Lightning Q&A: Placement Agencies, Live Deals, Age, Racism, Lifestyle, Recruiting, Day Trading
The reader questions continue coming in, and we’ll take a similar approach to the most recent Rapid-Fire Q&A. Lightning Q&A, Round 2, now commences.
1. What do you think of paid placement agencies? I’m about to write a check to one, since they promised they could get me an internship at any bulge bracket bank.
Don’t send the check! Anyone that makes such a “promise” is lying because there’s no way you can make such a guarantee – there are simply too many variables involved in the job hunt process.
While you can significantly boost your chances by doing things such as reading this site, having your resume reviewed and practicing interviews, there are no guarantees.
In short, they’re a scam. Avoid.
2. Hi, I just launched a new financial web site on credit cards / debt relief / loan consolidation. Will you link to me?
I must get about 10 of these requests per week.
NO.
While your site is technically “finance-related,” it has nothing to do with investment banking, private equity or anything else I cover here. And by the looks of it, it looks like you’re running some kind of shady pyramid-scheme.
3. Can you only write about “live deals” on your resume? What exactly is a “live deal”? I’ve heard lots of different definitions.
What you write about on your resume should be determined by how much you contributed and the impact you made rather than by whether it was a “live deal” or not.
Honestly, I don’t think there’s an official definition; you could call it anything that involves a signed engagement letter with a client, but there are plenty of deals where that only comes together in the last moments.
If you work on a deal where you do a lot of research, modeling and such but you are not “officially” representing the company and then it falls apart at the last minute, I would still write about it (without using real names, of course) even though it might not have been a “live deal.”
4. Help! I’m a freshman at Yale and I read Damn, It Feels Good To Be A Banker where the author wrote that Harvard, Princeton and Wharton are the best schools for bankers and Yale, Stanford and MIT were “second-tier.” Should I transfer to Harvard to improve my chances of getting in?
No. While Damn, It Feels Good To Be A Banker is a very funny read and you can learn a lot from it, keep in mind that it’s a work of fiction. Every major bank recruits at Yale and transferring to one of the “top 3″ is a waste of time because there’s no substantial difference in recruiting quality.
5. Is 31 too old to start in banking?
As an Analyst, yes, probably. When you’re over 30 you don’t want to be pulling all-nighters on a regular basis. As an Associate it’s fine and I knew some who were closer to 40.
However, more than anything else this question boils down to whether or not you have a family. If you’re married with kids, doing banking at any age is going to put a toll on you; if you’re single you could be fairly old and still tolerate it.
6. What was the best part of your experience as an investment banker?
1) Getting to meet really smart and talented people and building my network
2) Learning a lot about the industry I worked in
3) Constant trips to Starbucks at all hours of the day
4) Models and bottles (come on, I have to mention this at least once in every post)
7. I have a first-round phone interview with a well-known tech group coming up. How should I prepare?
In addition to having good answers to the usual “Why banking?” questions and specific stories/anecdotes to back up your responses, make sure you can intelligently discuss your interest in technology.
It’s a good idea to read TechCrunch and other news sites periodically and make sure you can intelligently discuss a few companies in the market.
This applies to any industry group – you always want to use your interest/experience in the industry as your “angle.”
8. Do you think bankers are racist? I’m a minority and very nervous about starting my job.
It’s true that at the top levels banking is not very diverse, but that is starting to change. We had a few female and non-Caucasian MDs at my old office, for example.
In all honesty though, no, I don’t think there is much racism; people are separated much more by class (e.g. Analyst/Associate/VP) rather than race. No one really cares what your background was, they just care how good you are at cranking out PowerPoint.
9. I’m very interested in IBD but I’m afraid of the lifestyle sacrifices. If I want to leave between 9 and 10 PM every night and don’t want to stay past midnight, should I go to a middle-market firm?
No, you shouldn’t do banking at all if you never want to stay past midnight.
You might get a slightly better lifestyle at very small regional boutiques, but this is still banking and you shouldn’t expect much in terms of having a life.
10. What is most important when recruiting? People on WallStreetOasis say that modeling is the most crucial skill.
Not to disparage the site or anything since I post there a lot, but many people on the message boards there have not worked in the industry before, haven’t recruited and haven’t interviewed people – in short, they don’t know what they’re talking about.
While it’s good to have some basic financial ability, for entry-level hires having great experience and being able to properly tell a convincing “story”, backed with details from your experience, are far more important.
Those who ultimately make hiring decisions – the Managing Directors – aren’t going to ask you detailed technical questions. They are much more focused on the qualitative aspects.
