it makes me feel really good. The finance classes in my school are relatively flexible and they don't have the horrendous curving system of the accounting classes. I also recently had a finance internship that had to do with trading bad debt in bankruptcies and I always enjoyed talking to the analysts. The thing is that just having a BBA in Finance or an MS isn't something I only want. I want to really stand out. This lead me to research something called financial engineering. Basically it is a lot of advanced calculus, finance, statistics, and programming put together. My school only has a master's program for this and the acceptance rate is something like 6% so I'm not betting the farm on it. So this is basically my plan for now. My plan is to major in finance and take some of the advanced math courses at my school in order to prep myself for a good try at the MFE program. If that doesn't work out its off to grad school or work then CFA. Why math? Some of the higher level math courses are very interesting in relation to finance and they definitely have some applications. They include: Introductory Financial Mathematics Introduction to Probability Introduction to Stochastic Process Computational Methods in Probability Risk Theory Algorithms, Computers, and Programming What am I doing in the meantime? Constant research on all of this. Learning finance and accounting on my own outside of school. Reading annual/quarterly statements and making test portfolios. Meeting with department heads and professors to get all of my questions answered. Reading Businessweek, SeekingAlpha, this forum, and a few blogs such as Oddball Stocks (I like this one a lot). Reading Security Analysis (2nd edition). Does anyone have any specific experience with MFE, CFE, MBA, and MS degrees for finance? Does my plan seem good to you or would you change anything? Questions, thoughts, or opinions? Just trying to apply myself correctly. I know college isn't everything but I want to make the right choice. Appreciate any feedback. Thanks, Wolfie

I don't know much about this stuff but I have a curious question. What other incentives are there for Lehman to do this deal other than the $16.5 million "profit"? I mean it seems that the worst case scenarios are highly unlikely and the "profit" is relatively low. Also, how would you know how much of a bank's or investing institution's profits are due to futures and derivatives? Is there a sort of term or measurement that aggregates these profits but separates them from others such as lending and insurance? I'm pretty much a newbie when it comes to this stuff and I'm just trying to grasp the concept.

[amazonsearch]Predictably Irrational [/amazonsearch] After reading books like Buyology by Martin Lindstrom and Blink by Malcolm Gladwell I started getting a serious interest in understanding what motivates consumers. My general introductory economics classes offered me a more "rational" picture of things but looking all around me I saw people buying impulsively and neglecting to save. I believe that we are light years away from the world in Adam Smith's The Wealth Of Nations. The invention of credit cards and the detachment from physical cash has pushed us into a new age of consumerism. While Smith's concepts of the invisible hand and the division of labor still make sense today our modern economy has changed substantially. After a few online searches and some reading I stumbled onto something called behavioral economics. Eventually after a recommendation from a friend I picked up Predictably Irrational by Dan Ariely. He does a great job at covering subjects like relativity, supply, demand, free, norms, arousal, self-control, ownership, price, opportunities, and expectations. At first I thought this book was more theoretical but he uses a legitimate scientific approach to apply his ideas. If there was ever a writer who could really get into the psychological side of business it would be him. Dan has a PhD in business administration and a PhD in cognitive psychology. Needless to say the stuff he writes about has many implications in the personal and professional realms. I'm pretty sure any value investor can read this book and take away a few things that could really help them. Without spoiling too much about the book I would recommend this to anyone who as an interest in investing, business, or psychology. The "Revised and Expanded" edition is around three hundred pages. You could finish this up in a couple of weekends of relaxed reading. Here are some links if you are just wondering about what's inside before giving it a read. http://zsoltbabocsai.org/dan-ariely-predictably-irrational/ http://bookoutlines.pbworks.com/w/page/14422685/Predictably%20Irrational and Dan Ariely's website: http://danariely.com/ I am in no way affiliated with him or getting compensated for this. I just legitimately like the book. I also recommend the first two books mentioned in this post. Happy reading and investing, Wolfie

