The Return of Reader Q&A: World Domination, Mermaids, the Meaning of Life, and Plans for 2011
After a long absence, reader Q&A makes its return today.
Read on to learn all about job postings on Craigslist, whether or not you learn anything useful in banking, the meaning of life, and more – plus my next destination now that I’ve been deported from Asia.
Q: So, why haven’t you done one of these Q&As in such a long time?
A: It’s too hard to find information when it’s presented in Q&A format, and most of the Q&A articles brought in very little long-term traffic compared to, say, the resume template or cover letter template or the private equity interview guide.
But I like giving updates and addressing shorter questions sometimes, so Q&A is back – at least for today.
Craigslist, certifications (my favorite topic ever), and buying your way into finance: legitimate?
Q: Are those job postings on Craigslist worth applying to? I’ve seen them posted by banks and other financial services firms, but I have no idea whether they’re legit. Thoughts?
A: Sometimes they are actually legitimate, but it’s hard to tell unless they post the name of the firm, which rarely happens.
A bulge bracket investment bank won’t advertise for analyst or associate positions on there, but sometimes real, smaller finance firms do post ads.
Applying online anywhere is 500x less effective than talking to a real person and leveraging that to get an interview, but if you have a few spare minutes, sure, go ahead.
But please don’t spend hours a day on Craigslist looking for that perfect listing.
Q: I know you’re not a fan of the CFA or CPA, but what about the Series 7 / 63 / 65 / 66 / 79? Don’t you think those are more relevant to banking?
A: They might be more relevant, but that doesn’t make them useful. Luckily they take far less study time than the CFA, so if the thought of getting those certifications is keeping you up at night, go ahead.
Just be aware that there’s little point in doing so because you’ll prepare and take them during training anyway if your bank requires it.
Q: Let’s say I don’t have a banking internship lined up. Do you think those internships where you pay $5,000+ to work for free are worth it?
A: I’ve heard mixed reports. Some of the companies are not real banks or PE firms – they’re just random 2-person operations that have been set up specifically for the internship.
That’s not always the case and sometimes you find legitimate places, but you definitely need to do your own due diligence before you send over thousands of dollars – ask to speak with and visit the firms that are offering the internships first.
The Meaning of Life
Please, no more networking, resume, or interview questions, OK?
Q: You’ve said before that you don’t learn complex math or gain “hard” skills in investment banking. So why should I do it? My parents think I should be a doctor / lawyer / accountant instead since I would at least learn something real!
A: Just show your parents what bankers make compared to what those other professions make and point out the prestige factor and you should be golden.
You don’t gain “hard” skills in the same way you do in those other fields, but you gain something even more valuable: relationships and sales or investing (on the buy-side) skills.
But most people have a hard time assigning value to those skills, so they don’t “get” why financiers make more than the other professions you named.
Q: I don’t understand why it’s so hard to break into finance – you’ve said before that the work isn’t that difficult. I have 15 years of experience working with senior executives, and no bank will even talk to me.
A: The issue is specificity, not difficulty.
It’s like if they’re casting for a movie and need an actor who’s 6’1″ with brown hair and blue eyes: you can be the best actor in the world but if you don’t meet that criteria, you won’t get the role.
Banks focus on recruiting university and business school students 99% of the time because they want people without much experience and people who are willing to pull all-nighters all the time.
Working with senior executives has no bearing on your ability to supervise pitch book production – and you might actually be worse than a newly minted MBA because you will question everything and delay the process.
Q: You’ve said that it’s foolish to follow a “path” and that we should focus on making money instead. But how can you have no plan at all? Isn’t that unstable?
A: I’m not saying that you shouldn’t have any plan – my only point is that creating a detailed 10 or 15-year plan is silly.
Stability is just an illusion – adaptability is far more important.
You don’t have enough information to plan so far in advance, and such a detailed plan will also limit your options – sure, you might want to do 2 years of banking, 2 years of PE, 2 years at HBS, and then go to a hedge fund to conquer the world, but what happens if you change your mind or something better comes along?
Q: I’ve seen comments on your site before that everyone in finance has the “herd mentality” and that no one can think independently.
