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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 

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In my experience...it is not quite what you know, but WHO you know.  Where you graduated from is also tremendously important.  Unless you go to a higher ranked school, you will have EXTREME difficulty getting into the higher levels of the finance industry.  In fact, I would argue this is absolutely the single most important thing.

 

Of course, you have to have very good grades, and know your stuff forwards, backwards, up & down...

 

Accounting is still a good pick.  You can get hired in accounting, even from a lower ranked school.  Of course, accounting is critical to understanding finance.  Accountants can also make good money.  It is a solid base to add to.

 

Don't worry about the accounting courses being graded on a curve.  Study hard, work hard and set the curve yourself.

 

Also, remember to stay away from student loans!

 

Good luck to you.

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Guest deepValue

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).

 

This is what I did in college. Unfortunately, I paired my outside learning with a degree in finance. My biggest regret is not majoring in something that I didn't know much about. A liberal arts or natural sciences major would have been more interesting.

 

Although majoring in business will give you access to finance recruiters, enterprising soon-to-be-graduates with non-business majors can get in front of hedge funds/banks as well. A lot of those companies don't expect you to know too much about investing/making perfect PowerPoints (what you'd be doing at a bank); they're mostly interested in getting smart people into their training program.

 

Your major isn't as important as it seems. Unless you're planning on going to medical school, you can pick just about anything and get a job doing just about anything. Start looking for internships right now and build relationships with people at hedge funds (or wherever you want to end up after college). The summer after your sophomore year is the perfect time to go work for someone for free. You'll have that on your resume to get a better internship after your junior year, which will then translate into a decent job after college. Between your major and your life experience (internships, entrepreneurship, community service, etc), your life experience is a much more important factor in many employers' (especially business employers) hiring process.

 

Focus on developing interesting extra curriculars, make good grades in whichever major your choose, and network like crazy (local money managers are a good place to start). That's all you really need to get a job in finance.

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In my experience...it is not quite what you know, but WHO you know.  Where you graduated from is also tremendously important.  Unless you go to a higher ranked school, you will have EXTREME difficulty getting into the higher levels of the finance industry.  In fact, I would argue this is absolutely the single most important thing.

 

I couldn't disagree more.  This type of thinking is dangerous and will ruin the Ivy league grad due to a false sense of entitlement, and will ruin the non-Ivy league grad by encouraging early defeat. 

 

I retired young after 25 years in the finance industry and I can assure you that contacts, networking, and degrees from self-important schools are meaningless.  What matters is your positive attitude, and your effectiveness in helping others (read=your bosses) meet their goals.  I saw one recruit get hired for having the guts to tape his resume to a pizza box delivered to the head of trading at lunch time.  I saw another with a community college degree spend time getting coffee, fixing printers, running errands, and became so well liked they made him a junior trader.  Today, he runs the High Yield desk.  My last boss graduated from Kutztown State (how many can even guess which "State" this school resides?).  I could go on and on.  The point is that there is always a position for people with a good attitude and in the end it doesn't matter where you came from.

 

My advice:  Stop strategizing.  Spend time on the things you enjoy. Find those that could benefit from your efforts and offer your work to them.

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I agree 100% with Onyx.  I think it is important to have a funny as it sounds is a servant/steward attitude towards the folks you work for.  That does not mean doing everything they say and think but if you don't think the action is correct having a rationale for your disagreement and being able to express that in a positive way.  It also helps if you a doing something you are passionate about so you can bring some insights you have developed outside of the data you were given for your task.  Your attitude is something you can control versus what you cannot (other folks contacts).  I have seen similar stories to Onyx in our business.  We had one guy stop by our place looking for a summer job and we hired him as an intern then as a research analyst and was one of our best.  The combination of attitude and intelligence is what it takes.  BTW he had an English degree.

 

Packer

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i read hedgefund wizards, and it was interesting how all those guys got into it. One guy had a liberal arts degree, and when he got hired he found out they didnt like people with accounting degrees. Because in their opinion, what kind of boring creativeless dolt starts out studying to be an accountant at 18  :) , they figure if the hire was smart, they would be able to teach him quickly anyway..

 

Most of them got into it the ways onyx describes really.

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Because in their opinion, what kind of boring creativeless dolt starts out studying to be an accountant at 18  :) , they figure if the hire was smart, they would be able to teach him quickly anyway..

 

Most of them got into it the ways onyx describes really.

 

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?

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I would never study accounting in college.  I studied finance, and am now working with finance and some engineering.

