What is the most shocking level of incompetence you've seen in a workplace?

earthwalker7's picture
Rank: Human | 11,069

From a former employer - which was a real estate developer. The CFO didn't know what an IRR is, and doesn't seem to understand compounding. He was a bean counter who rose to CFO just by virtue of never leaving over 30 years. Because the big boss isn't a finance guy either, he just defers to the CFO. But it was apparent when we discussed projects with the CFO that he had no clue what we were talking about.

Us: "Project equity in is $100mn, so with a 15% IRR, in 3 years we'd be looking at $152mn."
CFO: "No you'd be looking at $115mn. And if it's so low a return, then we should just buy some shares in public stock."
Us: "No, it's 15% IRR - you know, an annual return of 15%...."
CFO: "That's what I said. A 15% return. No need. We just buy some shares."

Comments (110)

Mar 4, 2020

How are we supposed to share stories when they'll be immediately dwarfed by a CFO who doesn't understand compounding? lmao

Great story. Would love to see that guy in an investor presentation.

Don't @ me

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Mar 4, 2020

I concur. I can't think of a single person more incompetent than a CFO who doesn't know basic--BASIC--finance stuff. That's incomprehensible to me.

Mar 13, 2020

I'm just blown away that the CFO didn't even assume return of $145mm. Not only did he not understand compounding, also didn't understand concept of annualized returns...

Mar 13, 2020

That's a good point. Multiple dynamics of ignorance going on there.

Don't @ me

Mar 4, 2020

I run into grossly incompetent people that are just like what you described above...more luck than skill.

Anyways, the best I've run into was a guy with a company doing ~$30M+ a year in revenue but he only received books once a year and they weren't really books either. When we started the DD process...I asked for books and he sent me their fucking tax return via paper.

The company ended up declining from $30M/yr to $15M/yr within a 2 year period but it was because he never bothered building a mobile website...and the company was an eCommerce site! For reference, you can buy a mobile ready template in Shopify (which easily handles sites that large) for like...$50 - $150 and swapping over would have been super easy as nothing was specialized.

The ONLY reason he managed to scale so easily is because he was one of the first guys selling the specific product he sold online, and he acquired customers back when digital marketing was easy...and customers were like $3 instead of $30.

  • Analyst 1 in Other
Mar 5, 2020

Why did he send you tax returns intead of the books? Did he only read one book a year, thats slow. Maybe he was afraid to share his sex novels. ...JK, but the first thought I had was why are you asking for books he read.

Mar 5, 2020

Not sure if you're joking but books = financial statements lol

Mar 8, 2020

a non-financial guy at a small business who'd never had to look at financials sent you his tax returns - which, btw, has the summary info for IS and BS? not that bad.

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Mar 4, 2020

Second year analyst did not know the difference between discretionary and non-discretionary.

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Funniest
Mar 4, 2020

I bet he found out during bonus season.

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Mar 4, 2020

Wealth Management
11:00 AM goes out to lunch with teams in office and fixed income PM. PM goes in depth on how corporate high yield is getting exceedingly risky late cycle and if you want to take that would be better to just be in equities.. or go for higher quality bonds
12:30 PM back in office.. boss builds model portfolio for client with 20% of assets in corp high yield credit fund because "the alpha's looked good" completely oblivious to everything discussed at lunch

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Mar 6, 2020

Could there be more factors to the decision here? Like office politics?

Mar 9, 2020

No, sheer incompetence

  • Analyst 3+ in IB-M&A
Mar 4, 2020

First IB stint out of school where worked with a VP in his 40s who was incompetent at literally EVERYTHING he did. I still to this day have no idea how he got his job or got into a target ivy for MBA. He had no idea how to run an M&A process and EVERYTIME my MD (who was hands off but very demanding) asked for the status of a deliverable, my VP would just look at me and expect me to answer (keep in mind I had zero experience starting the job and the VP was supposed to be running the deal).

