Why Making a Career Change Can Look Good on a Resume
By Diana Ransom / The Wall Street Journal Online / August.22, 2007
Say you want to quit your job in sales to become a bartender. Or maybe you're ready to bag your law practice and open up that café you've been dreaming about since undergraduate school.
Should you or shouldn't you? And what are the implications?
Making a radical career change at any age is risky. But for many workers -- especially those in their 20s -- a career change, not just a job change, can be a welcome addition to your resume, say some career counselors and recruiters.
While sticking to one career demonstrates focus and dedication, changing course "shows a degree of risk taking and self-awareness," which can be attractive qualities to some employers, says Joseph McCabe, a vice chairman for CTPartners, an executive search firm in Boston.
It's also a part of being young, he says, adding that most people "in their 20s right now won't wind up working for the same employer their entire career."
Take a Chance
A younger person usually has more opportunities to change than does someone who has been working for a while, says David Bowman, chairman of TTG Consultants, a human-resources consulting firm in Los Angeles.
And the younger person has less money, which can be a good thing when you don't have to give up a lot to follow your bliss.
"Once you start making hundreds of thousands of dollars a year, you can't readily make that career change and replicate your current salary," says Mr. McCabe.
Employers at this stage also don't necessarily focus on your experience as much as your "core competencies" -- that is, your natural abilities and your capacity to learn. Additionally, younger people often don't have families and other debt obligations that might hamper major changes.
Weigh Costs and Benefits
"You really need to think like a statistician," says Marty Nemko, a career coach in Oakland, Calif., and author of "Cool Careers for Dummies." Consider the odds that your investment of time and money in a change will result in a happier or more lucrative career.
Mr. Bowman suggests seeking the advice of individuals who know you both personally and professionally. They can help you identify pros and cons that you may not have considered.
That's what 27-year-old New York resident Jenna Carl did before quitting her job as a management consultant to go to Spain to teach history.
"It's safer to keep going in the same field," admits Ms. Carl, who is preparing to move in October, "but I would have been denying my passion."
Be Selective
But while young people should feel free to experiment with different careers, too many dramatic moves -- even in today's transitional work force -- can raise red flags to future employers.
Additionally, job hoppers face a possible loss of retirement savings. Your new employer may not offer a 401(k) plan, and if it does, it may not match your contributions right away, if at all.
Another consequence: You could lose pace with your peers. Say you and a co-worker started your jobs at the same time. As you leave in search of greener pastures, your former peer is likely rising in the ranks while you're effectively starting over again.
Get Your Story Straight
Changing careers takes "focus and commitment," says Mr. Nemko. To be successful, carefully consider how each move you make will affect the rest of your career and be able to articulate that for future, and former, bosses.
Once employers see that you thoroughly thought this out, they may not hold one or even two job switches against you.
And whatever you do, don't burn bridges, warns Mr. McCabe: "As long as you leave professionally and gracefully you will likely get an invite back."
Wednesday, August 22, 2007
Bank of America Invests $2 Billion In Countrywide
By JAMES R. HAGERTY, VALERIE BAUERLEIN and LINGLING WEI / WSJ / August 23, 2007
Bank of America Corp. acquired a $2 billion equity stake in Countrywide Financial Corp., a move aimed at dispelling a crisis of confidence among creditors and investors in the nation's largest mortgage company.
The move, which received quick approval from federal regulators, amounted to a private-sector bailout of the mortgage giant. In recent weeks, it had struggled to raise the financing it needed to fund its business, stoking concerns among investors about its prospects and pummeling its stock. Worries about the fate of Countrywide, which originates one out of every five mortgages in the U.S., have been a major factor in the recent tumult in financial markets.
News of the investment came late yesterday afternoon, just hours after Wall Street investment bank Lehman Brothers Holdings Inc. announced that it was closing down a subprime-lending business and two days after another big lender, Capital One Financial Corp., closed its GreenPoint mortgage arm. Those operations joined scores of small to midsize lenders that have collapsed over the past six months amid growing anxiety over a surge in home-loan defaults and a weakening housing market.
"Countrywide is a survivor," Angelo Mozilo, chief executive officer and co-founder of the Calabasas, Calif., company said in an interview late yesterday.
