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15 things I wish I knew as a first year banking analyst
 

frgna's picture
O
 
Points)
 on 2/17/13 at 6:14pm
super_monkey.jpg

I was writing an email to a fellow monkey who is about to start as a banking analyst in the summer. It's been a little over 5 yrs now since I was a wee young first-year analyst in restructuring for one of the Moelis/Houlihan/Evercore type firms (I call them the firms where most people will still say "What?" and sort of nod their heads when you tell them where you work - thanks for validating my 80 hour work week - anyways moving on).

I really like mentoring and sharing knowledge for future generations - a lot of people have helped me along the way, and still are, and I really like WSO in general - there are giant gold nuggets all over this site from which I have benefited so I thought it's high time to throw one back in the pit.

Here's what I wish I knew as a first year analyst:

1) Your performance from day 1 matters. So, prepare as much as you can beforehand. Ask (politely) if your future colleagues can send you some pitches/other helpful materials and start working on your excel, formatting, attention to detail. Keep your Outlook box tidy and have a folder for every single deal - learn to back up your email box. Have a good system for knowing where each file is. Always carry a notebook and your HP12C, and learn to use that little calculator really really well. That thing can run a full DCF in seconds if you know what you are doing. Especially if you work in debt, know how to use the financial functions (I, PMT, PV, FV, n).

2) For your first 3 months you will be a burden - just try to be a small burden. Don't spin your wheels, ever - Associates hate when their analyst is sitting there fumbling and stymied. Don't ask questions that you haven't at least tried to think through yourself - but once you've thought them through, don't be afraid to ask. Write down everything so you remember what you learned and don't have to ask again.

Get close with a good Associate/Sr. Analyst - tell them you just really want to do well and look to them for areas to improve BEFORE your midyear/full year reviews. Your first midyear review will likely be pretty pointless, unless you've done something really bad, but keep the year-end review in mind and realize people's memories are much shorter than you think, so a good 3 months leading into the review can make up for quite a bit of mediocre performance. Bankers love to see when people have really "stepped it up" - it validates that their criticism did something and that you aren't afraid to improve and take advice well.

3) If you want to someday go to the buyside, think of that from day 1 as well. Start talking now with people who are where you want to be in 2-5 years time. Figure out where past analysts have gone and how. You can jump after 1 year, 2 yrs, or later - but realize it might get tougher later on. You will need to teach yourself how to model quick and dirty - prepping for HF/PE buyside interviews is serious, serious business. I could write a whole article just on that process.

4) Be thinking about whether you want to go to grad school, and where, and what experiences will help that cause. Keep detailed records of the things you do - because you're about to do so many things, that you will inevitably forget some of the best ones. 2 yrs at a non-incredibly-amazing firm is not likely to get you into HSW, even with a good GMAT - a better track is to target 4-6 years of work experience and have a non-banking role in between - PE, work for a startup, go do microfinance in Tunisia, whatever you like really - just something to distinguish you from all the other bankers - HSW will have plenty of BB IBD kids from target schools to fill their class. If you know you want to go for an MBA eventually, think about taking the GMAT before you are working 80 hours a week. I think the GMAT takes about 2 months of good work for most really to maximize your score (this is another good WIWIK possibility).

5) Before you present important work, ALWAYS print it - errors stick out like sore thumbs on paper and are much easier to find and correct. Take the 5 minutes and print the product before you put it on your boss' desk. Set the tone early that you are simply not a person who makes spelling or formatting errors.

6) On that note, set the print area right away and always run a spell check (yes, Excel has spell check too!)

7) Master your macros - if you have time or inclination before starting, maybe even take some Excel VBA classes online or something - if you are really good with Excel you will be a prized asset. Ask your future colleagues if there is a particular package they use and if they can send it, otherwise maybe use the WSP pack or any macro pack you can find. Remove your F1 key because it will only get in the way. People generally say don't touch your mouse - I mostly agree for Excel, but there are still the few odd things that are quicker with a mouse sometimes. Excel is another potential WIWIK topic.

