CNBC: Rethinking Wall Street: MBA Grads Face Grave New World

From CNBC website:

On Thursday May 21, 2009, 12:34 pm EDT

Kunal Agarwal, 28, started the MBA program at UCLA's Anderson School for Management back in 2007 thinking he would end up working at a financial giant. But after watching the financial crisis claim major banks and investment houses while putting a damper on head counts and compensation, Agarwal is coming up with another plan.

"Big established brands don't really mean as much as they used to," he says.

The crisis that wiped out both Lehman Brothers and Bear Stearns and perhaps forever changed the world of high finance in America, is now forcing the next batch of MBA graduates to change their idea of where they'll end up working. While some lucky students are still picking up traditional jobs, others have had to rethink their Wall Street dreams and look elsewhere.

Agarwal was offered one of the rare positions at an investment bank, but is holding off on accepting it while he explores entrepreneurial opportunities at new technology companies and new social networking sites that he hopes could be the next Facebook or Twitter. "It may not pay up front, but it may down the line," he says.

Of course, some newly minted MBAs are jumping to take advantage of the dwindling opportunities at prestigious firm. Javier Escobar, a 28-year-old student at Columbia Business School, was offered a corporate banking position at Citi (NYSE:C - News) after interning there last summer.

Adair Newhall, who's graduating from University of Virginia's Darden School of Business this month, is going on to work at venture capital firm Domain Associates. Newhall, 30, also interned at the company during the summer and was talking to several venture capital firms before he finally got an offer from Domain Associates a couple of weeks ago, securing his dream job.

"I'm probably the minority on this one," he admitted.

Though Newhall and Escobar didn't have to settle, some of his class mates are having to.

"They're being more flexible in the types of jobs they take, and taking jobs in other cities and not necessarily staying in New York," says Escobar.

Overall, recruiters expect to hire an average of six new MBAs this year, half that of 2008, according to a survey conducted by the Graduate Management Admission Council, a global association of graduate business schools.

"Students need to be resilient and look way beyond their dream job," said Jody Queen-Hubert executive director of career services at Pace University's Lubin School of Business.

That means considering job offers from government agencies as well as health care and energy companies. Alternative energy, in particular, has assumed a higher profile, thanks to President Barack Obama's agenda.

"I think some students might find it's a scary time to graduate, but they might be at the front end of careers of the future," says Rebecca Joffrey, co-director of the career development office at the Tuck School of Business at Dartmouth, adding they represent the "big problems that we're addressing as a society."

President Obama's suggestion that it may be a good time for the the best and the brightest to work for the government has probably inspired more than a few students, but a government job has other virtues in a world of layoffs and high unemployment.

"It seems more secure from the student perspective and the benefits are good," says Zelon Crawford, director of graduate career management and corporate relations at Temple University's Fox School of Business. Crawford notes the IRS recruited at the school this year for the first time.

Agarwal, the UCLA Anderson student, noticed that the government representatives were "more aggressive in their recruiting this year," based on their presence on campus and the number of jobs posted on the school's job site.

Students who fail to find a job by graduation will still look to their schools for help.

"All schools will graduate students with fewer offers than we did last year," said Jack Oakes, director of the Career Development Center at the Darden School of Business. "We'll continue to work with these graduates throughout the summer even as we ready for the new crop of students coming in."

Many companies are hiring as they are firing

A recent article in the WSJ says that companies don't have a hiring freeze, but they use this environment to replenish their talent, with people who have new skills, appropriate to the new challenges. 

The article cites all the big companies, like Boeing, Microsoft, IBM and others. 

See the article below, as written by Cari Tuna, WSJ.

Boeing Co. cut more than 3,000 jobs in the first four months of 2009, most from its commercial-airplanes unit as airlines deferred orders. But the aviation giant added 106 employees in its defense arm, and is looking for hundreds more.

As layoffs mount, many of the same employers also are hiring -- in other business units, in other places, or for other skills. Microsoft Corp., International Business Machines Corp., AT&T Inc.,Yahoo Inc. and Time Warner Inc. are among the companies shedding some workers, while adding others.

The simultaneous hiring and firing highlights the dynamism of the economy and shows how employers are trying to adapt to changing needs. It also offers hints on how the recession is changing the work force, with some employers placing more emphasis on worker skills.

