The Bull & Bear October 2011

We make the match, you make the decision.

Jobbook Launches 7

Graduating Case Comp 10

MUNACA opinion 12

Facebook Timeline 13

The Bull & Bear A publication of the

McGill’s Management news since 2003

MANAGEMENT UNDERGRADUATE SOCIETY

Steve Jobs, Apple’s visionary co-founder, passes away October 5th

bullandbear.ca

October 2011 • Volume 9 • Issue 2

“Avicii took the madness of Management Carnival, the spirit of Frosh, and the rage of Power Hour, and packed it into the most amazing three hour set I’ve ever seen.”

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S TI E AR LL G FU PA E

S TO

O PH 9 D 8

AN The Brief 2 :: Monthly Markets 4-5 :: News 6-10 :: Lifestyle 11 :: Opinion 12-15

Always online at www.bullandbear.ca

The Brief

2 The Bull & Bear Alex Pajusi Executive Editor Ian Burke Cameron Lead News Editor Ivan Di News Editor David Lin Lead Opinion Editor Jessica Simmonds Opinion Editor Kristine Pinedo Lead Lifestyle Editor Chris Conery Lifestyle Editor Kunal Shah Photo Editor

What not to miss in Management this month.

First-Year Street Team A brand-new committee dedicated to promoting MUS events to first-years Manuella Djuric Advertising Director

The MUS is pleased to announce that they have a new committee dedicated solely for first-year students! The First Year Street Team is a new initiative that was created by the Vice President of Communications, Rebecca Black, and the Board of Directors Branding and Communications Committee. With a

lack of first-year student involvement within the Bronfman community, there was a need to reach out to first year students not only to get them involved but also to make them aware of upcoming MUS events. This committee will be dedicated to promoting MUS events to first year students in the various residences and even to those students who live at home in Montreal. The MUS hopes that the First Year Street

Team will not only increase short term participation to events, but hopes that they will inspire other first year students to get involved faster and more often.

Launching its first year of operation, the committee will consist of two Co-Chairs: Jony Tabuteau and Lara Ballantyne, along with eleven committee members: Derek Smith, Alexandra Twyman, Daniel Sorek, Michelle Gastle, Emily Gastle,

Jenny Nguyen, Qing-Qing Yang, Natalie Huey, Emily Cheng, Amanda Hadid, and Brian Lau. “It’s truly about making first year students feel welcome within the Bronfman community.

And what better way to reach out to them than by their peers”, says Rebecca Black, Vice President of Communications.

Manuella Djuric Advertising Director

Desjardins Info Session

Michaela Hirsh Ad Coordinator

Oct 12 - 11am - Bronfman Lobby

Sean Alex Finnell Online Editor

Come learn about exciting opportunities at Desjardins.

Michael Horowitz Layout Editor Olivia Siu Marketing Director Rodion Gusev Special Advisor Staff Writers Elana Cipin Dann Bibas Tarun Koshy Dan Sorek Dan Novick Andrea Zhu Yina Zhou April Wu Sameer Rizvi Max Waterous Alvira Rao Christian Sullivan Siddharth Mishra

CASCO Hype Party Oct 20 - 9pm - Queue Leu Leu (Old Port) The theme is cowboys versus aliens. Price is $10 advance, $15 at the door. Tickets on sale the week of (Bronfman lobby) exclusive McGill event, great drink deals. What cowboy doesn’t want to dance with a bunch of aliens at a costume party?

Photographers: Amélia Couture Holly Sherlock Kapil Mehra Jordana Cohen Nicole Himelfarb Theodora Meyers Soumia Zehri

The Bull & Bear is an editorially autonomous newspaper published by the Management Undergraduate Society of McGill University. Editorial opinions expressed in the Bull & Bear are the sole responsibility of the Bull & Bear’s Editorial Board, and are not necessarily those of the University, MUS or their officers. The Bull & Bear is not responsible for the delivery of any goods or services sold or advertised through its sponsors or Business Directory and is not liable for loss or damage of whatever nature and extent resulting directly or indirectly from any use of the information made available by the newspaper and sponsors.

October 2011

Always Online. bullandbear.ca The Bull & Bear

News

Ian Burke Cameron, Lead Editor ian@bullandbear.ca

3

MUNACA Strike Continues As October begins, still no end in sight Ian Burke Cameron Lead News Editor

Over a month after the beginning of the MUNACA strike that saw McGill’s main entrances become sites of long picket lines and non-stop drumming, no agreement between the university and the union has been reached.

After dozens of meetings between the two parties, the end of the strike does not seem to be in sight. And, despite the recent injunction that saw MUNACA’s picket lines shrink and noise levels fall, the union does not seem any more willing to go back to work than it did in early September.

One of the picketers, whom The Bull & Bear offered to identify only as John, described the atmosphere before the injunction outside Bronfman – at the corner of McTavish and Sherbrooke – as “upbeat,” saying that “what [the strikers] are doing doesn’t appear tedious.”

Despite admitting: “I don’t understand [pensions] that well,” John reminded The Bull & Bear that “McGill is notorious for not paying,” and that all of MUNACA’s demands amount to “parity with other universities in the province.”

Other picketers interviewed post-injunction, however, have admitted to finding the new rules somewhat disheartening.

One of the strike negotiators – who cannot be named due to his position – maintained that the morale of the picketers was encouraging and that the lines reflect the frustration that runs through every level of the union.

Frustration, MUNACA holds, that stems from unfair payment

MUNACA workers picket outside the Bronfman building.

practices, undesirable pension adjustments, and continued renovations around campus in the face of the school’s financial woes.

Another picketer, identified only as Ingrid, radiated optimism and confidence that the strike was going well. Citing the significant student support MUNACA has been receiving, Ingrid told The Bull & Bear that “It’s just amazing what [the strike organizers] are doing.”

Despite being “just a picketer,” Ingrid insisted that the entire union is pushing for the same goals – goals that, at worst, boil down to “at least [having] to be heard.” On Friday September 16, MUNACA held their biggest rally since the strike began on the corner of McGill College and Sherbrooke, across the street from the Roddick Gates; if Ingrid’s statement were meant literally, she can rest easy.

The Montreal Gazette – who

had reporters at the rally – quoted McGill student Jamie Brunett as stating that “Everything [at McGill] is slower and I’m spending more time in lines…It really makes it clear how important their work is.”

However, despite Ingrid and the Gazette’s reports, not all students are in support of the strike. Students who spoke with The Bull & Bear in anonymity expressed frustration with what they characterized as the union’s

Kapil Mehra | The Bull & Bear

impractical demands, and The Bull & Bear’s David Lin openly opposes the strike in this issue.

With meetings between MUNACA and McGill scheduled until October 26, it is unlikely that any students will soon be relieved with shorter lines and fully-staffed libraries. Until an agreement is reached, MUNACA’s members remain adamant that they will not be returning to work.

Steve Jobs 1955-2011

October 2011

The Bull & Bear

4

Monthly Markets

Ivan Di, Editor ivan@bullandbear.ca

Diving into the Greek Debt Crisis Sameer Rivzi Markets Writer

F

rom Spanish Conquistadors in the 16th century to the British Colonizers in the 19th and 20th century, Europe has undoubtedly been the super power of the world for the past half millennium or so. However, as economist Dambisa Moyo (How The West Was Lost) sheds light on how a host of shortsighted

they say. And nothing is more indicative of this statement than the European sovereign debt crisis that started in the last few months of 2009.

