You won’t achieve ‘impossible’ things without structured goal setting

Topic: how to get what you want

Discussion: very few people actually do have real thought-through goals

Conclusion: brainstorm many, many goals, identify your top ten, write one page per top goal on why you want that


You absolutely must write down your goals

-to find out which they are

 

If you want to reach your goals, try this:

  1. Identify your goals
  2. Write down why you want to reach them
  3. (then figure out how, by breaking down the why:s to small, tangible how:s)

I recently listened to an episode (#131) of one of my favorite podcasts, Framgångspodden, in which the guest, Mikael Arndt, talked about goals, why they are important, how you can find out which are the most important ones to you and how to maximize the likelihood of reaching them. He also underlined the importance of updating your goals about once a year to avoid wasting time on outdated ones your younger, ignorant self thought were cool.

Here I wrote about the dangers of setting and keeping goals.


Mikael Arndt turned out to be quite the philosopher, not the used cars salesman archetype I was half-expecting. Among other things he stressed the value of regularly going over your goals and your why:s, e.g. like this:

  1. Write down your goals. Take a physical pen and paper and write down 100 things (or 50, or 200; “many”) you want, want to do, want to achieve — no matter if they are implausible, unlikely or down right impossible. This is not the time for why or how, just what. If you find this hard, take your time, one goal after the other. You’ll get faster with practice. Remember the Red Queen who could believe six impossible things before breakfast.
  2. Categorize your goals as A, B or C. A: top-1 priorities that provide the meaning of life, the reason for getting up in the morning (somewhere to sleep, children, time and money to travel?), B: Nice to have goals (a sports car? fancy clothes), C: less important, could probably do without altogether, such as “an ice cream”, “a web page”. You still mustn’t bother with why or how to reach your goals.
  3. Write a why page for each top priority “A” goal on why you want that. If you can’t write a page on why, maybe you don’t really want it (if you ask me, sometimes a shorter why is better, but you get the point). The more you write the easier it gets to weed out goals that are due herd behavior, group think, and societal peer pressure than your own true-to-self innate goals.
    1. Maybe you want a sports car. Why? I want to drive fast, I want others to know I’ve made it, I like looking at it.
    2. Why do you want to drive fast, why do you want others to know, why do you like looking at it?
    3. I get a nice sensation in my stomach from acceleration and dangerous speeds, cooler and more interesting people will want to hang out with me, looking at it makes me think of what I’ve achieved and what other things I may succeed in doing.
    4. And on and on.
    5. Some goals will become less and less poignant with each explanation, others increasingly enticing.

Most people don’t do anything near this. Mikael said 97% don’t, but the 3% that do are several orders of magnitude more likely to reach their goals. Why not become one of the 3%? It doesn’t really cost anything more than a few hours of using and training your imagination.

Once you have your list of goals it’s time to break them do into tangible steps to get there. But the most important work is already done. Once you’ve got your target, purpose and why’s you have laid the foundation for inspiration, motivation, perseverance and grit — and that’s what get things done in the long run, not somebody else’s idea of success, orders or to-do lists.

Check out Framgångspodden if you understand Swedish, or if you hadn’t already go back and read my post about why not to set big, long-term goals that you stick to through thick and thin without questioning.

And why not check out today’s interview with me in Börsvärlden?

P.S. If you don’t scrutinize, specify, adapt and update your goals you often tend to target what everybody else is, which exposes you to the Red Queen Effect of running just to stand still.

How to ace a hedge fund job interview

How to get through a hedge fund interview with flying colors

Reading time: 2120 words

Warning, this post is a bit unusual. It’s a run-through of a job interview case I used at my hedge fund Futuris.

It takes about five to ten minutes to read, and will teach you a lot about what I was looking for when hiring analysts (PMs to be), and what you probably should keep in mind during an interview.

Executive summary

Don’t crack under pressure was probably the most important part of the test – the ability to pick oneself up and continue, to try new ways and ideas, after failing one route. Functioning under pressure, keeping communication up, and being able to make decisions, ask questions and try, despite having made a few mistakes.

That…

…and keeping neat notes, following a logical order, formulating a plan, communicating, demonstrating an ability to do quick sanity checks on the fly, to combine a bird’s eye view with at least a quantum of sense for details and plausibility in the micro perspective.

 

How long is a string?

(“piece of string” – I know, but I want it to sound a little retarded)

Well, a quantum string is around 10-35 meters long, so they’re pretty well defined in terms of length, if that’s what you’re asking.

string

Huh?

