However, I’ve received an unprecedented number of comments and emails inquiring about “what happened to Saturday”, so I went back to my journal to figure out what Saturday in this week looked like.

I could be cruel and write about that one Saturday when I was summoned away from dinner and had to pull an all-nighter into Sunday, but that’s not representative of a typical weekend (plus, that’s a story for another time).

So here’s Saturday of that same week:

12 PM - Wake up “late.” If you recall from my Friday account, I went to sleep around 5 AM. Those of you still in school might be used to waking up at 3 PM on Saturday, but I recommend getting up by noon once you’re a banker.

1 PM - Head to the gym. Check Blackberry intermittently in between sets, but so far no major surprises.

In case you’re wondering, people at the gym do look at you strangely when you check your Blackberry every 5 minutes.

2 PM - Get back. A few friends are in town for the weekend and one of them wants me to quit investment banking and buy a laundromat with him (apparently they are profitable cash-cows). I have a diverse group of friends.

It’s tempting, but I’m not crazy enough to invest the amount of cash required, so I decline for the time being.  Plus, I need to continue living the dream for at least 2 years.

3 PM - Here it is: The Email arrives. I have to run back to the office to take care of a Board Presentation needed on Monday for a prospective client.

The Board Presentation is a nebulous concept; it refers to any presentation given to a company’s Board of Directors, but the size, scope and format vary widely depending on what you’re presenting. It can be a 100 slide presentation that requires strings of all-nighters, or it can be a quick update of previous materials.

Luckily, in this case all I have to do is refresh a valuation that we showed the company previously and add a few slides of text, so it shouldn’t take long.

You might be wondering why I have to do this on Saturday if it’s only needed for Monday. As I mentioned previously, everything in investment banking requires at least 10 revisions and everyone from Associate to MD will have to look at this first and offer feedback before it’s done.

So things often take longer than expected.

7 PM - Finished. I distribute to my team, knowing that no one is likely to look at it on a Saturday night.  I’m a free man (temporarily).

7:30 PM - Meet up with friends for dinner. I am still being pitched on this laundromat idea. Maybe if I had just pulled an all-nighter it would sound more attractive.

9 PM - Exchanging text messages with friends planning out where we’re going tonight. In the immortal words of Leveraged Sellout, “There is no consensus, but one thing is agreed: it is going to be epic.”

10 PM - Still no consensus has emerged, so we split up and head to separate clubs.

11 PM - See another few friends from different banks in the city.  I mentioned how you can’t get away from work, no matter how much you try, right?  Having a Blackberry on you at all times doesn’t help, either.

2 AM - Things are winding down, so it’s time to go elsewhere.  If this were a Thursday night, 2 AM would mean time to sleep, but this is Saturday.

Models and Bottles Watch: Luckily it’s a Saturday night (even on a tropical island in the summer, a Monday night out results in few members of the opposite sex), so the model count is high.  Bonuses are not out yet and I’m still a starving 1st Year Analyst at this point so the bottle count is lower than expected.

3 AM - Head to stereotypical hookah bar.  I don’t know why bankers love these so much, but they do.  Personally I don’t smoke at all (it would ruin my diet) but I follow my friends there and hang out for awhile.

4 AM - Sleep.

Key Observations

You might be surprised that there were “only” a few hours of work on this particular Saturday.  When you get busy on weekends, it’s usually because of pitches and aggressively marketing to prospective clients.

As you might recall, most of my work this week was related to existing clients - a.k.a. “deals” - so there wasn’t much to do on the weekend.  This isn’t always true - often if a deal is just starting or about to finish up, there will be a mad rush to finish things over the weekend - but I’ve found it to be a good rule of thumb.

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Since I looked at a week in the life of an investment banking analyst (my old life) last week, I thought today would be a good chance to contrast old and new.

6:30 AM - Wake up. Look next to me and confusion sets in when I see no Flashing Red Light: yes, my Blackberry is gone. For a moment I pause in panicked confusion.

Some habits die hard, and despite being on “vacation,” I can’t bring myself to wake up late. Being in a different time zone doesn’t help either.

8:30 AM - Sleep in for awhile longer. None of my other friends is awake yet. Back to sleep… for even longer.

11 AM - 11 sounds like a good time to wake up - everyone else is also conscious by now. It’s 2 PM or so back in the office, which means my friends still working there are probably being told that whatever model they’re working on currently is “needed ASAP.”

12 PM - Head to lunch. Life near the beach is slow. We spend around 2 hours eating and reminiscing over the good old days. The whole time I keep looking down at my hands, only to see no Blackberry…. still. My friends are wondering why the nervous twitch persists.

2 PM - Finally we finish up and leave. Can’t do anything too strenuous, though, so we head to the beach and sit in the sun for awhile. The water’s much more colorful than my Excel spreadsheets.

4 PM - Time passes quickly when you’re in the sun all day. We go and play frisbee on the beach while some other friends head off to go kayaking.

5 PM - On our way back from the beach, I get a text message from a friend at work wondering about some model I worked on a long time ago.