The situation became particularly tense in early 2011 as the sovereign debt crisis, which was initially most pronounced in a few eurozone countries, developed into a perceived problem for the European Union as a whole. The one economy that was in distinct spotlight for the

“Greek national debt and budget deficit have worsened at an unprecedented level”

policy decisions have left the economic seesaw poised to tip away from the Western industrialized economies and toward the emerging world, it is clear that Europe is no longer the great power that it once was. Since 2000, the average growth rates of China and India, 9.8% and 7.4% respectively, have far exceeded Japan’s 1.6%, Germany’s 0.9% or the United States’ 2.8%. By the end of the century, the majority of the world will be developed – The era of western economic supremacy is over… or at least

October 2011

majority of this summer is the “Hellenic Republic” of Greece.

Since its inception in the first few weeks of 2010, the anxiety regarding excessive national debt has only developed at an exponential rate. And rightly so, as not only have sovereign credit default swaps seen extreme growth, but also Greek national debt and budget deficit have worsened at an unprecedented level. Currently, gross external debt is an estimated US$ 532.9 billion, an alarming 151.4% of Greece’s nominal GDP. As previ-

ously highlighted, this is a eurozone-wide issue. Gross external debt is at 83.2% of nominal GDP in Portugal, 64.8% in Ireland, 118.1% in Greece, and 63.4% in Spain. Collectively, these nations are sometimes referred to as PIIGS, an acronym coined by international bond analysts, academics, and the economic press – often in regards to matters relating to their poor performing economies.

What truly caught the attention of the press, politicians and public alike occurred in January 2010, when Greek Finance Minister, George Papaconstantinou, admitted that Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. A German newspaper stated that “at some point the so-called cross currency swaps will mature, and swell the country’s already bloated deficit” – This is happening now.

However, all is not lost yet.

Over the last two years, Greece has revised countless macroeconomic policies and adopted strict austerity measures and packages.

Further austerity measures have also been implemented since June 2011, when S&P lowered the Greek sovereign debt to a CCC rating, the lowest in the world, following the findings of a bilateral EU-IMF audit.

In recent development (29th September), German Chancellor Angela Merkel, who was initially seemingly against providing any further bailout funds for Greece, has now approved an expanded EU bailout fund. By a large ma-

jority, Germany’s parliament had voted in favour of supporting a more powerful fund to bail-out troubled Eurozone economies.

As Europe’s largest economy, Germany has agreed to raise its financial commitment to this bailout from €123 billion to €211 billion. Although this 71.5% rise is seemingly large, it is already being dismissed as inadequate in the light of the worsening Greek crisis and similar crises being faced by other European nations.

A large number of analysts believe that these austerity measures and bailout plans are, in reality, pushing Greece’s paralyzed economy deeper into recession and choking any chance of real growth. Currently, the Greek prime minister, George Papandreou, is in talks with many other EU leaders on a new bailout “tranche” Greece needs to avoid bankruptcy in October. But the question really is whether the other troubled European nations will continue to fuel these futile bailouts or would it be better for the greater European economy for Greece to just default on its debt.

Arguably, this is the first eurozone crisis since its creation in 1999. Managing Director of TRUST Investment Bank, Jason Manolopoulos, conclusively pointed out that the eurozone is far from an optimum currency area. Niall Ferguson, in 2010, wrote that “the sovereign debt crisis that is unfolding [...] is a fiscal crisis of the western world”.

Ben Rooney (CNNMoney), in a May 2011 article, argued “Greece can continue to cut spending and raise taxes in a painful attempt to convince creditors that it can change its ways. Or, the country can admit defeat, default on its debts, and hope for the best.”

Perhaps, Europe’s economic future is uncertain, but then again, uncertainty is inevitable in any financial market.

The Bull & Bear

Monthly Markets

Ivan Di, Editor ivan@bullandbear.ca

5

China’s Property Bubble: How it’s different from that of the States Siddharth Mishra Markets Writer

C

hina’s economy may be growing but its property market seems set for a tumble. All signs point to a bubble that is poised to burst, with average housing prices rising 1% a month this year according to the National Bureau of Statistics. The supply only seems to be increasing as over 1.7 million square feet of new office space is being built in Shanghai this year.

Hedge fund manager James Chanos calls it “Dubai times 1,000 or worse”.

The implications of a real estate bust could be bad but not catastrophic. The Shanghai and Hong Kong markets would suffer due to their heavy exposure to property development companies. But most experts believe that it will not send the entire construction sector into

a depression. The impact of this bubble could, however, be felt on a number of markets that export heavily to China. Many Latin American and African economies have shifted their focus toward Chinese demand for their raw materials, and many Western firms, including U.S. retailers and fast-food chains, now bank on Chinese consumers feeling wealthier to make up for stagnating sales elsewhere.

The causes for this bubble are varied. The unprecedented growth of the Chinese economy led to a lot of new wealth being created. This newfound wealth went into real estate because keeping money in Chinese yuans provided no return (due to low interest rates). A high rate of urban migration has also contributed to the creation of the bubble.

However, bursting of this bubble may not have the same catastrophic effects as that of the 2008 housing bubble. The

Chinese property market isn’t as leveraged as the US market was in mid-2000s. As David Semple, Director of International Equity at Van Eck Global puts it, “China is not Dubai on steroids. You don’t buy with no money down there.” Moreover, the Chinese market is more regulated. Since last November, in China’s top tier cities, buyers are required to put 30% down for their first home, 60% down for a second home, and are not allowed to buy third homes on credit. The Chinese government has been introducing several other policy measures since last year to slow real estate inflation, including raising interest rates, directly restricting home purchases, imposing price control targets in Beijing and Shanghai and finally charging a real estate tax, albeit on a trial basis, in Shanghai. Perhaps the biggest difference is that the government actually recognizes the problem - unlike its American

“Bursting of this bubble may not have the same catastrophic effects as that of the 2008 housing bubble”

counterparts who denied that the housing market was overheated just when housing prices were skyrocketing.

The leverage of the financial system and the consumers to the boom and bust isn’t as great as

it was in the United States. This, coupled with regulations by the Chinese government, ensure that the bursting of this bubble will not result in a prolonged economic downturn.

Operation Twist Maxwell Waterous Markets Writer

O

n September 21st the US Federal Open Market Committee, the branch of the Federal Reserve (the Fed) that determines the direction of monetary policy, announced a new plan to help stimulate the American economy. Its grave tone, however, sent sellers rushing for an exit and the Dow Jones Industrial Average declined 5.9% over two-days, the greatest twoday percentage drop since December 2008.

With a depressed housing market and the US unemployment rate hovering around 9%, the Fed felt the “significant downside risks” to the US economy warranted a new round of monetary stimulus. Nicknamed “Operation Twist”, after a similar program during the Kennedy administration in the 1960s, the Fed effectively “twisted” the yield curve through lowering long-term rates while keeping short-term rates where they were. Over the next 9 months the Fed will purchase $400 billion of Treasury securities with remaining maturities of 6-30 years and sell an equal amount of Treasury securities with remaining maturities of less than 3 years. Unlike the Fed’s “quantitative easing” policies, which used newly created money to buy assets, Operation Twist will avoid October 2011

expanding the Fed’s $2.8 trillion balance sheet.

As part of Operation Twist, the Fed will also reinvest proceeds from maturities in its mortgage backed security (MBS) portfolio with the hopes of bolstering the housing market. Today, 90% of all new loans in the US are funded by MBSs. Operation Twist is designed to push down interest rates on everything from mortgages to

tinue to draw fire from critics.

