gekkouno

I know the book answear. "buying and selling products both on behalf of the bank's clients and also for the bank itself." But what do IB do on a daily basis and how much does a person earn right out of a college like Cornell being an investment banker? (Assuming the person gets in the door) Is market knowledge and trend recongnition more important than being a great salesman?

Thanks

Majayiduke09

This answer is in reference to Investment Bankers, Not S&T.

If you want S&T as well, I will be happy to provide an answer.

Compensation:

The bonuses will typically have a range (low end to high end). For example, 2007 1st year bonuses (paid out in June/July for analysts), reached a record high ranging from -- I may be slightly off -- 60k-90k

Analysts are ranked into "buckets," so a top bucket analyst got the high end bonus (90k) and the low end (60k).

It should be noted that due to the sub-prime mortgage crisis, many banks are suffering from diminishing deal flow, so this should be reflected in the bonuses for analysts (i.e. lower bonuses) in the summer 2008.


Responsibilities:

On a daily basis, analysts will do industry research, due diligence, work on pitchbooks and financial models (DCF, LBO, accretion/dilution, comparable transaction analyses)

FreshElephant

This may sound dumb... where can I learn to do that stuff? Is it something you can learn while in college or do they teach you after you get hired?

Also, up to what math do you have to go to be competent in investment banking? Do you have to go up to Math 103 or is 31L enough? Or 32? What other courses do you recommend for IB?

Thanks.

futurenyustudent

They spend like 4 months teaching you how to do everything you need to do.

gekkouno

I was wondering what sort of math abilities are needed to be an investment banker? I have very little math ability, aside from statistical analysis. However I am a pretty good writer and very gregarious and outgoing. I would be sort of the ***** man I guess. I am also a good communicator and conflict resolver. Is there a place in investment banking/private equity for me?

Thanks

lynda

er.. you do realize schools have different numbering systems ... course titles?

anyways, ibanking isn't rocket science, you don't need real analysis for it.


for sales and trading its becoming increasingly important to have a quantitative background. the interesting jobs in S & T (prop trading.. not market making..) all require very strong quantative abilities.. ( probability theory, stochastics..etc)

however on the banking side, you only need enough quantitative ability to know how to use the modeling formula (for dcf). if you have a good quantative background (like undergraduate econ major) you are better off since you can understand the technicals better.. but trust me when I say enough people (even MBAs) just memorize the technicals w/o really knowing why they are the way they are, and eventually come to understand them as they work with them long enough.

Majayiduke09

lynda,

I go to the same school as FreshElephant.


FreshElephant,

At bulge bracket firms:
For summer analysts positions, there is a week of training; for full-time training, there are weeks of training.

You will get a good foundation in training and learn more on the job.

I recommend at least Financial Accounting (Econ182) and Advanced Fin/Man Accounting (Econ 183). You will learn about the financial statements and how they flow together.

You can take Math31L I suppose, but IBD really is not that math-intensive at all.

In general, I highly recommend taking finance courses.

If you consider S&T, take higher level math and stat courses. Econ157 would not be a bad bet either.


gekkouno,

Same response to Fresh Elephant. IBD is not math-intensive. You basically need to know how to add, subtract, multiply and divide and remember some finance technicals, which will become 2nd nature as you do the same thing over again.

S&T is where I would recommend a better grasp of quants.

FreshElephant

So for S&T, would Math 103 be ok (Multivariable Calculus)? Or maybe some stats courses?

Thanks a lot btw

Majayiduke09

Hmm..well...it is not quite as simple as that...

First remember S&T incorporates sales, sales-trading, trading, and structuring (which is considered the most quantitative, so many are math, physics, and engineering majors)

However, in general, I would say that a multi-variable calculus, probability, and stat course is a nice foundation.

Try to look for classes at Duke they focus on bonds and derivatives as well (prob under ECON in ACES though you may not be able to get into them until your junior or senior year.)

lynda

market making/sales/research on equities=> not much beyond algebra needed.
energy/commodity desks=> econ'll do you more good than probability
fixed income => now it starts getting mathy undergrad math/econ math/engineering are probably better suited for these desks.
derivatives (futures, options, exotics...)=> while some vanilla options are done w/o much math background, derivatives is where the math really gets interesting..and this is where structuring and quantitative research plays in.

prop trading desks I consider to be most quantitative.. you wont see many masters there.. most ppl on prop desks are pure quant phd/DE. shaw types. (in the words of one MD I met " people with brain size bigger than planets")

in general for the less quantitative desks.. what math do you know is not as important as how comfortable are you with working with numbers.

multi's a good prep for econ classes, probability is foundation of pricing models

cryptography

true quants or quant traders need to have a much better grasp of probability. almost all the probability will be based on calculus and continuous time models. you'll learn things like martingales, brownian motion, random stochastic processes...etc

FreshElephant

Majayduke (or anyone else at duke),

have you taken econ 182? how intense is it? I'm planning on taking it next fall to see if this whole thing is for me.

thanks for the help

Majayiduke09

Yeah I have taken Econ 182 with Skender, and I am taking Econ 183, which is the second sequence.

He is a great professor and as long as you go to class and take notes, do the homework, and the practice tests, you will be fine.

Seriously if you can do the practice tests you will be A-OK. He does not try to surprise you.

openingdoors

Just wondering, majayiduke09. What is your background in IB? You've interned somewhere, I'm assuming?

Majayiduke09

openingdoors,

I've been a summer analyst in S&T and IBD at a bulge bracket investment bank, and I'm working as an IBD summer analyst this summer at a bulge bracket.