While I’m under no obligation to answer such inquiries anymore, without my bonus in my bank account yet I’m not about to take any chances. Sure, 2008 bonuses were down quite a bit (as I predicted), but it’s still way too much money to risk losing.

Bonuses are typically paid out in mid to late July or sometimes even later, so I have to be careful for awhile longer.

And even without a Blackberry, I am still reachable 24/7 thanks to cell phones.

6 PM - Head over to the spa for a massage. Turn my cell phone off. There’s no way anyone’s interrupting this one, not even for the most urgent Excel question ever.

7 PM - Go back to our hotel and I do some more planning for my upcoming investment banking prep program. Today I’m outlining what the Networking Into Investment Banking course will look like and what kind of content I want to have there.

I think this is a subject that other courses and products have not covered in much detail, so there’s a pretty good opportunity to go in-depth here. From my survey, it also seems that most readers are very interested in learning more about this topic.

See, even when I’m on vacation I manage to do some work - old habits…

8 PM - Go to local restaurant for a late dinner. The food is almost as good as all the places back home, but there’s no $30 expensing of dinner each night so we’re a bit more conservative with spending.

Everyone loves expensing dinners at first, but eventually you realize eating out too much just results in even more of a gut than you’d normally get from staring at a computer all day.

As I wrote back in how to stay fit as a banker, I strongly recommend using your daily dinner expense at the grocery store instead of eating out all the time (if possible).

10 PM - Get back and get ready to go out. It’s a Monday night so there probably won’t be much in the way of models and bottles, but one can always hope.

11:30 PM - Luckily there are always people on vacation here so the club isn’t totally empty, but it’s not exactly happening either. In short: there are plenty of bottles but no models.

But hey, it’s a Monday night and this sure beats sitting in a cubicle until midnight.

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7:30 AM - Wake up late for 8:30 AM meeting with Client A.  Associate is calling to ask where I am.

8:15 AM - Arrive and Director running the deal looks upset.  Luckily, he already has all the presentations so he has nothing specific to be upset at other than me arriving 15 minutes in advance of the meeting rather than 30.

8:29 AM - As I’m about to join the meeting for Client A, I get interrupted and the Managing Director in charge of Client C (the company being sold to a group of private equity firms) wants us to speak with our Leveraged Finance team and figure out how much debt the company can take on and what the terms would be. 

The Leveraged Finance group at an investment bank is responsible for debt issuances and works on pretty much all debt/private-equity related deals.  Often the work on a Leveraged Buyout deal will be split between the M&A group (us) and Leveraged Finance and they will do more of the nitty gritty finance.  Both groups are well-versed in modeling but they focus specifically on debt, whereas the M&A group does all types of modeling.

Speak with their Analyst and figure out what materials they need from us, then get started working on a brief memo they need by the end of the day.

11 AM - Miss a call with lawyers to review Purchase Agreement for Client B (public company being sold to larger public company); VP needs me to swap some files on a USB drive quickly before a potential client leaves.  Luckily the Associate for Client B covers for me.

12 PM - At long last, we’re almost done with the materials we’re sending out for Client C.  We hold a call with them to go over everything one last time.

1 PM - Leveraged Finance calls to yell at me for not sending over enough information.  There’s often a fair amount of friction between different groups in a bank.

3 PM - Associate for Client C finally sends out materials.  I run to Starbucks with a few other Analysts to celebrate the Friday afternoon.  Discuss plans for the weekend. 

One of the best parts of the investment banking analyst job that few people ever mention is the camaraderie you develop with your fellow Analysts (and sometimes Associates and up).  It’s almost like being in college again, except you’re making a lot more money.

6 PM - Finish off materials the Leveraged Finance Analyst needs and send them over.  Almost everyone else has left the office for Happy Hour; I show up briefly but I’m really tired so head home shortly thereafter.

7 PM - Pass out.

10:30 PM - Wake up.  Meet up with some friends and head out for the night.  Mostly discuss plans for next year; some already have buyside jobs lined up, others are still looking and some just want to retire to Thailand.

3 AM - Head back to my apartment and go to sleep.

There you have it: a week in the life of an investment banking analyst.  If you read through all the entries in this series, you might notice the lack of all-nighters.  This is because I did not work on any pitches in the week described here - it was almost entirely client-related work.

If you look back at my worst day, you can see most of the pain was a result of multiple simultaneous pitches.  You should avoid these if it all possible, but you usually have to do at least a few each month (and sometimes many more than that).

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9 AM - Head in. I’ve been here for awhile now so I’ve long since stopped caring about being in “early.”

9:30 AM - Internal call to review the Purchase Agreement we received for Client B (the public company being sold to another public company) yesterday.

10 AM - Come to the realization that today may indeed be a much-anticipated “Slow Day.” There is some continued work on the presentation and Offering Memorandum for Client A and further revisions to our model for Client C (the private equity deal), but so far I’m spending most of my time shopping for furniture online.

Don’t manage to find anything good online so conclude I’ll probably have to go to a few places in-person over the weekend, assuming I have time.

3 PM - A few hours have passed and I still haven’t done much. Client C keeps sending us a stream of information throughout the day but we’re holding off updating anything until they finish. This is fine by me - I love efficiency.

