Must Watch Movies for Finance Enthusiasts

Yes, you read it right! This post is going to be about movies that will entertain you as well as enhance your knowledge about the finance industry in specific and about capitalism in general. I've watched a good number of finance movies/documentaries purely out of interest and I find following 10 movies to be the best picks for my finance movies portfolio:

Wallstreet (1987) 

This is one of the first hollywood drama to be made about Wallstreet. The main theme of this oscar-winning movie is of insider trading and illegal means to get an edge in the stock markets. Here is one of the epic dialogues by protagonist Gordon Gekko in the movie:

"Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA"

Enron (2005)

This documentary depicts the collapse of the 7th largest US firm, Enron, to bankruptcy in less than a year. My favorite character in the documentary is Jeff Skilling, the CEO of Enron. He is shown as a person who takes risk, purely for the thrill of it. 

Too big to fail (2011)

Based on the events leading to the financial crisis of 2008. The movie has characters with actual names and real-life events. The movie gets it's name from the fact that US banks have grown so huge that their failure will lead to collapse of the global economic system i.e. they are Too big to fail.

Inside Job (2010)
It provides a comprehensive analysis of the global financial crisis of 2008. It presents exclusive research and interviews of key politicians, journalists, academics and finance people. The movie concludes that finance industry has gone rogue and has corrupted politics, financial regulation and academia.

Overdose (2010)
This documentary traces the origins of the financial crisis and explores the similarities in policy lapse of financially unstable states like Greece, Iceland and even the USA.

Rogue Trader (1999)
The real story of trader Nick Leeson, who singlehandedly led to the bankruptcy of Barings Bank, one of Britian's oldest and important bank.

Margin Call (2011)
A fiction movie depicting key employees at a bank 24 hours before the financial crash.

Zeitgeist: Addendum (2008)
This documentary is an excellent critique of our "fractional reserve" debt-money system and the "Federal Reserve System" that controls it.

Freakonomics (2010)
Freakonomics is a collection of documentaries that explores human behavior in various real-world scenarios using the science of economics. An example which is presented in the movie: Can you improve students academically by awarding them cash prizes? This movie analyses and provides conclusions to such out-of-the-box questions. This movie is inspired from the famous book that goes by the same name, you can read the book if it interests you.

Capitalism: A love story (2009)
This film examines the impact of corporate dominance on the everyday lives of Americans. It's a sarcastic and humorous movie that addresses a serious issue.

Any additional suggestions for movies/documentaries/tv-shows/books are most welcome! 

My Placement Story: Part I

The year was 2012 and it was placement season for me. It was an important event and I knew it was going to be hectic. This post will summarize my experience with IITB's placement process. Due to it's length I've divided it among several posts.


Resume uploading starts around mid-August and you have to prepare your resumes and submit them till mid-Sept. Remember that resumes are very important, because some firms simply shortlist candidates based on their resumes; so it's essential that you give a good impression. And anyways, even if the respective firm doesn't shortlist based on resumes, they'll definitely have a look at it. So it's better to prepare a decent resume. My advice:

• Take a look at a few of your senior's resumes and use them as templates.
• Make several drafts, and improve your resume incrementally; remember that every word on your resume is important.
• Use simple English. Don't try to show-off your vocab skills, it might back-fire if the interviewer misinterprets!
• After having a final draft ready, send it to a couple of your seniors asking them for advice. 
• Make necessary changes as per suggestions and upload!

Placement season structure at IITB
Placement season consists of 3 phases: Phase-1, Phase-2 and Phase-3. Below I list the important timelines involved in Phase-1, which is the most important phase:

1. Resume uploading (deadline in mid-Sept)
2. Pre-Placement talks (Last week of Sept - Last week of Nov)
3. Preliminary Tests conducted for shortlisting (First week of Oct - Last week of Nov)
4. Final Interviews for shortlisted students (1st Dec - 15th Dec)

Which firms did I apply?

I gave the tests of companies that I was interested in, and that must have numbered to around 35. Here is the  comprehensive list of firms with whom I was involved for the shortlisting process:

Tests started in the 1st week of Oct and the frequency of tests per week was around 2-3. But this frequency increased gradually as we approached November end. I remember precisely that I gave 5 tests on Nov 30th, just a day before the D-Day! It gets very hectic in the last week of November, and you don't get any time for preparing for final interviews. All I did was gave tests day-in and day-out in the last week of November; you simply don't get time for anything else.

Where was I shortlisted?
After going through the tests and other shortlisting methods of the above firms, I was shortlisted in the following firms for final rounds of interviews to be given on Day-1 and Day-2.