Republicans in Congress sent a letter to the Fed Chairman, Ben Bernanke, before the announcement warning against any further intervention in the economy fearing inflation. Also, many economists believe that lower mortgage rates will not solve the housing market’s problems as they maintain the issue lies with access to credit and not its affordability. Their claim is backed up

“Operation Twist is designed to push down interest rates on everything from mortgages to business loans” business loans to help encourage the private sector to loosen its purse strings and start spending. Since Operation Twist was announced, the yield on 30-year Treasuries has fallen more than 30 basis points to 2.90% on September 30th, achieving the Fed’s goal of twisting the yield curve.

Even though the plan has had initial success in lowering rates, the Fed is likely to con-

by the fact that even before the announcement the national average 30-year fixed rate mortgage stood at 4.09%, the lowest rate since Freddie Mac began keeping records in 1971.

Even with Operation Twist, many investors are worried that the problems in the US may drag on for longer than expected as fiscal policy remains sidelined by a divided congress.

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6

Ian Burke Cameron, Lead Editor ian@bullandbear.ca

In a Competitive Job Market, How Do Desautels Students Match Up? Chris Conrey Lifestyle Editor

Holly Sherlock | The Bull & Bear

A speaker stands at the microphone during the SSMU General Assembly.

Oops, We Lost Quorum Again SSMU passes three out of five motions before losing quorum April Wu News Writer

With over a hundred students in attendance, the Students’ Society held its first General Assembly (GA) on Monday, September 26th.The surprisingly large turnout was due to the hottest topic on the floor: the motion regarding SSMU’s commitment to pursuing accessible post-secondary education.

SSMU President Maggie Knight expressed excitement for the discussion of this motion: “All the motions are interesting in their different ways, but tuition hikes are a really big issue,

part-time job. This results in students laden with debt, which affects their future credit score.

The other side of the argument is that education is an investment; to be able to afford the best professors, we need to pay the price.

Arts Representative Isabelle Bi suggested that “The tuition hikes are not targeted towards McGill University, and instead of focusing on this motion, money should be put towards creating more work-study positions and even funding a co-op program.”

With 73 for, 17 against, and 14 abstaining, the motion regarding accessible education was

“What was meant to be a joyful result was met with the sudden exit of more than 40 students” as we believe that post-secondary education is a pillar.”

The Quebec government has increased tuition fees for university students by $325 a year, totalling a $1,625 increase over the past five years, which has been the largest tuition increase Quebec has ever seen.

The issue sparked heated debate, with those supporting the motion emphasizing that education is a right and not a privilege.

With tuition rates skyrocketing, students turn to loans, as many cannot juggle academics with a October 2011

passed, meaning that SSMU will specifically oppose the tuition increase affecting Quebec students and actively encourage its members to participate in mass demonstrations against tuition fee increases.

What was meant to be a joyful result was met with the sudden exit of more than 40 students who were either displeased with the outcome or simply had no interest in the remaining motions on the floor. The SSMU GA had lost quorum - the minimum number of members of an assem-

bly that must be present to make the proceedings of that meeting valid - and was reduced to a mere consultative forum, which could not make any substantial decisions.

The SSMU executives expressed their great disappointment at losing quorum. SSMU Speaker Nida Nizam was appalled that students would walk out when the voting results were not in their favor, stating that this jeopardized the integrity of the event.

Before the mass walkout, the GA swiftly passed the motions regarding the SSMU Board of Directors and sustainability. The SSMU Executive Board was especially pleased that the motion regarding the democratic reform of the SSMU Board of Directors was passed.

“We are going through a whole governance overhaul this year. Passing this motion allows us to improve the current structure by making the board bigger so that councilors hold more power than the executives,” Knight said.

Although the remaining two motions were only passed symbolically by the consultative body, these motions will still be submitted to the legislative council for consideration next Monday.

The first GA ended with SSMU encouraging reformation of subsequent GAs, so that they may be more effective and involve a larger portion of the student body.

On Friday, September 24th, the Omni Hotel hosted the Desautels Career Fair, bringing together 310 job savvy McGill management students and top recruiters from Canada and the world around.

The Career Fair gave students the opportunity to meet and network with potential employers while recruiters scouted up-and-coming talent for their companies. Overall, employers’ reactions were positive towards McGill students.

Derek Ruediger from L’Oreal explained that Desautels is “almost a feeder school for young talent at L’Oreal. Above just academic achievement, McGill students seem to fit within the organization. There is an added dynamic to their education.”

makes events like Career Fair so important for attaining prestigious positions because 80% of jobs are not posted. Beaudin gave suggestions regarding how to stand out in recruiters’ minds: 1. Be professional, first impressions are key 2. Be engaged in discussions 3. Bring a portfolio of accomplishment (mentally, or physically) 4. Don’t sit back; be proactive 5. Follow up!

Career Services has recently implemented a new portal to myFuture - career portal. This new feature gives students the knowledge and tools needed for specific careers in an effort to

“Employers are looking for well-rounded, well-balanced candidates with achievements outside their academic careers.”

Surveys recording companies’ reactions to the Career Fair noted that Desautels has “an amazing pool of talented students who are well prepared, organized, well-spoken, and aggressive. In this regard McGill graduates have an upper hand on competing schools.” But is that enough for recruiters?

The folly of the GPA is something that distracts many students from what really matters.

Executive director of Desautels Career Services, Marie-Jose Beaudin, explains that “GPAs are relevant for certain jobs, but not all. Employers are looking for well-rounded, well-balanced candidates with achievements outside their academic careers.

They’re looking for the passion, outlook, culture, value, and fit that defines candidates. A good GPA helps, but there is much more.”

In such a competitive job market, it is more true than ever that it is not what you know, but who you know. This is what

help them launch into their careers early.

U1 student, Dora Du, majoring in International Management knows that it is never too early to start the job hunt, “I found the event provided a great opportunity to gain exposure and meet potential future employers.”

However, not all students shared the same reaction to the Career Fair. James Xiang Ji, a U3 Computer Science major explains, “Although recruiters were taking resumes today, they were telling students to apply online; they simply took resumes as a courtesy. I was planning to make 30 new contacts and was only able to make 10.”

Similar to years past, companies were impressed with McGill students. Recruiters continue to offer jobs to McGill graduates because of their continued excellence. The most important advice from recruiters was that you can never be too aggressive; passion is something that all recruiters find refreshing and appreciate.

The Bull & Bear

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Ian Burke Cameron, Lead Editor ian@bullandbear.ca

7

Job-Search Website Jobbook.com Launches Former SSMU President and other employees unveil site at pre-launch party Elana Cipin News Writer

A

fter approximately one year of planning, the new and contentious social media site Jobboook went live to the public on Monday, September 26. The goal of this start-up is to connect students and recent graduates from most of the top Universities in Canada and the United States with prospective employers.

The idea for the company originated from Jean de Brabant, a 73 year-old Montreal-based entrepreneur. The plan was to create a free service that matched candidates to jobs of interest.

Thousands of dollars in investment funds have gone into inventing a new system to alert the user of jobs sorted by field, profession and title. A user must send their CV to the participating company, and if hired, Jobbook is paid by the employer a small percentage of the starting salary.

Before it can become accepted in the McGill community, Jobbook must face a few challenges. Like any other new company, there is a steep learning curve. Brabant explained, “When you’re a start up it’s hard to be a leader - at the bottom there are a lot of roles to fill.”