Indeed, Countrywide had argued that it would endure the current mortgage meltdown and emerge even stronger as competitors vanished. But the company was caught up last week in a storm of speculation as it found it could no longer tap the market for commercial paper, or short-term corporate IOUs, which was a major source of its funding, and an analyst from Merrill Lynch warned in a report that Countrywide could face bankruptcy in a worst-case scenario.
Last week, Countrywide borrowed $11.5 billion from a syndicate of 40 banks to shore up its finances, and it would have survived even without Bank of America's help, Mr. Mozilo said, but he added that this "vote of confidence to the world" will make the company stronger. In after-hours trading yesterday, shares of Countrywide jumped $4.06, or nearly 19%, to $25.88.
Bank of America's investment involved Countrywide nonvoting convertible preferred stock yielding 7.25% annually. The preferred can be converted into common stock, subject to restrictions on trading for 18 months. A full conversion would give Bank of America a 16% to 17% stake in Countrywide's common shares, Mr. Mozilo said.
Mr. Mozilo dismissed as "frivolous" for now any speculation that the investment could lead to a full merger between Bank of American and Countrywide, but he said the two companies would explore "where we can provide services to them better than they do themselves, and vice versa.... We'll continue discussions."
Immediate reaction to the deal was positive. "I'm not sure $2 billion will help them a whole lot, but the good news is, hopefully, there will be more to come if Countrywide needs it," said analyst Chris Brendler at Stifel Nicolaus, a securities firm based in St. Louis.
"It shows a sign of faith from Bank of America that they are supporting Countrywide, and that's huge," said Richard Hofmann, an analyst at CreditSights, a bond-market research firm in New York.
Mr. Mozilo noted that Bank of America has provided financing for Countrywide's lending since 1970, shortly after the founding of the home-loan company. He declined to specify when the two sides began discussing the equity investment but said it came together "over a relatively short period of time," and that regulators were kept informed.
The investment puts Bank of America much more deeply into the turbulent but sometimes highly profitable home-mortgage market. In the first half of this year, Bank of America was the fifth-largest originator of home loans in the U.S., with a market share of about 7%, according to Inside Mortgage Finance, a trade publication. Countrywide was No. 1, with a market share of 17%, well ahead of No. 2 Wells Fargo & Co., at 10.5%.
One of Bank of America Chairman and Chief Executive Kenneth D. Lewis's first acts after he became CEO in 2001 was to remove Bank of America from the subprime-mortgage business, which caters to borrowers with weak credit records. Bank of America cited the risk and volatility of that business. At the time, the bank took a $1.25 billion charge, about half of it tied to subprime loans.
But Mr. Lewis has been eager to build scale in prime mortgage loans. Bank of America, the nation's largest retail bank, with 5,700 branches, hasn't been a major mortgage player, relative to its size. It originated $95 billion in mortgages in the first half of 2007, less than half of Countrywide's $245.13 billion, according to Inside Mortgage Finance.
Bank of America, which reached its coast-to-coast size with a dazzling string of acquisitions, is also bumping up against a regulatory cap that bars any U.S. bank from an acquisition that would give it more than 10% of the nation's total bank deposits. That leaves pursuing more mortgage customers as one of the bank's few potential routes to growth. Bank research shows that its customers with a mortgage tend to be credit-worthy and profitable, with an average of five accounts at the bank.
Bank of America in May rolled out a national "no-fee" mortgage program. Under the program, Bank of America doesn't charge borrowers for loan applications, title insurance, appraisals and flood certifications or require them to get private mortgage insurance -- part of a bid to secure customers' long-term business. To qualify, borrowers must have at least one account with Bank of America and obtain their loan through one of the bank's retail channels.
Word of Bank America's investment in Countrywide came as the dwindling number of large mortgage lenders still active in the market sought to regain their balance. IndyMac Bancorp Inc. said it will resume offering large prime loans known as "jumbo" mortgages, those exceeding the $417,000 ceiling on loans that can be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.
Over the past two weeks, investors have been so spooked by doubts over possible losses on mortgages that they have shunned even relatively high-quality loans simply because they don't carry a Fannie Mae or Freddie Mac guarantee on payments of interest and principal. IndyMac's move is a sign that the market for jumbo loans might be settling down after a spike that has sent rates on 30-year fixed-rate jumbos to an average of around 7.5% from just under 7% in early July, according to HSH Associates, a financial publisher.