 

 

I wouldn't study accounting because:

 

 

  • It's really boring
  • It's not the closest thing to what can really make you lots of money and give you job freedom later, such as finance, law, and definitely engineering (mostly software but there are other kinds).  Money isn't everything here, it's just most accounting tracks are standard and there's less rapid upward-mobility in accounting
  • It's boring
  • I doubt you will be passionate about accounting (I've never met a passionate accountant that goes home thinking about their interesting problem, how they can improve their field and make peoples' lives better ok, except Buffett and Munger, but they didn't train as accountants)

I echo the thoughts of studying something I didn't know anything about.  I knew quite a bit about finance from my parents but studied it anyways.  I wish I could go back and study something that would help me make the world a better place AND have a nice life for me and my family.  This is totally possible today, especially starting out at 18!!

 

 

If I was going to college again I would study computer science, unequivocally.  CS has by far the most upside for an ambitious person today.  It offers creative outlets, and fixing one's problems.  You can start dozens of businesses using CS in a lifetime, with essentially zero capital.

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My thought on the "It's who you know" angle of things. I work in technology not finance but I hear this quite a bit in my industry as well. Most of the work I have done over the past 8 years came to fruition through my network or "Who I know". Resumes and interviews as this point are usually just a formality. However these relationships are generally built on experiences I have had working with the people in my network over the past 16 years. Part of the reason why knowing these people is valuable is because they know me, my experience and work ethic.

 

In my opinion "Who you know" is a product of working hard from the ground up and creating a reputation for yourself. Knowing people without having the rep and track record will not get you very far IMO, it may open some doors but if you don't have the work ethic to back it up it will fizzle out. However if you work hard and don't know anyone, your network will materialize over time. Its hard to go unnoticed when you are bright hard worker.

 

My suggestion would be to study something your sincerely interested in, something that excites you regardless of what it is. When the time comes to look for a job, find some places you want to work and do whatever you can to get your foot in the door. Take positions or work you think may be beneath you if needed and then kick some serious ass once you are there. Maybe you won't need to do that, maybe a great opportunity will find you. But don't wait around for it. 

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Networking is important but don't confuse real networking with the version that they tell you about at business schools.

 

Business school's twisted version of "networking": begging strangers for jobs

 

Real networking: providing value to people without asking for anything back to make genuine friends

 

Keep in mind that the key is "providing value". You can't provide value unless you have a skill. And you can't get a skill from the stuff you learn from school; it's just not enough. If you are interested in deliberately learning and developing a skill, you have to do it yourself and there are plenty of resources on the Internet that can help you do that (like this place).

 

If your passion is in value investing, I would go with accounting over finance, and the reason is accounting is simply more relevant to the value investing process - it's the language of business that helps you understand a business's fundamentals. Most finance courses taught at business schools are totally useless and can be easily learned on the Internet. I remember running linear regressions on historical stock returns as the main project for my "investments" class.

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My suggestion would be to study something your sincerely interested in, something that excites you regardless of what it is. When the time comes to look for a job, find some places you want to work and do whatever you can to get your foot in the door. Take positions or work you think may be beneath you if needed and then kick some serious ass once you are there. Maybe you won't need to do that, maybe a great opportunity will find you. But don't wait around for it.

 

 

spot on.

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My suggestion would be to study something your sincerely interested in, something that excites you regardless of what it is. When the time comes to look for a job, find some places you want to work and do whatever you can to get your foot in the door. Take positions or work you think may be beneath you if needed and then kick some serious ass once you are there. Maybe you won't need to do that, maybe a great opportunity will find you. But don't wait around for it.

 

 

spot on.

 

Exactly. I wanted to post a reply but this would pretty much be it. One thing to add: while going to university most students have a vague plan about their future. But really 90% of them end up doing something completely different. You have no clue, so pick the most interesting study, work hard and enjoy it. Don't let financial incentives decide whether you do finance or accounting. On average both will be fine and present a similar set of opportunities. (might be different if you have to choose between dentist and classical languages)

 

No matter what you do, take as many easy classes as you can and get the highest possible GPA you can get. Seriously.

 

I would never suggest the first part. It's not all about the end result.

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You might want to go the accounting route, & include a CIA. You cannot grab the world by the cohones, & squeeze, unless you have something to fall back on. You are not always going to avoid getting kicked; so when it happens, & it will - you need to be sure you can land on your feet, & anywhere.

 

Cost accounting is one of the most valuable courses you will have been taught, you just do not realize it. If you ever go into business for yourself, you will be doing it in your head as naturally as breathing, & it will be that ability that lands you the next bid. Talk to any controller/finance manager, who is not in Financial Services. You will also see the value of those 'flake' courses you had to take, & kick yourself for not doing more of them; as many an engineer discovers 10yrs into their career.

 

Accounting & finance are not exclusive, & lots of accountants go on to do a MBA in finance.

