Why does everyone think banking is mindless?
I keep seeing posts where people say that banking just involves running models and copying charts into powerpoint. While I do understand that formatting is mindless and a big part of banking, I don't understand why anyone would think valuation or advisory is mindless.
If you actually know what you are doing, valuation is extremely detailed and requires a ton of thought. Moreover, telling a company how it should spin off an unprofitable division or restructure billions of dollars in overdue debt to save it from liquidation seems like it would require some cognitive thinking. So why do people say that banking is mindless for analysts? Maybe they are either too caught up in the stupid formatting? Maybe they just do what their superiors tell them without thinking? Maybe they actually don't know finance and don't know what they are doing so their superiors have to tell them what to do?
Please shed some light for someone that hasn't been in IB before.







Hahaha...because as an
Hahaha...because as an analyst you will very rarely be doing anything BUT mindless crap...but will most likely still find a way to walk around and act like you are the next Moelis. There are always exceptions but at a BB this will almost certainly be the case. The perception of glamour and prestige that was created a long time ago in order to draw Harvard grads into entrepreneurial cutting edge firms, still hasn't faded even though all those same Ivy grads are just fighting and clawing to pack into what will most likely be a soul crushing/brainwashing experience, like sardines.
If you work at a BB the
If you work at a BB the formats are already built, you are just plugging in numbers. Please tell me at an analyst level what requires cognitive though on a valuation? Everything is a formula except maybe creating the comp set (what I should be doing right now instead of being on this forum), i am not saying analysts are dumb by any means. The fact is you are just not given that much latitude on your valuations at the very junior levels. Anything that has any big of subjectivity will almost certainly be handed down from your higher ups.
Haha oh college students. So
Haha oh college students. So bright eyed, bushy tailed, and full of visions of front page deals and big swinging dicks. All of the things you mentioned in your post are things that your FIRM will be doing. 10% of the time, you might get to help. The rest of the time however, you will be doing all of the dogshit that has to happen behind the scenes so stuff that makes the Wall Street Journal can happen. That includes mindless/pointless research, changing the color of an arrow just because your MD doesn't like the color green, or redoing a month of said mindless work in a single night on a VP's whim.
And the modeling. Oh, your model shows a valuation of 7.3x? The client is expecting to see 8.5x at least or we won't win the deal, so you'd better tweak your inputs so it spits out something higher than that.
But keep that idealism going, that's how we get you to sign the offer letter :)
- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
HFFBALLfan123 wrote: If you
If you work at a BB the formats are already built, you are just plugging in numbers. Please tell me at an analyst level what requires cognitive though on a valuation? Everything is a formula except maybe creating the comp set (what I should be doing right now instead of being on this forum), i am not saying analysts are dumb by any means. The fact is you are just not given that much latitude on your valuations at the very junior levels. Anything that has any big of subjectivity will almost certainly be handed down from your higher ups.
This "set" model you speak of - are you saying it has over a 1000 inputs? Unless it does, there is absolutely no "set" model you can plug into that will give you a correct valuation. Every company is different and has many different valuation issues.
That is, of course, if you are actually trying to get the right valuation. Are you saying that the right answer isn't what they want?
aceofspadestrader wrote: If
If you actually know what you are doing, valuation is extremely detailed and requires a ton of thought. Moreover, telling a company how it should spin off an unprofitable division or restructure billions of dollars in overdue debt to save it from liquidation seems like it would require some cognitive thinking.
That's not something that analysts or associates do. The MD's are the advisors. Companies don't pay millions of fees to get 100 PP slides with graphs telling them info they can find out themselves. If I'm a CEO, why should I pay so much money for an analysis that I can get by hiring an accounting graduate, enrolling him in a valuation course and paying him 50k per year. Companies pay your MD's to act as agents and to provide expertise based on years of experience. Your presentations and 'analyses' are just marketing materials to help your MD play his role of a salesman. Excel/PPT/financial analysis skills are commodities. Relationships and experience add value.
Are you reinventing WACC or
Are you reinventing WACC or CAPM? Didn't think so, ok so you may have to re write a few things and delete some cells, real tough. I am always doing valuations on our portfolio companies and am at the mercy of my bosses, some of the stuff i do requires in depth analysis but it is not my valuations. All my valuations are tweaked a million times by my bosses, i certainly don't come up with growth expectations or days of expected receivables. Quit being a d-bag, you asked a question and you got an answer. I was not being a sarcastic little pric like yourself, so go get some insight and then return with a valid arguement.