Day-1 (Dec 1st)

• Google 
• Microsoft
• Opera

Day-2 (Dec 2nd)

• Epic Systems
• GREE
• Works Applications
• Informatica
• Adobe
• Chronus
• Oracle
• Mylikes
• Walmart Labs
• Myntra
• Lexity
• Strand Life Sciences
• Dolat Capital
• Finmechanics

That's it for this post, I'll post about the intricacies and my horror story of Day-1 and Day-2's interview experience in upcoming posts. Keep checking!

PS: On after thought, this post seems to be very IIT-Bombay specific, but hopefully you may find some useful bits and pieces.

Breaking Into Wallstreet: Finance Interviews Prep

In this post, I will be focusing on preparation tips for Analyst-level finance jobs at major investment banks and other finance corporations. It's based on my experience with finance firms that recruited at IITB in 2012; so this post will make more sense for finance-enthusiasts at the IITs.

This post will not be focusing on Quant-finance profiles. If you need some fundae for preparing for Quant finance interviews, checkout Cracking Quant-Finance Interviews.

Integrating the following in your placement preparation routine should ideally help improve your chances of getting a finance job


Start reading a Financial daily
If you really want a financial markets role, you should know what's happening in the financial world and know it well. You should be able to answer questions based on important events that occurred in the financial markets over the recent years. For example, you might be asked 'Why did the 2008 crash occurred?', 'Tell me about what you think of Euro-zone crisis', 'What is Quantitative easing?' and so on. Reading financial news daily would help you answer above kind of questions. I suggest at least one of the following regularly:

• The Economic Times: Focused on Indian markets. Highly recommended.
• The Economist: It publishes some excellent finance and economics-oriented articles with interesting analysis and statistics. Recommended for those who absolutely love Economics.
• Bloomberg/Reuters: Focused primarily on US and European markets. Read them once in a while to get an idea about stuff going on globally.

Getting your Finance concepts 'Right'

Do you know what are derivatives are? What about options? If these terms sound greek to you, I suggest reading them up from the following sources.

• Investopedia: This is the wikipedia of finance. Read up the beginner's tutorials. Subscribe to Investopedia's daily word.
• Vault Guide to Finance Interviews: This is an awesome handbook that gives introduction to almost all topics in finance starting from stocks & bonds to currency & interest rates. 
• Vault Guide to Investment Banking: This one somewhat digs deeper into Investment Banking roles of Sales, Trading and Research and topics like Corporate Finance.

Financial Certifications 

• Although certifications like CFA and FRM are way too expensive (at least by Indian standards, especially after the Rupee has eroded in comparison to Dollar), clearing them would put you in the favorites-list of recruiters. Also, they demonstrate interest and dedication that you have towards the field of Finance, thus giving you an extra cut over others in the competition. 
• You can also pursue NCFM certification (National Stock Exchange's certification in financial markets)  for various finance modules.

Finance related Coursework 

• Show-off some course-work in subjects related to Finance and Economics. You should try out Finance/Economics related courses running in your institute. 
• You can pursue some from tons of Finance and Economics courses on Coursera like Game Theory, Introduction to Finance, Economics for Scientists etc. Here is the comprehensive list.

Internship in Finance

This is kind of mandatory. So try to get an internship in some role related to Financial markets if you are really interested in a long-term career in finance. 

CAT Practice
Give some mock CAT tests even if you are not going to appear for CAT. Most of the finance companies use aptitude test based shortlisting procedure and practice will help you get in the final interview shortlist. Practice Quantitative Aptitude and Data Interpretation sections from the CAT mocks, it will really help you do good on the tests.

Miscellaneous Websites I found the following websites to be great in terms of getting to know the Finance Industry and other interview tips. Do read them to know more. You can also ask your related doubts on the forums of some of these websites.

• Wallstreet Oasis
• Mergers and Inquisitions
• Economic Collapse

Firms that offer Financial Analyst profiles (IITB Placements, 2012)

• Tier1: Deutsche Bank, JP Morgan, CitiGlobal, Credit Suisse, Optiver, American Express
• Tier2: Capital One, Crisil, Finmechanics, Forefront Capital, FinIQ, Blufin, RAK Holdings

Google's Hiring Algorithm

Found this infographic on Jobvine, very interesting stuff. Gives a good insight on how complex and selective the process is!

How does one 'Get that job at Google'!

Following post is inspired from Steve Yegge's legendary post on prepping for Google Interviews.

Coding Knowledge C/C++ and Java are the preferred programming languages for Google Interviewers. You must know at least one of them really well. You will be expected to write code in the phone screen interviews and in the onsite interviews as well.

