@ sammy, No harm intended, I am just contributing my bit. Just a quick teaser, before we completely derail this thread. Let me create a trajectory for you using the cost vs prize analogy.

Cost- possibility that the entire savings meant for a kid's college fund will be wiped out.

Prize-the commission to be made from a transaction involving the above cited even in the face of information asymmetry and moral hazard


Cost- sale of complex securitised derivative instruments to unsuspecting and unassuming investors.

Prize- taking huge bets on the above cited just to satisfy the hubris of a finance professional.

I could go cite more examples on this analogy.

I still take risks and in fact it is what I do for a living but sometimes it is quite refreshing to challenge the status quo. Who knows, maybe it could bring about a 'disruptive innovation' that will totally change our perception about finance.

@OP, apologies for derailing your thread.

^ You are not derailing.

As long as we are learning, a little digression wont hurt.

yamakuza: ^ You are not derailing as long as we are learning.

Abi o, i was about posting the same before i saw this.

@denee and sammy, please continue, its good that you are doing this, it is of a great benefit, especially to starters(am included). Afterall, i derailed the thread first with the 'first class in a fed university vs 2.1 in a state uni' stuff.

deenee: @ T22, One phrase-Elegant Simplicity!


I am not going to provide an answer using some complex charts or graphs. Neither will I try to back up my assertion with some seminal theories or financial models. Also there won't be any figures or historical data included herein. No far from it, what I will do is to direct your attention to the story pasted below. It is not an original piece of work hence credit should be accorded to the person who conceived the idea of the story in the first place. I am sure you must have come across it somewhere. I will then leave you alone to decipher the message herein whilst asking your self certain poignant questions. Happy reading!

The Mexican fisherman and the Investment Banker

An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, "only a little while."

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15-20 years."

"But what then?"

The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions."

"Millions.. Then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

The fisherman smiled at the businessman, quietly gathered his catch and walked away.

Hahaha, what an illustrative answer. I flow with your drift.

Oh well, avarice is a significant motivator but also a smooth way to perdition.

T22.

deenee: @ sammy, No harm intended, I am just contributing my bit. Just a quick teaser, before we completely derail this thread. Let me create a trajectory for you using the cost vs prize analogy.

Cost- possibility that the entire savings meant for a kid's college fund will be wiped out.

Prize-the commission to be made from a transaction involving the above cited even in the face of information asymmetry and moral hazard


Cost- sale of complex securitised derivative instruments to unsuspecting and unassuming investors.

Prize- taking huge bets on the above cited just to satisfy the hubris of a finance professional.

I could go cite more examples on this analogy.

I still take risks and in fact it is what I do for a living but sometimes it is quite refreshing to challenge the status quo. Who knows, maybe it could bring about a 'disruptive innovation' that will totally change our perception about finance.



@OP, apologies for derailing your thread.

You just reminded me of contract theory. Meanwhile, I suspect you do more of HFs nowadays. The highlighted sounds very skewed in that direction.

T22.

.

deenee: @ sammy, No harm intended, I am just contributing my bit. Just a quick teaser, before we completely derail this thread. Let me create a trajectory for you using the cost vs prize analogy.

Cost- possibility that the entire savings meant for a kid's college fund will be wiped out.

Prize-the commission to be made from a transaction involving the above cited even in the face of information asymmetry and moral hazard


Cost- sale of complex securitised derivative instruments to unsuspecting and unassuming investors.

Prize- taking huge bets on the above cited just to satisfy the hubris of a finance professional.

I could go cite more examples on this analogy.

I still take risks and in fact it is what I do for a living but sometimes it is quite refreshing to challenge the status quo. Who knows, maybe it could bring about a 'disruptive innovation' that will totally change our perception about finance.

@OP, apologies for derailing your thread.

Something consistent about those analogies: the prize seemed to be for the agent only. I guess finance professionals, as agents, need to put more effort into educating the principals about the risk involved in investments. If after painting a clear picture of the possibility of losing the entire college savings, the principal agrees to place the funds in some alternative, high yielding asset, then he's solely to be blamed. His loss will be someone else's blessing in the zero-sum game of financial markets.
About financial modelling. I'll assume that one needs to know the most basic programmes, at least excel, for simple analysis and forecasting. If your role is purely in advisory, the need should be less pronounced. I'm not a big fan of software either, but I can't escape excel.

