Investment-management

First of all, the directory in the back of the book is full of time sensitive information. It is also recommended in the book that you go to the company's web site before you send off an application. If you are interested in consulting, get books specifically written about case questions. If you are interested in investment banking, make sure you have a strong background it what exactly investment bankers do, because the book doesn't really give you a good idea.

A few more points:

Although the book is written by a female minority, the book has nothing about minority hiring programs. If you fit the bill, it would be worth your while to investigate that.

The book is specifically written for those who have 4.0 GPA's at UPenn, Harvard and Stanford. It devotes a little time to the "non-targeted," but it's pretty clear that if you don't have the grades, and you don't go to the right school, then you don't have a chance. Talk to your career counselor about grads from your school that may have made it in the field you're interested in.

The book is trying to entice you into becoming an investment banker or consultant. Although it tries to be unbiased, it is clear that it doesn't provide the big picture. Read books like "Liar's Poker" and "Monkey Business" if you want an honest look into the professions. Your best bet, however, is to find someone who is in your field of interest, and interrogate them. Only then can you get the full picture.

Started looking into similar stuff more than a year ago. Bought this book 3 month ago, just read it yesterday.

Reading the book is like hearing your bigger bro/sis telling you about the walks they have walked, about challegens you feel very uncertain/frustrated, and about what things REALLY are and how they could be done the BEST. Those experiecens are not told in a cold tone like in Vault or in some drab books by professionals who write resum/cover letter for a living. It is rather put together in a knowledgable, guiding, rich-in-"meaningful"-example and willing-to-help way. Author's intention and effort in basing the knowledge of job-hunting process on what you may feel about certain things and what you may want to know the most are evident too.

Author's own experience where she "battled through grueling recrueting season, totaling about seventy-five intervews..." and getting into Goldman Sachs, and later into Gemini is curcial in above regards.

The book has something for everyone; whether you're a novice investor trying to navigate the world of mutual funds or a hedge fund manager with a penchant for short selling, you'll find it eminently useful. (And if you happen to be the New York state attorney general looking for a blueprint to prosecute Jack Grubman and the rest of Wall Street, you'll find the book very worthwhile!) While the book covers investing basics with exceptional clarity (it has a paragraph on the P/E ratio that is one of the best I've seen), it also contains some headier material that more sophisticated investors will find helpful (his 12 point checklist for uncovering financial shenanigans is a keeper).

It's difficult to write a book that is both entertaining and instructive, but Faber has pulled it off in spades.

The first group of authors tell you to look for certain price and volume patterns; that the stock price depends on those patterns because those patterns are a reflection on human behavior.

The second group of authors tell you to look for certain ratios in the financial statements; that the stock price depends on those ratios.

Then there's this book, which tells you that the price could depend on a lot of things, like mergers and acquisitions and the synergy they generate, executive compensation, competitive strategies, stock buybacks, etc. But they don't tell you how to calculate those factors into the stock price. The book is a good book which certainly provokes thought. And it's probably good for finding stocks for the long term investor. But for me, it's a little too impractical. And a little too academic intellectual guru voodoo. When I have money at risk, and I have to make quick decisions (which can affect my net worth), I like to keep things simple and easily measurable which technical and fundamental analysis allows me to do.

1. TAKE JUST WHAT YOU NEED. Even though I'm a valuation expert, I thought some chapters of this book stood out as just plain useful. Chapters with great standalone value include: (A) Chapter 8 on Real Options, which develops the only framework for applying real options that I've seen that's intuitive; (B) Chapter 10 on M&A analysis which gives a solid treatment of all deals including often-ignored fixed-value stock deals; and (C) Chapter 5 Appendix on Employee Stock Options which explains how ESOs affect valuation (this is ignored by every other book on valuation). Moreover, I found the tutorials and spreadsheets at the expectationsinvesting.com web site made it easy to apply these ideas without hours of tedious spreadsheet work.

Some chapters may be more or less applicable to various readers. For example, investors may find Chapter 11 on incentive compensation to be more applicable to managers. Also, Chapter 4 is most beneficial to those who haven't read the strategy frameworks of Michael Porter, Clayton Christensen of INNOVATOR'S DILEMMA, and Varian/Shapiro of INFORMATION RULES.

2. USE "EI" TO PICK STOCKS. Chapters 5, 6, and 7 lay out the "EI approach" to investing. Namely, the authors suggest that investors use a DCF approach to reverse engineer consensus expectations from a company's current stock price. Then, the authors suggest you compare YOUR expectations to CONSENSUS/MARKET expectations. If you think market expectations are low, buy the stock. If you think market expectations are too high, sell or short the stock.

At first glance, it might seem that this material has already been covered in McKinsey's VALUATION or Damodaran's valuation library. But those books don't deal with two things: (A) the importance of the "forecast period" and its relation to strategy and competition, and (B) the importance of figuring out market expectations. Thus, even though I've read those and other books, I learned a lot in this section.

3. TO LEARN HOW TO THINK ABOUT INVESTING. I'd also recommend this book to someone who had a smattering of financial knowledge, but was confused by the contradictory smorgasbord of investing theories out there. Any MBA -- or any determined individual investor who can read a balance sheet -- would find this to be a great foundation book. You could use other more detailed books to fill in the cracks, but this is the best place to start.