11. My parents want me to go to medical school but I hate it and wish I hadn’t majored in biology. Can I still get into banking even with only research experience?
I’ve seen it done. Unless you have a killer connection at a bulge bracket, though, you’ll need to go smaller and come up with a great story that explains why you suddenly got interested in finance.
You’ll also want to re-position your research experience and focus on the leadership/financial aspects (for example, fund-raising, managing others) if there were any.
12. I’m a great day trader. I started with $500 and turned it into $200,000 over 4 years, almost like Tim Sykes. Can I get into investment banking?
Unlikely, especially if you don’t even have an undergraduate degree. Plus, if you’re that good why don’t you just keep trading and turn that $200,000 into $80,000,000?
If you do want to get into finance, you’re better off applying to hedge funds and small prop shops where they’d take you more seriously and be impressed with that kind of accomplishment.
13. I work at a Big 4 Transaction Advisory Services group. If I’m already a few years out of school, can I still break in?
Yes, but you should act quickly because the longer you’re in it, the harder it is to switch. If I were you I would start your recruiting efforts ASAP.
14. You haven’t replied to my email! When will you reply?
My goal with this site and my upcoming projects is to reach as many people as possible. As you might imagine, I get more email in a day than the average person gets in a week.
In the interest of efficiency, I typically read and reply to everything once or twice a week – otherwise I’d spend all day replying to email and I’d never get around to anything else.
If you do want a faster response, I would suggest the following:
1) Send me an email with a clever title (example: “The Leveraged Bail-Out” or “Bear Stearns Episode 2: The Shareholders Strike Back“).
2) Become a client by purchasing a resume review or a mock interview / Q&A session (email me for details).
3) If you’re a former client I’ll try to get back to you more quickly.
15. When are you releasing those training courses you wrote about?
They’re coming. I hesitate to give a release date, but you won’t have to wait too much longer. I’ve finished a good amount of the content already and have shown it to some of my friends currently/formerly in banking and everyone has said, “WOW I WISH I HAD THIS A FEW YEARS AGO!”
Huge projects like this take awhile and I don’t want to release anything in a half-finished state. Trust me though, the wait will be worth it.
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I’m going to be transferring out of a community college to either University of Illinois at Urbana-Champaign or DePaul University. Do you think one school has a better chance for myself to receive a IBD job at a bulge bracket with a solid 3.8+ GPA? and which school would be better to attend for networking and interning possibilities?
Thanks for all of your assistance!
Neither is really a target school but I think Illinois is better overall so I’d recommend that over DePaul.
I called JPMorgan Chase & Co. today and the recruiter for undergraduate full-time hiring said their entire analyst class has already been filled with their summer analysts.
I was left speechless when she said that JPMorgan Chase & Co. would not be recruiting for full-time analyst potions at all this fall.
Most other firms I have called echoed similar outlooks, a Barclays Capital recruiter said that she could count the amount of people they were going to hire on her hands for investment banking.
I don’t know if I believe it completely since it is coming from human resources, but this is what I was told on the phone.
Not to step on the Inquisitor’s toes here, but that is probably true – at least for now. There’s a solid chance that once the economy stabilizes a bit more (think right after the election), banks are going to realize that their incoming analyst class falls way short of where they need to be. That could open it up for periods of hire like in 2006, when any one with a degree from a 4-year school could get into banking simply because of the growth. That’s probably a huge exaggeration, but I think there’s a good chance that if you keep in contact with these banks, you’ll find they’ll need to do more recruiting/hiring at some point later in the fall.
I want to make clear that this information is just from cold-calling human resources / campus recruiters at different banks, so take the information with a grain of salt.
I really don’t know anyone at any of the firms which would be able to paint a much clearer picture. I was just really surprised to hear this type of information from firms I was interested in working for.
The HR/Campus Recruiters probably weren’t lying. With the economy in such a volatile/poor state, fewer companies are going public, fewer acquisitions/sales are happening, and there is less investing in the market due to the aforementioned reasons. That leaves banks with less business and less revenue. With less business, they need fewer employees – plus, they’re paying for 100 employees to do $2 worth of work each, but there’s only $100 of work available (I hope that makes sense). No need to increase head count through analyst hiring in these times.
When the market does re-gain stability – I don’t think it even needs to get a lot better, it just needs to show signs of stabilization and improvement on the horizon – the business for banks will start to increase, and they will realize they hired way fewer candidates than they need and will go get some more. That will delay the normal recruiting process a few months, but they’ll still be hiring for the July 1 start date. With the election upcoming, just getting Bush out of office should do a lot for our economy (this is not a dig on Bush, just his overall approval levels are rather low and most of the country certainly does not approve of his economic policies). Getting a change in the office would probably further improve stability, but either Obama or McCain should help us out.