Thank you all for the wealth of information and high quality answers. I will try to summarize all of the advice that I will take away from this discussion. While the classical value investing books such as Security Analysis and The Intelligent Investor are difficult to understand I am still going to take a crack at them. I am doing this for two reasons. The first is that I am a strong believer in the value of history regardless of how difficult it might be to understand. The second is that I enjoy reading on my free time and I've still got plenty of time until I start investing this summer. My logic is also that if I really can't understand the fundamental ideas that Graham and Dodd are talking about then maybe investing isn't for me. I took a little peek into the preview of Security Analysis and so far I understand most of it so I ordered the book. Although a position of just 1K doesn't seem like much and the brokerage fees will be a pain I believe the experience I will learn from making (or probably losing) money will prove to be invaluable. I am definitely a more "hands on" type of person. I would also like to apply the ideas and opinions I extract from those classics into the actual market to see what works best where. As for my majoring in Accounting, the "accounting sucks" thing is something I am very well aware of. This is something that has kind of pushed me towards finance in the past couple of months but for now I am sticking to my first choice. I am not that far into Accounting. Value investing is something I want to research heavily during my time off and manage during my time in class. The things I want from investing this 1K are (in order of importance): understanding a business from every angle, gaining experience specifically from trading stock (beating Mr. Market), and lastly to see some kind of decent return. I will take the first two without the third and still be happy. Thank you all for so much help, Wolfie

Thanks for the detailed reply! I'm going to take all of your advice step by step. I did a quick search for "Security Analysis by Ben Graham and David Dodd" and I got a ton for results. Here is the link: https://www.google.com/search?q=Security+Analysis+by+Ben+Graham+and+David+Dodd&rlz=1C1CHFX_enUS553US553&oq=Security+Analysis+by+Ben+Graham+and+David+Dodd&aqs=chrome..69i57&sourceid=chrome&espv=210&es_sm=122&ie=UTF-8#q=Security+Analysis+by+Ben+Graham+and+David+Dodd&tbm=shop&spd=0 Which version do you recommend the most? The first one looks awesome but its a bit out of my budget. After I'm done with the book I'll move on to the blogs. Reading those 10-Ks on a daily basis!

As a newb myself (less than one year of investing experience) I'm finding "cloning" to be pretty successful. I'm at 55% IRR right now by picking up several suggestions I feel comfortable with on this board and looking over the super investor's filings. Watch all of the Mohnish Pabrai videos you can get your hands on for more info. By cloning you mean copying the big guys? Also by 55% IRR you mean just on test portfolios you've made or actual money you've put in? Sorry not too keen on some of the more technical terms. Will check out Mohnish Pabrai. Thanks!

Hello value investors! I only recently started looking into value investing and reading up on people like Graham, Buffett, Lynch, and Greenblatt. While value investing seems like the best way to go for me I still have plenty of questions. There are tons of stock screeners and guides out there. I know some of the basic ratios such as P/E, P/B, P/S, PEG, etc. I'm also familiar with the basic ideas of profits such as gross, net, EBITDA. So basically I can look at an income statement/balance sheet and have a general idea of what's going on. While I do have a general understanding of these statements and big businesses, my test portfolios in the past have not performed as well as I wanted them to. I did learn from some of my mistakes but I am still not confident enough to put any of my own money out there. I am currently a college student majoring in Accounting with about $1000 that I want to put into the market hopefully by the summer. I know diversification is key to investing but since my budget is pretty small I am looking to buy and hold no more than three stocks at a time. I'm not looking for anything to be handed to me or just to copy someone's portfolio. What I'm asking is to be pointed in the right direction. Which valuing formulas and approaches have worked well for you in the past? What screeners do you use? Any advice for someone like me starting out? Here are some of the screeners and tools I use: http://www.valueexplorer.com/ (This one is probably my favorite so far) https://valuemystock.com/screeners/ (Seems pretty sophisticated but not too sure about this one) http://seekingalpha.com/ (Pretty much a must have for any investor) Some formulas I had questions about: Yay or nay? http://www.buffettsbooks.com/intelligent-investor/stocks/intrinsic-value-calculator.html (Interesting to me) (Seems pretty basic) Daniel P.S. I have been browsing through some of the posts before I signed up to this forum. The posts are very high quality and civilized. Love this forum so far, thanks in advance for any replies!