S&T interviews and how they differ from banking interviews

So I hear a lot about what banking interviews are like, and there are interview guides such as the Mergers and Inquisitions interview guide which I purchased that seem to have some great info. But, although I've heard that S&T interviews are much harder, I can't seem to find a lot of information on how this is. Can some experienced users here enlighten us?
I'm assuming the interviews must be much more technical or mathematical? If so, in what way, and what kind of technical questions are they? I am studying economics but I have not taken any advanced mathematics or finance classes. Am I at a disadvantage?
I'm applying everywhere but ultimately I think I would prefer to be in S&T rather than banking. I'm just more interested in market movements and macroeconomic developments more than dealing with specific deals and companies.

 

S&T interviews are quite a bit different. There are still "fit" and "technical" questions, but they're significantly different from banking interviews:

-"Fit" questions are more about whether you have the "trader mindset" and can make decisions quickly, think on your feet, how much you follow and enjoy the markets, your risk tolerance and how well you manage risk, etc.

Fitting in with the team and culture is also important, and you could still get leadership / team-type questions or get asked about your background, but it's less about proving you're a workhorse and more about proving you're a quick thinker and can act like a trader.

-Technical questions do not have anything to do with accounting, valuation, or corporate finance - I guess theoretically they could ask you this stuff, but in practice most of the technical questions are about math, probability, and brain teasers rather than how to build a DCF.

You don't have to "know" as much going into technical questions in S&T interviews, but you need to be very quick with mental math and good at staying calm under pressure.

I never created an S&T interview guide because there are fewer "standard" interview questions, and IMO it's much harder to prepare for these types of interviews - the variety of questions you could get is larger than in banking / PE interviews so it's more about practice and less about learning everything in advance.

Math and probability classes would definitely help, but you don't necessarily need them... they're not going to ask you about quantum physics or anything, the concepts are simple but the actual questions are tricky.

 

Dosk pretty much summed it up. In my experience, my S&T interviews were much more about how quickly I could think on my feet and do quick mental math. Nothing that you can really memorize like IB interviews. But, in S&T, your fit is really important. You have to be able to work non-stop the entire day with almost no down time, especially in trading. You need to show your interviewer you thrive in a fast paced environment and love following the markets. Also, be prepared for the "pitch me a stock" question. I got that one in almost every one of my S&T interviews as well as some brainteasers like what's 7 cubed or what is 7/16. A lot of these types of questions you can't prep for, you just actually have to know how to approach them, and actually be good at math...

 
Billy Ray Valentine:
Dosk pretty much summed it up. In my experience, my S&T interviews were much more about how quickly I could think on my feet and do quick mental math. Nothing that you can really memorize like IB interviews. But, in S&T, your fit is really important. You have to be able to work non-stop the entire day with almost no down time, especially in trading. You need to show your interviewer you thrive in a fast paced environment and love following the markets. Also, be prepared for the "pitch me a stock" question. I got that one in almost every one of my S&T interviews as well as some brainteasers like what's 7 cubed or what is 7/16. A lot of these types of questions you can't prep for, you just actually have to know how to approach them, and actually be good at math...

How quickly are you expected to answer those mental math questions? Do you have some time to think about it, or are you expected to be able to answer within a few seconds?

 

I am in S&T now, and come from a similar background (Econ with very little Finance/Advanced Math.. damn LAC's). I agree, dosk summed it up very nicely. The only thing I would stress is that you have to know how to keep cool under pressure when you don't know the answer and talk through everything. Going blank or spitting out something ridiculous just to be done with the question is unacceptable. I realize that may be obvious, but from talking to my interviewer after I accepted the offer, I don't think this can be understated.

Don't be nervous about your lack of hard numbers experience. In my experience, being able to process concepts and lower level math quickly, as well as being able to speak your way through something you may not fully understand, are more important than knowing advanced math.

 
Best Response

Good advice from ortsmam1. Don't just spit something out to get through the question. Think about how you can tackle it and talk your way through your answer. They are looking to see you have. Solid thought process even if you don't come up with the right answer. Sometimes they will give you questions that are so difficult, they know you won't be able to figure it out unless you have heard it before. If you can't figure it out, say something like "I'm not entirely sure... I would think about starting by _______, am I on the right track?" and see if they will help guide you through it. For something like the 7 cubed question, you should be able to get that pretty quick, but I've seen some brainteasers that take some serious time, some that require paper and guidance from the interviewer and others that I got lucky with and had seen before. There are a lot of threads on brainteasers on this site, so use the search function and I know there are some brainteasers and S&T specific questions in the WSO guides as well if you haven't looked at them yet. Even if you don't get the exact same question, knowing something similar will help you in your thought process and working through the problem.

Remember, just stay relaxed and think out loud. Don't just start rambling. It's all about your thought process and ability to stay cool in high pressure situations.

 
Blade1988:
Regarding the non-math technical part, what sorts of questions should one expect? Explaining different asset classes? Yield curves? Portfolio theory?

More likely they would ask you to talk about the markets. Perhaps if its for Fixed Income they would see what you know about duration or convexity, etc.

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Revsly:
Blade1988:
Regarding the non-math technical part, what sorts of questions should one expect? Explaining different asset classes? Yield curves? Portfolio theory?

More likely they would ask you to talk about the markets. Perhaps if its for Fixed Income they would see what you know about duration or convexity, etc.