"It's not just routine turnover," says Lori Kletzer, an economics professor at the University of California, Santa Cruz. "Quite often the people being laid off don't have the requisite set of skills or experience to move into the growth areas."

The U.S. Labor Department Friday said employers eliminated 539,000 jobs in April, slightly fewer than in preceding months. But that bottom-line figure masks considerable turnover. In February, the most recent figure available, the government estimates that employers hired roughly 4.4 million workers; the total number of jobs shrank in February because more people quit jobs or were let go.

Some experts say the churn also shows changes in workplace policies. In past decades, many employers retrained and relocated underused workers, says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's Wharton School. "Now they've discovered that you can restructure even faster by laying off and hiring."

Boeing, for instance, plans to cut roughly 10,000 jobs in 2009, including 4,500 from the commercial-airplanes unit. Those affected include thousands of contingent, administrative and support staff, as well as hundreds of hourly manufacturing workers. In mid-2010, Boeing will slow production of its large 777 airplanes, which could prompt more layoffs.

At the same time, Boeing has more than 1,500 current and anticipated job openings -- in various stages of recruitment -- most for mechanical, electrical, software and other engineers. Many of those hires will join Boeing's defense unit, a large maker of military aircraft, which last quarter made more money than the commercial airplanes unit. The company is hosting a recruiting event May 21 for software engineers for defense projects.

Executives who are both hiring and firing often say they need different types of employees, who can do different things. National Public Radio has cut more than 70 jobs and two programs since December, but is hiring for its Web site, including bloggers and online news editors.

"A blanket hiring freeze was just not feasible," says Chief Executive Vivian Schiller. "It's not a smart way to run a business. The show must go on."

Microsoft last week laid off a second group of workers, bringing its job-loss total to about 5,000, scattered across many departments. But the software giant plans to add 2,000 to 3,000 jobs in "key investment areas," like online search and cloud computing, says spokeswoman Elizabeth Herrera Smith. Since April 1, Microsoft has posted more than 350 job openings, including 260 in the U.S., for software developers, program managers and others.

Likewise, AT&T this year plans to cut 12,000 employees, or 4% of its work force, including technicians and installers from its traditional wireline business. But it's adding 3,000 workers in its growing wireless, Internet and television units. The changes reflect "shifts taking place in the industry," says spokesman Michael Coe. Some laid-off union members will be retrained for the new jobs, he says.

IBM has cut close to 10,000 U.S. jobs this year, including some that were shifted overseas, according to people familiar with the matter. But the technology company recently announced plans to add 4,000 employees over the next three years for a new unit in its consulting division. IBM also is opening a center in Iowa to manage customers' information-technology systems, which will employ up to 1,300 people by the end of 2010.

For the new consulting unit -- Business Analytics and Optimization -- IBM plans to open offices in New York, London, Tokyo and elsewhere. Many of the new jobs will combine technical skills, like software engineering or database management, with expertise in an industry, like health care or government, says Bill Pulleyblank, vice president of IBM's center for business optimization. He calls the new effort "a rapidly growing need."

Other Professional Group Events in Chicago

Monday, May 11, 2009

 The University of Chicago, Booth School of Business

Invites Alumni and Guests to an event on Monday, May 11, 2009

Sponsored by the Booth Business Book Roundtable

 

 

Johan Van Overtveldt Presents:

 

Bernanke’s Test:

Ben Bernanke, Alan Greenspan, and the Drama of the Central Banker

 

 

Location:  The University of Chicago Gleacher Center

450 North Cityfront Plaza

1st Floor, Room 100

Chicago, IL

(312) 464-8787

 

Program:

 

6:00 p.m. to 6:30 p.m.: Registration and Buffet Hors d’oeuvers, Cash Bar

6:30 p.m. to 8:00 p.m.: Author’s Presentation and Q&A

8:00 p.m. to 9:00 p.m.: Continue Discussion and Book Signing 

 

Registration Online Required

 

Event Fee: $15  

 

