All posts in Financial

Lex Van Dam And Anton Kreil Breaking The Myths Of The Financial Markets

By blogger on

Is it possible for a complete newbie trader, with only two weeks of training, to make money trading the financial markets? If the lessons learned from the BBC reality show Million Dollar Traders are anything to go by, then its highly probable that anyone can create wealth by trading the financial markets. The show broke many long held myths about the financial world of trading, and how difficult trading actually is. It also highlighted valuable lessons that every wannabe trader should learn in order to survive and succeed in the world of trading.

Million Dollar Traders was in effect a project that explored the hidden potentials of ordinary men and women and how effective they were in playing the market. The project was conceptualized by Lex Van Dam and Anton Kreil, both former Goldman Sachs traders. The concept was simple. A group of eight ordinary people belonging to different age groups, employment history, educational background and demographic were given one million dollars capital to finance their trading activities over an eight week period. The money was provided by Van Dam. Anton Kreil was the supervisor and mentor to the group. The participants underwent two weeks of intensive training and were then unleashed with the one million dollars, to trade as they wanted too for the two months. The only goal was to make money by building their portfolios and successfully trading them in the markets.

The format of the series combined the popular elements of typical modern day reality shows and informational documentaries. Refreshingly, there wasnt much of the normal overacting that you would associate with most reality shows. It was presented in a very straightforward manner and in my opinion was edited very well by the production company Century Films. The complexities and intricacies of the financial world of trading were for once explained really well to the mass audience, especially by Kreil. The production team seemed to strike a perfect balance between giving enough information to the audience so they understood what was happening, and at the same time managing to steer away from dumbing down the show too much. Of particular interest was how the show demonstrated that everyone can become their own trader.

The first episode introduced the wannabe traders and followed them closely as they began building their stock portfolios. The second episode tested the mettle of each participant in trading and managing their risks, and the final episode turned dramatic when four of the underperforming traders resigned and walked out of the office in protest. This was in reaction to when Van Dam and Kreil fired one of the traders for chronic underperformance. At the end, only a soldier, a student and a single mum had survived the eight week ordeal. The three of them together then had two weeks to trade one million dollars between themselves in an attempt to claw back the losses of the original group.

Incidentally, Million Dollar Traders was filmed when the global financial meltdown occurred in the summer of 2008. The context provided much stress, excitement, anxiety, and confusion for the novice traders. As U.S. Mortgage giants Fannie Mae and Freddie Mac were blowing up, Kreil summed up how difficult the markets were perfectly

If this happens the U.S. could be over for a generation, for anyone that has been in the markets for a long time, this is proper scary stuff.

Even as a viewer watching you could feel the pressure of the moment. One contestant broke down in tears for almost ninety minutes. Another one totally blew his investments, which made Van Dam furious. However, some of the contestants did show exceptional skills beyond their experience in managing risks and handling the stresses of trading.

At the end of the show, the entire team had lost two point four percent of their investments. But this figure was far better than the performance of most professional traders who lost more than five point five percent on their investments. Van Dam and Kreil showed that a novice trader can perform well in any market versus the professionals. I was certainly a fan of the show and Im eagerly awaiting the second installment.

Financial Goals, Objectives, Strategies And Tactics That Support The Company Mission And Vision

By blogger on

Do you have a strategic financial plan?

A strategic business financial, or capital plan is your road map to align your borrowing, investing and spending activities with the company mission and vision. Your financial plan is not your financial forecast or your budget. These are documents that memorialize the projected results from your strategic goals, objectives, strategies and tactics. Your strategic financial plan is how you will get to the results in your budget. Your borrowing will be more effective, your spending more powerful and your investing more accretive with a well constructed strategic financial plan.

The first step in capital planning is to identify your company mission and vision. These are high-level guiding statements about what the company is and where it is going. Typically, senior level executives are responsible for determining the company direction and often use the collaborative efforts of other employees to set a business course. Your capital plan must line up with the company mission and vision and provide financial support to the business functions that drive the organization forward. Spending, investing and borrowing activities must support the company mission and vision to achieve desired business outcomes. Debt and equity can be effectively employed to generate positive mission and vision leverage.

The next step is to set out capital goals that line up with the overall company goals. Goals are boundaries, limits or end points along the journey to business growth. Goals are by nature general, broad and non-specific. Don’t include specific measurable benchmarks in your goals. Improving financial durability is a good example of a capital goal. How we achieve the goal is the function of capital objectives.

Business objectives are quantifiable and specific milestones that support the attainment of business goals. Capital objectives are measurable hurdles using relevant financial metrics such as the amount of leverage or liquidity. Limit your financial objectives to three or four critical areas that will advance your business goals. You might decide to move your leverage ratio to 50% of total capital which is in-line with the average of your industry competitors. This objective supports the goal of improved financial durability by increasing resilience during economic or financial market disruptions. If cash flow falls or credit is tight your company can operate without crippling debt service or refinancing stress.