6 PM - Take a nap in the sleeping room.

The sleeping room is a designated office, usually unoccupied, where Analysts take private calls (often with headhunters) and sleep under the desks if need be. It’s usually small and removed from public sight.

Note: I don’t know if this is “official lingo” – this is just what I call it. Sometimes other people in the office thought I was crazy when I used this terminology, so you may want to avoid this one.

8 PM - Wake up from my power nap. I have missed dinner once again and other Analysts ate without me. Finalize presentation for Client A (the one who sent a bunch of last-minute changes the other night and forced me to the airport) for another meeting the next day.

10 PM - Need to wake up for an 8:30 AM meeting with Client A at our office the next day, so I go home “early” and fall asleep.

This is an example of how you can have a “slow day” even in the middle of a busy week. Your workload is highly dependent on specific requests from clients as well as how many pitches you’re working on; this week is somewhat unusual in that I had almost entirely client-related work and no pitches.

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8 AM - Join customer due diligence call for upcoming IPO for Client D. No way I’m at the office this early so I take this one from home.

Bankers conduct customer due diligence calls as part of any IPO process to “vet” the company, make sure its customers are happy, and make sure there are no major issues that investors need to know about. Sometimes with international customers, you get calls at 11 PM and 5 AM and such (another reason bankers work so much: to stay awake for these calls…).

8:20 AM - In the midst of the call, a fire drill erupts and one of our potential clients needs information pulled on potential acquisitions before a 9 AM Board Meeting. I have not left my apartment yet so panic sets in and I start calling every other Analyst in our office.

8:40 AM - I’m saved. The Star of our office gets back to me - as expected, he is there early to cover for me. He sends over the information.

9:30 AM - On my way to the office, Associate calls me to ask why I’m not there yet. He is about to call Client A (the one we’ve been working on the presentation and Offering Memorandum for) to discuss things. Explain that I will be there in 2 minutes.

10 AM - Call with Client A concludes and Associate and I review changes. This is revision #78 or so by now.

12 PM - Nothing immediate to do, so I run to Starbucks, the lifeblood of investment banking analysts everywhere. This is coffee #5 for the day, about par for the course. While I’m there, get Blackberry message that Client C (the private equity deal) has sent over further changes and materials for the buyers need to go out “today.”

3:30 PM - As I’m cranking through changes for Client C, a draft Purchase Agreement for Client B (the public company being acquired by a larger public company) arrives.

A Purchase Agreement (also called a Definitive Agreement or Stock Purchase Agreement, among others) defines the key terms of an acquisition. Beyond just the price per share the buyer is paying, other important terms are the representations and warranties (what the buyer/seller state is legally true about their businesses), the treatment of options (ignored, assumed, or cashed out) and the break-up fee (how much the buyer or seller pays if either cancels the deal after signing it).

That just scratches the surface and I could write a book on the topic (this will be one of my online courses for my upcoming prep service), but those are the basics.

5 PM - Finish off work for Client C and go through the Purchase Agreement with the Associate to summarize major points. Sometimes Analysts get little exposure to the legal aspect of a deal, but I was fortunate enough to learn about it here.

6 PM - Finish our summary and have the presentations department print presentations for a meeting between Client A and a potential buyer the next day.

6:30 PM - Passing in and out of consciousness due to (relative) lack of sleep the night before. Associate on Client C has a few changes and I make them quickly.

8 PM - Things slow to a crawl. No requests and I start looking online for new furniture to decorate my apartment (yes, that’s how bored I am). I’ve missed dinner with everyone else so I go outside to find something to eat.

8:55 PM - Contemplate “leaving early.” Decide it’s too risky.

9 PM - Good thing I didn’t leave early. Client A calls us and wants to change the wording on one slide of our presentation. The only problem: the Director in charge is already on his way to the airport, 20 copies in hand. His flight leaves at 10.

9:30 PM - Changes made and another 20 copies in hand, I rush to the airport to drop off the revised presentation. Director wonders why I’m out of breath when he sees me.

10:30 PM - Flood of emails from Client C. They do not want us to send materials out yet, despite the VP wanting to send them “today.” Sure enough, they have… more changes.

12 AM - Send the revised version to the Associate for inspection. Head home. Only bad TV re-runs are on so I fall asleep quickly.

As I wrote above, this is the closest example I have of a “typical day” in investment banking: periods of calm followed by periods of chaos. Despite all the work, I even had some downtime to shop online!

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9 AM - No fire drills today, so I get to the office at a normal time once again.  The morning is fairly slow and I spend most of my time making further changes to the presentation/Offering Memorandum for Client A from yesterday.

I defined fire drill back in my post on investment banking lingo, but it’s an emergency where the Analyst has to produce something under a very tight time constraint (usually less than an hour).  Often it turns out to be unnecessary after the fact.

12 PM - Multiple requests from different MDs; one of them wants to see an analysis of deal-related documents that Client B (the public company being sold to a larger public company) and the buyer are exchanging.  Another one is asking for some old presentation we put together.

