re: Economics Book Club (EBC): Book 4 Starts Aug 21 (The Smartest Guys in the Room)

The January effect, of course. The theory is that investors sell stocks in December for tax purposes and then buy them back in January, causing persistent seasonal outperformance in the month of January. The problem, of course, is that there's no free lunch in an efficient market and that phenomenon would be arbitraged away over time. If that kind of thing interests you, particularly the dangers associated with buying into behavioral pitfalls of this sort, there are numerous more examples in the CFA curriculum that we could expound on.

RSBR - Thanks for posting the note on the MB. I'm interested. MBA grad with 3 years of venture capital experience. Post VC helped start a technology company that's raised about $10M in capital. I run the finance side with some product and strategy thown in the mix. Primary responsibilities are everything from running the finance back office, fundraising from VCs and PE firms, building a technology product from scratch, and scaling a business.

Looking forward to contributing.

ETA: No political allegiance.

Great addition to the group and welcome. I remember your posts on Money Talk and being impressed by them. Good to have some VC and startup experience in the house. Your participation rounds us out to 15 so far.

RSBR could you elaborate on what CFA is and what related fields there are?

It's a highly practical, masters-level finance certification something akin to the PE designation in engineering or the CPA in accounting. Depending on what you wanted to do in finance, it could be overkill. It's primarily geared towards equity research and asset management, but does have application for investment banking, venture capital, private equity, corporate finance, commercial banking, and quantitative/statistical finance as well.

You're correct that financial returns can ultimately be reduced to a number of different inputs and outputs. As with engineering, there are numerous levels of complexity one might come across to determine exactly what those inputs and outputs are and being able to accurately predict them is a skill one never stops trying to perfect. Particularly in private equity and corporate development, financial engineering is often the most important driver of the deal.

thanks for the answer It seems that while analytical there is also an artistry/feel associated with these fields.

Could you giv e more information on deal making.

Would you say it is imperative to get an MBA from a highly regarded school or would getting one from LSU suffice?

Not to be a broken record, but depends on what you want to do. Want to work for an infrastructure-focused private equity fund? Will need to work in NYC or London, so will need to go to a school that has international relevance. Want to work in corporate development/M&A for a company? If in Louisiana, for example, a degree from LSU can be just as beneficial as anywhere else for the most part. It's all relative.

I suggest you survey the various areas of finance and I'll be the first to give you the no-BS response you're looking for. I've worked in numerous areas of finance across the Southeast and have worked with people from all the major finance markets in the world (sans Asia), so have acquired some decent perspective. Someone like Greg who posted in this thread earlier will also be able to help.

Alright everyone, with the night drawing to a close, just wanted to say I'm thrilled by the overwhelmingly positive response to this and look forward to getting started. As stated earlier, we'll get our list to choose from together tomorrow and will put the selection process up for a vote. We will target a start date of Monday the 12th. We'd initially said we'd target 5-10 hours a week but based on the totality of responses received, I've revised that down to 5. This will guide us when we go to make the weekly reading assignments. Obviously, page size, font size and the complexity of the material will be factors, but this should work out to about 100 pages a week on average. Does that number sound fine to everyone?

Also, in order to prompt discussion and keep the conversation moving along as fluidly as possible, I suggest we have a designated "moderator" for each book who has no formal responsibilities but is instead just asked to be active, ask a lot of questions, and try to be the one driving the discussion. I'm happy to volunteer for the first book, but this person should ideally be different for each book. Also, for planning purposes and to minimize shipping costs, it may be smart to decide on two or three successive books at a time. When we vote tomorrow, let's say those books receiving the second and third most votes will be the ones we read after the first book.

If all goes as planned, I think this will be a fantastic experience and we'll all grow tremendously from it.