Do you follow the stock market?
Hi Guys, I need your advice again. When faced with such question "Do you follow the markets??" in interview, how should one respond?? I come from a non-finance background (major in mathematics), and really felt this is one of the most difficult question. I felt that if I answer "Yes", I would be obliged to say something very insightful. Secondly, it is a really broad question, I don't know where to go on this.
Thanks for your advice in advanced!!!
Why aren't you following the markets if you want the job?
I don't understand how this question could be so difficult if you actually do.
If you say yes: you're getting at least 2 3 questions on the markets if you say no, you can stay at home and not even try the interviews.
Agree with this. Start reading the WSJ to get a feel for the newsworthy events that move the markets. Have a good feel for the where major indices are at when interviewing. This question really isn't a big one, just want to see if you care enough to follow what's happening around you. If you can mention some current events and talk a little bit, you will be fine.
I find the truth to be the best approach when asked questions in interviews. If this is going to preclude you from obtaining an offer, you need to change the truth rather than simply changing the answer.
Aka -- If following the markets is key to obtaining the position you're looking for, start following the markets!
The interviewer can tell
If you aren't following the markets then why do you want to work in banking? That should be one of the questions you ask yourself before applying for any more positions. If you are in it for the money/prestige, you're going to hate it eventually. Bloomberg news, CNBC and Forex news should be your best friends from here on out. (And you can make decent money trading currencies)
Read the FT and WSJ
Reading the WSJ/FT is the single best thing you can do to get through one of these interviews.
S&T --> you will learn about the recent price action in all the different securities
Banking --> you will learn about all the recent capital markets and M&A transactions
If you say no to this question, you may as well take your portfolio, put on your jacket and walk out of the interview room. Obviously you aren't going to be able to provide an analysis of the financial markets over the next decade like Bob Doll in the video on the home page of WSO, but you need to have some interest in the markets if you want to get this job.
You need to find finance stimulating. It doesn't have to be your favorite thing in the world, but if you don't have any interest in reading WSJ.com a couple of times per day, or keeping track of your own stock portfolio (or one that is made up) you really shouldn't be in this business. If you had no interest in finding a cure for cancer, would you dedicate your life to a job where you are doing cancer research? No, you wouldn't.
Start reading the FT, WSJ, Bloomberg, CNNmoney, whatever and they you can say "yes, I read X,Y,Z from time to time." Inevitably you will get the follow up question that asks you to talk about an article you have read, so have a few to discuss.
I would also say just know where all the stock indexes are trading when you go in for interviews, and if there were any big developments that pushed them up or down the previous day, know them and know why they had the effect that they did.
Great advice.
btw, when asked this question, are they referring to just the stock markets or also bond/currency/commodity markets? I follow a bit of everything but a little more of the bond and currency markets
Sometimes they'll ask if you follow the stock market. If they don't specify which market, just tell them what you told us - that you follow several markets, but you're most familiar with bond and currency markets.
^^ are they markets? You have just answered your own question. Interviewers will ask you questions like where do you think rates are headed/ what did the fed do to rates last week, what are your thoughts on inflation, or talk to me about a current deal your following in the market ....not just pitch me a stock, so it is good to stay current on all markets.
It's all interconnected. Understand the mechanics.
For example, Fed raises rates --> US Dollar Strengthens --> Price of Oil Falls --> Transport Stocks (airlines, freight) Rise
why are you interviewing if you can't say yes to that question? even quants have to follow the markets
Agree with whats said above but in addition I would say go to your school library and read Barrons every weekend. Usually the first article sums up the week and provides some good perspective on meaningful events in finance/politics/policy.
The question you're getting is very open-ended so it's best to focus on articles that talk about market trends as opposed to individual stocks/industries (For example, I inevitably wound up ranting about the weakness of the dollar whenever I got this question and it seemed to work out well). Also, even though he is a recovering drug addict, I find that pretty much agreeing with whatever Larry Kudlow (CNBC) has to say is your best strategy. He's the most conservative SOB on TV (Lou Dobbs recently retired) and if your talking to someone in IBD, it's likely they've been voting republican for some time now.
I was actually asked this question in the final interview (tech analyst position though).. I said I dont follow it every 5 mins but do update myself often. The next question I got asked was DOW jones index that morning :) knew it so got through..
it is indeed a stupid question, often bankers don't follow the markets at all
As everyone here already said, you should already be interested in the markets if you're going for such a job. If you're just starting out, it might take some time to notice trends (it means nothing to just memorize the latest numbers). But it's not too difficult. Although it depends on what you're going into, the main areas to follow in my opinion are
1.) News in general: Go through the headlines on the main business websites and newspapers. WSJ, FT, Bloomberg, CNBC, CNNMoney, etc.
2.) Stocks: Know the Dow, S&P 500, and Nasdaq indexes and be able to spot "big picture" trends. Will you be able to tell interviewers what year/quarter the stock markets performed the worst during this recession? Also try to formulate an opinion on what you think will happen over the short/long term. A lot of your opinions initially will come from reading/watching others' opinions. Also be able to mention some companies that did well in the previous quarter, and then ones that didn't meet the EPS forecasts.
3.) Bonds: Treasury bills, notes, bonds across various maturities. Know price/yield movements. Formulate an opinion on the direction of interest rates. When do you think the Fed will start raising rates again? Is inflation a concern? Read about what the FOMC is doing. Lots of concepts in fixed income and macroeconomics in general is cause and effect logic.
4.) Key commodities: Oil and gold for sure, and then whatever you find interesting. If you're going into commodity futures trading or something, then more work in this area of course.
5.) Currencies: Dollar against the yen, euro, GBP, whatever. 6.) International: Nikkei, FTSE 100, etc.
There are what I like to go casually go over day to day, but everyone is different, and you will find what interests you as you keep doing it. For example, I especially like reading headlines about financial politics (things about TARP, Geithner, Bernanke, Fed, etc.) Maybe someone else likes reading more about recent M&A deals.
Quarterly letters from big funds are a good resource to summarize what the big money is thinking and focus on the big picture.
It can be pretty difficult to keep up with the daily news flow and sift through all the noise. You can spend every waking hour "following the market" and still have no intelligent insight into what's going on.
Read:
Also read a few Lex columns from FT and Economist articles you find interesting. It shouldn't take too much time and you'll hopefully have an opinion on the market (which is much better than just following it). On a side note, I dislike "where is index xyz trading right now" type questions.
HEY MAN,
personally, i would start visiting sites like bloomberg, and the wsj daily. If there is a particular sector in the markets that you are interested in, then follow those. For example, you may have a keen interest in commodities, and currencies. So you could start following the fluctuations in prices of gold, oil, the yen, and etc. Thus this gives you some detailed examples to use next time you face that question.
So do you follow the markets? answer: well following the markets is such a broad question, but i do pay close attention to the commodities and currency markets. I've noticed that crude has been ..........
see what i mean? of course it gets a lot deeper but you have to start somewhere. HOpe this helps bud.
Hey , all the advice above seems really good, but I had a somewhat silly question..i m applying for IB jobs and from what I read abt how analysts work..there is not much abt following stocks/bonds/currency markets. I could be totally wrong, but do IB interviews have a lot of such questions?
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