Recommended books for CS interviews: 

• Introduction To Algorithms - By Cormen
• Programming Interviews Exposed 
• Cracking the Coding Interviews
• Algorithms for Interviews

Recommended websites for coding practice: InterviewStreet, Topcoder

Big-O This should be the starting point in preparing for an algorithmic interview. You must not struggle with basic complexity analysis, as it will guarantee not being hired. You should be familiar and understand the O, Θ and Ω notations. I recommend reading section on complexity analysis from Data Structures and Algorithms book.

Sorting You should be able to write algorithms O(n*lgn) like QuickSort and MergeSort with ease. Compare and understand the best, worst and average case complexities. I found this table on wiki to be very handy; it lists important properties of all sorting algorithms. Don’t neglect the basic O(n^2) algorithms like Bubble sort or Insertion sort, since other algorithms improve over these. Interviews are more about improving a basic idea, sorting algorithms will help with this process.

Hash Tables When in doubt, think of hash tables. They are useful in most of the problems and frequently help us improve the time complexity of some problems by caching results.

Trees Go through basic tree construction, traversal and manipulation algorithms. You should be able to implement algorithms based on binary search trees. You should be familiar with balanced trees although you are not expected to write code for them in the interview: AVL trees, Red-Black trees, Trie, n-ary trees etc. Thorough knowledge about inorder, postorder and preorder traversals is necessary, because we can solve many tree problems by doing simple modifications to one of these traversals.

Graphs 

• Graphs are a very important concept in Computer Science. Practice the three basic representation of graphs (objects and pointers, matrix, and adjacency list) and familiarize yourself with their pros & cons. 
• There is not much time during the interview so you should not expect something very complex. However, basic graph traversal algorithms (DFS and BFS) are a must, you should implement them in all basic representations. 
• You should be able to implement the Dijkstra or Floyd-Warshall algorithms as well as minimum spanning tree algorithms (Kruskal and Prim). Learn about topological sorting, since it is surprisingly very useful in many ordering problems.

Dynamic Programming This is probably the most important subject as the implementations are small. You should be able to implement 2-3 dynamic algorithms during a 35-40 minutes time. As you’ll check the resources on this blog or on the web, you’ll find that you should expect at least one dynamic programming question per interview.

Operating Systems Learn about processes, threads and concurrency issues. Know about mutexes, semaphores, monitors and how they work. Understand what deadlock and livelock are and how to avoid them. Learn about context switching, scheduling etc.

Mathematics You should familiarize yourself with counting, combinatorics and probability.

Google's publications Read up Google's path-breaking publications listed below if you have time.

• Google File System
• Google Bigtable
• Google MapReduce

I hope you find the above article useful :) Enjoy!

Cracking Quant-Finance Interviews

Quantitative finance or Mathematical finance is one of the most lucrative (read high-paying) job profiles offered at IITs. This post is meant to be useful to people who are targeting quant-finance jobs. Below post is based on my experience at IIT-Bombay's placements, but I think it will be useful to everyone in general.

What is Quantitative Finance ?
Naively speaking, it involves using mathematical models for profit maximization and risk minimization in financial markets. The word quantitative is used because instead of qualitatively ranking assets, you try to figure out actual numbers and hence make good decisions and thus great profits. Quants generally code up mathematical models. Thus extensive knowledge of Computer Science is needed.

Example: One example is Algorithmic Trading. In naive terms, you give the computer a set of conditions and if some condition holds true, you execute some trades (buy or sell orders).

• Since you have a huge amount of market data about different assets available every second, you need to be able to store and retrieve the data efficiently. Knowledge of Databases helps us in managing the data efficiently.
• Also sometimes, the profit-making conditions may hold true only for a fraction of a second and your hardware and software developed should be very fast so as to execute the trades within that fraction of the second. Thus your systems must be time-optimized at hardware and software levels. Knowledge in Algorithm Design, Compilers and Networks helps us tackle this problem.

Here is a presentation that Mr. Ashwin Rao (MD, Morgan Stanley India) gave on Quantitative Finance; it might give you more perspective.

Why Quantitative Finance ?

• You might want to work as a quant simply because you love Mathematics and want to see it's application in the real-world financial markets.
• Quants get paid truck-loads of money! This is because they help make Wallstreet banks and hedge-funds make huge profits. So money is a factor that might excite you to work as a quant. 
• But, one thing to be noted is that the work hours are on the heavier side. So it turns out to be "more work for more money" policy. Yet the pay-per-hour ratio is well above other kinds of job profiles.
• Also there are performance related bonuses and believe me, the bonuses can be as much as your base salary or even more. This is where the finance sector beats all other sectors, in general.

What are the skills needed for Quant Finance Jobs ?

• CS major students have an edge over others for this profile. This is because of application of various CS based concepts on the job. Knowledge about Data Structures & Algorithms is essential.
• You are expected to have a solid programming background in C/C++ or Java.
• Generally you are not expected to have any prior knowledge/experience in finance.
• Solid background in Math topics like Probability Theory, Linear Algebra and Calculus.