For more information or to register, please visit:

http://gsbtestwebsite.chicagogsb.edu/alumni/events/showEvent.aspx?eventId=1276

4/29 Market wrap up

Dow 8,185.73 +168.78

S&P 868.70 +16.90

EUR-USD 1.3264

OIL 51.01

Gold 900.10

10yr 97.109 3.09%

-OBAMA said to announce Chrysler bankruptcy tomorrow

-Positive earnings lead rally

-dream works killing it up 25% after beating estimates

-TWC up 3% after beating eps by 5 cents

-swine flu raised to level 5

-Volker says the US economy is leveling off no need for second fiscal stimulus package

-Lewis Ranieri says that housing market close to bottom

4/28 market wrap uP

Dow 8016.95 -8.05

S&P 50 855.16 -2.35

EUR-USD 1.3149

OIL 49.65

10 yr 97.828 3.01%

-Citi and BofA both short capital according to stress test

BoF A down 77 cents citi fell 18 cents to 2.89

BofA needs 60- 70 B according to Freidman Billings ramsey

-Delta shares off 9.9% off Swine Flu

-GM off 23 cents to 1.81 after bondholders expectedly rejected the 27 billion dollar debt exchange proposal

-IBM in the plus up 2% on news of 3b buyback and boosting div 10%

-Office Depot also in the green after reporting positive earnings of 10cents a share beating estimates

-Coventry Health Care 7.1% to 15.22 after beating analyst earning expectations by 21% at 30 cents a share nice

Value of MBAs falling no more getting rich quick

2 years ago when I started my MBA I had planned that I would be using my signing bonus at this time to put a down payment on a ferrari with a vanity plate reading "Gupinater".   Fast forward and I am now spending my time writing pro bono on a blog with the long shot hope google ad words makes me a mint.  This is very unlikely in fact I would be amazed if I can make enough money via my blog to purchase a six pack at the end of the year nothing fancy just PBR.  anyways enough bs I have posted an article below from the JOurnal confirming that Marvin Lee Gupta AKA the gupinater is not alone.   Apparently many MBAs are losing home and considering the 100k they just spent a sunk cost and are moving on.    With that said I question if they cost of an MBA will ever effect the decrease in value provided?  Although this is probably temperary it is huge had the market prospects been the same 2 years ago I would have been hesitant to plop down 100K to be in the position I am in today. with that said will the cost be the same and expected return decrease or will the "Friedman" market forces kick it and bring the cost down to 50K?  let me know what you think.  the article is below.

adios amigos

WSJ ARTICLE

4/23 Market Update

Dow: 7,957.06 +70.49

S&P 851.92 +8.37

10 yr 98.578 .92%

Oil: 49.66

EUR-USD 1.3145 +.0002

Headlines

Marriot: beats estimates stock up 12%

Ebay and Apple: stocks surge after yesterdays rosy earnings reports

NYSE EURONEXT up 14% on take over speculation

PACTIV: up 21% biggest mover in S&P on bullish profit estimates 

AMAZON beats EPS estimates

UPS 1st Q profits down 56% Brown is not killing it stock off 2.5% on news provided weaker Q2 profits in 45-55Cent range vs 65cents

AMEX beats estimates 32 cents vs 12 cents a share still down 56% from last year stock rallies 7.9% on news

MSFT quarterly revenue fell from the previous year first time in 23 year history 33 cents vs 47 from last year

Become a professional gambler? Why not? Interview with Raul Cohen

The good thing about being unemployed is that your opportunity costs are low.  Thus it is a time to try new things and take a look at creative and fun ways to make money. One of my all time career goals has been to become a professional gambler. I figure now is a better time than any to give it a try since I do not have much to lose.   With that said I did some investigative reporting and contacted a semi pro poker player.  Raul Cohen is a undergrad student at a big 10 university and has managed to make over 150K in the past two years with limited cash while attending school full time.   Although 150K for 2 years does not sound like much given are expectations after graduating from a top MBA program, it is not a bad deal considering that one can maintain a full time job and play poker, or that many like myself our unemployed. Thus  75K a year playing poker does not seem all that shabby.   Let's learn more.  

Q&A

How much did you make playing Poker since you started?  

Over the last 2.5 years of my undergrad I made about $150k 

How long did it take you to start making cash?

After 3 months I was beating the low stakes for 2k/month 

Is this a crowded market? 

In the past 4 years the market has become a lot more competitive. But in general there is an enormous supply of degenerates, and plenty that try to do what I do but are incapable. 