Unfortunately, you never know what kind of string the question is about, so the answer is usually completely arbitrary. What it means is simply “there is no (known) answer to your question”.

I love using it as my turn-around to a lot of questions I get about valuation, timing, subjective judgement calls etc. 

-It works for most truly important questions regarding life, the universe and everything:

  • How far will the stock market bounce go? What multiple is warranted for this and that biometrics company?
  • Is micro or macro most important for valuing this stock?
  • Is it different this time or not?

The answer is typically “both” or some variation of that.

 

On required skills (measuring strings) for getting a job at a hedge fund

When I hired people at my* hedge fund, I wanted to know the person could manage switching perspectives back and forth, while being organized and keeping calm enough to keep track of the task at hand. Not least I wanted to see how they handled pressure and (rectifying) mistakes.

I asked them one simple question:

“Does all the physical legal currency (bills and coins) in Sweden fit in the Stockholm Globe arena?”

The question is similar to asking if all the physical money in New York would fit in the Madison Square Garden arena.

globen case

The math is quite easy, and the assumptions needed are hardly rocket science either. Without pressure, a person of average intelligence and math skills should manage to do it within 5-1o minutes using just a pen and paper.

  • First you need to calculate the size of the arena.
  • Then the amount of physical currency.
  • Third, how many bills and coins that amount is, and how much space that many bills and coins would occupy
  • Fourth and final, you have to remember to compare the volumes of one and four, and answer if the bills and coins fit.

You get a pen and a stack of papers and about an hour, during which you’re allowed to ask questions, and supposed to explain what you’re doing and thinking.

Globen

The Globe arena

(*my = I was one of three partners, as well portfolio manager and the managing director)

 

Size of the arena

Is it 10 meters, 100 meters or 1000 meters? If you don’t know, just try to imagine a hockey rink or a soccer field.

Let’s go with 100 meters. It’s obviously larger than 10 meters across, and less than 1000 meters…

The globe arena building is (almost) spherical, but never mind that. Think of it as a cube instead. The volume thus can be estimated at around 100 x 100 x 100=1 million cubic meters.

globen

A few guys tried using the formula for a sphere but got it wrong. Once they got the correct formula from me they couldn’t handle the (very simple) calculations due to stress and inability to use rounding. Worst of all, they didn’t verify the answer against the volume of a cube of the same size. Those mistakes are not what you want to see an analyst or portfolio manager make.

You can always go back and refine if needed. FYI: the real answer is 0.6m cubic meters. Close enough. At least it’s not just 1 000 cubic meters or as much as 1 billion cubic meters…

 

Money

Triangulate the amount of currency in SEK:

  1. a certain percentage (2%? 1%? 10%?) of GDP (4 000bn SEK) is physical money
  2. assume how much cash all physical people (1000 SEK each?), stores (twice as much as the people? Four times?) and banks (as much as the stores?) are holding
  3. make alternative calculations based on total national wages or something similar, followed by circulation and accumulation in stores before being shipped to banks daily or weekly.
  4. make an assumption of the proportion of bills vs. coins… how much do you typically carry of each?

Answer: There is 68bn SEK in bills (8bn USD) and 5bn SEK in coins in Sweden.

When I first did this, 10 years ago, there were 100bn SEK in bills and 5bn in coins. Let’s go with the current number 68+5bn SEK.

By this time, many had already forgotten why they were trying to calculate the amount of money in Sweden, or estimating GDP etc.

Some were so confused they started comparing GDP in SEK to the cubic meter volume of the globe arena.

What?! Comparing GDP to a volume?! What were they thinking? What if an investment decision was made using a similar approach? 

They had to be nudged into calculating the physical amount of money needed to drive GDP, people’s wallets, cash registers etc., i.e. how many coins and bills there were and their physical volume requirements.

 

How many bills and coins?

Well, assume an average value per bill or guess the amounts per each type of bill. The answer is the average value per bill is 200 SEK and consequently there are around 68bn/200 => 340 million bills (317m actually). Let’s go with 300 million typical bills.

Do the same for coins. The average coin is worth 2-3 SEK and there are thus 5bn/2.50 => 2bn coins.

100 SEK

How much space does a bill or a coin occupy

So, how much space do these slippery little buggers occupy?

Could the amount of money in New York occupy Wall Street? Madison Square Garden?

How big is a bill?