Managing Directors don’t interact much with Analysts, but there are always exceptions.  Everyone has a different style and some of the MDs are more “hands-on” than others.  Sometimes if it’s a simple request the MD will just ask the Analyst directly rather than going through 2-3 other layers of people.

3 PM - Have to run a Premiums Analysis for a potential client.  Dealing with them is often more painful than working with real clients.

A Premiums Analysis is one of those valuation methodologies you may not know about if you’ve only read the Vault Guide or some of the other packages out there before.

When a public company is acquired, the buyer has to pay a premium to the seller’s share price so that… there’s an actual reason to sell the company.  Why would you sell for $25.00 if your share price is at $24.75 currently?

A Premiums Analysis lists all public companies that have been acquired in a certain market (for example, Internet companies) in a certain deal size range (over $5 billion) in a given time period (since 2006) and establishes the median 1-day, 20-day, 30-day, 60-day (and sometimes even more) premiums paid to the seller’s share price.  The medians are usually in the 15-35% range, and sellers will rarely agree to be purchased for anything under 10% unless there are unusual circumstances (recent run-up in stock price).

If you apply the median of the set to the company you’re looking at, you get an idea of the price to expect.

6 PM - Analysis takes longer than expected since most of our data is wrong (this happens a lot).  Client C (the private equity deal) has sent a flood of information throughout the day and I make further changes to our models.

8 PM - Some of the other Analysts go out to eat.  I want to leave before 2 AM so I pass on this one.

10 PM - Finish up work for Client C and speak with Associate on changes for Client A’s presentation.

This is how the workflow in investment banking works: constant revisions of presentations and documents until they’re in passable form.  90% of your time is spent on everything after the initial version.

1 AM - Accomplish my goal of heading home before 2.  Changes took longer than expected.

2 AM - Decide to go work out despite being tired.  I don’t recommend this.

Note to incoming Analysts: If you’re at all into fitness, I recommend finding a 24-hour gym near wherever you work.  Often you’ll only be able to hit the gym at unusual hours.

3 AM - Arrive back home, even more tired.  Pass out.

This was a standard Tuesday.  There was probably less downtime than normal, with 16 hours of actual work.

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In the spirit of those previous posts, this week I’m posting an entire Week In The Life Of An Investment Banker. Today I’ll cover Sunday and Monday (what, you thought we had weekends off?) and each day I’ll cover another day of the same week.

Sunday

12 PM - Wake up late. Was up late the night before at a friend’s birthday (fun, but no models and bottles). Find food and get ready for the day.

1 PM - Head to gym. While there, run into another friend at a different bank and talk about plans for next year (one of the most popular discussion topics among Analysts) and why neither of us is at the office currently.

3 PM - Relaxing near the pool post-workout when the dreaded email arrives. Client A, a sell-side M&A client, has reviewed a presentation we sent yesterday and has changes. I have to run to the office at 4 to discuss the changes and then revise the presentation.

4 PM - While on a call going over the changes, I get bored and begin internet surfing in the background. Most of the edits involve wording and font sizes on graphs through 100 or so slides. This is going to take some time to finish because of the sheer volume of changes.

10 PM - I finish up with the revisions and the Associate sends out to client. Meanwhile, Client B, a public company being sold to a larger public company, has sent over revised projections and we need to update our merger model.

A merger model (also called accretion / dilution model or combo model) is used to analyze the impact of an acquisition. The output is generally the change in EPS (Earnings Per Share) - how much the acquisition raises or lowers it by - and the most important inputs are purchase price, form of consideration (cash, stock, or debt), and the buyer and seller’s financial profiles.

11 PM - Finish updates and head home.

This was a fairly standard Sunday - some time for fun, some work, and being in the office for at least part of the day.

Monday

9 AM - Arrive at work and chaos is unfolding. A standard Monday morning.

We’re working on further revisions to the presentation for Client A, and the Director in charge of the deal is quite persistent with the “Are you done yet?” questions.

At the same time, we’re also multi-tasking between that and getting NDAs (Non-Disclosure Agreements) executed for Client C, a large public company we are selling to several private equity firms.

(Yes, this was back in the day when Leveraged Buyouts were actually happening)

Getting NDAs (also called Confidentiality Agreements (CAs), among other terms) executed involves sending the document back and forth between legal representatives of the buyer and seller until they reach agreement. It’s somewhat of a joke because there’s no way to enforce an NDA, but both parties want protection so that their secrets and employees won’t be stolen if nothing comes of the discussions.

In this case the Associate is handling most of the work.

2 PM - CFO of Client C (the private equity deal) sends updated financials and other information that we need to incorporate into our own models and into the materials we’re sending to the buyer(s). VP informs me this is needed “ASAP.”

5 PM - Finish up updated model and the VP sends it to Client C’s CFO so he can review it and “sign off” on it. Just as I’m finishing, learn that I am being staffed on an upcoming Fairness Opinion for an M&A deal that is set to be announced soon.

A Fairness Opinion is just an extremely rigorous valuation that is prepared by a bank for legal reasons (to “prove” that a deal price is “fair”). It’s a bit silly because no bank is ever going to say that a price is not fair, and they’ve become formalities.