If you wish to own/run any kind of significant business; you will have to as well.

 

Squeeze, & squeeze hard!

 

SD

 

 

 

 

 

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No matter what you do, take as many easy classes as you can and get the highest possible GPA you can get. Seriously.

 

There is a LOT of wisdom in this. 

 

I would add to also ONLY take enough classes to graduate.  I foolishly took a TON of courses because I liked learning stuff & 18 credit hours cost the same amount as 12 credit hours.  So I always took 17 & 18 credit hours.

 

It was all fun & games till I got a C+ my senior year...

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On the other hand, if you want to be amazingly successful eventually, perhaps you should follow the path of one who drifted through college, doing as little of the required work as possible, questioning everything, not always following  the rules, so that one of his professors called him: "that lazy dog", despite his obvious intelligence.

 

He was not able to get a job in his chosen field for a number of years after graduating, after many attempts. Yet, strangely, he became one of the most successful people of all time.

 

Who was that man?

 

Albert Einstein :)

 

 

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You might want to go the accounting route, & include a CIA. You cannot grab the world by the cohones, & squeeze, unless you have something to fall back on. You are not always going to avoid getting kicked; so when it happens, & it will - you need to be sure you can land on your feet, & anywhere.

 

Cost accounting is one of the most valuable courses you will have been taught, you just do not realize it. If you ever go into business for yourself, you will be doing it in your head as naturally as breathing, & it will be that ability that lands you the next bid. Talk to any controller/finance manager, who is not in Financial Services. You will also see the value of those 'flake' courses you had to take, & kick yourself for not doing more of them; as many an engineer discovers 10yrs into their career.

 

Accounting & finance are not exclusive, & lots of accountants go on to do a MBA in finance.

If you wish to own/run any kind of significant business; you will have to as well.

 

Squeeze, & squeeze hard!

 

SD

 

I always like the point of view of a (very successful) business owner! :)

 

+1

 

Gio

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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.

 

Bet the farm.

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I'll just toss up some general opinions since I was an undergrad accounting and finance major and have 2.5 Master's degrees in the same :P

 

Accounting really doesn't pay all that well unless you go the Big 4 route, and even then, if you sit down and calculate your hourly rate, it's not worth it. There are more job openings available in accounting, but the average pay rate isn't all that great (which just goes to show how much WORSE most other majors/fields are). Just to compare, I'd say a public school teacher makes more when you factor in the 9-month schedule and if they are willing to just put in the 35-40 hours a week and treating it like a "job" vs a "calling."

 

My experience with the subject has been that it is pretty much memorization. You don't really "get in" and "understand" the financial statements. Additionally, the whole major is obsessed with getting a job in public accounting, which if you're like most accountants, you won't, and then you'll secretly loathe learning all this Sarbanes Oxley minutiae ;)

 

That being said, don't even bother with finance unless you have connections, live in area with decent financial services firms that YOU want to and are able to get a job at (say you already did an internship with them). I'm very interested in value investing too, but I'm not going to pretend for a second that I'll ever do it professionally (even though I've had numerous finance professors who've never bought a single share of stock or derivative, but they have the PhD and I don't, so I can't question them).

 

The fact of the matter is that, for an average student at an average school, finance is a WORSE choice than accounting. Depending on where you are, you may be able to get a job at a podunk bank, but then again, you could do the same with the accounting degree.

 

Now, let's talk about the prominent designations in either field, the CPA or CFA. Let's look realistically at which one has a quicker route to actually obtaining the license. The CPA is pretty much offered year-round at prometric centers, and is broken down into 4 parts. If you get 150 hours (and the extra 30 hours can be in anything, again showing that it's just another hoop to go through, so you could pick up an extra "dummy" class every semester and do it without a Master's) and obtain 1 year of pretty much any sort of work experience (depends on the state, but most are very lax in what qualifies), you can get to add the CPA to your business card within 1 year.

 

However, the CFA test has parts 2 & 3 only offered ONCE a year. CFA level 1 is offered twice. You could get 1 & 2 done hypothetically in one year of course. They are more expensive (pretty much $1k a pop vs $1k TOTAL for the CPA). You can only take the CFA tests in certain cities (you may have to travel and account for that cost). Then, on top of that, it requires 3-5 years of more specified work experience, and even more if your duties don't fully "count." So you could go down this route, end up in a job that doesn't really count and require the CFA, and be done with 2-3 parts of the test and it pretty much not count for anything. The curriculum doesn't have anything to do with value investing, so it won't help you there. It is mainly a designation for analysts.