How long is a piece of string, some applicants seemed to think and just froze. And, yet, they had a stack of papers in front of them – just like a stack of bills…

applicants freezing up

Anyway, a typical Swedish bill is around 70 mm x 140 mm x 0.1 mm.

At least it’s not 200 x 100 mm.

Nor is it 1 mm thick (I seem to remember somebody going for 2 mm (1/10 inch) thick for a while. That guy did not know the length of a piece of string).

Sure, you’re free to think out loud, but you should always do a quick “in and out” (of micro and macro perspective, to make a sanity check: What would a stack of 2 mm thick bills look like. Just ten of them would be an inch thick! Is that plausible? What if you folded it 5 times, making the equivalent of a stack of 32 bills?)

Bill x32

Anyway, a reasonable assumption, given the time and task was to say a bill had the dimensions 100 x 100 x 0.1 = 1000 mm3, or 1 cm3. However, any assumption within half or twice those dimensions in all directions would have been more than OK.

Some stopped right there.

Some just forgot about the coins (sloppy notes) and went on to do all kinds of crazy things.

Some tried comparing the volume of one single bill to the arena. Some compared the volume of a bill to the volume of a coin. Some tried stacking the bills on top of each other in one single stack 30 km high (300 kilometers in one case) and draw conclusions from that.

OK, a few just took the volume of the notes and compared it to the arena. Pretty good, albeit a bit sloppy. They were asked to repeat the original question (in order to remember the coins), which they should have written down neatly on top of the first page. I repeatedly throughout the case urged the applicants to keep neat and clear notes. None of them did.

P1010650

OK, back to the coins:

A typical coin is about half that size (20mm diameter and 2mm thick), but assuming it occupies the same space as a bill is perfectly ok.

Those lucky enough to get this far, often went right ahead and made a stack of coins 4bn mms high = 4 000 kilometers, and then went through all sorts of trouble trying to fit it inside the arena in various ways (rarely succeeding)

Total volume then comes to: 300 million bills x 1000 mm3 each + 2 billion coins x 1000 mm3 each = 2.3tn mm3. Scaling it to cubic meters means dividing by 1bn (1000 x 1000 x 1000), or 2300 cubic meters.

 

Comparing volumes

Here and now, you should have a couple of neat notes saying

  1. “Arena volume=1 000 000 cubic meters” and
  2. “Money volume=2 300 cubic meters”

Some did (very few – actually not a single one of all applicants had such neat notes. However, four of them were at least able to eventually find the numbers, with some barely legible notes attached).

Most had to go back and redo a lot of their calculations, while trying to keep their notes in better order (often stressing and failing again, this time freezing up on simple calculations like 2+3 or 4/2)

And, yet, even those with the two appropriate numbers at the ready still found it somewhat difficult to answer if the money would fit. Mostly because they weren’t entirely sure which number was the volume of the arena and which was the money volume, due to… sloppy notes… and inability to make a simple quick verification of the easiest volume to calculate (1003=1m).

Four finally did answer, trembling and sweaty (they claim to still get shivers down their spines, just hearing about the “Globen Case”), that yes, the money fits.

 

Fingerspitzengefühl

Then I asked them to draw the arena and the money in it (remember it would only would occupy some 0.2-0.4% of the volume), and invariably got way, way, way too big piles on the drawings. By then, however, we couldn’t exclude more people or we would never be able to hire anybody.

I’m sure you are feeling smug by now, thinking the above case was super easy.

Actually, you’re right. It is. The case in itself is easy.

It’s just that when sitting down at a job interview for a hedge fund, with me in your face, and not really knowing how long you have and not wanting to look stupid, can give anybody stage fright and freeze up.

And that was probably the most important part of the test – the ability to pick oneself up and continue, to try new ways and ideas, after failing one route. Functioning under pressure, keeping communication up, and being able to make decisions, ask questions and try, despite having made a few mistakes.

That…

…and keeping neat notes, following a logical order, formulating a plan, communicating, demonstrating an ability to do quick sanity checks on the fly, to combine a bird’s eye view with at least a quantum of sense for details and plausibility in the micro perspective.

Actually, the real lesson here probably is that hedge fund managers can be quirky.

 

Bonus: How to write a CV

If you want to help a friend prepare for a job interview, share this article with him or her. Even if it’s not for a job in finance, they might find it useful anyway. If, nothing else, you could always talk them into subscribing to my newsletter and reading my book about investing.

Read more about applying for a job in finance here (how to write a CV), and why you shouldn’t here (please don’t waste your life in finance), and what you should do instead (robotics).