Some McGill students are upset to hear that Zach Newburgh, former SSMU President, is the Vice-President University Relations at Jobbook. SSMU Council voted in early February 2011 to censure Newburgh, as

October 2011

his involvement with Jobbook was viewed as a conflict of interest. Newburgh was alleged to have met with student executives at other universities and pitched Jobbook at the same time.

“I was not representing the SSMU in an official capacity. And that should have been clear. And was made clear,” Newburgh said in an interview with The Daily on when Jobbook was mentioned in his meetings with other student executives.

During a meeting in February with the Legislative Council, Newburgh declared that he “used the Conflict of Interest Policy to guide my involvement with Jobbook in the first place.”

Although he admitted that he should have been more open with SSMU about his involvement, he maintained that his involvement never impeded his ability to function as SSMU President. In addition, he noted that Jobbook would help McGill students.

A number of groups thought that Newburgh abused his leadership position to gain a financial stake in this opportunity. When his involvement became a controversy in January, Newburgh told the student body that he was dropping his financial share and commitment to the company.

Some who believed Newburgh’s actions were unethical have been sceptical about joining Jobbook.

However, Newburgh shrugged off past controversy at the pre-launch party that took place on Saturday, September 24.

Friends, family, and the media

Dan Novick | The Bull & Bear

Above: Zach Newburgh shows off the Jobbook interface Below: Employees, friends, and reporters gather at the Jobbook pre-launch office party.

joined the founders and employees of Jobbook in the spacious Montreal head office to celebrate the opening. Newburgh and his coworkers were very welcoming, and showed guests how to use the interface while explaining the way it all works.

Some guests were impressed by the open-concept office space they walked into, with a DJ playing. They compared the atmosphere to that of The Social Network, since the Jobbook office had non-traditional features such as a basketball court, darts, and a work-out room.

Jobbook can be compared to sites such as Monster.ca or LinkedIn. However, co-founder An-

toine de Brabant, son of Jean de Brabant, explained that “[with] LinkedIn, a lot of people get confused about what the services are. People don’t really see it as a place where I’m going to go find a job that’s for me.” He further explained that LinkedIn is mostly for the benefit of the employer, and that Jobbook is not aiming to take away any of their market.

According to de Brabant, the intention is to have a more userfriendly system for the typical student. “Imagine more of a dating site where you get to see basically live streams of jobs based on your selections, and you get to ‘like’ them or not ‘like’ them.”

It was Antoine de Brabant

who thought that having a spacious, unconventional office would be key in building up Jobbook’s success. “These are amazing offices, and can only hold an amazing project,” said de Brabant.

Jobbook’s exponential growth has been impressive. In only three or so days since its launch, Jobbook reached around 4 500 members. They intend on introducing new design updates and features in the near future.

They are also trying to get involved in the Montreal start-up community, and have been holding conferences in their offices to that end.

Dan Novick | The Bull & Bear

The Bull & Bear

News

Ian Burke Cameron, Lead Editor ian@bullandbear.ca

9

VENI Kristine Pinedo Lead Lifestyle Editor

On September 15, Veni Vidi Avicii, presented by the Management Undergraduate Society, took its place among McGill’s largest student-run events. The show was fully sold out, with 1200 McGill students in attendance. Tim Bergling, the Swedish DJ, remixer, and record producer professionally known as Avicii, performed an exclusive concert for McGill students.

Telus Theatre was packed within one hour of doors opening. When the clock struck midnight, the lights went off and the crowd erupted, chanting “Avicii”.

Students welcomed Avicii with an epic McGill Once, McGill Twice cheer. As 1200 students chanted the final ‘MCGILL!’, Avicii blasted an unreleased remix of his latest single, “Fade Into Darkness”, immediately electrifying the crowd to what would be a thrilling three hour set. Avicii featured “Seek Bromance”, “Blessed”, and “Rolling in the Deep” as well as hits such as “Let Me Show You Love”, while ending the show with a remix of The Killers’ “Mr. Brightside”.

“Words cannot describe how ridiculous that night was,” said Aram Aharonian, U3 Account-

October 2011

VIDI ing. With an impressive light show, four CO2 jets, gold confetti blasters and a sold-out crowd, “Avicii took the madness of Management Carnival, the spirit of Frosh, and the rage of Power Hour, and packed it into the most amazing three hour set I’ve ever seen,” described Ben Pidduck, U2.

Director of Corporate Relations, Manuella Djuric, orchestrated the event with the support of the MUS. The original idea for the Avicii concert was to bring the music superstar to play for SSMU Frosh; however, they instead chose Dragonette. Djuric went on to plan the concert as an MUS event exclusive to McGill students that would become part of Avicii’s North American College Tour.

The concert was an exciting way to start the school year and encourage involvement in MUS events. First year students received a reduced rate as a welcome from the MUS. As Michelle Gastle, U0, stated, “After the Avicii concert, I knew McGill had been the right choice and all my friends agreed. It made me want to get involved in our awesome faculty and I interviewed to be on the First Year Street Team the following week.”

Graduating students such as Marissa Rosen, U3,

A VICII share the sentiment, “Avicii was hands down the best electro/house event I have ever been to. It is a testament to the MUS understanding of what the faculty wants, which is evidently more fun seeing as how successful the night was!”

Djuric and her promotional team worked with Spin Artist Agency to schedule Avicii and with Telus Theatre to set up the show. “Tim’s booking agents, David Brady and Andrew McKeough as well as his road manager Malik Adunni, were extremely helpful and an absolute pleasure to work with,” stated Djuric.

Djuric conceived the idea for the concert after meeting Avicii during Grand Prix Weekend over the summer where she mentioned the idea for a McGill event. “It was a huge challenge, but it was definitely facilitated by meeting with him first and then working through the details with his team,” she said.

Gaby Abou Merhi, MUS VP Finance, spoke with The Bull & Bear detailing the finances behind the event. The MUS raised approximately $50 000 in revenue from ticket sales. $30 tickets were sold to Frosh leaders and first-years entering Bronfman as a thank-you for their involvement, and to help them get to know the

MUS while integrating into the faculty. Ticket sales were then staggered into batches of 200 and sold in $15 increment increases, reaching $60 in the last week.

Profits from the concert, totaling approximately $7995, will go towards MUS events that did not receive sufficient funding through sponsorship, such as last month’s Graduating Case Competition.

After all the difficulty of planning such a large event, Djuric expressed her feelings about the outcome of the show, “I feel the concert went extremely well…the positive feedback I have been getting from it is absolutely amazing.”

Photographs from the event, taken by McGill students, Amelia Couture, John Kelsey, Soumia Zehri, and Thuymi Do can be found at the Bull & Bear website and at www.facebook.com/musavicii

The Bull & Bear

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10

Ian Burke Cameron, Lead Editor ian@bullandbear.ca

2011 Graduating Case Competition Desautels’ students put their education into practice Alvira Rao News Writer

The 2011 Graduating Case Competition, sponsored by Capital One and Sinfully Asian, took place on the weekend of September 23rd. The contest was divided into three categories: strategy, marketing and finance, and was judged by twelve representatives from various companies, including Accenture, Wire Rope Industries, BMO Nesbitt Burns, Interinvest, Claridge, inc., KPMG, and Pandion Investments, Ltd. Fifty-six members of the graduating class participated in the competition, which started off on Friday with two tutorial sessions, followed by an opening cocktail at the Omni Hotel. The next day, participants, who were divided into teams of four, were given a case to crack within three short hours. After their time was over, they gave a twenty-minute presentation followed by a fiveminute question-and-answer session with the judges.

