Showing posts with label fund management. Show all posts
Showing posts with label fund management. Show all posts

Apr 25, 2009

Job Application Interview

Most actuaries don't have to apply for a job....

This apparent advantage could turn out to be a disadvantage later in our career, when we suffer from an 'application experience gap'.

Anyway... Do you recognize the flabbergasted feeling that occurs when, after a 'splendid' job interview, you come home with a positive feeling and the day after you are rejected?

Although you thought you performed well in the interview, somewhere, somehow, you missed the boat.

What went wrong?

Well, apart from the general pitfalls in a job interview and the trivial explanations of a rejection, most probably things went wrong due to lack of proper communication.

Probably, when you're having an interview, you'll take notes.
Because you're focused on getting the job, you're inclined to (only) write down the positive aspects of the job and the conversation.

This will definitely give you a biased view on the outcome of the interview. You simply miss or underestimate the minor or negative remarks in the interview.

How to solve this?

This is what you can do to get a more realistic idea about the outcome of the interview.

  • Listen
    First of all, make sure you listen well.

  • Take Notes
    Be careful not just to write down your personally important or spectacular issues (e.g salary, benefits, car, etc), but especially note (and write down!) small remarks, advices or 'used adjectives' of the interviewer.

  • Split in Negatives and Positives
    Split your note paper in left and right, and put the positive issues (the Positives) on one side and the negative issues (the Negatives) on the other side.

  • Manage the Negatives
    Make sure to write down every single negative issue or negative adjective, no matter how small. Don't ignore these Negatives. By questioning, make sure you understand them right and manage them one by one. If you're not able to get those negatives from the table or to put them in quarantine, they might kill you in the end without you realizing it. So:

    Manage the Negatives instead of counting the Positives

  • Feedback
    At the end of the conversation ask for feedback and check by asking the interviewer to summarize your Positives and Negatives. If any Negatives are left, handle them with care right there.

  • Don't fake
    Don't try to reason away negatives that are clear facts. If that would imply a rejection, be happy, because you are not qualified for this job and therefor wouldn't be happy in this job as well.

Evaluating an interview is not simply balancing Positives with Negatives. Even a single Negative can screw it up.

Anyway, this Positives/Negatives Method is not only applicable in case of a job interview, but can be used in every "beauty parade", contract negotiation or proposal you try to defend.

Next time, with a positive attitude, keep your 'sixth sense' on the potential Negatives and manage them!

Nov 20, 2008

Investment Banking explained!

As actuaries we all know investment Banking is a complex business.
This Youtube video explains the essentials of Investment banking in about 8 minutes.

Be sure to study the video seriously, it will be the best study investment you've done in years.

Jul 7, 2008

Simpson's paradox

Let's take a look at a simple fund management score card.

Fund 1

Fund 2

Fund 1+2

Return Assets Rate Return Assets Rate Return Assets Rate
Fund manager A
8 200 4,0% 72 800 9,0% 80 1000 8,0%
Fund manager B 48 800 6,0% 22 200 11,0% 70 1000 7,0%
Total Fund managers 56 1000 5,6% 94 1000 9,4% 150 2000 7,5%

Clearly Fund manager B performs 2% better in both Fund 1 and 2 than Fund manager A. However, across both funds, Fund manager A seems to perform better.

This effect is called Simpson's paradox.

Keep in minds:
  • Always be critical in ranking mix funds (managers) on overall performance
  • Even if the risk profiles of Fund 1 and 2 are the same, Simpson's paradox may show up
  • Besides choosing the right Fund manager, choosing the right asset mix is just as important

Another nice example of Simpson's paradox is:




Survived # Start Rate Survived # Start Rate Survived # Start Rate
Treatment A 3135 3300 95 4020 6700 60 7155 10000 72
Treatment B 7395 8700 85 650 1300 50 8045 10000 80

A cohort or a series of people receive treatment A, and another cohort receives treatment B. The survival rate of treatment A is better for woman as well as for man, but not for people!

Simpson's Paradox Actuary Links:

  1. Ratemaking: The CEO asks the actuary...
  2. Smokers and survival rates
  3. Credit Score really explains Insurance Losses?