How to craft the perfect CV, letter and interview to land the job of your dreams in finance

This is an article about what to do during job interviews and when writing your CV/résumé, as well as what not to do (i.e., the things I did)

Let’s start with my own spectacular failures – entertaining in retrospect but frustrating for my father (I didn’t really care, I saw myself as a winner for just getting to the interviews at BCG, Andersen, Goldman, McKinsey, ABB Financial Services etc.).

CV letter finance retarded

Do your research

– know what you are getting into, if nothing else to appear interested

To start with I had no idea what I was doing, meaning I just took the free food on the company presentations at school and sent in my papers (applications) to the biggest and the baddest chicken curry subs.

That landed me interviews with most of the largest management consulting houses and investment banks. I can’t recall ever being rejected in that stage, even though it might have happened. There were a lot of application processes and interviews back in the spring of 1994.

 

Trim your application

I didn’t

I can’t see why I was called to all those interviews, since my CV and letters were a mess.

I included exactly everything, despite my only relevant experience being my then unfinished studies at Stockholm School of Economics. I included translating a technical manual for my father, building a model in Excel for his wife, two weeks as a street peddler for a dating agency, speaking French, Italian and Latin (I did have the book The 1500 most important words in Latin), being a ninja and having competed in Tae Kwon Do, and so on…

You will not come through as a renaissance genius that way. Consider every entry as being a link on a chain – do not add weak links.

renaissance you did not make build this CV letter job application retarded

 

Do not stand out

-unless it’s unequivocally positive

In one of my most infamous interview rounds, I got called in for three consecutive rounds, each consisting of 2-3 interviews and “cases”. I was asked to estimate the market for train  signalling equipment in Poland and other real life business scenarios. I thought I did really well and it seemed as if they thought so too, since they kept calling me for another round of talks. At the end of the third occasion, we had a semi relaxed conversation (approximately interview nr 8!) just to seal the deal…

He asked me if I had a role model in literature, and I promptly answered in my then slightly autistic and robotic flow of words “Ford Prefect, in the fifth installment of the Hitchhiker’s Guide To The Galaxy trilogy, when he jumps out of the window at the 26th floor to keep the element of surprise on his side”.

aconcagua ice jump CV letter job application retarded finance

Glacier jumping during summit climbing Aconcagua

“Eh, don’t call us. We’ll call you.”

 

Do not propose genocide

Another time, ABB Financial services complemented their interviews for the position as trainee (a much coveted position among the top students since it entailed 5-6 different one-month positions throughout ABB Financial Services), with a math test and an IQ test.

The managing director Peggy Bruzelius was responsible for the tests this day. I aced the math test and she took that as her cue for some chit chat, excusing the IQ test as a bit crude and not too informative but perhaps still somewhat useful. Nevertheless she was sure it wouldn’t pose a problem for me.

I didn’t think so either, and to make her less embarrassed I said “It’s problably still true that if the lower half on the IQ scale were shot, the upper remaining half would do better. Not that I propose that”.

idleness boring retard 5

These are but two of many, too relaxed, interviews that ended badly when it seemed I had already won them over.

At least at Andersen my dismissal was more to the point: “I’m sure you would do excellently here, but I’m also certain you would leave within two years to join an investment bank in order to make more money

My thoughts: “1) No, no, no, just give me the job and 2) WHAT?! I can make even more money in this thing called investment banking? What and where is that?

bored money blinds retard idlefailure is an option money isnt everything

 

 

How the alpha student became an errand boy

I eventually got a job, but not one of the fancy ones above. I got the possibly lowest of low jobs there were in the finance industry (stock broker assistant at a third tier very small Swedish outfit). I, however, was happy as a camper – doubling my “income” from 1k USD/month (student loans) before taxes to 2k (wage).

Actually it was a little less, but let’s round it to 1k USD/month after taxes or 10-12k/year. That was not what was expected of the top student from the top business school in Northern Europe, so take all my advice on job seeking with a bit of salt :)

 

The Retarded Employer

Fortunately for you my, career turned out okay and I eventually found myself screening applications and interviewing applicants.

Here is my advice for applying for a job in finance. It’s not comprehensive or statistically significant. It’s just my view, my way, from my perspective as an employer at one single firm – The European Hedge Fund Of The Decade. By the way all people we hired turned out to be extremely valuable and useful, so we apparently picked the right ones, and they made sure they were picked by sending the right papers and providing the right answers at the interviews.