A perfect example is the controversy caused by the Bear Stearns deal back in March 2008. Lazard, its financial adviser, issued 2 Fairness Opinions, one for the original purchase price of $2.00 per share and one for the revised $10.00 per share price. Both prices were deemed “fair,” raising questions over what exactly these Opinions prove.

8 PM - Head to the Conference Room to eat dinner quickly with other Analysts and then go back and try to wrap up an Offering Memorandum and presentation for Client A. The Associate is side-tracked on other projects all night so I have to handle this work.

An Offering Memorandum (or Information Memorandum (IM) or Confidential Information Memorandum (CIM) ) is a long document with an overview of a company, including its products/services, customers, management, history, and financial profile that “sells” it to potential buyers. As an Analyst or Associate you spend a lot of time working on these.

12 AM - Head home.

This was a typical Monday - 15 or so hours of work, some chaos in the morning and a decent amount of actual work at night.

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I take feedback very seriously, so this post is a re-write of the original and hopefully gives better advice specific to banking rather than just listing business casual items to buy.

Basic Rules

The most important point to keep in mind is also the most obvious: don’t do anything that’s egregiously bad. If suits are required, wear a suit. Don’t show up in shorts and a t-shirt unless it’s the weekend and other people do that.

You can debate endlessly where to buy clothes, how much to spend on shirts/suits and how many shirts/suits are needed, but unless you screw up on a consistent basis, your fashion choices are not going to affect your reviews, your bonus, or your future potential (at least until you get more senior).

When To Shop

I would suggest buying most of your wardrobe before your investment banking summer internship starts. If you’re coming in as a full-time hire, I would suggest shopping during or just before training due to 1) the sheer number of fashion choices in New York City and 2) your plethora of free time before the job really starts.

You may not appreciate it now but your time will be extremely limited later on so it’s better to front-load as much as you can.

I would keep an eye out for sales, especially at higher-end stores, and try to time your shopping to coincide with those as well.

But if you have to choose, it’s better to get the clothes you need and pay a little extra rather than wait for that amazing sale that happens 2 months after you start when you really want to go shopping but get called into the office at 8 AM on a Saturday morning for a pitch needed by Monday.

Suggested Budget

If you’re a full-time Analyst I would allot around $3,000 for your wardrobe. Since you have a 2-year commitment, you need a decent amount of clothes to start with.

As a summer analyst you can get by with less than that, especially if the dress code is business casual.

Suits will be the most expensive item in your wardrobe so you need to figure out what the dress code is before you start. The number of suits required determines your budget.

Where To Shop

I would stick to outlets for most of your shopping needs, especially if you’re an intern.

The specific outlets to go to depend on where you’re working - when I was in New York for training I went to an outlet mall just outside the city and did some shopping there.

There are plenty in the city as well - I just went to Premium Outlets because I had shopped there before. They have locations near SF, LA, Chicago and throughout Texas as well so no matter where you’re working you can probably find a nearby location.

Even though Leveraged Sellout pokes fun at bankers doing all their shopping at Brooks Brothers, in general I think it is a good choice so long as you go there during a sale.

Brooks Brothers works well for dress shirts, slacks and belts; you could conceivably get your entire wardrobe there, but for suits you will be able to find better deals at major department stores such as Saks and Lord & Taylor.

What Do You Actually Need To Buy?

If you do not need to wear a suit every day, I would suggest 2 suits, 5-10 dress shirts, 2-3 pairs of shoes, 3-4 ties, 5-10 dress socks, 3-4 dress slacks and 2-3 belts. If the dress code is business formal, you’ll probably want 3-4 suits rather than 2.

I had some questions on how you can possibly survive with only a few suits if you have to wear one every day - the answer is quite simple: you do not dry clean a suit after wearing it just once.

In fact, too much dry cleaning actually damages your suits. Once every 3 months is a better frequency (obviously if you get a stain, get it removed as soon as possible).

If you can’t wash your clothes every 2 weeks you might need more than what I recommend above, but I would take a wait-and-see approach with this.

I took a quick poll of Analysts in my office and no one had significantly more clothes than what I suggest above (well, one guy did but he’s worth a couple million and no one here knows why he’s even in banking to begin with…).

What To Pay

I would spend between $500 and $1,000 on a new suit and make sure it’s tailored to fit you properly. It’s better to pick a non-brand-name suit that fits you well rather than dropping $5,000 and getting a high-priced suit with sleeves that are 2 inches too long.

This is one reason it’s better to go to a department store for a suit - you can get a tailor to customize it properly and end up paying about the same since the suit itself is less expensive.

For dress shirts you can expect to pay in the $40-$60 range assuming you are buying during a sale and/or have gone to an outlet. Try to pay less than $100 per pair of slacks.

People have a wide range of views on shoes; if you want something that is classy and lasts several years, expect to pay close to $300, but you could get away with a pair for $100 - they probably won’t last too long though. In the $300+ range, Allen Edmonds and Alden are popular choices.

For ties I would try for less than $100 each; belts should be around $50 each. And you’re crazy if you spend more than $10 per pair of dress socks.