How to do well on Quant Interviews/Tests ?
You need to be very good in Probability theory, Combinatorics and general Math topics like Linear Algebra and Calculus. Also having idea about Data Structures and Algorithms is essential. I recommend reading/practicing from the following resources:

Probability / Combinatorics / Math:

• FAQ in Quantitative Finance : Contains very good puzzles on probability and math along with solutions.
• Fifty Challenging Problems in Probability with Solutions 
• Mathematical Puzzles - A Connoisseur's Collection : For general math puzzles and combinatorics.
• Heard on the Street : Excellent quant puzzles and finance-based questions.

Data Structures and Algorithms:

• Introduction To Algorithms - By Cormen : If you have no idea about Data Structures and Algorithms, this book is an absolute must. It's considered to be a bible for Algorithms.
• Algorithms For Interviews : This book has a huge number of algorithmic puzzles classified as per different algorithm design paradigms. I recommend practicing from it if you have time.

Puzzle Blogs:

• CSE Blog : A puzzle blog by IITB alumnus. Contains most frequently asked puzzles in Quant Interviews along with solutions and interesting discussions.
• Me, Myself and Mathematics
• Rustan Lieno Collection

Also, I will be posting questions asked by various quant firms that appeared at IITB's 2012 placements. I suggest you to keep checking my blog from time to time.


Which kind of firms offer Quant Finance jobs ?
Generally investment banks and hedge-funds. Some recruiters at IIT-Bombay offering quant-finance profiles:

• Hedge Funds: WorldQuant, Tower Research Capital
• Investment Banks: Goldman Sachs, Morgan Stanley, Deutsche Bank, CitiGroup, Credit Suisse

CSE-IITB Placement Statistics

Placements at IIT-Bombay started on 1st December, 2012. This year's placements proved to be the best till date for BTech CSE batch.

I will be highlighting some important figures of the placements of BTech, CSE IIT-Bombay 2013 batch. More than 90% of the batch has already been placed since placements began.

Job locations offered

As compared with last year, a significantly higher number of software companies visited for campus placements, many of them for the first time ever. There were a lot of opportunities for overseas locations like USA, Japan, Middle-East etc. Following is the distribution of the students according to job locations offered:

Distribution of job locations

As compared with last year's placements a substantially more number of students have been placed in firms offering job locations in USA. One thing that I observed was that the number of Day1 companies for CSE were too many and all of them had shortlisted from a fixed set of students. That is the same set of students were present in most of the shortlists. Due to this, many students ended up with multiple job offers from different companies. Many companies offering lucrative packages had to walk-away empty handed due to this anomaly.

Job profiles offered

Distribution of job profiles

As we see in the above chart, very few students opted for finance-based Quant Profiles. A huge number of students were placed in software engineer profiles. This is because of the numerous US-based companies arriving for placements this year. This resulted in many people opting for US-based software engineer profiles against India-based Quant Finance profiles. None of the students opted for other kind of profiles like Management Consultant, Financial Analyst etc.


Packages offered

Gross salary offered to BTech CSE students averaged out to be around 14.4 lpa (lakhs per annum) for India-based jobs. For US-based jobs, the average is around 100,000$ per annum.

For India-based software engineering jobs, the average is around 11.6 lpa. For India-based Quant profiles the average is around 26 lpa.

Pre-Placement offers

Around 15% of the batch had received and accepted pre-placement offers from companies where they interned. This proved to be a boon for rest of students in the batch because the PPO'ed people weren't allowed to apply at all the companies arriving for campus placements, thus reducing competition.

Top Recruiting Firms at IIT-Bombay

• Software Engineering: Google, Microsoft, Facebook, Samsung, Twitter, LinkedIn, Rocketfuel, Mylikes, Epic Systems, Sony
• Quantitative Finance: Tower Research, Morgan Stanley, Goldman Sachs, WorldQuant
• General Finance: Optiver, Deutsche Bank, Citi, Credit Suisse, BlackStone, Jump Trading
• Management Consulting: Mckinsey, BCG, Booz & Co., Bain & Co., A.T.Kearney

From what I have experienced during placements, it seems that having a CPI (cumulative performance index) above 8.5 is very good and preferably puts you into the set of students who have a chance to get shortlisted at most companies. You also need to have at least one good summer internship. Thus, my advise to juniors is to increase their CPI whilst they can. Higher the CPI, the better are the chances you get a "good" placement.

Best of Luck! :)

Note : The above statistics hold true only for the BTech CSE, IIT-Bombay and should not be used to predict a generalized trend for other departments and programmes. I have tried to calculate the figures as accurately as possible however I do not guarantee it to be exact.