Shift from Business Valuation to ER/AM (My 3 year plan)

Guys I’m looking for some advice/critiques on my 3 year plan to shift from Valuation to ER/AM. I’m currently employed in a small outfit that specializes in the Valuation of closely held firms. I’m making decent money but I can’t see myself doing this forever. I’m currently registered for Level 1 in June, 2008. Heres the plan: 1)Keep working in Business Valuation 2)Complete all three CFA Levels by 2010-11 3)Try to get a Junior position in either ER or AM (Ill be 29-30 at this point with 4 years exp.) Ive read that Business Valuation counts as experience towards your charter and I feel some of the skills I have picked up will translate well to ER in particular. I realize ill probably be looking at a pay cut initially but its well worth it for me. Also would it be possible to make the shift earlier, say after Ive cleared L1 or L2? I’m definitely at a crossroads here and any help would be appreciated

I’m a n00b but I def think it would be possible to get into a Jr. ER/AM role after passing level II, prob at level I as well. However, I don’t know what the diff in salary would be.

The difference in salary isn’t a big concern for me. I’m pretty confident of being able to work my way up. My main concerns are not being able to even get interviews after L1 or L2 and that If I have to wait I might be too old for an entry level job. Is there normally much age discrimination in these jobs?

i think you should be able to land a few interviews after passing L2. just try, I am kinda on the situation as you, the only difference is that I will be taking L1 in Dec and also I am working in operations.if i get L1 and L2 down by June 2008. i will start sending resumes out and see what comes along… my advise, i wouldnt wait until L3 to start looking for ER/AM positions… the earlier… the better.

I got a position in ER after completing LI with little previous working experience. It’s all about how you present yourself (and your resume) to companies and you what the hell you’re talking about in interviews. I say try right after passing LI !

where are you located Alayle?

I can think of a few buyside shops, particularly in the small cap equity (esque) space where your skills would translate quite well.


I’m hoping that showing up with a sample Equity research report will go a long way towards showing my dedication and hopefully my understanding. I downloaded Intel’s SEC 10k and have been developing a financial model for it the last 2 days. I’m going to keep it brief so it doesn’t end up in the trash. Is the following structure ok? 1. Some trend analysis (Gross Margins are down 8% due to doubling of polysilicon prices etc) 2. Small note on the competition, in this case AMD (some info on AMD’s purchase of ATI) 3. Explanations of my assumptions and forecasts 4. Calculation of Intel’s WACC (Im getting around 12% right now) 4. Projected Income and FCF followed by a DCF Analysis Right now my DCF Valuation is showing a fair value of of $26.2/share. Since Intel is currently trading at 25.9 I’m guessing thats a “Hold”? Any suggestions on how to spruce it up would be much appreciated!

Any suggestions on the target capital structure and WACC based on these numbers? Figures in Millions of USD Total Current Liabilities 7,660 Total Liabilities 11,948 Total Equity 40,971 Of the Liabilities 1,990 is denoted as debt. (Cost of Debt is murky, cash interest payments only amount to 22 so far this year). Ive tentatively taken Cost of Debt = 6% Intel’s Beta = 2.19 Tax Rate = 30% I’m going with a Treasury rate of 4.75% and a Market Premium of 5% and a target D:E of 20:80 All this is giving me a WACC of 13.4%

I think that’s good initiative. It’s a matter of what makes you feel comfortable but I would have avoided a technology firm because of the obsolescence of products and the high intangible assets. It’s a matter of choice. Submitting that along with a resume will get you a look because most candidates don’t take it that far.

BOMC Wrote: ------------------------------------------------------- > I think that’s good initiative. > > It’s a matter of what makes you feel comfortable > but I would have avoided a technology firm because > of the obsolescence of products and the high > intangible assets. > Depending on the job function, but alot of business valuation is valuing intangible assets, so a skillset in that area may help a transition

Agreed, but dealing with intangibles and steep assumptions about semicond. product lines opens the door for people to argue with your minutia and perhaps not pay as much attention to what you’ve put together. It’s just my opinion based on what I would do. If he’s comfortable, rock on!

very interesting point, BOMC

The thing is, you’re trying to break in at a junior type of role into ER, and you come into the interview with a full blown out valuation model which are usually developped by senior associates / analysts. You might throw them off into thinking you’re that “book nerd” type of guy who will want try to get a hand on everything first day on the job, whereas this is exactly NOT what they are looking for. Just playing devils advocate here