IndyMac said it plans to keep the jumbo loans in its portfolio until demand from investors improves.
Countrywide last week outlined a strategy under which it planned to use its Countrywide Bank unit, a federal savings bank, to fund nearly all its loans, up from more than 70% at present. The bank provides a much more stable source of funding than the commercial-paper market and other short-term instruments that were the only source of funding for dozens of smaller lenders that have collapsed in recent months. The savings bank also can borrow from the Federal Home Loan Banks, government-sponsored cooperatives.
After announcing the Bank of America investment, Countrywide's Mr. Mozilo said Countrywide would proceed with its plan to rely more heavily on its bank.
Bank of America, which earned $21.1 billion last year, has increasingly been willing to take equity stakes in other companies, agreeing in April to join two private-investment funds and J.P. Morgan Chase & Co. in paying $25 billion for student lender SLM Corp., more widely known as Sallie Mae. The Charlotte, N.C., company also agreed last year to pay $2.5 billion for a 9% stake in China Construction Bank, one of China's Big Four lenders.
Bank of America's Mr. Lewis said in a statement that the $2 billion should prove to be a very profitable investment. "We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets," he said.
But Mr. Lewis also said the investment was an important step to restore confidence and liquidity in the nation's credit markets. "This investment reflects our confidence in their business and recognizes the importance of the company in providing home financing across the country," he said.
By JAMES R. HAGERTY, VALERIE BAUERLEIN and LINGLING WEI / WSJ / August 23, 2007
Bank of America Corp. acquired a $2 billion equity stake in Countrywide Financial Corp., a move aimed at dispelling a crisis of confidence among creditors and investors in the nation's largest mortgage company.
The move, which received quick approval from federal regulators, amounted to a private-sector bailout of the mortgage giant. In recent weeks, it had struggled to raise the financing it needed to fund its business, stoking concerns among investors about its prospects and pummeling its stock. Worries about the fate of Countrywide, which originates one out of every five mortgages in the U.S., have been a major factor in the recent tumult in financial markets.
News of the investment came late yesterday afternoon, just hours after Wall Street investment bank Lehman Brothers Holdings Inc. announced that it was closing down a subprime-lending business and two days after another big lender, Capital One Financial Corp., closed its GreenPoint mortgage arm. Those operations joined scores of small to midsize lenders that have collapsed over the past six months amid growing anxiety over a surge in home-loan defaults and a weakening housing market.
"Countrywide is a survivor," Angelo Mozilo, chief executive officer and co-founder of the Calabasas, Calif., company said in an interview late yesterday.
Indeed, Countrywide had argued that it would endure the current mortgage meltdown and emerge even stronger as competitors vanished. But the company was caught up last week in a storm of speculation as it found it could no longer tap the market for commercial paper, or short-term corporate IOUs, which was a major source of its funding, and an analyst from Merrill Lynch warned in a report that Countrywide could face bankruptcy in a worst-case scenario.
Last week, Countrywide borrowed $11.5 billion from a syndicate of 40 banks to shore up its finances, and it would have survived even without Bank of America's help, Mr. Mozilo said, but he added that this "vote of confidence to the world" will make the company stronger. In after-hours trading yesterday, shares of Countrywide jumped $4.06, or nearly 19%, to $25.88.
Bank of America's investment involved Countrywide nonvoting convertible preferred stock yielding 7.25% annually. The preferred can be converted into common stock, subject to restrictions on trading for 18 months. A full conversion would give Bank of America a 16% to 17% stake in Countrywide's common shares, Mr. Mozilo said.
Mr. Mozilo dismissed as "frivolous" for now any speculation that the investment could lead to a full merger between Bank of American and Countrywide, but he said the two companies would explore "where we can provide services to them better than they do themselves, and vice versa.... We'll continue discussions."
Immediate reaction to the deal was positive. "I'm not sure $2 billion will help them a whole lot, but the good news is, hopefully, there will be more to come if Countrywide needs it," said analyst Chris Brendler at Stifel Nicolaus, a securities firm based in St. Louis.