 

Here is how to write a CV (what caught my eye)

Language – your CV/letters should be correctly spelled, punctuated, natural-flowing and not too formal (like a serf addressing the king – those get dumped in the big round archive right away). Write naturally, relaxed, with not too big words unless necessary.

Let many people read it before sending it. It’s worth it.

One of my best hires ever was a guy with slightly less impressive merits (schools and grades) but with the best flowing letter of all applicants. My partner said (a weak) no, but I still got to interview him as a wild card. He passed the quantitative management consultancy “cases”, got the job, and stayed on for 8+ years and became partner.

Keep it short – the CV and letter should be respectively maximum 2 pages. MAXIMUM! I can’t really see you needing more than one page for either, but perhaps in extreme cases a second page might be needed.

Clarity and space is of course more important than cramming stuff on one page just for the sake of it, but first think about cutting. Imagine you are about to hire yourself. What is really relevant for the employer?

Do not include foreign languages you don’t intend to use. Do not include that lemonade stand in 4th grade or your 8 week summer job. Do not include jobs shorter than one year full employment unless they are directly relevant for the position. Do not include every hobby you have ever had, or sports you have ever practiced – just the best, formative or current ones.

Achievements, experience and skills should be the focus, not (long) job descriptions

Include character forming experiences such as organized sports (swimming, football, computer gaming, programming etc.) -anything that made you attend practice several times a week for several years, made you rise early, that disciplined you (it shows you understand the value of “long term” and of taking orders…). Achievements!

Winning – If you won anything hard that didn’t include luck, show it off: a math contest, a scholarship, a national chess tournament, a computer game. Achievements.

Excellence – climbing a high summit, swimming across the English channel, making and selling a computer program. Achievements.

Example of a CV, perhaps a bit too boring for my taste, but the structure and spacing are good enough (though not the content). Please note that I was publicly shamed on Twitter by the finance gurus at Wall Street Playboys before clarifying the latter.

 

Once you get called to an interview, here are some pointers:

The interview

This is what I was looking for, and what I think you should aim for

Analytic versatility: Demonstrate that you manage switching back and forth between a bird’s eye view and minute details, that you can keep track of data points from both perspectives and draw conclusions from combining them.

Interest: Show that you are actually interested in the tasks*, not just the potential winnings – that money is secondary and would come anyway. Personal investing experience in some form is mandatory. 

*understanding business models, various accounting methods, micro/macro, reflexivity (feedback loops)

so you want to work in finance retarded hedge fund manager

Markers of genuine interest, in stocks, valuation, business models, human behavior and micro/macro interplay, rather than money, were inferred from the applicants casual talk about his life, his investing experience, his stock picks, his personal life. This was of course highly unscientific, but it’s what I did.

Organized: (applicants asked questions during case studies, wrote down the answers, read the interviewers’ intentions and behavior, knew where they had written what and why, and could use it for further calculations and conclusions)

Calm: (applicants wrote things down methodically in their own time)

Clear: Able to communicate conclusions and results in layman’s words, rather than trying to sound professional (all the best investors and analysts that write typically write in very simple sentences and paragraphs, see Roach, Dalio, Klarman and many more). Being able to talk about personal investment decisions without stolen soundbites is just as important.

 

Focus on concrete skills: My hiring style had its emphasis on tangible competences and all but ignored extra curricular activities. That said, exciting and unusual jobs, hobbies and other experiences, that were hard, tough or complicated were markers of excellency for me.

Subliminal influence: Flatter subtly and copy the employer’s body language. Read Dale Carnegie’s book (see my summary and review here) about influencing people, and possibly Neil Strauss’ The Game,… or then again, perhaps not the latter.

Remember names. Firm handshake without overdoing it. Do not interrupt, ever! If you say something you sincerely regret, take it back immediately and clearly, and move on.

Be one of the guys, whether that is being a vegetarian, a tee-totaler or a banana chumping gorilla. Don’t stand your ground unnecessarily during the interview. Avoid subjects that matter highly to you if you don’t agree, maybe even lie outright (you don’t have to stay at that very firm your entire life, but you need to get in).

 

Summary

Really? How do you summarize this article that is a a kind of summary in itself? Well, here goes; the ultra short version of landing your dream job in finance:

  • Write a short CV and letter with immaculate language, and focus on achievements and skills
  • Be clear, methodical, interested and adaptive during your interview. Don’t space out, but demonstrate your wide-ranging analytical skill.

cv interview job finance application