Sammy107_d:

Something consistent about those analogies: the prize seemed to be for the agent only. I guess finance professionals, as agents, need to put more effort into educating the principals about the risk involved in investments. If after painting a clear picture of the possibility of losing the entire college savings, the principal agrees to place the funds in some alternative, high yielding asset, then he's solely to be blamed. His loss will be someone else's blessing in the zero-sum game of financial markets.
About financial modelling. I'll assume that one needs to know the most basic programmes, at least excel, for simple analysis and forecasting. If your role is purely in advisory, the need should be less pronounced. I'm not a big fan of software either, but I can't escape excel.

Thanks, i'd thought one must be skilled superbly.

As per the original post, i personally prefer economics.

^
complex forecasting of businesses and the economy. I think its not working anymore in Europe and America.

^^
That's a myopic way to look at things.
Economics has a much broader outlook. In the same way, I'd have preferred to study physics at undergraduate level, as opposed to engineering.

^^ hehehe... yeah you can call it myopic but forgive my bloated derision

Has anyone made this observation? Finance academics have this sort of hatred for economists. My professors ALWAYS made condescending comments about their colleagues in economics. They make them look like unintelligent people with idealistic ideas about the world; impractical.. Sadly, I've been forced to have that same attitude towards economists too.

Sammy107_d: Has anyone made this observation? Finance academics have this sort of hatred for economists. My professors ALWAYS made condescending comments about their colleagues in economics. They make them look like unintelligent people with idealistic ideas about the world; impractical.. Sadly, I've been forced to have that same attitude towards economists too.

It is a minor academic rancor between academic economists and finance people..Just the same way we ignorantly believe you guys in the industry don't know jack . Surprisingly, economists believe that they are superior to finance people, just as you say that finance people believe that economists are nitwits.

Having deeply studied both courses at graduate level, my view is that pure finance is much, much milder than economics. That is why economists believe that those lazy finance people are beefing them, and the lazy finance people believe that those overly idealistic economists are mere eggheads. I agree that quantitative finance is something else, but I think that is not what you are talking about.

Economics and Finance are great. I will always encourage any mathematician, physicist, engineer, computer scientist and any other physical science person, who is tired of all those our science wahala, to purse an academic or professional career in one of Economics/Finance. Till date, the most competitive people I have met at graduate level Finance/Economics never studied these courses at undergrad level. University of Chicago, for instance, has a very notorious PhD Economics program that eliminates students from the first year down to the third year..You will see many 3.8-4/4 students plus almost 1500/1600 GRE being told that 'we are sorry, you would have to withdraw and look elsewhere'. Most students that have survived this elimination never did Economics at undergraduate level. Anyway, this one is just to encourage those graduates of some other disciplines wishing to pursue one of these courses.

So, yes your observation is not out of place. The rivalry has been there for decades and I think it will not die down any soon.

T22

@op, both are nice courses but i prefer economics or both( if possible)

Btw, is there any course like finance/economics (i have heard about it before, but am not too sure)?, i know of financial economics.

@ T22, I am still in private equity and I have decided to stay put there. The PE industry is very active now (both home and abroad) because, investors' apathy towards the capital markets and public flotations is still high hence they have channelled most of their funds to PE. More so, I occasionally participate in some deal origination and execution with some HFs that manage some endowment and institutional funds. for my clients.

deenee: @ T22, I am still in private equity and I have decided to stay put there. The PE industry is very active now (both home and abroad) because, investors' apathy towards the capital markets and public flotations is still high hence they have channelled most of their funds to PE. More so, I occasionally participate in some deal origination and execution with some HFs that manage some endowment and institutional funds. for my clients.

Okay, good. But your lingo is biased towards HFs nowadays

T22

wow!!! I never knew this thread was still alive,thanks to google anyways.I had a rather disappointing first semester,finished with 4.61,no thanks to a b in sociology a 4 units course(wonder why it's a 4 units course) and a b in micro economics of all courses no thanks to the rift between the two departments.Deenee your initial post was so inspiring. Am now in P.E 1 with P.E II being the last stage I should be a chartered accountant by next year,then CIS will be next.I also intend to start CFA after my NYSC since one has to be a graduate to enroll. T22 hope i didn't disappoint.