"It shows a sign of faith from Bank of America that they are supporting Countrywide, and that's huge," said Richard Hofmann, an analyst at CreditSights, a bond-market research firm in New York.
Mr. Mozilo noted that Bank of America has provided financing for Countrywide's lending since 1970, shortly after the founding of the home-loan company. He declined to specify when the two sides began discussing the equity investment but said it came together "over a relatively short period of time," and that regulators were kept informed.
The investment puts Bank of America much more deeply into the turbulent but sometimes highly profitable home-mortgage market. In the first half of this year, Bank of America was the fifth-largest originator of home loans in the U.S., with a market share of about 7%, according to Inside Mortgage Finance, a trade publication. Countrywide was No. 1, with a market share of 17%, well ahead of No. 2 Wells Fargo & Co., at 10.5%.
One of Bank of America Chairman and Chief Executive Kenneth D. Lewis's first acts after he became CEO in 2001 was to remove Bank of America from the subprime-mortgage business, which caters to borrowers with weak credit records. Bank of America cited the risk and volatility of that business. At the time, the bank took a $1.25 billion charge, about half of it tied to subprime loans.
But Mr. Lewis has been eager to build scale in prime mortgage loans. Bank of America, the nation's largest retail bank, with 5,700 branches, hasn't been a major mortgage player, relative to its size. It originated $95 billion in mortgages in the first half of 2007, less than half of Countrywide's $245.13 billion, according to Inside Mortgage Finance.
Bank of America, which reached its coast-to-coast size with a dazzling string of acquisitions, is also bumping up against a regulatory cap that bars any U.S. bank from an acquisition that would give it more than 10% of the nation's total bank deposits. That leaves pursuing more mortgage customers as one of the bank's few potential routes to growth. Bank research shows that its customers with a mortgage tend to be credit-worthy and profitable, with an average of five accounts at the bank.
Bank of America in May rolled out a national "no-fee" mortgage program. Under the program, Bank of America doesn't charge borrowers for loan applications, title insurance, appraisals and flood certifications or require them to get private mortgage insurance -- part of a bid to secure customers' long-term business. To qualify, borrowers must have at least one account with Bank of America and obtain their loan through one of the bank's retail channels.
Word of Bank America's investment in Countrywide came as the dwindling number of large mortgage lenders still active in the market sought to regain their balance. IndyMac Bancorp Inc. said it will resume offering large prime loans known as "jumbo" mortgages, those exceeding the $417,000 ceiling on loans that can be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.
Over the past two weeks, investors have been so spooked by doubts over possible losses on mortgages that they have shunned even relatively high-quality loans simply because they don't carry a Fannie Mae or Freddie Mac guarantee on payments of interest and principal. IndyMac's move is a sign that the market for jumbo loans might be settling down after a spike that has sent rates on 30-year fixed-rate jumbos to an average of around 7.5% from just under 7% in early July, according to HSH Associates, a financial publisher.
IndyMac said it plans to keep the jumbo loans in its portfolio until demand from investors improves.
Countrywide last week outlined a strategy under which it planned to use its Countrywide Bank unit, a federal savings bank, to fund nearly all its loans, up from more than 70% at present. The bank provides a much more stable source of funding than the commercial-paper market and other short-term instruments that were the only source of funding for dozens of smaller lenders that have collapsed in recent months. The savings bank also can borrow from the Federal Home Loan Banks, government-sponsored cooperatives.
After announcing the Bank of America investment, Countrywide's Mr. Mozilo said Countrywide would proceed with its plan to rely more heavily on its bank.
Bank of America, which earned $21.1 billion last year, has increasingly been willing to take equity stakes in other companies, agreeing in April to join two private-investment funds and J.P. Morgan Chase & Co. in paying $25 billion for student lender SLM Corp., more widely known as Sallie Mae. The Charlotte, N.C., company also agreed last year to pay $2.5 billion for a 9% stake in China Construction Bank, one of China's Big Four lenders.
Bank of America's Mr. Lewis said in a statement that the $2 billion should prove to be a very profitable investment. "We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets," he said.
But Mr. Lewis also said the investment was an important step to restore confidence and liquidity in the nation's credit markets. "This investment reflects our confidence in their business and recognizes the importance of the company in providing home financing across the country," he said.
Subscribe to:
Posts (Atom)
