Interview with WallStreetPlayboys: A Top 3 Institutional Investor Ranked Analyst (part 2/2)
The following is Part 2 of an interview with WallStreetPlayboys (he is also available to answer your questions). See Part 1 Here.
General Advice
- What is the one tip you would give to current students (ugrad and/or grad students) to help them succeed?
Work hard and get job experience. When a résumé hits an inbox they look at school, GPA and job experience. They also run key word searches on the resume so if you have good experience the software will realize it for example “investment banking analyst” is much better to write on your resume than “corporate finance analyst” if you in fact did an investment banking internship.
The world is changing fast and we don't want to train an employee as much as previously, so the more relevant experience you have the better you stand at getting a job offer. Banks are becoming risk averse to hiring candidates with no experience. - What are some tips for moving up and becoming “the boss” (i.e. a department head / managing director / partner)?
Develop trust. The reason why we care so much about attention to detail and hard work is we want to know you care about your work. The more you care the more people trust you will also stay around for a bit longer. Also the more responsibility you get the more leeway you have when it comes to getting promoted, getting a higher bonus, finding a new job or otherwise.
- Any specific cold-emailing or cold-calling tips you can pass on?
Do not send resumes with photos, blatant lies, or elongated email messages. If you are going to cold email an MD keep it short, 3-4 sentences or so should be solid. This sounds harsh but if you are sending a Wikipedia level life story to a Managing Director, the chances of him/her responding to you is zero. Positively, if you do not get a response back you can go ahead and try to send another email, in the same format, a few months later. Your average Managing Director is going to receive thousands of emails in a day so it can easily slip.
With that said remember to keep it short. The moral of the story is this “Don’t waste his/her time”. This post was a good summary on networking and I hope he finds a new job soon.
//www.wallstreetoasis.com/forums/laid-off-today-seeking-advice-and-help
- What is a memorable experience you have of how someone got your attention? (for networking / internship / job purposes)
One associate candidate approached me at an Analyst Day (where research analysts and/or associates attend a long presentation from a company under coverage) and pitched me on the spot during a break.
I knew of a place where an associate slot was open and passed along his resume the next day. He was hired a few weeks later. - What are unique things college students and young-professionals can do to separate themselves from the crowd?
This needs to be reiterated, get job experience. Your degree in (insert sector) engineering is not worth it if you’re below a 3.5 GPA and cannot obtain an internship in investment banking, equity research, sales and trading or otherwise.
Sample of transferable skills as follows:
1. Experience with excel spread sheets (updating models, updating CapIQ/FactSet Sheets etc.)
2. Experience with PowerPoint and Word in a professional environment
3. Sector knowledge (Oil & Gas, Medical etc.)If you have zero job experience start at the bottom and work your way up if you must. For example, if you are a freshman it may make sense to work in wealth management, financial advisory or otherwise as an intern during your semester/quarter. These small jobs signal to employers that you’re interested in finance.
Notably, on the Non-Target front, job experience and networking are going to be your best options to get a job on the Street. If you have a below average GPA and you are at a Non-Target the odds are stacking up against you so you need to hit the phones/emails/friends/family connections and find ways to make your GPA less of an issue. If you have a front office sell-side internship or otherwise and your GPA is sub-par or you’re at a Non-Target the work experience will certainly get your foot in the door.
- What are some ways (in general) someone could best prepare for an upcoming internship or ft job at a firm like yours?
Assuming your financial knowledge is in good shape then simply practice speed and accuracy in Microsoft Office. Accuracy is more important than speed, particularly when you are new to the job.
When you turn in a document and you are a new person to the firm if there is a single error in the document we will assume the entire document is done incorrectly. Everyone makes mistakes but the less you can make from day one the better.
Over time the errors decrease substantially and no one is ever entirely perfect so if 99% of your work is error free your clients will simply joke about the 1% of errors you do make. With that said it is certainly not okay to incorrectly spell a CEO’s name or say a company is trading at 1x P/E when it is really trading at 100x P/E
- What is your opinion on gaining relevant experience at a lesser known firm vs. working for a brand name firm (with less relevant experience)?
This depends, relevant work experience is key, if you want to do investment banking, choose a middle bank for an internship over a bulge bracket bank for a sales and trading job. Long-term, prestige does matter. Notably, it is hard to decide where in finance you want to go long-term at a young age, however the earlier you do the faster you can position yourself to get there.
- What do you look for in a potential intern candidate?
To be honest HR and associates do the vast majority of the screening. I will certainly interview them.