These quotes represent sales/outlet prices - you could go even more budget, or you could pay a lot more as well. I’m just sticking to the middle of the road here with the assumption that you want to look nice without spending more than $3,000 on a new wardrobe.

What NOT To Do

It’s almost easier to give advice on what NOT to do since that is pretty well-established.

Avoid pure black suits. The logic here is that they are more appropriate for formal settings like dinners or for religious functions like funerals - not business.

Inquisitor Note: I have worn black suits to interviews and meetings before and nothing happened. In fact, I received offers from every interview I wore a black suit to.

I’m sure more fashion-conscious people thought I was an idiot, but it didn’t prevent me from getting top bonus last year, so it’s not the end of the world if you’ve worn or own a black suit.

Still, if you are just starting out I would stick to charcoal, grey and navy blue instead. It’s just the safer and more acceptable practice. Only buy a black suit if you have a series of funerals coming up.

In terms of other colors, don’t go crazy with shirts and ties - light blue and white are usually the safest bets, especially in terms of matching with a suit. I would avoid larger/crazy patterns and stick with either solid colors or very small patterns.

This may seem “boring” but it’s better to be on the conservative side when you first start and adapt as you see what other people in your office are doing.

Do not buy cufflinks, especially if you’re an intern. One summer analyst last year wore these to work his first day and we laughed at him for the next week or so. When you get promoted to VP and start making more on an hourly basis than a McDonald’s worker you can consider buying these items.

For shoes, just stay away from anything with square toes and make sure they have leather soles (e.g. they are actually high-quality shoes).

Ok, But How Important Is Fashion In Investment Banking?

Even though I tend to be a minimalist, I’m not going to lie and say fashion is irrelevant. However, it matters more at the senior levels when you’re meeting with clients every day and are judged on how presentable and polished you are.

As an Analyst or Associate, you won’t have enough client contact to justify spending a fortune on clothes. This is the dirty little secret that those glossy career fair brochures don’t reveal.

You will be judged on the quality of your work rather than the quality of your wardrobe. It helps to make a good first impression, but it doesn’t matter if someone is wearing a $1,000 suit and yours is only $500.

90% of the conversations between Analysts at a bank are dominated by 2 topics: 1) complaining about work/life and 2) gossiping about co-workers.

Fashion rarely comes up unless you do something laughably out of place (cufflinks as an intern on the first day).

More Resources And Questions I Can’t Answer

Some readers have also asked how to decide whether or not a suit is a good fit and how to evaluate different items for quality. This is extremely difficult to describe in writing and I am not an expert - I just know what generally looks right and what doesn’t.

A good book on these topics is Dressing The Man, by Alan Flusser. It’s focused almost entirely on business and formal wear, and is known as the gold standard in terms of professional attire for men.

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-MD’s, The Leveraged Sellout

Continuing our series in Investment Banking Lingo this week, we resume today with more essential vocabulary that any good banker must know to get ahead in today’s tough market.

Even Frank Quattrone had to learn the meaning of “Alt Tab” at one point or another (ok, maybe he was born knowing that one…).

Downtime

Typical usage: “I had some downtime today so I was catching up on American Idol.”

What it means for the Analyst: You get a break from staring at Excel and instead get to stare at your web browser.  Just make sure not to do anything too naughty, or your IT department may catch on and alert the authorities.

What it really means: There’s never a constant flow of work in investment banking.  Some days are nightmares and other days you don’t really do much, get to go home early and even watch low-quality made-for-TV movies.  Since your workload is dependent on whenever the senior bankers get around to reviewing what you produced (general rule of thumb: “I need it by tomorrow” = “Will look at it in 2 weeks”), a lot of time is spent sitting around waiting.  And waiting.  And waiting…

Tips and tricks: The key to using downtime effectively is simple: don’t get caught.  Whether it’s using Facebook 4 hours every day like a certain trader at Goldman Sachs, looking at uh, inappropriate sites, installing games or watching that episode of American Idol you missed, you must have a fast way to exit whatever it is you’re doing.  Be alert - don’t listen to blaring music - and avoid suspicion by browsing sites with mostly text.

Alt Tab

Typical usage: “I had some downtime today so I was catching up on House…  VP almost saw me but luckily I Alt Tabbed out of it really quickly!”

What it means for the Analyst: Alt Tab is your lifeline.  Bankers are pretty good at Excel, but we’re actually much better at hitting Alt Tab just before someone notices that we’ve been watching Grey’s Anatomy for the last hour.

What it really means: For those who haven’t yet entered the work world and learned the wonders of Alt Tab, it is a shortcut to quickly switch the visible program on your computer.  So if you have Excel and YouTube open at the same time, hitting the Alt and Tab keys at the same time will rapidly switch between the two.  Brilliant.

Tips and tricks: Alt Tab can be used successfully only when you have advance warning.  If someone pounces on you and sees you looking at Dealbreaker or Leveraged Sellout, it’s all over.  So make sure you don’t listen to blaring music, and try to position yourself in your cube so that you can see any incoming enemies and intercept them with Alt Tab.