One instance I remember in particular was when we were on a call with a client going over the CIM... I remember us going through the deck slide by slide and at the end of the call he said to the client, "Well, we'll leave the rest of deck for you to go over stuff like spelling and grammar, you know, the tedious stuff"... my jaw dropped.

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Mar 5, 2020

Plus for you though, your VP's lack of knowledge allowed you to take more of a lead on the deals. Downside being it sounds like you didn't have anyone to learn from there.

Don't @ me

Mar 10, 2020

Kind of a virtuous cycle right? He got into a good MBA, possibility undeservedly, and then a good IBD as a result, then lateraled to another Bank, and if he stays long enough he will rise in the ranks. And one day he may become POTUS.

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Mar 11, 2020

The amount of people that "fail upward" in this industry is mind boggling. Curious if it is the same across other competitive fields.

Array

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Mar 17, 2020

you mind sharing what mba? genuinely curious

  • Manager in AM - Equities
Mar 4, 2020

This story is going to be less good than it could be, but I need to protect anonymity.

I used to work for a smart beta startup. The strategy was so simple that we put a brief summary on our business cards, and even the boss' secretary had it down cold. We got bought by a large firm (think $100B+ AUM, 1K+ employees) and they hire somebody to build out the product line in this field, assuming they're seriously experienced, given the resume. We're talking C-suite level, direct report to the President and CEO, and one of about a dozen people on the executive committee, along with the heads of distribution, finance, etc.

About three months into the job this person goes on live TV and royally screws up the basic investment thesis which can be summed up in one sentence of less than ten syllables. Thankfully it was B-level investment TV, and the AUM in the strategy was small at the time, but we were still playing defense for months.

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Mar 5, 2020

I had a someone interviewing for a credit analyst position here that didn't know what we did at all (thought we were merchant cash advances and not loans), and didn't know what EBITDA was.

Mar 5, 2020

During my time at a boutique that had a few $1B+ transactions, 1st year Analyst didn't understand that the balance sheet had to balance--we used to ask him if his favorite shoes were No Balance.

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Mar 5, 2020

One of my interns came up to me on his first day and asked "hey man how do you add two numbers in excel?"

Needless to say it was some clients nephew or some shit.

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Mar 5, 2020

I was interning at a LatAm focused Wealth Management shop over the summer. Got a task to send out a memo to clients of the news that the S&P had surpassed its highest price ever ( each client had a net worth of 50 M+ ). I received about 10 emails from clients asking what the S&P was because they had no idea what I was talking about.

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Mar 7, 2020

que? jajajaj

Array

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Mar 5, 2020

An analyst at one of the top RX shops argued for 30 minutes that the cost of debt is higher than the cost of equity.

Mar 5, 2020
Mephistopheles:

An analyst at one of the top RX shops argued for 30 minutes that the cost of debt is higher than the cost of equity.

...Have you checked Tesla lately?

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Mar 5, 2020

When I was at a LMM / MM boutique one of the MD's I worked with didn't really know how to use a computer. For one, he didn't know how to navigate files on a computer outside of those on his desktop. He kept paper files of everything that filled up his office and the office next to him. On top of that he didn't know how to use the printer so I printed everything for him (e.g., all SPA draft, all CIM drafts, emails, etc.). If he was traveling and needed to look up something, he would get me to go through all of his paper files (which btw were not even alphabetized correctly) and find a copy or printout of the file he was searching for.

He wasn't really that old either (~45-50) he just never adapted to technology and would shovel everything he didn't want to learn onto the rest of the team. At the end of the day he founded the firm so he can do whatever he wanted and he knew M&A, but besides being annoyed at how ridiculous the situation was I was dumbfounded how he got so far never really adapting to using a computer.

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Mar 5, 2020

Ran across a similar situation. A guy with a huge RE portfolio and he has his secretary print out emails, reply to them, etc... Pretty amazing he gets anything done.

Mar 6, 2020

I showed a VP at a previous employer Google Docs and Sheets. Mind was blown.

I even showed a team how to do conditional formatting in Excel. It got broken in a couple days because they kept hardcoding on top of my formulas, but it was interesting to see.

