Greed is good!

Tomes have been written about how hard and stressful an investment banker's life can be. 80-120 hour work weeks. Being a slave to excel, being on-call 24/7. You know the spiel...

And yet you have some of the fittest bodies in banking. I have seen bankers around the FiDi (Financial District for you less hip types) who look like they have been pumping iron 8 hours a day. Gelled hair, Armani suits, Pierre Cardin watches....I guess it must take 45 minutes to get dressed in the morning. And oh, I forgot the sun tan-unless the banks are handing out tanning lotions and have tanning salons in the office, where do they get that bronzed tan if not by sitting on the beach :-)

Truth be told, I am sure they work pretty hard-but so do consultants, marketing and sales people and operations people. Imagine being a supply manager in a large oil and gas company-how much stress would there be in your life. How much of the company's money is riding on you doing your job well. It sure can't be fun. Or being a sales lead on telecom projects who is putting together tender after tender for large multi-million projects-with a slim to nothing chance of success. No job is more accountable than sales.

So why exactly do bankers make multi-million dollar and pound bonuses?

Do women have it easier than men?

Business schools fawn over them-offering them plenty of scholarships. Banks and consultancies love them. Industry managers at top companies have their KPIs now defined by how many women are among their direct reports. Headhunters fawn over them. So do women indeed have it much easier than men in the business world today?

On the other hand, let's look at CEO positions. Only 10 of the fortune 500 have women CEOs.
A very surprising study by the two Olin business school professors points out that investors have less confidence in companys that are run by women CEOs. Here is the link to the entire article.
http://news-info.wustl.edu/news/page/normal/6414.html

And, Kellogg says that exclusion from an organization's informal network, gender-based stereotyping, and the lack of role models are the top three barriers for women seeking high-ranking positions.
http://www.kellogg.northwestern.edu/news/hits/050210cdh.htm

But just getting to the corner office is just one metric. What about middle managers and mid and small-sized companies? Do women perform better at men in middle-management roles? Apparently so-more than 50% of middle and entry-level jobs are held by women.
http://www.post-gazette.com/pg/06206/708431-28.stm

So do women have it easier than men? Maybe so at entry and to a certain extent in middle-management. That's about it.

The jar of life

A finance professor stood before his MBA class and instead of talking about WACC, ROIC and NPV, he told them a story.

Take a large empty jar and fill it with rocks. Then pick up a box of pebbles and put them into the jar. The pebbles, of course, will roll into the open areas between the rocks. Next pick up a box of sand and pour it into the jar. Of course, the sand will fill up everything else.

"Now," said the professor, "I want you to recognize that this is your life. The rocks are the important things -- your family,your spouse, your health, your children -- things that if everything else was lost and only they remained, your life would still be full. The pebbles are the other things that matter like your job, your house, your car. The sand is everything else. The small stuff.

If you put the sand into the jar first, there is no room for the pebbles or the rocks. The same goes for your life. If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you. Pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out dancing. There will always be time to go to work, clean the house, give a dinner party and fix the disposal. Take care of the rocks first -- the things that really matter. Set your priorities. The rest is just sand."

The habits of highly effective people

I have been awfully busy the last 2 days-had been dodging this mandatory class on the 7 habits of highly effective people but finally succumbed to repeated reminders (and threats) from HR. This means that my work day has effectively doubled. I attend the class at a city hotel from 8:30-6ish and then do my regular work in the evenings.

Maybe that job in Investment banking wouldn't all that bad? I could atleast drive myself to spontanous orgasm by looking at my bank balance when I feel depressed :-)

Honestly, the class is pretty good and is being taught by our CFO and general counsel so the discussions are pertinent and insightful. The food ain't bad either-have been to an Indonesian and Japanese restaurant so far.

I also find the class more tuned towards self-actualization than your professional life. The questions that are put before you can be a bit unsettling. If you died tomorrow, what would your epitaph read for example? Did you have a "mission statement" for your life? Would you be remembered as a good son, brother, spouse or uncle? Would there even be something worthy to put on your epitaph?

Oil price concerns

Why are oil companies buying back so much of their own stock? The reason is that they don’t have a lot of truly attractive opportunities for investing in new production. Most of the oil reserves are either legally off limits for the them or they’re de facto off limits because they’re in places where it’s so hard to do business.

Although all of us are seized by the high price of energy, the major energy companies are concerned that prices are going to decline sharply. If there is a recession, which would dampen demand for energy, or the capacity to produce oil around the world improves, then prices will decline. That fear retards a lot of investment because these investments have a very long capital lifetime, and need to be protected against low prices over an incredibly long time horizon.

So high oil prices are good for us because they incentivize oil companies to invest in more efficiency?

Wrong! In reality, much of the revenue from high oil prices is accruing to state producers like Russia, Iran and Saudi Arabia. Indeed, the Soviet Union’s most dangerous adventures correlated with the high oil prices in the 1970s. And when oil prices came down, the Soviet Union collapsed. Geopolitical tensions can only increase as undemocratic producers become increasingly wealthy and dictate terms to the US, India and China.

High oil prices do have some positive effects though-photovoltaic startups are springing up all over the world. Toyota, Honda and the Detroit 3 continue to innovate on electric vehicles. Ethanol production from corn in the US and from sugarcane in Brazil is rapidly rising.