The marketing case was cho-

sen by Capital One - the platinum sponsor of GCC - and related to student cards. Because most students tend to sign up for their first credit card under the same bank as their parents, the case focused on how to attract students to Capital One instead. It was a particularly popular case because it was a real-world case and especially relevant to students.

The finance case, however, proved less popular and more challenging. It related to pension funds, about which most students had little knowledge. Some felt that the question was “unclear” and that the over-arching topic was not close to student interests. Judges even joked that there were “four groups, and no perfect crack.”

Awards were given out at a cocktail on Saturday, which was attended by participants, judges, and The Bull & Bear. Judges were generally quite impressed with the teams, but the greatest praise was undoubtedly given to DCGA Consulting. They were the winners of the strategy

A winning team poses at Graduating Case Competition

case, which involved identifying where to expand existing product lines with a strategy that would allow LEGO to maintain market dominance in their market. One judge enthusiastically exclaimed, “They blew us away and made us

Kapil Mehra | The Bull & Bear

want to buy a thousand bucks worth of LEGO!” The closing cocktail on Saturday marked the end of the intensive two-day competition for participants, who described it as “incredibly stressful, but equally

fun.” Fortunately, there was an open bar to for the fatigued participants to either grieve loss or celebrate victory.

step towards launching a career.

An undergraduate degree demonstrates to potential employers that the student has acquired basic skills and will thus allow you a first level entry job. In order to “move up the corporate ladder more quickly,” industry courses are critical. If you are interested in the retail side of finance, such as investment management for individuals, a Canadian Securities Institute certification is crucial. If you are interested in the institutional side, a Chartered Financial Analyst designation is recommended. Even after getting a job, if you think you are done with education, think again. For example, Bonsant takes continuing education classes in order to maintain his securities and insurance licences. This is not meant to discourage, but instead to prepare you for what to expect once you leave Milton Gates.

In terms of changing jobs, only pick the opportunities that represent a progression and will allow you to grow. Speaking from experience, Bonsant advises “do not change just [for the sake of] change.” Change if you are unhappy with the current job or if you think you can learn more in a new position.

As a cautionary note, not all personalities are suited for in-

vestment advising. One should be outgoing, disciplined, and willing to help other people. At the beginning, establishing a client base requires much persistence and patience as cold calling and rejection are standard.

Bonsant’s experience is exemplary of the fact that it requires time to find the right job.

Many students leave university without any idea as to which career they wish to pursue. Do not worry if you are still soul-searching and hesitating - trial and error is likely before you find a job you are passionate about. Keep your options open and be willing to take whatever comes your way.

Golden Ticket to Success McGill alum shares his long journey in the financial industry Yina Zhou Lifestyle Writer

Robert Bonsant, Vice President Investment Advisor of CIBC Wood Gundy, recently spoke with The Bull & Bear to offer McGill management students some advice and insights about the financial industry. According to the McGill alumn, “life is not a sprint, but a marathon.” It took Bonsant around twenty years to find a career choice he was truly passionate about. Indeed, his career path is anything but boring.

Bonsant worked as a teller for RBC, an analyst at the Montreal Exchange, a sales representative at Standard Life, and a regional manager at Crown Life. Throughout his career, he continued his education, completing the Canadian Securities Course and all three levels of the Chartered Financial Analyst program. Bonsant finally discovered his calling with his fifth job in investment advising. He describes his job as “having [his] own business without having to put down a lot of capital.” As an investment advisor, he is able to find his own clients and maintain relationships with them as he sees fit. Work-life balance is easy to achieve as Bonsant fixes his own schedule. He is motivated October 2011

by personal responsibility since he is directly compensated for the outcomes of his effort. As future employees of a company, he recommends students be “revenue items [and not] expense items.” If you are able to bring in new accounts and close deals, you will be respected and not be the first to go in times of financial distress.

Wood Gundy has been helping Canadians manage their investments for over 100 years.

Within his sixteen years at Wood Gundy, Robert Bonsant has noticed a trend in the industry.

Margins are decreasing as more assets are needed in order to generate comparable returns. This is due to increased information flow and the possibility for the “Average Joe” to do his own investing. However, since margins are thinner, it takes more skill in order to “beat the market,” something that “Joe” may not necessarily have.

The median age of Investment Advisors at Wood Gundy is around fifty. Even though clients should not think that age is the sole determining factor of an adviser’s ability, it is most definitely reassuring when a person has proved himself or herself in an industry for so long. Bonsant recalls how hard it was to

sell pensions to senior executives while working for Standard Life in his twenties. They did not take him seriously. Jokingly, he says that this is “one of the advantages of having grey hair.” As

Robert Bonsant, a McGill alumnus and Vice President Investment Advisor at CIBC Wood Grundy.

Baby Boomers will be retiring in upcoming years, companies like Wood Gundy will need to begin preparing and training young associates. To this effect, they have in place a mentorship program where associates can expect to prepare reports, analyse portfolios, and execute other clerical tasks under the supervision and guidance of a mentor.

Despite Bonsant’s pride in being a McGill alumn, he notes that university is only the first

The Bull & Bear

Lifestyle

Kristine Pinedo, Lead Editor kristine@bullandbear.ca

11

The Next 36 Visionaries unite in entrepreneurial spirit Christian Sullivan News Writer

W

ith just a month remaining until the November 7 application deadline, The Next 36 is hot in pursuit of Canada’s best and brightest future entrepreneurs. At an event at the Desautels Faculty of Management last month, the founders of The Next 36, supported by business leaders from Montreal and across Canada, pitched their idea to McGill faculty and hopeful students. Last year The Next 36 chose 36 of Canada’s most promising undergraduate students to participate in their eight month entrepreneurial boot camp. Supported by Canadian business figures including W. Galen Weston, Paul Desmarais and Jim Pattison, The Next 36 offers participants classes with faculty from leading institutions such as Harvard, Wharton, Ivey and Georgetown, one-on-one mentorship with top Canadian CEOs and entrepreneurs, and to top it all off, seed capital totalling $50,000.

The brainchild of serialentrepreneur and University of Toronto business professor Reza Satchu, who admits that ”it’s an absurd program”, The Next 36 aims to transform those students with the most potential into high-impact entrepreneurs. His hopes are that the candidates will start identifying problems and creating real-world solutions.

However, this requires experience and understanding that the candidates have not yet fully developed.

That’s where the experience of established CEOs and entrepreneurs is so valuable. Fourstudent teams are created by the organisers based on area of study and specific ability, and each team is mentored by one CEO and one industry-specialist. At last month’s event, Executive Director Claudia Hepburn recalled how the mentors were told they’d be spending 5-10 hours a month conferencing with their teams, but in some cases spent up to 60 hours per month with their teams.

The program culminates in the expected launch of ventures created by the teams in the area of digital media and communication. Whether the ventures succeed or not, the candidates have gained something even more valuable: experience.

However, the experience is not without a purpose. The Next 36 is a venture that is living the October 2011

Reza Satchu speaks at Desautels event

strategy it aims to teach to others, solving the problems that would scare away anyone but the most willing and able. “We’re trying to solve a major problem here” says Mr Satchu, ”the prosperity gap between Canada and the United States is increasing. It’s not that there are not enough highly productive workers, it’s that there are not enough Googles here”.