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

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Mar 10, 2020
m_1:

Ran across a similar situation. A guy with a huge RE portfolio and he has his secretary print out emails, reply to them, etc... Pretty amazing he gets anything done.

This doesn't scream incompetence to me, as much as someone who just isn't adapting to technology very well.

Harry Macklowe didn't need to understand how to send emails in order to envision the Apple Cube. Still a genius real estate play. Inefficient and incompetent are not the same thing. At least in real estate, one can do the job without ever sending a single email and still make tens of millions of dollars.

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Mar 13, 2020

I've seen this from a GP I invested with in a past role. Unbelievable.

Mar 5, 2020

Building on this incompetent CFO trend, at a firm I interned at the CFO was bragging about spending two weeks cooped up at home adding up all kinds of account info manually and how much work it was. They had literally been going through what must have been thousands of rows of entries adding them up cell by cell.... Another intern explained the SUM function to her and she was not super happy.

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Mar 5, 2020

I'll play.

I have a distant cousin that thinks Google is a cookie. And he owns a construction company.

Guy still goes to the brick and mortar bank everyday to get his acct balance.

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  • Analyst 2 in IB - Gen
Mar 5, 2020

this is incredible, +SB mate. cheers

Mar 5, 2020

Working on a forecast during the sale of a LMM business. CFO sends back a projected balance sheet - alone. Call the CFO to ask if he could also send the projected income statement - his response was "yeah I'm going to do that one next."

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Mar 5, 2020

Have, multiple times, had to explain the basic concept of getting from enterprise value to equity value (and vice versa) to my MD. Had a solid 10 minute back and forth with him when he put DFCF equity value in draft transaction documentation.

Mar 5, 2020

Overheard an MD ask a VP what RWA meant.

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Mar 10, 2020
NYCbrough718:

Overheard an MD ask a VP what RWA meant.

I'm sorry, but what is "RWA?" Google only got me the 'Romance Writers of America' and I have no other clue.

(EDIT: Apparently the Romance Writers had some sort of big scandal last year, but I wasn't interested enough to read into it.)

Mar 10, 2020

Risk weighted assets

Mar 6, 2020

Some of the above really made me feel better.

Some people are incompetent, then there are those maestros who take incompetence and make it an artform.

Adding up each cell after cell and not knowing the =sum function? Mind blown.

Mar 6, 2020

CEO at my first internship: What is COGS

Me: Cost of goods sold..

CEO at my first internship: What is that?

Me (thinking): This place is doomed

It was a small VC/accelerator shop but ffs this is basic stuff.

Mar 6, 2020

Back when I was working in a MM M&A boutique my senior associate asked me, multiple times, what's the difference between revenue and net profit and how to get to EBITDA.
MD adored her for some reason.

Mar 9, 2020

"her" "for some reason" "analyst" "MD"

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Mar 8, 2020

A few months in, new juniors are pretty fluent at the basics and we've given them all a little project to see which ones have some quant ability. They had a few days market data for one instrument, had a few weeks to script a strategy to trade the instrument, we let them assume they would successfully fill any trades going any volume that showed on the order book.

At the end we come over, one kid seems especially sprout compared to the other juniors. Tells us he worked really hard, had good results from the get go but spent ages tweaking it to make it even better. His algo made tonnes of cash on every day of the data we gave him. We look at his code for one minute - he's been buying at the bid price and selling at the ask price.

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Mar 8, 2020

So... did he get the return offer?

Mar 19, 2020

This was actually a full time position, the company only started doing internships a year or two later. He had done well at the other parts of the program so he wasn't totally screwed. He kept his job and to my knowledge is still there a few years later, doing fine I presume.

Mar 9, 2020

that's lowkey brilliant given the parameters of the assignment.

Mar 17, 2020

can you explain what this means in terms of the assignment? trying to learn

ALT+M+I

Mar 19, 2020

The assignment involved taking as input raw market data from a certain exchange, they continually send you trade ticks, orderbook updates and some other messages. In case you are unfamiliar with this level of data, take a look at e.g. https://www.btcmarkets.net/buy-sell . You can see the orderbook (prices and volumes that people are willing to buy or sell at) and the trade ticks (prices and volumes of the trades that have actually gone through).