8) Headhunters want: smart people, who can hold a good conversation, humble, good team players, sharp modeling, who can THINK LIKE INVESTORS - always be thinking like an investor - if you want to do PE/HF later on, this might be your single most important point. Many banking analysts go into PE/HF interviews and have never thought like an investor - they have no conviction in their ideas and their investment theses have little basis. Many BB kids think they are simply entitled to a HF/PE job. Don't be one of those. Do your work. And be a good person. Everyone will have decent technical skills, but if you can strike your headhunter as also being just a super nice and hardworking person, that counts big time.

9) If you want to practice for HFs, pick any public company that doesn't have nightmare financial statements (i.e. don't pick a FIG unless that's your thing), download the latest K and Q, and give yourself 2 hours to make a working 3 statement model with a DCF and a quick LBO analysis. You should be able to get the 3 statement model with 5 yr projections and a balancing balance sheet in 1 hour or less, then do the DCF and LBO in the next half hour, and leave a half hour to check your work.

9b) Be a good person. Don't be a finance 'dick.' Yes you work in investment banking and probably make good money doing it. No that doesn't automatically make you cool. You can be hugely successful and still be a nice guy and down to earth. Take note of the associates and VPs that you really like to work for, and aspire to someday be a person that you yourself would like to work for. Finance is full of jerks and egos - that makes people who are down to earth and really genuinely nice an asset. Find a style that works for you and is true to who you are - you'll have to be firm sometimes, but keep that blade sharp.

10) Adhere to the logic that you can't learn if you aren't listening, and you can't listen if you are talking. Be a good listener. Some bankers and even some analysts are so garrulous that they miss key points, and their words just lose weight over time - they're so eager to say what they know that they just blurt out whatever they know on a subject. You want it so when you speak, people know you have listened, and you're saying something of value. Keep your cards close.

11) Perhaps the most important - figure out who on the Admin end really runs the show. Admins are some of the most powerful people in terms of making your life better as an analyst. Treat your admins with respect and go out of your way to treat them well. Bring up some flowers every once in a while to brighten the reception desk. Pick up a few extra coffees when you run out, and take note which admins like which kinds of coffee. Being a banking admin can be really dreary work sometimes and those little things can brighten their day a lot.

12) Be neat about your reimbursements - I probably lost hundreds to low thousands just by not being prompt/organized about receipts and the like. Get the best possible credit card plan you can find for travel and hotels.

13) Take care of your body - watch the Thursday night cocktails and save it for Friday/Saturday. Oversleep one important call/meeting and you might never recover. Most analysts are vitamin deficient - take a good daily multivitamin and drink water, not red bull. Fish oil is good for keeping your skin/eyes/brain in good shape. Burt's Bees Serum for your face is a god-send - my girlfriend says it looks like I am glowing after I put it on.

14) If you do mess up badly at work - learn from it and get over it. Don't beat yourself up too much. Other people might have a little giggle now and then about your f-up but believe me nobody is thinking about the f-up as much as you think they are. Consider how many of your brainwaves you spend in a typical day thinking about other people. Now get back to work.

15) Many bosses will preach a work-life balance and say things like "This can totally wait until Monday." But they will still be more impressed if you did it over the weekend and give it to them Monday morning. Figure out who those bosses are.

I think those are the main ones - I'll probably think of more here and there and I'm sure tons of other users have some great things to add. Any questions/thoughts let me know.

Cheers
frgna

if you like it then you shoulda put a banana on it
Tags:
blastoise's picture

mo like 60.

O
 
Points)
 on 2/10/13 at 12:08pm

mo like 60.

JWR34's picture

Fantastic thread and great

IB
(Orangutan, 255
 
Points)
 on 2/10/13 at 12:10pm

Fantastic thread and great advice for anyone about to go into an SA stint as well.

cogitoergognome's picture

Great post. Thanks.

 
Points)
 on 2/10/13 at 12:26pm

Great post. Thanks.

Brouhaha's picture

Wow, awesome post. Would love

(Monkey, 36
 
Points)
 on 2/10/13 at 7:29pm

Wow, awesome post. Would love to see a WIWIK for Excel/modeling/etc.!