Once in the interview I look for the following: Proof of hard work, GPA, knowledge of the job, knowledge of the sector, knowledge of the bank and why he would like to work in our group/sector/bank. - What are some of the worst mistakes you’ve seen people make in interviews?
Lots of mistakes. Sending resumes with a photo, incorrectly spelling the Company name on their resume, format is not aligned, lying about their background… The list goes on.
Specifically for interviews, many people simply do not know what they are signing up for and do not know what the job entails. In addition, another major issue is rambling, you want to give clear and concise answers. This is similar to the email template, if you’re wasting their time they will unlikely hire you.
To drive the point home, even the biographies of Managing Directors are short. They generally have a template that is one paragraph long, about 5 sentences or so. To get an idea of the biographies, you can find press releases when major managing directors switch firms.
- Thoughts on resume?
Overall, make your resume spotless, this is your first impression. If you cannot make a formatted one page resume with no errors then we will not trust your ability to make a power point presentation or excel model with zero errors.
Make the important things stand out. Example closing two M&A deals is much more interesting than saying you made pitchbooks and spread comps.
- How to Standout on the Job?
In short here is the order of priorities and how to move up the ladder starting as an associate (time frame is ~5-10+ years to be an MD). When you reach point 4-5 is when you begin adding value. That usually takes 2-3 years of experience. Again, do not expect to add value from day one, start off by learning the ropes and doing exactly as told then move up over time.
1. Marketing Decks, FactSet/CapIQ Screens, “data dumps” eg: aggregating vast amounts of information
2. Comps
3. Updating and revising models
4. Answering low end client requests
5. Begin fielding calls for low end clients
6. Begin marketing with companies under coverage from time to time (Corporate Access)
7. Begin doing teach-ins and initiations on his/her own
8. Begin fielding calls from middle end clients and begin carving out ideas for a space to cover
9. Begin answering all questions on a small subset of companies (2-3 or so)
10. Begin initiating on companies and becoming a Vice President by carving out names - Buyside and Sell-Side?
One looming question is why don’t some Analysts move to the Buy-side and the answer there is variance in pay and timing. An example comp structure at a hedge fund could be something in the range of $250-$850K all-in (wide range at hedge funds and SirTrades or other members on the buy-side can chime in).
Basically, the difference with the sell-side is that you’re generally at the middle of that area (assuming you are not a top ranked analyst where you move to the $1M+ mark). So the idea is that pay is more consistent on the Sell-side (relative basis).
(Note: for associates and/or lower end jobs there are different pay scales, but the same theme plays out with variability.)
In addition, timing is important. If you are interviewing for a hedge fund with the comp structure laid out above, however you just got moved up the ranks in Institutional Investor… The buy-side job offer is now unattractive. The same can happen at the associate level, if you land a hedge fund job, but are getting promoted to a Vice President role… The give and take becomes difficult.
Overall sell-side and buy-side jobs both have positives and negatives depending on your personality. To be honest I enjoy sales, I enjoy helping people and I enjoy researching new companies. If a major opportunity for the buy-side comes up any Analyst would certainly take a look.
- What are your thoughts on this statement: “Wall Street is a more meritocratic place than most. If you are a young person and you have good ideas, people will often listen to them, if you are in the right role” ?
We left a post on this basically its two tiers:
1. Hard working and talented
2. Hard working not talentedNumber one will find a way to get to a revenue generation role at some point in the future (opinion). Number two will also be able to get into a finance role but will unlikely ever make it to revenue generation.
With that said, the post came off a bit pompous so that’s really the message. If you’re willing to work like a dog you can make $200K or so which is not bad if you’re really not incredibly smart. If however, you are both well the sky is the limit for you.
Notice though if you’re not willing to learn or work, you’re not going anywhere on Wall Street it’s not a cake walk like the media likes to tell people. If it is a cake walk, you’ve already put in a large amount of effort or got extremely lucky where your dad was the CEO of a major corporation. The truth however, is that more people actually make it without the aforementioned CEO connection.
- Any other interesting stories or wisdom you would like to share with the WSO readers?
Hopefully this interview answers the major questions. Questions that require longer responses will be answered this weekend, will try to answer easier questions during the week.
With that said, stay positive about everything in life. It is easy to be negative and cynical, it also adds no value to your life and can cause major health issues which is even more important than the number of dollars in your bank account. So keep working, keep grinding, keep improving and things will get better.
Solid post. Though, someone seems to have deemed that you have arguable points in your responses (seems to have thrown monkey shit as a result).