I had an S&T commodities final round where I was asked to walk the interviewer through the entire debt securitization process.

 

Thanks for the great responses I've gotten so far, I think I understand the process much better now I'm also curious about Blade1988's question Also, I have an S&T interview with SEO in about a week. I'm guessing it'll be more or less the same as interviewing with a bank?

 

I always got a lot of questions on EV/EBITDA in ibd interviews, had some on value creation differences between stock buybacks vs dividends (hint perception only) and if X happens, what does it do to Balance Sheet, CF Statement and Income statement, and what is the effect on the company's NAV.

ER is a lot more individualized and unique, typically tailored to the analyst you're going to work for. I like to ask people direct industry specific questions, other guys go with more general styled valuation questions. Very often a 'give me two longs and a short' type question.

 
overpaid_overworked:
I always got a lot of questions on EV/EBITDA in ibd interviews, had some on value creation differences between stock buybacks vs dividends (hint perception only) and if X happens, what does it do to Balance Sheet, CF Statement and Income statement, and what is the effect on the company's NAV.

ER is a lot more individualized and unique, typically tailored to the analyst you're going to work for. I like to ask people direct industry specific questions, other guys go with more general styled valuation questions. Very often a 'give me two longs and a short' type question.

sounds like youve done some interviewing for Equity Research positions? would you be able to expand on what's likely to be asked when you get a chance. thanks

 
overpaid_overworked:
I always got a lot of questions on EV/EBITDA in ibd interviews, had some on value creation differences between stock buybacks vs dividends (hint perception only) and if X happens, what does it do to Balance Sheet, CF Statement and Income statement, and what is the effect on the company's NAV.

ER is a lot more individualized and unique, typically tailored to the analyst you're going to work for. I like to ask people direct industry specific questions, other guys go with more general styled valuation questions. Very often a 'give me two longs and a short' type question.

when you say "two longs and a short" question...what exactly does that mean? Simply, what two stocks would you go long and short in the industry you're interviewing with?

 

Equity research interviews are largely (1) fit-based, (2) analytical, and/or (3) market related. As mentioned above, you should certainly have stock pitch prepared. You don't have to convince the interviewer to buy it, you just have to convince them that you know the stock well and have done your homework. You should also be prepared for an analytical question -- think "how many gallons of gas are puchased in the US each day". The correct answer isn't important, but they are looking for your life of thinking to get there. In equity research, you have to use incomplete information to come to a conclustion, so these types of questions help show that you don't completely freeze up.

My experience in IBD was certainly different than most (I got in as a lateral hire, not during the typical recruiting cycles) and the vast majority of my questions centered around making sure I knew what I was getting in to. Everyone asked me "why do you want to do banking" and pressured my on the answers I gave to make sure I thought everything through.

 
NNOVAK:
Equity research interviews are largely (1) fit-based, (2) analytical, and/or (3) market related. As mentioned above, you should certainly have stock pitch prepared. You don't have to convince the interviewer to buy it, you just have to convince them that you know the stock well and have done your homework. You should also be prepared for an analytical question -- think "how many gallons of gas are puchased in the US each day". The correct answer isn't important, but they are looking for your life of thinking to get there. In equity research, you have to use incomplete information to come to a conclustion, so these types of questions help show that you don't completely freeze up.

My experience in IBD was certainly different than most (I got in as a lateral hire, not during the typical recruiting cycles) and the vast majority of my questions centered around making sure I knew what I was getting in to. Everyone asked me "why do you want to do banking" and pressured my on the answers I gave to make sure I thought everything through.

Great, thanks for the run-down NOVAK. Any way you would suggest preparing for an ER interview (oil and gas industry specifically) with regards to the analytical and marked related sections you outlined?

 

You can certainly google (or perhaps find here) some basic analytical questions. You won't get asked the same ones, but you should be comfortable thinking out loud and walking through limited information and making assumptions.

For market related questions, acting like you know too much about the job you are applying for is a death sentence. For instance, if you go in a pitch an oil and gas stock to an oil and gas analyst, you are most likely going to embarrass yourself. If you know the team you are applying for (sounds like you do), I would try to get your hands on one of their research reports. Use that as a launching pad for conversation. Try and understand the basic drivers of the industry, but also come prepared with questions on the analysts view (I.e "why do you believe this about company xyz"). I would be prepared to pitch one stock outside or oil and gas and one oil and gas company (only if they ask for it)

 

Two longs and a Short is just what you've said, give me two companies that you'd buy, and one to sell, then why. The last ER interview I did I know exactly where I screwed this up. I'd just finished talking about how I was trying to imrpove my ability to distill down complex ideas into 3-5 simple bite sized pieces the sales desk can use, because if you can correctly articulate the investment thesis in a few sound bytes, you must know the story well. When we got to the two longs and a short, I got excited, picking companies that I knew a lot about and rather then clearly explaining 3-5 reasons, I tallied off a huge laundry list of reasons the company was great. A lot of people do this, and it's not good for ER positions, give your reasons with the data in your back pocket incase you need to back up the reasons.

 

they'll want you to be able to speak about the markets and depending on what asset class they specialize in i expect they might ask you about recent trends and future expectations. if it's a typical interview, you might be asked to read an article in 30 seconds and then summarize the key points. if you want IB though i would find something at a fairness shop, boutique i-bank, etc. S&T skills don't really transfer well to banking.

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