Strategies are the plans designed to accomplish business objectives. There may be one or more strategies for each financial objective. Executives design capital strategies to lay out how the company will achieve its financial objectives. Think of strategies as a blueprint a general would create to fight a battle. They are the high level plans to accomplish a business objective. The chief financial officer might design a capital strategy to identify and payoff certain loans with small prepayment penalties to support the objective of a 50% total leverage ratio. She also might develop a strategy to obtain new equity from investors as a source of funds to retire debt.

Tactics are the actions required to implement financial strategies. They are detailed marching orders with specific instructions and coordinated movement by unit level team members. Business leaders must be aware of the strengths and weaknesses of their managers and employees to carry out tactics. The wise leader makes a critical evaluation of the talent on his or her team and uses that information as a foundation for the strategic planning process.

The CFO might hold a road show with specific cities and dates to provide the most current financial and operating performance data to the highest qualified investors. Finance, investor relations and accounting staff are key contributors to developing and delivering the road show tactic. The investor capital secured by the road show supports the financial strategy of acquiring new equity capital to retire debt. The debt reduction supports the objective of a 50% total leverage ratio which fulfills the goal of greater financial durability. The company can pursue its mission and vision from a position of greater balance sheet strength.

Financial goals, objective, strategies and tactics are a strategic planning pyramid. Each element supports the elements above it. Strategic financial planning brings all the business capital activities into alignment with the global corporate identity and the direction of the company. Plan for business success through well designed and executed financial goals, objectives, strategies and tactics that effectively support your company mission.

Avoiding Financial Mistakes In Divorce

By blogger on

Article by Nancy C.L. Stein, Esq., Staff Writer, PR4Lawyers

If you think that your spouse intends to divorce you, take steps to protect yourself. Make copies of all important financial documents including savings, stock and insurance account statements and any information relating to your married lifestyle including checking account, mortgage and home equity statements, charge card statements and your federal and state tax returns. If you fear your spouse may try to liquidate or change title to marital assets, provide written notification to the asset holder and seek a restraining order. Cash in joint checking and brokerage accounts and cash value of life insurance policies are also vulnerable. Protect assets in advance. Legal and forensic accounting costs to uncover and get back these assets can be prohibitively expensive.

Avoiding Contentious Litigation

Engaging in a winner-takes-all battle is a big mistake, leaving far less to live on post-divorce. Except in the most egregious cases, equitable distribution laws apply in divorce and courts wont punish a spouse financially for being a bad person.

If there are few valuable assets, both parties want to avoid a contentious divorce and are willing to workout joint custody and a fair settlement, mediation is a cost-effective alternative to litigation. You save thousands of dollars in legal fees, avoid emotional stress and benefit from the flexibility mediation affords.

Consulting Financial Professionals

Work together with a financial planner or accountant to minimize the total taxes you and your ex-spouse will pay during the separation and post-divorce. Such professionals can also help you create an accurate, complete budget, which will avoid the need to have a court reconsider maintenance later on.

Evaluating Settlement Proposals

When considering the fairness of a divorce settlement and whether it is workable, conduct a comprehensive and realistic analysis of your post-divorce lifestyle. Consider its future sufficiency and viability, remembering that inflation can hit hard.

Include assets, incomes, budgets, maintenance, child support, educational expenses, taxes, retirement goals, and investments in your analysis. Focus on the after-tax value of assets.

Avoid emotional attachments to assets. Concentrate on your true needs instead of on unrealistic desires. Failing to give a payor spouse sufficient money to live on will likely result in payment default. Be fair, but verify everything. Get payments up front whenever possible and secure them with assets and insurance.

Using the Right Professionals

Visitation and custody issues are best resolved working with a therapist. Accountants and financial planners are particularly skilled in addressing financial arrangements. Consult qualified professionals for emotional support and financial analysis instead of simply calling your attorney.

Updating Estate Documents Post-Divorce

Failing to change your life insurance policy, IRA and will beneficiaries post-divorce means that your ex-spouse will inherit a marital share.

Insuring the Divorce Settlement

Life and disability insurance can protect your divorce settlement payments and your family’s security should your ex-spouse die prematurely or become disabled.

The Post-Divorce Financial Plan

Develop a post-divorce financial plan to help transition to a singles lifestyle. Recognize financial limitations, prioritize financial goals, and create realistic expectations and a plan for allocating financial resources.