 

Really, both aren't all that great to be honest. I mean you may make double what an average full-time college graduate can make, but that extra money will be squeezed out of you. Sure, you can become CEO, CFO, etc., but what happens if you're not and you've wasted half your life selling widgets that people really don't need?

 

Fact is, either route is extremely risky and you're preparing yourself to be pretty domesticated as a worker. Just one slip up, and you can be blacklisted from the higher echelons of the field forever. Hope you're getting these degrees on the cheap :)

 

 

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I'll toss this out there too. The average accounting/finance job that a BA/BS in either subject could get are now being outsourced. There really isn't much reason to pay a domestic worker more for a task that pretty much at it's core is data entry and analysis. Sure, auditors and the like still have to physically go to the engagement sites, but I wouldn't be surprised if they keep requiring more education, certifications, etc. for people to keep the same job domestically. They've pretty much done that with the 150 hour requirement when before, well, just take a look at this:

 

http://captaincapitalism.blogspot.com/2013/09/10-years-of-unnecessary-hoop-jumping.html

 

TL, DR is MNCPA board chair didn't even have a college degree, but was able to pass the CPA when it was arguably harder to do so. Food for thought.

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Well, here's where the rubber meets the road.

 

Anyone here in a position to hire?  I'm looking.  Any advice would be greatly appreciated too.

 

End goal: Philanthropy through financial partnerships.

Current Position: Director of a 501©3, 6 years in position.

Background: BS Biochemistry (top WA state school), some graduate theological work (Vancouver, BC).

 

The experience accumulated has been technical and critical (biochemistry), for the past 7 years the soft skills of teaching, public speaking, and communication have been learned on the job.  Biochemistry was chosen because I wanted a challenge.  It kept me interested.  The job was chosen as well because of the challenge and it's opportunities to develop what my undergraduate had not.  Approaching 30 I find my temperament, analytic abilities, and passions align far more with value investing than anything else. 

 

The resignation was tendered this January, effective June 2015.  There is plenty of time to take any classes needed (accounting, economics, finance, etc).

 

Best position in 2013: HHC

Best ideas going forward: ALS.TO, FIATY

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Well, here's where the rubber meets the road.

 

Anyone here in a position to hire?  I'm looking.  Any advice would be greatly appreciated too.

 

End goal: Philanthropy through financial partnerships.

Current Position: Director of a 501©3, 6 years in position.

Background: BS Biochemistry (top WA state school), some graduate theological work (Vancouver, BC).

 

The experience accumulated has been technical and critical (biochemistry), for the past 7 years the soft skills of teaching, public speaking, and communication have been learned on the job.  Biochemistry was chosen because I wanted a challenge.  It kept me interested.  The job was chosen as well because of the challenge and it's opportunities to develop what my undergraduate had not.  Approaching 30 I find my temperament, analytic abilities, and passions align far more with value investing than anything else. 

 

The resignation was tendered this January, effective June 2015.  There is plenty of time to take any classes needed (accounting, economics, finance, etc).

 

Well, if you happen to have a lot of student loan debt, I would advise you to stick out at that position until 10 years total if the numbers work out. You can get a public service forgiveness at a non-profit on federal loans.

 

In regards to value investing, well, good luck. I'd say Nate at Oddball Stocks is the most prolific person in this space, and it doesn't look like anyone is going to come in and scoop him up. The fact of the matter is that it's a buyer's (i.e., employer's) market. Employers want you to do free work for years, THEN pick you up. I mean, the ValueUncovered guy developed a pretty good body of work and then got a semi-value investing related job. Course, I think he had a spiffy MBA degree too.

 

If you're interested in deep value investing a la Nate or me, there are pretty much no job openings, and even if there is, you have to haul yourself halfway across the country to get them depending on where you're located.

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Speaking of Biochemistry, I've got a friend who recently completed a PhD in Pathology. The only nibbles he is getting are in lab jobs that he could have pretty much done as an undergrad (or, if we're really honest, as a 16 year old with some on the job training). I've got another who has a Bachelor's in Biochemistry who is having problems finding the same sort of jobs since she lacks a graduate degree. As a matter of fact, she was trying to get a job at a place that just does drug testing on urine, and they wanted her to have a Master's :D

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Thanks TTT.  Research jobs are hard to come by, and hard to fund.  I'm the lone graduate in my class without a PhD or MD.  Most are MDs now, the PhD's have had a hard time in the job market.

 

I've thought about going back for a MS Finance, PhD Finance, or just working a lucrative job for 10 years and then managing my own funds.  Non-profit doesn't pay much, but I'm debt free (minus the mortgage), and save 500-800/month for investing.  Unless there's a serendipitous event where I get picked up as an analyst I'll probably go the lucrative job route for 10 years to build up investment funds.

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