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Finance a la Shmoop! What are five questions, you can expect to be asked, in

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a public market investing interview? Alright number one, it sounds

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innocent enough of a question, right? And note that you aren't being asked, so what

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do you think of GE here? As a relative newbie to investing, you are not expected

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to have an opinion on much, of a range, of stocks. But it certainly is fair game to

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ask you about one specific stock, you come up with, that you follow. So if you [two men in conference room]

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answer, I don't really know, then well, just end the interview right there

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and save everyone a whole lot of time. Two, and the interviewer may ask you, why?

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Why, well you said you liked Apple. Well why do you like Apple and not the fruit

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the computer company and the answer can't be because Kramer says so. That's

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almost always the wrong answer. It also can't be, because I like the new iPhone,

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or well who doesn't like Apple. Yeah you need metrics and an opinion. Like, well

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the street doesn't appreciate Apples earnings power, from the new markets [interviewee talking to interviewer]

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they're entering all over the world and the new push to sell really high margin

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software through its home systems and the new products are totally

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underestimated and it's good if your voice gets kind of high and squeaky like

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that too, shows passion. Ok dandy, here you've given a claim that is different

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from what any yutz can read about in the Wall Street Journal. Which is also, almost

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always wrong. And remember if the journalists were actually good at

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picking stocks, they'd pick stocks. They wouldn't make one thousandth of the

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money per year just writing about stocks, or opinions of other people's opinions [woman in suit crying]

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about stocks and or bonds and so on, right? So you have edge in your answer,

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but you also need metrics. All right, three metrics. What are apples, why do you

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like them, Hmm? Answer, well the published street

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estimates are, 16 times earnings this year and 14 times next, and you sound

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purposely semi cryptic. Because the presumption is that anyone who follows

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stocks knows, that you're referring to, published stock broker, or sell side

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research reports, when you say Street and that 16 and 14 are times the published [page with definitions]

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estimated earnings numbers. So you speak Street, bully. But then you give edge, or

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alpha. That is you say something like, the street

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isn't appreciating the mountains of cash, Apple has over seas. The market cap of

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the company is a trillion, but it has 350 billion of cash and no real debt. So if

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you X out the 350 from the trillion, it's 650 billion dollars of equity cap and [man talking]

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well on those numbers it's just twelve and ten times earnings. I think it's a

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buy here. Yeah all right pretty good. Four vocab, well you won't be asked for a much

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vocab lingo in your interview, or if you are the interviewer is just being a dick.

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But by clearly elucidating the difference between, market cap and equity

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cap. A subtle but important difference. In an Apple's case, well it's a huge and [mother and daughter swinging]

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meaningful swing. Well then you are conveying the sense that you were

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actually awake in class that day. Yeah, nice job. All right, moving on. Five, the

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plan, so what's the plan. You have to have one. The right answer when the

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interviewer asks you, what's your plan? Is usually something like, well I'd like to

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eat nails 80 hours a week here, for three years, then go to business school and

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work on my golf game. Or it might be, I don't want an MBA, I'm gonna bring a [farmer talking]

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watering can, to plant my roots in whatever firm I go to next. So I'm having

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deep conversations with just a handful of firms, I've come to admire. Or it might

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be, I really should have answered the questions you asked better, I'll go now.

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Yeah, or it might even be, sir for the millionth time, I'm not a financial

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analyst, I work at McDonald's and I'm just trying to give you back your change.

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You wanted fries with that, so here you go. [McDonalds employee]

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