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How to Succeed in Wall Street. ny ssa Friday Career Coffee. Ann Rutledge, Founding Principal R&R Consulting. Disclaimer. My life is not a good example of succeeding on Wall Street! Pre-MBA background is liberal arts/Chinese language Single parenthood imposed big professional constraints

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How to succeed in wall street

How to Succeed in Wall Street

nyssaFriday Career Coffee

Ann Rutledge,

Founding Principal

R&R Consulting


  • My life is not a good example of succeeding on Wall Street!

    • Pre-MBA background is liberal arts/Chinese language

    • Single parenthood imposed big professional constraints

    • I have never actually worked ON the Street FOR the Street

    • Almost 50% of my finance work experience has been with R&R

  • But I am still in play—still setting goals and achieving them.

  • Which leads to my caveat about “success”

Finite or infinite game james carse
Finite or Infinite Game? (James Carse)

  • Wall Street is a Game

  • Your life has strategic elements

  • Does your model look at success as a FINITE or an INFINITE GAME?

    • FINITE GAMES have a definite beginning and ending, played with a goal of winning. The game is resolved based on the RULES.

    • INFINITE GAMES do not have definite beginnings or endings. They are played with a goal of keeping it going and bringing in more players.

Success factors in winning
Success Factors in Winning

  • You are human. Confucius’ structural view on what it means to be human:

    • 15: skill acquisition

    • 30: building social/political capital

    • 40: seeking a balance between your masters and you

    • 50: becoming a master—or falling off the path

    • 60: capitalizing on the distance you’ve earned

    • 70: doing what you like

Success factors in winning1
Success Factors in Winning

2. Don’t let your comfort zone be the limiting factor of your game

  • Go ahead and “waste” time building the right skills.

  • Teach. It’s a natural, low-risk dress rehearsal.

  • Play games that are risk-based.

  • Allow yourself to relax. What you do outside work builds or wastes your energy for work.

  • Learn to say “no” and “yes” gracefully. Some pointers—

    • Assess the type of person you are saying no to—tread carefully with narcissists—and remember what you are hearing is partly a response to what you are projecting.

    • Disarm your opponent, with—humor, dress, surprise.

    • Listen to what is being asked of you. Find something to agree to.

    • Learn express vulnerability—but with limited downside.

Success factors in winning2
Success Factors in Winning

  • Choose your path of progress: are you a natural with building social capital within the enterprise or with strategic networking, ie, within the industry?

  • One is micro, one is macro, both are important. This is not absolutely either/or, though, so you must stay mindful of both.

    • The social networking path means being able to compromise, pushing the “you need me” button

    • The strategic positioning path means being comfortable with brinkmanship, pushing the “someone somewhere needs me” button

  • Less autonomy? Or Less certainty?

    • One of these sacrifices will suit your temperament better.

  • I discovered the possibility of choice by strategic positioning.

    • Much of my career has been about finding and exploring trends.

Wall street is an infinite game
Wall Street is an infinite game

  • Are you playing its game?

  • Or is it playing yours?

Credit work
Credit Work

  • Credit work defies the usual Wall Street stereotypes

    • It is not a winner-take-all game or a “random walk down Wall Street”

    • It is not about owning but about building sustainability and rewarding professionalism

    • However you say “no,” there is almost always a way to say “yes,” just a question of structure and price.

  • Securitization: small is beautiful

    • Get rid of the Fundamental Theorem of Accounting. It can’t be true.

    • Link leverage to asset quality. With the right D-E split, you create sustainable markets.

    • Once you learn how to operate in this market, you can do things that can’t be done in ordinary banking.

What is structured finance
What is “Structured Finance”?

“Structured finance” is a misunderstood term. All of finance posits the existence of a capital structure. Only securitization enforces referential integrity between observable asset data and value statements about the assets.

Traditional Corpfin

  • Dynamic assumption: static

  • Closed, balance-sheet based system

  • Key constraint: asset liability parity

  • Input filters: public data disclosures only

  • Dominant framework through the early 1980s

Derivative Finance

  • Dynamic assumption: random walk

  • Open system: synthetic credit based on AL parity and put-call parity

  • Input filters: exchange traded prices, public data disclosures

  • Dominant framework from early 1980s - today


  • Dynamic assumption: account lifecycle

  • Closed system: uses numerical methods to sequence and value risky cash flows

  • Input filters: none. Fixed valuation scale required.

  • A revolution in financial thinking, thoroughly understood by very few.

Elements of structured finance
Elements of Structured Finance

  • “Structured finance” here means a refinancing where the capital structure is crafted to attain a certain financial goal.

    • EG: corporate arbitrage relies on fulfillment of the minmax condition “Maximize proceeds at the least COC.” Balance sheet optimization.

    • Optimization is only possible in two senses: socially, i.e., what investors will accept, and technically—historically, what the rating agency would accept.

  • Securitization is a type of structured finance transaction that transforms private contracts (for which wholesale valuation benchmarks do not exist) into securitiesto further a financial goal.

    • EG may include loans, leases, rent rolls and other accounts receivable.

    • The motivation to securitize is the existence of a corporate arbitrage discernible in private data that is hidden by public accounting disclosures.

How to succeed in wall street
Securitization dispenses with AL parity on the corporate balance sheet, finds value, moves it off balance sheet.

XYZ 2012-4

XYZ Corporation

Receivables’ Average Life

7.8 yrs

Shadow rating: A+

AL: 5 yrs

Rating: BB+


Craft the structure

Pool Cut

Receivables’ Average Life

<>5 yrs

Shadow rating: >>BB+

Annual interest cost saved because of better information:

For 1995 – 2003: BB+ COF = 8% A+ COF=0.8%


Current era: savings 2%-.55%= 1.45%

Lifetime interest cost savings (X AL):

For 1995 – 2003: 56.16%

In the current period: 11.31%

Structuring completes the optimization
Structuring completes the optimization. balance sheet, finds value, moves it off balance sheet.

XYZ 2012-4

(same Static Pool)

95% AAA

AL – A, B


5% BB-

  • Original era: assume AAA premium is 20 bps, BB- premium is 10%

  • .95%* 20 bps+.05%*10% = 69 bps vs 80 bps

  • Lifetime funding cost = 5.38% vs 6.24%

  • Current era: assume BB- premium is 2.5%

  • .95%*20 bps+.05*2.5% = 31.5 bps vs 55 bps

  • Lifetime funding cost = 2.42% vs 4.29%

  • Even more capital efficiency possible with—

  • Capital market segmentation

  • Capital market inefficiencies

  • More data showing even better asset quality

Securitization just the tip of credit s own quiet scientific revolution
Securitization: just the tip of credit’s own quiet scientific revolution




NL convergence


New metric system






Volatility adjustment

Macro recalibration

Credit s new playing fields
Credit’s new playing fields scientific revolution