Staffer

Typical usage: “Just walked by the Staffer’s office… he saw me and now my weekend is completely screwed.”

What it means for the Analyst: Let’s just say that if you were Spiderman, the Staffer would be Dr. Octopus.  The staffer is your arch-enemy.  He or she can end your life with a single sentence.  Avoid the Staffer at all costs and certainly don’t be anywhere near his/her office on Friday at 4 PM.

What it really means: The Staffer assigns work to Analysts and makes sure work is distributed evenly (theoretically, anyway).  This is one of the most un-wanted jobs at an investment bank, and usually only the most extreme sadists dream of one day becoming the Staffer.  The Staffer is usually an Associate or senior banker who handles this responsibility in his/her “spare time.”

Tips and tricks: Avoid the Staffer on Fridays.  You can try to befriend it, but such beasts are rather difficult to tame, so avoiding it and always looking busy is probably the best strategy.  Just make sure you always have a good explanation for why you’re so busy - the Staffer is a cunning demon and can see through the thin lies you tell.

Closing Dinner

Typical usage: “Sweet!  Closing dinner on Friday in Vegas.”

What it means for the Analyst: Relief.  The Closing Dinner happens after a deal closes and is a celebration for everyone involved.  Usually the finest restaurants, the finest wine, and yes, the finest models and bottles are involved.

What it really means: See above.  It’s a big celebration after a deal closes and you usually get to go to an exotic location (or it could just be Vegas), eat $1,000 dinners and drink ambrosia from the hands of the gods.  And the best part: you’re not paying for it.  It’s one of the most fun nights you’ll have as an investment banker.

Tips and tricks: DO NOT GET DRUNK.  Trust me on this one.  No matter how tempting it is, do not get drunk in front of your entire team and start telling stories of all your crazy youthful adventures.

DD

Typical usage: “Deal is taking awhile… their DD never ends.”

What it means for the Analyst: Waiting and sometimes formatting a company’s financials and other information so you can “add value” before sending them to the buyer.  But mostly waiting to see whether or not a deal is going to happen or not.  Sometimes you get to pretend you’re a consultant too, and you travel to wherever the buyer/seller are located.  Just hope it’s not Alaska in February.

What it really means: Due diligence.  Finding out everything and anything possible about a company you’re going to buy.  This is what private equity firms and VCs do all day.  This is usually a faster process if it’s a financial buyer (private equity) rather than a strategic, where they actually hold onto it for a long time and are therefore quite careful.

Tips and tricks: Remove yourself from the process as much as possible.  If there’s an issue, blame it on your client.  You can’t audit every single bit of information they send over.  Sometimes this tactic doesn’t work so be careful or you might find yourself in the conference room waiting to hear your severance number.

MD

Typical usage: “I completely messed up the numbers in front of my MD… my bonus is gone.”

What it means for the Analyst: If the Staffer is your arch-enemy, the MD is the man behind the curtain.   The Wizard of Oz.  The one giving the orders but not directly ordering the Analyst around.  He has the power to fire or hire you, and he doesn’t play nice.  Be respectful but fearful.

What it really means: The Managing Director.  The top of the heap.  The king of the castle.  He makes rain and brings in deals and revenue for the firm.  The only people higher than the MD are Group Heads and the executives of the firm.  The MD is usually a lifelong, battle-hardened banker who has been through it all.

Tips and tricks: Don’t screw up.  If you do something wrong in front of an Associate or VP, that’s one thing, but screwing up repeatedly in front of the MD is one sure-fire way to assure yourself of a bottom-bucket bonus and no recommendations for those exit opportunities you’ve been dreaming of.

Just Wait, There’s Even More (Maybe)

Lingo is one of my favorite topics so expect to hear more about this one in the future.

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Most importantly, however, I want to stress how willing I am to do “anything for the team.” I realize the possibility of long hours exists in such a position, and I am ready to work as hard as necessary. I have been practicing staring at a computer monitor for extended hours; I can currently sit motionless in front of a screen for 28 hours, and I am improving daily.”

-RE: Lehman Brothers Recruiting, The Leveraged Sellout

So, how do you succeed as a young investment banker?  How do you perform best in your upcoming summer internship?  What if you’re a full-time hire and you don’t want to be laid off 3 weeks into the job?

Dressing for success and buying some nice clothes might help (don’t go crazy, though).  And yeah, make sure you network and make a good impression on everyone.  Maybe try to learn some modeling before you start.

But one aspect that advice-giving bankers often overlook is the lingo.

Not the basics, like IPO, M&A and LBO - you can read about those in some book called the Vault Guide.

Let’s just skip to the interesting lingo.  The lingo that determines your life or death as a young banker.

Fire Drill

Typical usage: “Sorry for the fire drill, but we need to get this presentation out in the next 30 minutes - can you take care of it?”

What it means for the Analyst: Your life is going to suck for the next 30 minutes… or next 2 hours… or even longer, but at least it will be over at some point.  No, not your life.  The sucking.

What it really means: A “fire drill” is an emergency where you need to finish a presentation or analysis under very tight time constraints.  Generally it’s client-related (so the firm might end up getting paid something for all the insanity), although often it turns out to be completely useless.