D M's picture

Great post, SB for ya

O
 
Points)
 on 2/10/13 at 7:52pm

Great post, SB for ya

"WSO is like the 300 for anti spamage. None shall pass." -happypantsmcgee
"You stop being an asshole when it sucks to be you." -IlliniProgrammer

frgna's picture

No problem folks. One thing I

O
 
Points)
 on 2/11/13 at 11:20am

No problem folks.

One thing I forgot to mention - live on your base, bank your bonus, at least for the first 3-5 yrs. After that you can put your saved bonuses into whatever - house, etc. But always try to live one or two rungs below your means. If you're thinking of grad school you'll thank yourself later. In finance, money=freedom, so don't build a lifestyle that will lock you into a job you don't love. The brand new BMW can wait until you are 26.

Also, unless you just have a really naturally good memory (some do), really make an effort to "study" key details about your engagements. Memorize all the coupon dates and maturities of the tranches of debt, know the capital structure cold, memorize historical revenue and EBITDA and capex etc. for the last few years. Know which comparables are the most comparable in your valuation by geography and revenue composition/size and business type.

if you like it then you shoulda put a banana on it

duffmt6's picture

Great stuff. SB to you good

IB
(Neanderthal, 2,304
 
Points)
 on 2/11/13 at 11:27am

Great stuff. SB to you good sir.

"Social cohesion and puritanical morality place roughly on my list of concerns between whether I'll pick up jock itch at the gym this week (not likely, since I don't go the gym) and whether it'll rain in Christchurch, New Zealand next Tuesday."
-Eddie

jdrdeer's picture

Great post. Thanks, if i had

HF
 
Points)
 on 2/11/13 at 12:21pm

Great post. Thanks, if i had and SB's I would give you one.

Morten123's picture

This was a really really good

ST
(Monkey, 32
 
Points)
 on 2/11/13 at 2:49pm

This was a really really good post man. Wish I'd read something similar for S&T before I started working!

bigdecisions's picture

This is awesome! Thank you!

 
Points)
 on 2/11/13 at 3:35pm

This is awesome! Thank you!

mr.b's picture

as someone starting ft this

IB
 
Points)
 on 2/11/13 at 4:59pm

as someone starting ft this summer, I really appreciated this post - one of the best i've read on this site

AndyLouis's picture

great info, thanks for

 
Points)
 on 2/11/13 at 7:56pm

great info, thanks for posting

WSO's COO (Chief Operating Orangutan) | My story | Connect with me on Linkedin.

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neilol's picture

5) Before you present

IB
(Orangutan, 251
 
Points)
 on 2/11/13 at 8:28pm

5) Before you present important work, ALWAYS print it - errors stick out like sore thumbs on paper and are much easier to find and correct. Take the 5 minutes and print the product before you put it on your boss' desk. Set the tone early that you are simply not a person who makes spelling or formatting errors.

Gold - sounds dumb but its important

clammers1234's picture

Really appreciate this.

IB
(Baboon, 120
 
Points)
 on 2/11/13 at 8:33pm

Really appreciate this.

peinvestor2012's picture

I'd add, few give a shit

IB
(King Kong, 1,571
 
Points)
 on 2/11/13 at 8:53pm

I'd add, few give a shit about a DCF. It's all about Comps.

rpc's picture

One of the best posts I've

ST
(Orangutan, 325
 
Points)
 on 2/11/13 at 9:45pm
H34D SH01's picture

great post!

(Monkey, 55
 
Points)
 on 2/11/13 at 10:44pm
Plato's picture

Great post, thank you.

(Baboon, 166
 
Points)
 on 2/11/13 at 10:45pm
eleutheros's picture

Great read!

IB
 
Points)
 on 2/11/13 at 11:00pm
seville's picture

Fabulous post!

 
Points)
 on 2/11/13 at 11:10pm
aempirei's picture

Good advice. Now I just need

IB
(Gorilla, 726
 
Points)
 on 2/12/13 at 1:19am

My name is Nicky, but you can call me Dre.

NorthernMonkey's picture

Great post, thanks! I

CO
(Monkey, 40
 
Points)
 on 2/12/13 at 5:36am
SirTradesaLot's picture

Nicely done.