This may not make any sense what-so-ever, but in my little head it works out to me. I know at my school we generally get a few bulge brackets and a few boutiques, but none of the bulge brackets are coming this year (as of now) due to filling their quota through summer interns. One guy from GS even said that they had four interns in their group and were only hiring ONE due to limited hiring, and no other roles would be filled via recruiting. But I wouldn’t be surprised if they come back and do some recruiting later in the semester.
And by the way… a lot of boutiques and mid-markets are doing some serious hiring
(accidentally hit add comment)
because of the limited hiring done by the bulge banks. Generally, top Ivy leaguers will go to the Goldman’s and Morgan’s, but due to limited hiring, they are looking at the smaller banks. These banks view this as a chance to stock up on serious talent that they typically wouldn’t get their hands on. Give those banks a chance – even if you’re not a “star” like some kids, you’ll certainly have a shot.
Yup good points on the economy as well… mid-markets and boutiques might actually be hiring MORE this year.
What Ryan said below. :) I’m not too surprised – bulge brackets in general are not doing much, if any, recruiting this year. Go smaller and check with other firms and some of the “elite” boutiques like Evercore, Lazard etc.
As a former Summer Analyst this past summer at JPM, I can verify that this is slightly true. Only few of the SA’s were given offers to return at my office, and the rest are on a rolling basis.
JPM posted several openings on my school’s career website, but they canceled the Investment Banking positions and left only middle market/commercial banking positions with Chase (not JP Morgan).
I am still waiting on my offer, but I am not holding my breath. I remember that the Inquisitor posted something regarding some of the incoming JPM IB Analyst class was “demoted” to commercial banking. This was true, but my friend (sent to healthcare commercial banking) was able to “talk to the right person” and found himself a spot in IB Natural Resources.
Anyway, to address your concerns, more banks have pulled some of their job postings on my school’s website (Citigroup, Lehman) and some banks have posted new positions for their restructuring groups like the Inquisitor said. I wouldn’t rule out any particular firm. You just have to talk to the right person.
Yup it’s definitely a tough market. And knowing the right people goes a long way toward getting in, as always.
Inquisitor:
Random question that has nothing to do with the post. I am looking at a few boutique’s and mid-market banks. What would you expect a place like RW Baird, Harris Williams, or Sandler O’Neill to pay? Sandler O’Neill is a bit above MM or boutique, not quite bulge. Do you think salaries and bonuses would be comparable to bulge brackets (not necessarily Goldman), or would it be lower by a pretty good amount? Thanks!
Salaries should be about the same for starting Associates and Analysts, but bonuses will be lower in most cases. Maybe 20-30% lower overall, more at really small regional boutiques.
In your opinion, how is the outlook for summer analyst positions for 2009? Are banks cutting back on hiring as many interns now? Am I screwed??? lol…but not really.
Down but not nearly as badly affected as FT hiring has been / will be. Banks always tend to hire around the same # of summer interns and it’s more recession-resistant overall.
I think you should write an entry on those of us who haven’t received an offer. Not because we messed up but because banks extended offers to only 30%. So do you think we’re all screwed for FT? any comments suggestions?
You’re not screwed but you will probably have to go somewhere smaller – luckily you will have an advantage because of your previous internship.
I’ve read a lot on this site as well as in books regarding banking and they all talk about modeling. Could someone tell me what it actually entails? Is it just inputting financial data into excel and finding the valuation of the firm, or are there actually many definitions of modeling?
Thanks
Definitions vary, but basically it means inputting data into Excel and then creating your own projected data based on those numbers – and using those projections to determine a firm’s future operating profile, the effects of an acquisition, the value of a company, or a PE firm’s return in an LBO (for example).
I currently go to a community in southern California and am setting up for a transfer to Cal State Fullerton. If i change that transfer to UCLA and talk on a small student loan would i be better of than at Cal State Fullerton which has a fairly decent business program. Would my chances of getting a internship at UCLA be higher as well.
-By the way My goal is to get into a BB
Yes you would have much higher chances at UCLA
In your years in the industry would you say UCLA is an upper level school that can produce worthy employees?
If I were to be hired by a BB firm would the odds of me moving out of Southern California be high.
Thanks.
Yes UCLA has a lot of bankers. You can stay in LA.