Can unemployed broke MBA's be taught how to play?

Absolutely.  MBA's by default are usually intelligent, and being a critical thinker is the most important skill in playing poker.  I recently coached an undergrad business student to beat the $25 tables for 1k/month after knowing him for only 2 months.

How much can an MBA expect to make playing if they learn your system?

With some focus and good risk management one could expect to make between 1k-3k after a couple months.  If the person sticks with it and works hard they could make between 40-100k after a year.

How long to train an MBA to play poker?

1-2 months

Do you advise playing with Visors or Sunglasses?

Usually I like to clearly look my opponents in the eye as the dealer ships me the pot.

What is your poker strategy?

Basically, gathering as much information as possible and just figuring out how people think and then playing optimally against them based on what I know they know.  Also removing bad as well as good reactions and emotions from your play is uber important.

Last but not least Killing It or Getting it Done?

Without a doubt Killing it

Talk like Shakespeare Day in Chicago

Today, in Chicago, Mayor Daley has declared the "Talk like Shakespeare Day". While I think it's a good idea to remember the great Elisabethan bard, I won't make any attempt to talk like him. Supposedly, you have to replace "you" with "thou", "is" with "tis", start your sentences with "methinks" and end every verb with "eth".

Check this out: http://www.talklikeshakespeare.org/

Why I mention this, beside to remember you that it's time to brush up on your Shakespeare knowledge? Well, a while ago, I've seen an advertisment on a bench, saying "Shakespeare, creating employment for the last 400 years." How true! I still remember that ad. 

So, brother, where art thou?

The Pregnant and the Unemployed

The Pregnant and The Unemployed

To set things straight, my wife is the pregnant one in this story, and I am the unemployed. Our baby boy is supposed to come any day now, but it could also be a week until it happens. My wife took the week off from work, so she can rest during the day and mentally prepare for the labor and delivery. I did not have to take any time off, because I was already at home, watching the horizon for jobs. While seen from outside, these may be tough and trying times for us, it is actually the reverse. We have realized, with surprise in our voices as we were saying it, that in more than 13 years of marriage, this has never happened to us: to be together at home, for many days in a row, enjoying each other company, while we’re waiting for our first baby to pop out. These must be really special times, which, by the nature of this situation, could be repeated, but never matched again in our lives. Nothing will be like this, because these moments are unique, through the uniqueness of the feelings attached to every moment. Watching the kicking belly has become our daily avocation. The stress of finding a job is still there, but is now muffled and weak.

My point of this story is the following: yes, being unemployed is a stressful situation by itself, you don’t have to participate into making even more stressful. You are also not alone in this state, as you can probably read the unemployment report. You can do many, many things to take advantage of this time off, which you may not get back until retirement. Use this time wisely. My favorite activities are, in this order: networking with existing friends and making new ones, learning new skills (getting a license, prepare and take an exam), taking some time off (sic!) and think about what would be the perfect use of my professional time. Spending time with friends is very rewarding. Not only you have a chance to bounce ideas off each other, but you have fun doing it as well.

If you are not an MBA, you may think of applying to a business school, because when the economy turns around, the MBA skills will be back in demand, no matter what the naysayers are saying today about the value of the MBA. I don’t know about other schools, but as a graduate of Chicago Booth, I highly value the skills I’ve worked hard to acquire. They are indeed very valuable. I know that, and every Chicago Booth graduate knows that. And that’s enough for me.

If you are an MBA grad, then going back to your school’s career service center to ask for guidance, may be a good idea. They have many resources you can use to think, rethink, strategize, network, and research your next move.

Whatever you do, make sure you are enjoying every moment of it. That’s my advice.

 

 

 

 

 

Daily Market Summary 9/22/09

DOW 76886.57 -82.99 

S&P 500 843.55 -6.53

10 Year 98.391 Yield 2.94

EUR-USD 1.3004

OIL 48.65 +.1

Headlines

-Morgan Stanley Whiffs and misses earnings Stock down 9%

-AT&T beat estimates

-CFO of Freddie Mac Suicide

-APPLe beats estimates on IPHONE and IPOD sales

-EBAY beats analyst expectations

-Goldman issues buy on Ford shares up 13% (that Fusion is Hot)