Tips and tricks: Unfortunately, you can’t do much when confronted with a fire drill except extinguish the flames as quickly as possible.  The good thing about a fire drill is that it forces you to focus for a set period, and then all the work is done.  You may lose some hair in the process, though.

Bake-off / Beauty Pageant

Typical usage: “We have an IPO bake-off on Friday - can you work on the pitch?”

What it means for the Analyst: Your life is going to suck until the bake-off is over.  There will be many, many (as in potentially over 100) revisions of the presentation until every last comma is placed in exactly the right location.

What it really means: A “bake-off” (also called a “beauty pageant” or “beauty contest” though that sounds even weirder…) refers to several investment banks competing for the same business, whether it’s an IPO, a financing or an M&A deal.  These types of “contests” involve long and very painful pitchbooks.

Tips and tricks: The best way to deal with an upcoming bake-off is to do as little work as possible and to only do specifically what you’re told without going overboard.  If you don’t need a graph with market share by competitor, don’t do it.  Don’t submit work too far in advance of the actual deadline - this just gives people an excuse to add unnecessary material and increase your workload.

Bandwidth

Typical usage: “We have an IPO bake-off on Friday… do you have any bandwidth?”

What it means for the Analyst: Unless you answer “no” with a compelling reason, your life is going to suck until you finish whatever it is the senior banker is indirectly asking you to do.

What it really means: They are trying to give you work and assess whether you have any “capacity” (bandwidth) left to finish it by a certain time.  If you are leaving before 2 AM every night, you have bandwidth.  If you have 3 other bake-off pitches in the next few days and 5 active deals, you don’t have bandwidth.

Tips and tricks: When you’re trying to convince them you have no bandwidth, focus only on future deadlines.  It doesn’t matter how many all-nighters you’ve pulled in the past week, all that matters is how much work is due in the next 24 hours.  This one is straight out of Monkey Business and is as true today as it was back in the 1990’s.

Face Time

Typical usage: “I’d leave right now but it’s only 9 PM… need to put in some face time.”

What it means for the Analyst: Even if you have no work and no one has successfully detected this and given you work, your life is still going to suck because you can’t go home and risk alerting the higher-ups of this truth.

What it really means: “Face Time” refers to staying in the office until an acceptably late time (11 PM or later, though some offices can be more like 2 AM) so that everyone thinks you’re busy and no one gives you more work.  This concept might seem strange to those of you who don’t work in finance.  Don’t worry - it still seems strange to me and I’ve been doing this for 2 years.

Tips and tricks: Actually, many firms and offices are not as big on face time as they once were.  If you have a bad staffer (the one who assigns work to Analysts), he or she might actually go back to the office late at night and check to see who’s still there.  But even at bulge brackets, most groups have become more reasonable in recent years.

If you are in a bad group or one where a lot of face time is required, I would find other ways to get out of the office, like going to the gym on weekdays.  Also, you can start a blog on investment banking to pass the time.

Below The Bar

Typical usage: “This deal is below the bar… I think we’re going to pass on the business.”

What it means for the Analyst: Your life, for once, is not going to suck because your MD has decided to give up a client that was too small for the firm.

What it really means: Every firm has a “bar” or “minimum size” deal it will do.  The minimum size can be based on either potential fee or potential deal size (the 2 are not always directly linked, though generally a larger deal will result in a larger fee).

Most bulge brackets, for example, will not do deals below $300 million or so in size.  In a tough market this can change, but bulge brackets focus on deals over $1 billion.  At middle-market firms, the “bar” might be $25 or $50 million.

A small deal takes as much work as a large deal and generates a lower fee, so why spend time and resources on the small fish when you can land the whale?

Tips and tricks: Just keep your mouth shut and be glad you avoided some extra work.  Small deals are really painful anyway because those involved tend to be less sophisticated and cause an uproar over small issues.  So be glad you got to work on Microsoft-Yahoo, even it fell apart, rather than the sale of some $10 million family-owned business with more leaks than the Titanic.

Low Hanging Fruit

Typical usage: “Currently we only have 1 office in Europe but we’re getting requests from European customers all the time… so staffing up there to meet demand would be some real low-hanging fruit.”

What it means for the Analyst: Your life will consist of many painful PowerPoint charts and you may have visions of being a consultant for awhile.

What it really means: Clients usually use “low hanging fruit” to refer to any easy opportunities to increase sales that will become available only after they get sold… or raise money… or get taken private.

Generally “low hanging fruit” is not low hanging at all and requires substantial time and resources.  It’s just a “selling point” or “acquisition consideration” you might try to sell investors on.

Tips and tricks: Use your presentations department.  Avoid the temptation to do too much PowerPoint yourself.  I’ve seen this mistake in many banking newbies.  Also, try to mentally replace any reference to “low hanging fruit” with “this is going to take a lot of time and money and it’s all a lie.”

More To Come

This just scratches the surface - what other investment banking lingo do you use a lot, or do you want to hear about?  Again, nothing as simple as defining IPOs or M&A- you can read about those in an outdated version of the Vault guide.

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