Compared to the United States, Canada is slowly being left behind. The key factor is that innovation and the drive to take the risks to be revolutionary are not ingrained in our consciousness like they are south of the boarder. The Next 36 encourages participants to take risks, and to stay with it ”[so that] when [they’re] ready to do something big, [they] can do it” In an interview with Mr Satchu in July of this year, The Globe and Mail quoted him as saying “I thought all the kids from Harvard, Yale and Stanford would know so much more, but they didn’t. Their advantage is that they have massive exposure to leaders and much higher expectations of themselves.”

The difference between the American students and the Canadian ones isn’t one of education, but of trajectory. “It is about a mindset,” says Jon French, Director of Marketing and Events.

“Taking young leaders who are

Nicole Himelfarb | The Bull & Bear

already destined for great things and giving them an incredible amount of resources, with the expectation that they will have a huge impact on the prosperity of their country.”

Gideon Hayden, a participant in last year’s The Next 36 and a McGill graduate, believes that the mindset he grew into during the program has permeated not just his take on business and entrepreneurship, but his whole life. “I think that the value of The Next 36 is that you get exposure to such accomplished entrepreneurs and leaders in this country, and as a result your expectations of yourself drastically increase.”

So what are prospective applicants hoping to get out of this?

McGill student and The Next 36 hopeful Chris Conery told The Bull & Bear: “I truly believe that this program directly fast tracks participants’ success...only the most prominent applicants are selected and are given resources, education, experience that is going to unlock potential.”

That is what the team behind The Next 36 is hoping for. Believing that entrepreneurship can be taught, and working to give those most able the tools they need to truly exceed, The Next 36 is preparing the next generation of innovative and visionary thinkers for the Canadian business world.

The Bull & Bear

Opinion

12

David Lin, Lead Editor david@bullandbear.ca

A Modest Proposal to MUNACA Not everyone supports the strike David Lin Lead Opinion Editor

I

am inspired by the ongoing strike to recall a recent case in labour relations history.

In August of 1981, union members of the Professional Air Traffic Controllers Organization (PATCO) went on strike after a series of failed negotiations with the Federal Aviation Administration (FAA) to increase wages, improve retirement benefits, and shorten the work week. President Reagan subsequently fired them all and brought in the military to supervise and man airport towers. Two months later the FAA decertified PATCO. This case is meant to be allegorical more than premonitory, because unlike MUNACA, US federal employees are banned by law to stage mass strikes that could compromise the nation’s infrastructures.

Thus, I don’t anticipate, or even hope that MUNACA would share PATCO’s fate. Still, there are striking similarities in the way these strikes have been executed that need to be addressed.

PATCO chose to strike during the busiest time of the year for airlines; revenue losses would have forced employers to cut wages or even lay off additional workers. In parallel, MUNACA scheduled their demonstration to coincide with the fall back-toschool rush, thereby maximizing their collateral damage done to students and teaching staff in need of their services. Granted, this is a textbook pressure tactic commonly employed by labour unions en masse but what is the rationale for courting your hostages for support? Those students who do support the strike must surely have noticed the delay in IT services in posting online lectures, the closure of several libraries, not to mention the pre-meditated blocking of major entrances for the sole purpose of inconveniencing commuters.

I think I may be naïve in hoping that unions could abandon their geocentric world and for once refrain from exploiting innocent third-parties as a PR ploy, but in either case, I refuse to be treated as collateral damage and support this two-faced charade, and it is for this reason that I will not “join in MUNACA’s ranks in solidarity,” as SSMU so passionately pleads us to do.

MUNACA has shown that not only do they lack tact in execution but also lack credibility in their communication. Having invalidated themselves as an organization of subtlety, the October 2011

union has leveraged on the dissemination of their core message, “All we want is parity,” to build sympathy for their cause.

The underlying implication here is that they are not currently being treated as equals and as such, are granted by natural law to embark on a crusade against “social injustices,” as one worker described in her comment on another campus newspaper article. There are two problems with this: first, the scope of social injustices in our society extends beyond the confines of the Mc-

other union workers; rather, it is the slower rate at which their salaries increase per year that is the issue. By shortening the time to complete their salary progression to a proposed 6 years, workers will be able to increase their pay at an annual rate of 9.4% (28% increase over 3 years), but MUNACA argues that this isn’t unreasonable since the workers who have completed their salary progression are subject to no more than a 3% yearly increase thereafter. As the master framers of information that they are,

identify those casual workers who have been hired to work in lieu of them, a process informally known as “scabbing.” In their own defence, the union has even cited article 109.1 of the Quebec Labour Code which states that an employer cannot utilize the services of a part-time worker to replace a member of the bargaining team. What MUNACA didn’t disclose, either as an intention to frame or simply out of sheer ignorance, is that section 109.3 explicitly states, “The application of section 109.1 does not have the

Kapil Mehra | The Bull & Bear

MUNACA’s core message of demanding “parity” is misleading and poorly justified.

Gill campus, and second, there is no real evidence to suggest that MUNACA employees are grossly underpaid and are subject to intolerable working conditions.

The administration is offering a 1.2% annual increase in pay, which they claim is on par with other McGill unions and is more than what’s offered to 450,000 of Quebec’s public sector employees. Granted, 1.2% is lower than the average Canadian base pay increases of 2.9 per cent for 2011 (as projected by Mercer) and even lower than the CPI of 3.1%, but let’s compare this figure with MUNACA’s demands.

University workers in Montreal are compensated on a wage scale, meaning that employees start at the minimum level of pay and progress to the maximum salary at a rate that is determined by the employer, which in the current case is only 1% per year. At this rate, MUNACA claims that it would take a new worker 37 years to reach the maximum salary, as opposed to 3 to 14 years at other local universities.

It therefore becomes clear that MUNACA workers aren’t being paid less in terms of their salary levels compared to that of

MUNACA has failed to disclose that currently only about 25% of their employees have completed their salary progression, so the majority of their workers would still be eligible for a 9.4% yearly increase. Still, I find it difficult to fathom that a union would make such vampiric demands during a melancholy episode of economic trauma. To put things in perspective, the Canadian real GDP growth rate in 2010 was 3.1%; what justifications do clerical workers at a university have for increasing their income at three times that of the inflation-adjusted output of Canadian capitalism? That being said, the current contract stipulates a salary increase equivalent to only 0.33 times the GDP growth rate, so I think that some moderation is required for fairness to be reached.

The degradation of MUNACA’s reputation as a credible source of information is further evidenced in their reports of McGill’s contingency plans in the face of a strike. The school administration writes that “under Quebec law, certain types of managers are allowed to perform the work of the striking employees.” MUNACA was quick to

effect of preventing an employer from taking, where such is the case, the necessary measures to avoid the destruction or serious deterioration of his property.”

The terms “property,” “destruction,” and “deterioration” are subject to legal interpretations, but it is not difficult to argue that McGill had to act on behalf of its students and faculty to prevent a total shutdown of the university’s support infrastructures.

The final straw for me was the contemptible manner in which MUNACA responded to the recent court injunction. Following the court order to abstain from protesting within school grounds, workers began handing out pamphlets that read “Warning: you are entering McGill, a no free-speech zone.” Pardon me, but I do not condone your insulting my alma mater in such a degrading tone; just because you have the right to protest it does not mean that I have the obligation to listen to you, and it certainly does not mean that your employer has the obligation to provide you with a forum with which to broadcast your woes. To quote Ayn Rand, the philosopher and novelist, “The

right of free speech means that a man has the right to express his ideas without danger of suppression, interference or punitive action by the government. It does not mean that others must provide him with a lecture hall, a radio station or a printing press through which to express his ideas.”