So in team meeting
So in team meeting discussions of helping the client get through their problem/task, would a very very good ibd analyst ever be able to assist or at least ask constructive questions (even though the md/vp probably already took them into account)? Would this change at a BB versus a boutique?
Keep telling yourself that
Keep telling yourself that banking requires anything more than a high school diploma lol
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ANT wrote: Keep telling
Keep telling yourself that banking requires anything more than a high school diploma lol
hahaha only you ANT only you
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aceofspadestrader wrote: So
So in team meeting discussions of helping the client get through their problem/task, would a very very good ibd analyst ever be able to assist or at least ask constructive questions (even though the md/vp probably already took them into account)? Would this change at a BB versus a boutique?
Look, CEO's or CFO's are not some hopeless idiots that got into their positions by accident. It's not like their 20+ years of experience are so useless that they need to pay a bank several millions in fees just to have some nice chat with 22-year-olds who will ask them questions that will suddenly make them realize how to solve their problems. Even if that's the case, as a CEO, why would I pay your bank so much money when I can hire you for a fraction of that amount and your job will be to ask me questions all day. Or I can get that for free by making my wife at home ask me questions and help me 'think through issues'. As I said, you are not there to provide some insightful analysis that the companies can't do by themselves. I'm pretty sure that most CFO's have learned something about valuation at some point in their careers and they can figure out their company's value without your help. You are there to support your MD to help someone buy or sell something for as little/much as possible. In other words, you are there to do the annoying supporting paperwork that your boss will use as an aid in order to convince someone to buy/sell something for a certain amount. It's that simple.
Dude, they are outsourcing
Dude, they are outsourcing banking to India. I have come across a bunch of shops that have all the modeling done over seas. This shit isn't rocket science. Why do you think they take liberal arts graduates for banking positions. If you can figure out excel and sleep only 5 hours a night you will do fine in banking.
Hardest easy job to get
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I think there is a lot of
I think there is a lot of cynicism on this forum with regards to an analyst's role. I think the experience can be quite varied from being dull and boring crunching numbers, models and comps for your associate to being in the negotiation room with clients helping them think through the most appropriate offer structure and hedging and financing solutions. Certainly, I was fortunate enough to experience the latter, while the former is part and parcel of every analyst's life cycle at a bulge bracket. I think sometimes as an analyst you have to find ways to add value and not underestimate what a bit of lateral thinking and a fresh perspective can add to a deal. While you are initially expected to just crunch numbers (I'm talking perhaps most of your first and second years) the value of your grasp over the detail is generally never underestimated by the MD and / or the client. When you're in the drawing room with the client and you ask a smart question, that can sometimes be the trigger to initiate a discussion between the MD and the client, potentially resulting in a solution. Being the junior guy, you have the advantage of being able to ask a question without looking like you don't know what you're doing. Your VP or MD may not have the same luxury.
i call troll.
i call troll.
Veritas
this thread is great prep for
this thread is great prep for the question: "why do you want to do trading instead of banking?"
The why banking is the
The why banking is the hardest question in the world. You have to be able to lie through your teeth, with a straight face, while both people know it is for the money.
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ANT wrote: The why banking is
It's fascinating how many
- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
N.R.G. wrote:
then why do all the top hedge
robes wrote: then why do all
- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
Penn's got a great
Look, this is the third time
If I had asked people what they wanted, they would have said faster horses - Henry Ford
CaptK wrote: robes
boutiquebank4life
Banking is mindless. We just
boutiquebank4life
- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
robes wrote: then why do all
robes wrote: the HFs hiring
- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
-
In a nutshell: you are just
Whilst I agree with your
CaptK wrote: Everyone's a
Agree with CaptK, everyone is
I think the problem lies in
N.R.G. wrote: I think the
aceofspadestrader
that's why I work in a
I'm a current banker, and my
that's why I want to work at
Its more about detail
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robes wrote: then why do all
well people like to hire
ILOVENYGUY wrote: well people
There is no correct answer in
ILOVENYGUY wrote: well people
ANT wrote: Dude, they are
Yeah, every shop has analysts
Read Monkey Business and you
The outsourcing part of it
SHORTmyCDO wrote: ILOVENYGUY