Shanghai World Financial Center Construction

By blogger on

Shanghai World Financial Center construction was one structure worth researching. As anyone could imagine, building such a structure as Shanghai World Financial Center requires knowledge that has not been know before-but with technology and testing the project was completed on August 28, 2008

The importance of developing building technologies to resists earth movement and high winds in high-rise construction holds an important value. Initially planned to be the world’s tallest building, but because of economic situation, the Asian Financial Crises, and other delays, The Shanghai World Financial Center, located in Shanghai, China, is eye appealing. While it was in the building process, the building dimensions were increased for couple reasons that we know of. After a decision to increase gross area of the WFC in Shanghai by 15%, increase in overturning moment from wind forces of about 25% came as well. A diagonal bracing was also used. With the design changes, the service core shear wall was achieved and there came the decrease in the amount of steel needed for the robust structure.

The first structure was called the mega structure, which in reality consists of major structural columns, the major diagonals, and the belt trusses. The second one was a concrete walls of the service core I mentioned above. The third system was a relationship between concrete wall of the service core and the mega-columns, that were made by the outrigger trusses…

As the final design of LERA (Leslie E. Robertson Associates), Shanghai World Financial Center construction consisted of three relatively narrow columns, compared to seventeen wide columns. An important area to mention is how the stiffness of the perimeter and trusses has movement, as well as shears in the concrete walls of the service core, can be increased or decreased. The whole robust design is smiler that of the, previous, World Trade Center in NY. The wind engineering results were different compared to that of the World Trade Center in NY, based on extensive wind testing.

The earthquake engineering for the Shanghai World Financial Center construction was extensive. The design allows for a 200 year period for typhoon return and a 2000 year return on earthquake. In the process of its foundation construction, temporary support for both mat and below-grade concrete floors were made because of the use of top-down construction method, H-piles large steel sections extended from the piling to the ground surface…

Other issues that come with this high rise were the cost, as in any project. Because the pile cut-off was well below grade, it was costing too much to reinforce existing pile. LERA determined that the current pile foundation system they had in place could accept a larger expansion; they only had the issue of cutting the weight of the original building by 10% or more; the other aspect they had to do was to redistribute the loads to the pile so that increased lateral loads the come from wind and earthquake can be surpassed.

For Shanghai World Financial Center construction or other building areas where winds are a problem, the seismic effects typically include:

1. High base overturning moment and foundation design (wind, seismic)

2. High shear demand near base (seismic)

3. High gravity stresses in the vertical elements (and use of high-strength materials) to minimize structural sizes for
economic structural design and to maximize net floor area

4. Differential axial shortening under gravity forces, including effect on floor slope and outrigger force demands

5. Development of ductility in elements at the base of a structure under high compressive gravity stress (seismic)

6. Controlling lateral accelerations (wind)

7. Controlling story drift (wind, seismic)

8. Controlling damage so as to enable repair (seismic)

9. Ensuring ductile energy dissipation mechanisms and preventing brittle failures (seismic)

Each geographical location requires specific, special requirement, to be developed and tested, when the project is breaking new ground, like The Shanghai World Financial Center construction… Although other buildings were structured in that geographical location, but not with the same height and greatness…

Afe Know About Accredited Financial Examiner

By blogger on

The AFE Examiners of accredited finance review the financial records of the company in order to make sure the fulfillment with the regulations and laws governing financial regulations. As a division of these obligations, the financial examiners will assess bank management, evaluate loan risk and review balance sheets. They also train the other examiners, review board minutes, and establish policies and AFE Guidelines to ensure the regulatory observance along with monitoring the financial conditions of other financial institutions and banks.

The Financial Examiners operate in two major areas: Consumer compliance or risk scoping. The examiner working in consumer compliance evaluates the lending activity to make sure the borrowers are not subjected to predatory lending and are treated fairly. Whereas, on the other hand, examiners working in risk scoping asses the health of the financial institutions as well as banks.

More About The Exam:

You need to pass four examinations in order to obtain an AFE PDF designation, moreover to meeting the added necessities listed below. All the four exams include 50 questions that come with multiple choices. Each candidate receives a time of three hours to finish every exam.

The Four Exams are as Follows:

The first exam is of liability and property insurance accounting: This particular paper covers the primary principles of life and property insurers. The second exam is of health and life insurance accounting: This AFE Paper Covers the primary regulatory problems that are faced by the life insurer while preparing financial statement and the primary fundamentals of financial statements.

The third exam being liability and property insurance fundamentals: This paper covers the fundamentals of an insurance mechanism. The fourth exam being health and life insurance fundamentals: This paper covers the primary concepts of the role of life insurers as the financial institutions, pricing concepts in life insurance and fundamentals of health and life insurance.

Additional Requirements:
In addition to passing the Accredited Financial Examiner (AFE) exam, you will also need to fulfill some of the following mentioned requirements in order to receive this designation:

Your application for this designation needs to be approved by the committee of Insurance membership. You need to be a member of the AFE Online Educations financial examiners society. You need to meet the requirement of business experience by having minimum of two years work experience. You need to obtain a bachelor’s degree in any field or specifically a bachelor’s degree in accounting. Other than this you also need to meet the requirements that are listed on the website of the society of the financial examiners.