A MUNACA employee, whom I’ve become acquainted with over the years, chatted briefly with me while I passed him on the picket lines earlier in September. When I asked him, halfrhetorically, what he was doing, he explained that they are “living the dream.” I offered to do what I could to help, but even then I realized that no amount of slogan chanting or juvenile behaviour along the lines of booing at McGill executives during a meeting at the MacDonald Engineering building is going to help expedite the negotiations. Notwithstanding this insight, I’d like to uphold my offer and make a few modest (and non-satirical) proposals.

To MUNACA and its affiliated unions, I propose that you return to work immediately, thereby releasing students as your hostages during this siege against the McGill administration. It is understandable that a union such as yourself is not completely satisfied with the university’s counteroffers at this time, in which case the employees can resume their indispensable work of upholding McGill’s infrastructures while the councils and executives of MUNACA can continue the negotiations on your behalf.

Incidentally, I propose that you, as a collective union, come to the realization that your demands for wage increases are economically unreasonable and self-deprecating, as one practical way for McGill to fulfill a 28.9% salary increase over three years is to hire fewer of you. I further propose that if such an impasse were to occur in the future that MUNACA’s 1700 workers would kindly consider the consequences of such a strike on the lives of McGill’s 34,000 students and stage your protest at a time such as the summer as to minimize any disruptions to learning during the regular school year. In doing so, you might earn not only the students’ support, but also our respect. Alternatively, you can prolong this stalemate by your lawful occupation of marching and drum-beating, but I’d be wrong to assume that this is truly the “dream” your colleague spoke of.

The Bull & Bear

Opinion

David Lin, Lead Editor david@bullandbear.ca

13

A Look at the Facebook Redesign The Timeline interface is the social network’s biggest leap yet in user experience.

Alex Pajusi Executive Editor

Yesterday I was granted early access to Facebook’s new profile interface, called Timeline.

It’s without a doubt Facebook’s most radical redesign yet, and like all Facebook changes, it’s sure to have vocal opposition from some.

With new competitors in the social networking arena, Facebook has taken a large leap in re-envisioning your social life on the web. Whereas the firstgeneration Facebook had certain information boundaries, the new Timeline encourages you to share every detail of your life: birth (where you can even add a photo…I skipped that part), relationships, broken bones, illness, a new job, military service, pets, kids, loss of a loved one, travel; the options are shockingly detailed.

Many Facebook feature upgrades and redesigns have seemed the haphazard work of some geeky engineers. Most recently, the company backtracked on its idea to keep the Chat sidebar always visible on the right, yet show only people it thought

you might want to talk to.

Facebook Timeline shows a noticeable departure from that trend, with careful visual execution that demonstrates true emphasis on the user experience.

The first thing users will notice is the Cover, a full-width banner at the top of your profile. Here, the user chooses an image that best reflects their life. I picked one of my friends and I spending a hot summer day in the pool. The impact of this enormous billboard is immediate and truly emotional when done right.

Beneath the redesigned banner is the Timeline. Here, Facebook has taken its wealth of information about your life from the moment of your account creation and created a full timeline of your interactions. Active Facebook users may be surprised to revisit previous years of photos, wall posts, and events they had long forgotten. Timeline is very nostalgic, providing a virtual library of old memories that scroll endlessly down the screen.

Privacy advocates may argue that Timeline has gone a step too far in providing access to other peoples’ lives. True, Time-

The new full-width cover photo is the first thing users will notice about Timeline.

line does facilitate creeping. But it also serves to remind us just how much data we share with Facebook’s servers. In its effort to compete with Google+, Facebook has developed advanced privacy controls that allow for fine-tuning at the post level. If that’s not enough to assuage the privacy-concerned, they’ll have

little recourse – Timeline goes live system-wide in the coming weeks.

With increased emphasis on photos and a more visually pleasing interface, Timeline shows a refreshing new commitment to the user experience. As users spend a longer part of their lives on Facebook, the site has

adapted from what was simply a college social tool to a full digital record of your life.

schools like McGill. Education isn’t just academic prowess or research muscle, it’s also about sending out intelligent individuals into the workplace and intelligence means more than how much one can regurgitate on the exams. So don’t just tell me how to measure risk, show me how to manage it.

I had the lucky opportunity to work on the trading floor at a bank last summer and if there’s one thing I’ve learned, it’s that there exists a fine line between controlled-risk trading and acting out Die Hard as one’s trading strategy. In the aftermath of the crises and now the arrest, banks have been quick to tout existing internal controls or assure investors of new, tougher ones. Just a few days ago, Goldman Sachs President Gary Cohn cited poor risk-management practices, not products or trading attitude, as the cause of company losses and failures. Furthermore, Mr. Cohn went on to boldly state that Goldman Sachs has a “robust separation of duties.” In light of the recent UBS scandal and subsequent resignation of the CEO, it sounds to me like a very deft move to cover one’s posterior

rather than address the proverbial elephant in the room.

However, in my opinion, it should come down to dealing with the fundamental human behaviour. See, trading, unlike banking, is inexorably linked to squeezing money out of every market situation. So how does one both encourage and prevent a flawed human nature? Obviously, having traders unwilling to deal in anything but 100% safety won’t get anyone far – but neither will the trend of subtly prized high rollers.

My point comes down to one simple premise: the attitude towards trading must be of controlled risk. Be aggressive, but stay within ironclad, selfenforced limits. Traders are very smart cookies; they’re used to manipulating a system far more complex than new risk management systems and the culture, while differing within banks, needs to be cultivated in the early stages. So rather than strutting around like the next Warren Buffet, Don Draper or Prada model, be realistic about what you’re dealing with, because the market isn’t quite so forgiving.

To learn more about Timeline, visit www.facebook.com/about/ timeline.

One Giant Casino Excessive risk taking jeopardizes the stability of markets Tarun Koshy Opinion Writer

I

t seems, once again, that the world has waged war on traders and bankers alike, sparked by the recent arrest of UBS equities trader Kweku Adoboli in London over $2.3 billion in hidden trading losses.

Of course, the media has wasted no time in broadly painting the realm of trading as a world of professional gambling filled with frat-boy gunslingers betting on pure odds. What, was bankerbashing not enough? However, though as much as I would love to tear apart this sad stereotype, there is the proverbial grain of truth that needs addressing – business students aren’t being taught the right attitude when it comes to trading. Let me put it this way: how many movies do you see or articles you read about traders that consistently make steady returns? Probably not many.

There’s no underdog, ragsto-riches potential that Hollywood so loves. Wall Street, Wall Street 2, Boiler Room, Rogue Trader are all movies about big players, big positions and big October 2011

The endorphin-releasing thrills of gambling are stereotypically likened to the recklesness of risk-seeking traders.

money. And although the films attempt to provide a silver lining to the story, it’s far more interesting to imagine the fame of pulling in the big positions yourself.

You only hear about the big swinging, hard-hitting rainmakers who pull in enough to buy a small European country (or a couple of countries in this market). It’s the George Soroses and Warren Buffets of the world who are idolized and worshipped in business schools, not the steady, rational folks who work with the market day-in and day-out. And that, ladies and gents, is what really grinds my gears.

Sure, we can blame some of it on the media for dramatically sensationalizing the few big-hit-

ters and labelling the failures as “rogue”. Add to that the uneducated rants of people likening the financial market to one big casino and we have a rosy picture for our future traders. And trust me, that type of attitude has flourished in the ego-centric Bronfman High; talk to any budding finance student and you’ll be subject to a laundry list of how much money they’ve made trading on their own and how they’re like the next George Soros. For added effect, liberally toss in red “power” ties and LV handbags. But don’t tell me that the point of trading is just to make money – it’s as much about how one trades as it is about how much one makes.