Do you really think it attracts the best and the brightest? Shouldn’t they be smarter than that?
A: There’s a herd mentality in every industry – finance is not unique. It may not always attract the top students, but for now it still does – though that can easily change, as we saw with advertising in the 60s, bond trading in the 80s, and dot-coms in the 90s.
High-achievers make decisions analytically, and you can’t beat the ROI of finance if you look at money and time invested vs. expected salary, bonus, and prestige afterward.
You could argue that other options are more “fun” but there’s no way to quantify that, so they fall out of the running.
Q: You’re giving readers false hope by posting so many interviews with other readers from lesser-known schools who broke into finance.
The chances of getting into IB/PE/HF from a 2nd tier school are lower than getting into the NFL, and you should do the ethical thing and suggest brokerage and wealth management firms instead.
A: There’s a reason why I’ve labeled these “case studies” – they are examples, not scientifically controlled experiments. Obviously not everyone from lesser-known schools will get into the industry, and I don’t think anyone reading actually expects that.
The chances of getting into IB/PE/HF from a 2nd tier school, while not great, are significantly higher than the chances of becoming a professional athlete because fewer people are interested, there are more spots available, and you don’t need to start training at age 5 to make it.
Most interviews here are about IB and PE because I get the most questions on those, and because most readers are interested in those.
So, point taken but we’ll have to agree to disagree.
Life Updates, World Domination, and Mermaids
This is why you really read M&I, of course: entertainment. And mermaids.
Q: I saw on Twitter that you’re leaving Asia and you mentioned somewhere else how it didn’t go well – are you saying the entire region is dysfunctional, or was it just you?
A: The region can’t be dysfunctional if they’re already surpassing (have surpassed?) the West.
I realized after years of working and studying here on and off that I’m an extremely poor cultural fit for most countries in Asia – and that’s about all I will say to avoid to stepping on toes.
I’m off to Australia next, so let me know if you’re in Sydney and we can meet up.
I’ll probably go back to the US eventually but I have no idea when or why, or if it will be voluntary or a result of getting deported from elsewhere.
Q: Now that you’ve done dozens of reader interviews, have a line of 8 products, and hundreds of articles, what are your plans for next year?
A: There are still topics that haven’t been covered yet so I do want to get to those (DCM, LevFin, PWM, ER, Corporate Development, Brazil, Hong Kong, Eastern Europe, Russia, Western Europe…). Some of those are already in progress and will arrive soon.
In terms of products, Real Estate Modeling is coming next and there will also be some additions to the existing courses (e.g. insurance for the FIG course and mining for the Oil & Gas one). I don’t want to go crazy adding 50 new courses because it gets confusing after a certain point.
Two other things I don’t want to do:
- Re-hash topics that have already been covered.
- Cover the news (0 long-term value).
So I may change around the format of the site once again to support those goals.
Q: Why don’t you post 500 updates to Twitter each day? You’re not using Facebook Connect! Shouldn’t you be all over social media?!!!
A: It’s not really my style. I use Twitter occasionally but I don’t enjoy following the news and posting updates 24/7, nor do I enjoy sharing minutiae in my personal life.
The value of social media depends on the market you’re in – for something this narrow it’s not terribly helpful, especially since this site is already well-known in the finance community.
YouTube would actually be the most useful social media site, so I might explore that more next year.
Q: What do you do? I don’t understand – can’t you just make this entire site in 5 minutes and then sit back and have mermaids serve you piña coladas? Since you don’t sit in an office, you never do any work, right?
A: I spend most of my time working on this site and BIWS. At first I spent most of my time on writing and promoting content here, but over the past 2 years that shifted more and more to product development.
Recently, I’ve been spending more time training others, bringing on more people to help out with support, and setting up partnership deals.
I’m mobile but I’m never really “on vacation” – at the minimum I’m doing at least a few hours of work every day, including weekends and holidays.
You don’t get to 115 hours of video, nearly 300 articles, hundreds of thousands of monthly visitors, and thousands of customers by sitting on the beach all day.
The mermaids can’t help you with that, even if they’re former banking analysts.
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