What do you think is their job all about? any guesses?
Re: Question: Financial Engineers
Is this a quiz? I believe the term mostly refers to technical traders/analysts who design and develop algorithms to predict and trade the markets.
Re: Question: Financial Engineers
no Silaaj, this isnt a quiz, just a way of spreading information :)
A few months back , I had posted some similar threads and i remember I received a PM from a student who said after reading about a career on here , he researched it and decided to take it further :) It felt good to be able to help. So I am just trying to add to the vision.
your response is awesome , thank you so much , do visit us more often :)
Re: Question: Financial Engineers
leading investment banks have excellent opportunities in financial engineering and they are always looking out for new talent to recruit. Quite a lucrative job perspective
Re: Question: Financial Engineers
I am not trained in this. So just throwing in my 2 cents.
I am not sure traders and analysts develop the trading algorithms. They hire Ph.Ds in Math Physics etc t do this. And that's a shame. Waste of scientific talent.
My understanding of "Financial Engineering" is companies focused on short term to get the stock up. Share buybacks, stock split, smoothing of earnings (GE comes to mind).
In other words FE does nothing for company fundamentals.
Re: Question: Financial Engineers
I don't think its about writing algorithm. More of a rigorous type of financial analysis.
You can't be writing codes and conducting analysis. Thats like riding two diff. boats simultaneously.
Anyhow i don't mind being corrected if i am wrong.
Re: Question: Financial Engineers
And yes cb i am not stalking you, i keep clicking on thread title everywhere and end up at the nick
Re: Question: Financial Engineers
lol @rainydays .. no worries 
Its heart breaking though that I am not stalkable material :teary:
Re: Question: Financial Engineers
I stalk you all the time, Ms. Biryani.
Re: Question: Financial Engineers
How can Biryani be unstalkable? Even vegetarians do it. :)
On the topic though, think Southie is right. These are the guys that make a company 'attractive' for sale. So they are mainly concerned with short-term spike in shares and not with long-term fundamentals. For eg. AOL before it Time-Warner bought it.
Re: Question: Financial Engineers
Nice touch on the vegetarians part!
Re: Question: Financial Engineers
What do you think is their job all about? any guesses?
Creating products which have no value but can be sold at a price.
Derivatives are the most common form of such products.
Re: Question: Financial Engineers
my understanding of "Financial Engineering" is companies focused on short term to get the stock up. Share buybacks, stock split, smoothing of earnings (GE comes to mind)....
What you are describing is Corporate Finance, nothing to do with financial engineering.
Financial Engineering is more from Investment perspective. Financial engineers 'create' and manage financial products for investors to trade.
Re: Question: Financial Engineers
Lagee sharth?
Murari Lal to Jaychand - 1974
Re: Question: Financial Engineers
Lagee sharth?
Murari Lal to Jaychand - 1974
Yes, a bet is a type of financial product which can be designed by financial engineers. What you are describing is earnings manipulations, earnings guidance to analysts, managing analyst expectations, timing news dissemination to markets, etc. which has nothing to do with financial engineering.
I bet you $100 right now.
Re: Question: Financial Engineers
Yes, a bet is a type of financial product which can be designed by financial engineers. What you are describing is earnings manipulations, earnings guidance to analysts, managing analyst expectations, timing news dissemination to markets, etc. which has nothing to do with financial engineering.
I bet you $100 right now.
Murarilal did some research and concedes to Jaichand. But he would request Jaichand to read the following link
Man this cut and paste thing sucks. Works sometimes and don't at others. Where is good help when u need it.
Murarilal requests extension of deadline by 24 hrs.
Re: Question: Financial Engineers
Share Buybacks: Not So Good for Shareholders | Fox Business
Ok..worked.
Read towards end. Stock buybacks used as financial engineering to push stock price up. Nowadays such stunts by companies r labeled financial engineering. Right or wrongly.
Ps. Corporate finance probably has more to do with allocation of resources to run the company. To the extent that buybacks at nosebleed levels r poor allocation of capital I guess they still fall under corporate finance.
But pundints (as McCain would say) call such stunts as financial engineering. At least the ones I have come across. Maybe it is a basturdization of the term.
Re: Question: Financial Engineers
^ Okay. That is an older use of the term. "Financial engineering" what you are referring to the practice of doing things to deceive markets. This is NOT what modern financial engineers do. This term has negative connotations.
Financial Engineers create bets like derivatives based on price of soybean in Brazil, or Obama's approval ratings, or London temperature next week, or housing prices in Texas, or number of insurance claims in August, or future price of Oil in Bahrain. Investors and Banks trade those 'bets'. Mortgage Backed Securities, which have been identified as a major source of recent financial crises, were created by such engineers :D
Re: Question: Financial Engineers
^ I am way in over my head with these "engineering" line items, Jaichand.
Re: Question: Financial Engineers
^ I am way in over my head with these "engineering" line items, Jaichand.
I create a $100 bet with you saying Obama's approval ratings would drop next year. Chicken Biryani thinks Obama's ratings are not gonna drop, so CB buys that bet from you. A bank offers instant cash to CB to buy that bet. That bank bundles several such bets together and sells them to another investment company. That investment company creates an index based on all such bets and asks investors to bet on that index going up and down, the value of index depending on probability of Obama's approval ratings going down. Investors buy such bets (index based fund) and trade those on a market based on their individual expectations about Obama's ratings. An insurance company might create an insurance product to protect investors from downward or upward movement of the index fund depending on whether investors have sort or long positions. That insurance product can also be traded on market.
This is an example of what financial engineers are doing. There is nothing inherently of 'value' in the products that are being bought or sold. Essentially, they are all bets.