O
 
Points)
 on 2/12/13 at 8:08am

Turbo leverage for capital explosion -- BD Capital

My WSO Blog

Fundamentally Undervalued's picture

gold ps: wtf is a wiwik?

IB
 
Points)
 on 2/12/13 at 9:08am

buy it. ride it. sell it.

TheKid1's picture

frgna: Your first midyear

IB
 
Points)
 on 2/12/13 at 9:51am
frgna's picture

ghandi: elaborate on the

O
 
Points)
 on 2/12/13 at 9:53am

if you like it then you shoulda put a banana on it

frgna's picture

TheKid1: frgna: Your first

O
 
Points)
 on 2/12/13 at 10:08am

if you like it then you shoulda put a banana on it

frgna's picture

Fundamentally

O
 
Points)
 on 2/12/13 at 10:09am

if you like it then you shoulda put a banana on it

Oreos's picture

frgna: *****My single

HF
(Neanderthal, 2,449
 
Points)
 on 2/12/13 at 10:15am
Otter.'s picture

frgna: One thing, for emails,

CD
(Gorilla, 551
 
Points)
 on 2/12/13 at 10:24am

Hi, Eric Stratton, rush chairman, damn glad to meet you.

chrisjr's picture

Great post frnga - really

RE
(Monkey, 63
 
Points)
 on 2/12/13 at 11:07am
Plato's picture

frgna: TheKid1: frgna: Y

(Baboon, 166
 
Points)
 on 2/12/13 at 12:46pm
HOVA's picture

frgna: prepping for HF/PE

O
(Chimp, 9
 
Points)
 on 2/12/13 at 2:14pm
animalz's picture

damn... thank you! *googling

(Gorilla, 688
 
Points)
 on 2/12/13 at 2:43pm
alphasilverback's picture

good stuff.....thanks for

 
Points)
 on 2/12/13 at 4:50pm

We can't rely on anyone these days, we just have to do things ourselves don't we?

Bismarck's picture

Otter.: frgna: One thing,

CO
 
Points)
 on 2/12/13 at 5:16pm
Otter.'s picture

Bismarck: Otter.: frgna:

CD
(Gorilla, 551
 
Points)
 on 2/12/13 at 5:42pm

Hi, Eric Stratton, rush chairman, damn glad to meet you.

coleslaw's picture

Thanks for the awesome post,

AM
(Chimp, 12
 
Points)
 on 2/12/13 at 5:48pm

"Those who dare to fail miserably can achieve greatly"

NoSoupForYoU's picture

Awesome post. very good read.

 
Points)
 on 2/12/13 at 6:09pm
Amgajewski1's picture

Great post. It was extremely

IB
(Chimp, 14
 
Points)
 on 2/12/13 at 10:34pm
Football2Finance's picture

Speaking of gold nuggets,

 
Points)
 on 2/13/13 at 12:40am
meabric's picture

I'd add, if you want to be

 
Points)
 on 2/13/13 at 1:33am
milehigh's picture

Otter.: frgna: One thing,

IB
(Baboon, 141
 
Points)
 on 2/13/13 at 11:10am
frgna's picture

chrisjr: Great post frnga -

O
 
Points)
 on 2/14/13 at 12:31pm

if you like it then you shoulda put a banana on it

oowij's picture

Awesome post, going to have

 
Points)
 on 2/15/13 at 4:47pm
Dat Maz's picture

TheKid1: frgna: Your first

(Chimp, 5
 
Points)
 on 2/15/13 at 4:53pm
MCLittleMonkey's picture

Gold.

CO
(Chimp, 1
 
Points)
 on 2/15/13 at 10:36pm
rav942's picture

Thank you really helpful

(Chimp, 1
 
Points)
 on 2/16/13 at 5:21pm
peonturn's picture

Thanks! Great help even for

IB
 
Points)
 on 2/16/13 at 7:39pm
brainwashed110's picture

best post i've read on WSO,

AM
 
Points)
 on 2/17/13 at 6:40pm

time is the most precious commodity.

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