That’s the key missing link at

The Bull & Bear

Opinion

14

David Lin, Lead Editor david@bullandbear.ca

Daily Deal Drama

Business Blast

Leverage Your Image

Investigating Groupon and Campus Coupon Jessica Simmonds Opinion Editor

Andrea Zhu Columnist

I

n early June of 2011, Groupon filed its S-1 with the SEC – the formal move that signified its forthcoming initial public offering. However, its launch as a publically traded company has recently been put on hold, with the September cancellation of an important roadshow typically used to attract investors. In its preIPO state, Groupon is currently undergoing the “quiet period” during which federal law limits what company employees and representatives can say regarding the profitability of the company.

That said, a leaked office memo has left critics everywhere speculating not only about the delayed public offering, but also about the sustainability of the dailydeal business model.

In the leaked memo spread in late August, head executive Andrew Mason took skeptics head on, stating that he has “never been more confident and excited” about the future of Groupon. He urged his employees to “silently argue in their minds” rather than retaliate publically at bloggers and business writers, and addressed concerns that the company is spending too much on marketing with no profits to date.

Mr. Mason’s 2500 word cheerleader act may have turned some frowns upside down within Groupon headquarters, but the message of encouragement raised concerns that the company had violated SEC rules by hyping the company. In 1996, the IPO for tech media company Wired Ventures was pulled after an internal memo was made public – setting an unfortunate precedent for what is currently happening with the daily-deal mogul.

But it’s not breaking a vow of silence that has Groupon shaky on its upcoming IPO – there have recently been volatile swings in the market that endanger scooping the highest possible stock prices. As well, Groupon is low on cash. If the IPO is not carried through in the next month or so, the company should hunker down on reducing spending and making its marketing efforts more cost-efficient.

In other words, Groupon needs to make good on its remarkable rate of growth – 2009’s revenues of $30.47 million were bested by 2010’s revenues of $713.4 million. The first quarter of 2011 brought revenues of $644.7 milOctober 2011

In my personal endeavours, I have been fortunate to receive insightful feedback from my mentors. Along with a little humor and wisdom of my own, I am excited to share with you some tips, tricks, and thoughts that might smooth out a few wrinkles along the path to success. Follow my business blasts geared towards graduating students looking to have the upper hand when entering the labour market.

Amelia Couture | The Bull & Bear

Campus Coupon founders Jared Saks (left) and Jonathan Rosenbluth (right).

lion – almost as much as it made during the previous year. That said, regulators have been critical of Groupon’s accounting due to how it would book money that went to the merchant as their own revenue. Prior to September 23, the company counted as revenue the total value of coupons sold. After discussion with the SEC, Groupon is now only counting its commission on sales. This cuts its stated revenue for 2010 by half.

But Groupon isn’t nearly below water - its rapid growth cannot be denied. Groupon’s success can be attributed to its unique form of self-refreshing marketing – once the company grabs your attention, you are flooded with daily e-mails boasting 60% off a massage, or 70% off high quality Japanese fare. It becomes a game where consumers are invigorated to spend in order to save, and curiosity urges you to open up that e-mail every morning.

Its shortcomings as a model are then drawn from the type of customer a Groupon attracts: someone who buys a mani-pedi for 50% off is making the purchase for the one-time deal, and is not likely to provide long-term business for the merchant. Similarly, vouchers can reduce profits by prompting loyal customers to use discounts. Moreover, merchants can find themselves unprepared to deal with the on-

slaught of new customers – too many vouchers sold may exhaust the merchant of its products or services, leaving the merchant poorer than before, and customers angry. The Butchers Organic Meats store, located in Toronto, is an excellent example: over 15,000 vouchers were sold in 2011 to the point where their stock and meat quality became intolerably sparse, leaving customers feeling dissatisfied when they could only leave with sausages. So many vouchers were sold, in fact, that the shop decided to stop honouring them without informing the deal sites – leaving customers seething.

After having to interact with such a dishonest merchant, it would not surprise me if The Butchers deal prevented these people from using deal sites ever again.

That is not to say all deal sites fall victim to the same fatal flaws. Campus Coupon, McGill’s own daily deal site, has been flourishing since its late August debut. After conducting thorough market research and publicizing through listservs, students Jared Saks and Jonathan Rosenbluth have managed to run two weekly deals unscathed.

When asked what makes Campus Coupon more attractive than bigwigs Groupon or LivingSocial, Jared cites that the competitors have “failed to tap into the student market”. “The two of us are current McGill students, and

we both know what students like.

We offer deals that are specific to students, featuring nearby restaurants, bars, and more,” he says.

By their records, over 75 hungry students will be enjoying $12 worth of offerings from Le Smart Burger at a 50% discount.

Responding to the controversy surrounding Groupon’s finances, Jonathan states, “Overspending on marketing is an easy way for a group buying site to dig a hole for itself.”

“A balance between marketing and sales, and investing early profits into further marketing – as opposed to having a major marketing budget prior to any profits – is a successful model.” he finishes.

Upon reflection, perhaps the key to profitability lies in recognizing and aptly targeting niches.

Just as Mr. Saks and Mr. Rosenbluth have narrowed their audience down to McGill (and possibly Concordia) students, they are able to conduct considerable primary and secondary research to ensure a deal’s success before it even goes live.

It is clear that Groupon needs to amp up the “local” quality, as indicated by Campus Coupon’s new-found success. Deals sent to my mailbox should be catered to my interests, and thus should be concentrated much more heavily on Shiatsu massages rather than discounted power tools.

Who you are in the labor market is more than your knowledge, skills, and abilities listed on your CV. Your marketable identity includes your personality, lifestyle preferences, and yes, physical appearance as well.

Think Morgan Freeman – white hair, deep voice, and kind smile associated with the image of “God.” Or Tim Burton with his tinted glasses and dark suit, all characteristic of his macabre edge. What does your overall image say about you? Are you a creative soul with quirky classes?

The tall introvert who is always diplomatic? The serious negotiator with the perfect poker face?

Without even having spoken or shaken hands with anyone, our dispositions may already be selling us to the rest of the world.

Think about what your personal traits may be conveying to others, and leverage your image to best serve your desired identity. You could also work backwards and decide what image you wish to convey, and then make changes to help you portray that demeanor. Anything from picking a bright colored tie for an interview with a creative company, to lowering the pitch of your voice while presenting a business case will send a direct message. Impression management is more than just suiting up, and whether it occurs consciously or unconsciously, a targeted tweak in your image is likely to feed your audience more desired messages about your personal qualities.

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We make the match, you make the decision.

The Second Floor a photo blog by Holly Sherlock bullandbear.ca

We make the match, you make the decision.

October 2011

The Bull & Bear

MDJP11-090 • desjardins • annonce caisse • jeunesse 2011 • Info: mal/kbm-em foRMAT: 8 1/2’’ x 11’’ • VeRsIon: forfait - anglaise • CoULeUR: cmYk • LIVRAIson: nd

student cafÉ

sTUDenT PLan UnLIMITeD transactions foR $2.95/MonTh

With the desjardins Youth Profit account, you can enjoy a plan that includes unlimited transactions. exclusively for full-time students aged 18 to 25, the plan offers you flexibility and savings. find out more at your caisse today.

1-800-caisses

desjardins.com/forstudents

MDJP11-090 Jeunesse_AnnCaisse_FORFAIT_AN.indd 1

11-07-20 15:15