I think the best way to
explain this financial crisis would be to use Warren Buffett’s Annual Shareholder
report methodology. In the report he assumes that he is trying to explain his
investment thesis and objective to his two sisters who don’t have any idea
about Finance and Investment. Probably explaining this crisis would be tougher
for even Buffet cause what has happened is unprecedented and it requires an overall
understanding of financial markets ranging from monetary policy to CDS (Credit
Default Swaps).

Few weeks back I was going thru Times Ascent and I was wondering how important it is to have a grip over US GAAP for somebody who’s thinking of a career in Financial Research. In the same breath I thought that how many guys in our college actually have a good understanding of US GAAP.I think all the people who are vying for jobs in Investment Banks,KPO’s or Boutique Research houses, need to be equipped with US GAAP. I thereby struck upon the idea of doing a plain vanilla time-series analysis of a US balance sheet. I think this exercise can be done at your respective end (in you own PC), provided you have the right material and right guidance. (I would elucidate on the exercise a little later) Anyway I would recommend doing this exercise in a group of 3-4, but if anybody wants to go solo, he’s welcome.

MBA Finance (Specialization Dilemma)

During my MBA programme there was this ubiquitous discussion “Which specialization I should pursue”.

Benjamin Graham once said that “Markets act as voting machine in the short-term but they are weighing machine in the long run”. During that time Graham’s number got very popular as a way of investing, it’s actually nothing but your book value. It flared up a trend of finding value in a company’s balance sheet using Graham’s number.