The assignment was to process this stream of data and somehow decide what trades you would want to make, and you can assume that whatever orders are available in the orderbook you can actually do that trade. E.g. Say you've been observing this data and the trades going through in the market convinces you that you'd like to buy for $50.00. Suppose the orderbook shows you that 10 lots are available at ask price $50.00, then you can log into your backtest that you were able to get 10 lots at $50.00. This is obviously highly unrealistic because your order may not get to the exchange before all your competitors, or that volume you see in that instant may be cancelled by the time anyone's trade for it reached the exchange. Regardless, this is a good exercise for a junior quant.

EDIT: And just in case I need to clarify - If you want to take liquidity from the orderbook, you can only buy at the ask price and sell at the bids. lol

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Controversial
Mar 9, 2020
earthwalker7:

What Is The Most Shocking Level Of Incompetence You've Seen In A Workplace?

I've been following politics my entire life.

The Trump White House is the most shocking level of incompetence I've ever seen in a workplace, both from the level of incompetence to the impact that incompetence has on the world.

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Mar 11, 2020

I love too that no one actually steps up to defend the Trump White House as a high functioning workplace.

I posted that 4 days ago. The stark incompetence, and the obvious negative affects of it, has only become more obvious in the face of an international crisis.

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Most Helpful
Mar 11, 2020
CRE:
earthwalker7:

What Is The Most Shocking Level Of Incompetence You've Seen In A Workplace?

I've been following politics my entire life.

The Trump White House is the most shocking level of incompetence I've ever seen in a workplace, both from the level of incompetence to the impact that incompetence has on the world.

First time in a long time an administration said fuck you to the corporate world and forced companies to bring back jobs to the US by imposing trade penalties and increasing labor cost abroad.

First administration that didn't go into a new war blowing up shit up in the middle east and fucking everyone in the process and costing the US tax payer some more money at the expense of worsening international relations.

An administration that has started to bring back the level of salary for lower America and standard of living.

It takes time to get the right team in place - unfortunately Trump didn't get to "hire slow, fire fast". On day one he had to hire fast, but he fires fast and that's why he is numero uno. That's why he is going to crush Biden next election. That's why the US is started to be respected once again abroad (despite the bull shit you might hear in US medias) - I live in Europe and we fucking love the man, he does polarize people and your usual metropolitan elite doesn't take well to an outsider, but the middle and lower class like him.

Long live the Trump.

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Mar 12, 2020

This is all comically incorrect.

  1. Tariffs didn't force anything except a bailout that Trump had to give to farmers hurt by his policies.
  2. Trump literally assassinated someone in the middle east with a missile strike and then lied and then downplayed the impact to US troops from Iran's response.
  3. Salaries and standard of living in the US are still not keeping up with inflation. Meanwhile, Trump inherited a strong economy coming out of the great recession that is now tanking.
  4. Trump is polling behind Biden
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Mar 19, 2020

I'm from abroad and I can tell you that my family, other families I know, friends, friends of friends and myself do not respect the US

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Mar 13, 2020

This is why normal people despise people like you.

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Mar 14, 2020
RIPKobe:

This is why normal people despise people like you.

What a worthless first post.

"Normal" is not a synonym for "conservative" and incompetence is not something conservatives inherently embrace or embody enough to "despise" me for pointing it out.

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Mar 17, 2020

I think the reason this wasn't received well was that this thread contained personal stories of things that happened in people's own workplaces, and the level of stupidity was often funny to think about after the fact. You talked about something that wasn't your own workplace, and Trump's incompetence isn't really funny, it's disheartening. So in essence you posted a political issue in a lighthearted thread, and while what you said is not technically wrong, it's out of place

I'm a fun guy. Obviously I love the game of basketball. I mean there's more questions you have to ask me in order for me to tell you about myself. I'm not just gonna give you a whole spill... I mean, I don't even know where you're sitting at

Mar 9, 2020

Small RE developer. #2 guy at the company loves doing mental math out loud and getting the numbers completely wrong. No one proceeds to correct him...

