MSBO Technical Recruitment Primer PDF

Michigan Stocks and Bonds Technical Recruitment Primer This guide is intended to provide you with an overview of basic technical concepts that may be tested in MSBO interviews, which are split into a behavioral-based first round and a technical-based second round...

Michigan Stocks and Bonds Technical Recruitment Primer This guide is intended to provide you with an overview of basic technical concepts that may be tested in MSBO interviews, which are split into a behavioral-based first round and a technical-based second round. Critical thinking and communication skills, knowledge of basic investing principles, and interest in MSBO are the most important characteristics we’re looking for. Economy Federal Reserve’s impact on the economy Monetary and fiscal policy in context of markets Economic news, environment and trends Economic indicators: Unemployment, Inflation, Gross Domestic Product (GDP), etc. Markets What are the different categories of stocks? What’s the difference between them? ○ Value Stocks ○ Growth Stocks ○ Dividend Stocks Common stock metrics and their applications (P/E Ratio, EV/EBITDA, etc) Concept of stocks vs. bonds Stock exchanges and stock market indices (S&P 500, NASDAQ) Industries that have recently performed well and industries that you think will do well in the future Time Value of Money $1 today is worth more than $1 in a year because you can invest that $1 today and earn a return, increasing its value over time and therefore making it worth more than $1 in a year Financial Statements Balance Sheet ○ Snapshot in time of a company’s Assets, Liabilities, and Shareholders’ Equity. ○ Assets = Liabilities + Shareholders’ Equity  Income Statement ○ Overview of a company’s revenues and expenses over a period of time, typically one year ○ Starts with Revenue, subtracts out various expenses, and ends with Net Income Cash Flow Statement ○ Overview of a company’s cash inflows and outflows over a period of time, typically one year ○ Separated into Cash Flows from Operations, Cash Flows from Investing, and Cash Flows from Financing Investing What is fundamental analysis? What makes a good investment? General Business Knowledge Characteristics of good and bad companies and WHY Current events and trends in business news Advice for Your Stock Pitch Review recent changes in the investment that would affect future value and isn’t already priced in (considered by analysts in the current price) Helpful to look at the news or sectors that the investment is based in We would not recommend doing a short pitch, as MSBO does not short the stock of companies Pitch Structure Be able to speak for 1.5 - 3 minutes about your pitch Helpful facts to include are company name, headquarter location, ticker, and sector/industry that it is involved in Include 2-3 main thesis points on why it is a good investment Highlight how the thesis points are not priced in Completely unnecessary to perform valuation analysis! Follow-up questions from interviewers are likely Examples of topics to be familiar with  Basic company financials Market share Why invest now? Info on competitors Why would you not invest? Additional Resources ○ Finviz (simplifies stock screening) ○ Pitchbook (useful for M&A information or comparables analysis) ○ Wall Street Journal (standard newspaper everyone in finance reads) ○ CRE Daily Newsletter (daily commercial real estate newsletter) ○ Morning Brew Newsletter (easily digestible headliner news) ○ Marketplace Morning Report Podcast (standard economic podcast) ○ Investopedia (encyclopedia of investing)