^^^^

Nice one so far. Keep working intensely, and congrats on your PE 1 and 2 in advance.

T22

Don1Dee: Big brothers in the house, greetings! Your sincerity and advices in responding to serious posts here is priceless, God bless ya all.
     
          Between Finance and Economics, which is better and why?

Thanks

I'm studying financial economics, so it's the best of both worlds

chamber2: Both complement each other, so it is difficult to say which is better.Finance is an offshoot of the mainstream Economics.Studying Economics or Finance depends on one's interest and future goals.So, none can be said to be better.The only d/f b/w finance and economics is that the later is quite broader and therefore covers a lot more aspects of finance.An econs grad with little more effort can conveniently do what a finance grad can do or even more.

During my undergraduate studies we actually did almost all courses offered by the finance students, likewise they, except some advanced maths, micro-macro and econometrics courses which were taken by econs majors only.

In summary, i can say both are good and offer better career opportunities.Finance is basically applied Economics.

Let us call a spade a spade and not shovel by my own rating economics is the core of business. it is the father no mather how you view it.

abioila: Ialso intend to start CFA after my NYSC since one has to be a graduate to enroll.

You need not be a graduate (as long as you're in year 3) to start your Level I CFA - it's when you get to level two, that the graduate rewuirement is needed. Instead of going for CIS after ICAN, why not take CFA and continue through your service year?

Jarus: Well said, Chamber.

My additional advice is that it is better to obtain first degree in Economics and add professional qualifications and/orsecond degree in Finance.

Economics is wider and as an fresh Econs grad you will fit into more roles, and dare I say, have better prospect, than a fresh Finance grad.

Well i did Economics in my first degree and NOW i'm planing for my Msc in Finance, do you think it's better i do Msc Economics OR would you say Msc finance is just fine.
secondly, I hope Msc Finance would not be as Mathematically inclined as Msc Economics. is thinking of hat to do... pls i need your advice... OR what if i just go for msc Buz Admin. I want something simple in masters level, but not MBA.

juwoonn:
Well i did Economics in my first degree and NOW i'm planing for my Msc in Finance, do you think it's better i do Msc Economics OR would you say Msc finance is just fine.
secondly, I hope Msc Finance would not be as Mathematically inclined as Msc Economics. is thinking of hat to do... pls i need your advice... OR what if i just go for msc Buz Admin. I want something simple in masters level, but not MBA.

Depending on the school, MFin too can have plenty of calculations. Look for Masters in corporate finance

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abiola so hw did u see lasu at d end

abioila:
wow!!! I never knew this thread was still alive,thanks to google anyways.I had a rather disappointing first semester,finished with 4.61,no thanks to a b in sociology a 4 units course(wonder why it's a 4 units course) and a b in micro economics of all courses no thanks to the rift between the two departments.Deenee your initial post was so inspiring. Am now in P.E 1 with P.E II being the last stage I should be a chartered accountant by next year,then CIS will be next.I also intend to start CFA after my NYSC since one has to be a graduate to enroll. T22 hope i didn't disappoint.

By the grace of God, I hope you have achieved all these

Ugosample:


By the grace of God, I hope you have achieved all these

I just felt somewhat obligated to reply your post. ..somebody out there might be inspired .

On achieving all of what I wrote about some 5years ago.......hard work I must say.. Graduated with a first class (CGPA 4.87) - top of my class, completed a couple of internships with top MNCs, became a Chartered Accountant in 2013, currently a CFA candidate and I am currently undergoing my NYSC in one of the top investment banks.

Thanks to everyone that provided useful tips back then - Jarus chamber2 Don1Dee tanimola22 deenee etc.

abioila:

I just felt somewhat obligated to reply your post. ..somebody out there might be inspired .

On achieving all of what I wrote about some 5years ago.......hard work I must say.. Graduated with a first class (CGPA 4.87) - top of my class, completed a couple of internships with top MNCs, became a Chartered Accountant in 2013, currently a CFA candidate and I am currently undergoing my NYSC in one of the top investment banks.

Thanks to everyone that provided useful tips back then - Jarus chamber2 Don1Dee tanimola22 deenee etc.

Wonderful

I'm inspired.....

Even tho i did not finish with a first class eventually....

But with the professional exams and all, I can make up for it there

I'm very happy for you bro, and will be looking forward to more successes from you

Respect

Bravo.

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