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Mar 10, 2020

That's so awesome. Maybe he was doing it to punk everyone else.

"What was that you say? House is 20 ft x 100 ft? Is that.... one milllion square feet?"
"What was that? Divide 1,356 by 3? The answer is.... 4.8 of course. Duh"

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Mar 10, 2020

Don't forget "slap a 5 cap on it"

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Mar 10, 2020

Not this egregious, but painfully close

Mar 9, 2020

My old MD believes EBITDA is the same as Net Profit.

Current coworker is certain that Cash from Operations = Net Profit

I had solid 15 mins argument with one of our client CFO that Land DOES NOT DEPRECIATE in value.

Also one client wanted to depreciate his building to salvage value because he needed the deduction to not pay taxes.

Fact does indeed stranger than fiction...

    • 1
Mar 10, 2020
ASEANalyst:

My old MD believes EBITDA is the same as Net Profit.

Current coworker is certain that Cash from Operations = Net Profit

I had solid 15 mins argument with one of our client CFO that Land DOES NOT DEPRECIATE in value.

Also one client wanted to depreciate his building to salvage value because he needed the deduction to not pay taxes.

Fact does indeed stranger than fiction...

What business was the CFO in? In some specific instances land is depreciable.

Mar 10, 2020

Are you thinking of depletion?

Land is never depreciable.

Mar 15, 2020

Was he successful in depreciating it to salvage?

Mar 10, 2020

My current shop is run by 4 principals. 3 are directly involved in investment management. 2 of them are "fixed income PM's". The last one is an equities PM. All self-proclaimed.
None of them know how to read financial statements. None of them know how to effectively use Bloomberg. None of them have an advanced degree or respectable certifications/charters. None of them have institutional fundamental/technical training. None of them perform actual research on their name or the investment landscape. Fixed income PMs can't perform credit analysis even if given a credit report from sell-side. Fixed income PMs buy bonds according to spread over the 10 Yr, investment grade or not, and "you know, it is just a great American name". Equity PM doesn't know the names we own, much less what the companies do. Equity PM doesn't know equity risk premium or how to trade options. Equity PM sees an upwards trending graph and that is the thesis to "buy".

Equity PM gave himself a $100K bonus for 2019. All principals earn $800K+ pre-tax per annum.

Mar 10, 2020

no disrespect, but how the fuck is your shop still in business?

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Mar 13, 2020

You have no idea how dumb rich people can be.

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Mar 10, 2020

Who did you raise money from??

Mar 13, 2020

people who do well in other industries, but are an absolute monkey when it comes to finance

Mar 11, 2020

Can I join? I would like to earn $800k++. I promise to never do any research and will only momentum buy. Promise.

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Mar 13, 2020

You sound like you deserve a senior executive position here.

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Mar 11, 2020

Who the fuck are the LPs ? How did they ever raise assets lmao

Mar 13, 2020

You'd be surprised by the lack of knowledge people have.

Mar 11, 2020

Company I cover just reported; didn't give great numbers. We have it rated a Buy, asked the head of our department/my analyst what this company would need to do to move to a hold (should have been one already).

He said "If I think it'll go to zero, I'll move it to a hold'

That's a sell, brother.

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Mar 11, 2020
ironman32:

Company I cover just reported; didn't give great numbers. We have it rated a Buy, asked the head of our department/my analyst what this company would need to do to move to a hold (should have been one already).

He said "If I think it'll go to zero, I'll move it to a hold'

That's a sell, brother.

Not so much incompetence but the industry

Mar 11, 2020

and they say research doesn't add value....

Mar 14, 2020
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  • Analyst 2 in CB
Mar 14, 2020
Mar 14, 2020
Mar 17, 2020
Comment

Vincet Voluntas - Will shall win

Mar 23, 2020