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Variations On Sharpe

When a lot of us were taking our finance courses in undergrad, we all probably were introduced to a statistical concept called The Sharpe Ratio . It was developed by William Sharpe in 1966, and is generally considered to be a measure of the "efficiency" of a portfolio or any other investment. It does this by measuring the return of the investment security against the unit of risk (here measured by standard deviation).

The WSO dictionary has the definition as well, but the formula is excess return (i.e., the return of the investment over the risk free rate measured by US Treasuries) divided by standard deviation.

Who Owns Your Digital Property?

Many of you probably have substantial music libraries purchased from Apple's iTunes Store, and you believe that it's yours. You might be surprised (as I was) to learn otherwise...

Has your education capped your aims?

It's long been a hobby of mine, looking at the underlying patterns behind the super successful, and seeing what they did before they struck gold. This was the ground work that enabled them to get rich.

There is a significant lack of top notch education among them (read university, they all went to school...). If you subtract the applied technology ones, which require a huge amount of knowledge not attainable from a school (Google founders etc). its striking for the top of capitalism, to contradict our educational values.

So, a possible conclusion to this is, and this ties in with that viral piece on education, that your education has raised your mean standard of living, but significantly narrowed the spread.

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Stigma of changing jobs often

Hi guys,

I graduated from a masters program in the UK and took a job with one of the big 4. I took this job because it was all I could get at the time and the program included CFA sponsorship. My dream job has always been equity research . After passing level 1 and with one years experience I left to join one of the ratings agencies as a credit analyst where I work as a sector specialist. Again I was sponsored for CFA level 2, which I passed in June. I have recently been offered a job as a sell-side ER associate covering the same sector I cover now. The job is at an independent shop with about 100 analysts. I want to take the job but am also worried about the longer-term impact of jumping ship for the second time so early in my career.

Any advice would be much appreciated!

The Basics of Clearinghouse Efficiency: Fact or Fiction (Part 1)

Like the concept of energy conservation, I am of the belief that risk (as in the concept) cannot be created or eliminated. It is always present in varying quantities and more importantly, interpretations. There's risk in everything you do - relationships, career ventures, planned name it, there's inherent risk. While it cannot be eliminated, there is the belief it can be mitigated and transferred. This is where the clearinghouse concept becomes substantially more important - as a risk mitigator, not eliminator (you thought I was going to talk about risk in the framework of something scintillating!? Like my love life, or more accurately, the current lack thereof? Ha!).


Jane Street Final Round - What to Expect

This site has been invaluable for me during recruiting so I thought I would pay it forward now that I have graduated and am gainfully employed. Specifically I wanted to address the Jane Street final round interview for a full time trading position, which I had last year and could not find exactly what I was looking for on this site in terms of what to expect.

What should you ask the interviewer?

Cultural fit is one of the reasons many cube monkeys stay where they are - unengaged in what they do but at the end of the day it pays the bills. During your interview, the...

Apple's Crown Jewel: Valuing the iPhone Franchise

mod note: this was originally posted on 8/29/12
If you are a stockholder in Apple, it is time to celebrate again! The last week has been an eventful one for the company...

Square Seems Obtuse?

*Movie Preview Voice*

In a world where technology companies consistently receive absurd valuations and let everyone on earth down after their disgraceful IPOs, Square...

Abita Beer Is the Truth

Since today is both a holiday and the unofficial end of summer, I thought I'd do something a little different and answer an email that isn't finance related but might come in...

does FT recruiting even exist this year!?

I've asked some of my contacts and they basically said FT recruiting will basically be nonexistent this year. Some of the BBs might not even hire at all. One guy even...

Columbia MBA apps down 19% for Class of 2014

Columbia applications down from 6669 to 5409 - about 19% .

Selectivity, assuming they accepted 1060...

2014 MSF Class Thread

Hey everyone. Figured I would create a Class of 2014 thread for everyone thinking about applying for next years MSF programs. Good place to ask questions, compare profiles and...

Book Review: The Subprime Solution

I recently read Robert Shiller's book, "The Subprime Solution." I wasn't disappointed, even if I took issue with some of his arguments.

Shiller's prognosis of the...

How to Dress for Success on Wall Street (Part 2)

Hi Everyone. We're back this week with Part 2 of the Jon Yeazel Interview, "How to Dress for Success on Wall Street." See part 1 of the interview here.

Q: What are the suit essentials every man should own?

In my opinion the essential parts of a suit are not what many would consider essential at all. For the well dressed man the essentials are the small details of the suit that people often times will not notice until you actually put them into good use:

1. Pocket Square

starting a VC fund

hey guys, long time reader first (maybe second) time poster.

first off i just want to thank everyone on here. over the last yr this forum has been invaluable!


Daily Routine

What is your daily routine? Do you have any habits that you do on a daily basis that you attribute much of your success to? Exercise, meditation, having goals, etc? Interesting...

How China Is Partly Responsible For The Financial Crisis

When I came across this article by CNBC, "China--Not Wall Street--Caused 2008 Crisis: Study" written by Liza Jansen which is based on a study conducted by Erasmus Research Institute of Management, I thought to myself, "This must be a huge scandal!". But apparently, China was just being prudent with their money. Whether it was a national policy or a cultural difference, I couldn't tell ya. It basically goes like this:

US relaxes monetary policies during the beginning of the decade American consumers spends more, which drove imports from China

If you want to quit - SOLDIER ON BOY and stay put!

I was going to reply to some kid bitching about his job, and how bad he felt about being shit at it. But instead of replying directly to him I thought I'd make a more generic...

Commie Guns: Arming the Third World

After my last rant on US weapons sales in the Middle East, I thought it might be interesting to look at who I personally think is the most influential arms supplier in the world. Sure, the US loves selling high end goods to buyers with big bucks, but we certainly don't see various third world rebel forces hauling the latest versions of the M-4 Carbine around while they pillage and plunder, even if the good ol' USA is quite skilled at transferring foreign arms to foreign forces quickly and quietly. Of course I'm talking about the former Soviet Union and the incredible effect its arms have had on the course of history. In order to illustrate the vastness of the Russian arms industry, I'll tell you a story, and I promise it isn't the plot of "Lord of War".

WallStreet Prep Master Financial Modeling