+1 SB (which evens out the monkey shit).
Said poster seems to have thrown monkey shit at me as a result of me balancing out your monkey shit with my +1 SB.
^ hahahaha
Great interview series, thanks.
Awesome post, thanks. +1
Understanding technical skills like DCF, BETA, CAPM etc. are a must as you have previously stated. However, if you do not have the work experience using it, how can you exhibit your knowledge to people reviewing your candidacy? How can someone show they have the aptitude on paper/email to get that interview to prove themselves without the IBD/ER/AM internships?
In short work experience. Ie: using numbers in school is not indicative of transferable skills compared to real experience. If you have no experience you'll have to start at a lower tier, tough sell to go from zero finance experience and simply apply straight to a bank.
Will be unable to make long responses until late tonight. But feel free to ask away.
Great read. Thank you!
What about age and Associates and Analysts? Given some Analysts have been around forever (e.g. Bove), can people middle-aged take an Associate job and just hit Analyst whenever the right opportunity presents itself? Or is deemed a poor fit, culture-wise on the sell-side.
Hate this answer but the truth is "it depends" on culture, franchise, how the space is doing and your senior analyst as well. Instead of leaving it at that here is how you can decide if you have mobility.
If you answer yes to all five you can move up faster. If the firm likes you, you're on the cusp of a VP promote and the analyst leaves you're in a great slot to be fast tracked.
Notice that many of these questions are dependent on your own observations. There is a wide bracket for ages in research.
With that said, if you join a firm as an associate and three months later the analyst quits, with no previous experience, chances you get moved up are slim because they will likely hire a different senior analyst try to "poach" from another firm. 3-5 years of solid experience and responsibility, and you're in a better bargaining position if the analyst leaves to at least take over a small piece of coverage.
So lots of moving parts but that should answer the bulk of it.
Thanks for the response. Quick follow-up - how decentralized is the hiring process for Associates? If you got dinged by one Analyst, say, can you target others at the same firm?
Thanks
"When a résumé hits an inbox they look at school, GPA and job experience."
Very subjective question, but how weighted is the school in the overall decision-making process? I am currently at a Semi-target with a solid GPA and good job experience, but am looking to transfer out to a Target.
I do have connections in the industry on the West Coast, not so much on the Street.
Thanks, and as mentioned before, great post! Puts things in a much greater perspective.
No reason not to transfer (unless there is a personal reason/financial reason you would decide yourself). Your best bet to size the impact:
You tripled your chances. Include all banks, not just the big ones, you never know if the market will roll over so if hiring is light, you may have to start your career at a lower bank, if it's a hiring boom, well this is also good because the target schools will see more interviews and more job possibilities.
Assuming no personal/financial reasons, go ahead and transfer if you can get in front of more banks.
Wouldn't "researching new companies" be an argument for the buyside? My analyst has been covering more or less the same companies for 10+ years. It's actually why I find a generalist role so much more appealing.
I just got an internship in equity research. How would you prepare for the job?
This deserves a longer post.
The general rule for a new person (as noted in point one) is to do your work correctly (speed less of an issue) and to start out simply doing exactly as you are told. With that said, every analyst will be different, but this should give you a good head start.
To be clear you do not need to know decimal data, if the company does $10B in annual revenue and $4 in EPS. Simply know that it generally has $2.5B in quarterly revenue, and $1 in EPS per quarter. Most stocks have higher and lower quarters but the idea is to know off the top of your head if a valuation looks "odd". This way if you update an excel sheet you know it does not make sense if the excel sheet is saying "$1B" in annual revenue, you likely divided by 10 on accident.
Regarding previews, this would be a much more likely task for you later in the job if you are performing well. Heading into the next earnings season, they would likely have you help with a "preview" of a stock. The reason why is you have time to do it, they can check your work and by that time you should understand what is in the preview. At minimum you would be able to update items such as "our estimates are here, consensus is here, we are raising/lowering number due to (reason)".
If you have extra time, you can go ahead and start practicing your excel work. If they ask you to update an earnings template it would simply come for the 8-K filing. These filings are usually a month after the quarter ends as you know. Go find a recent earnings release and jot down the numbers they include in the model (will be attached to the back of said earnings recap). This way you can understand what items they highlight or do not highlight.
If you believe you will be tasked with updating earnings templates immediately, then you can practice by going through one or two earnings reviews. Go find the 8-K filed one month post quarter close and you'll see the earnings release. Go through the release and see what the companies give. Do they give guidance in the release or do they wait till the conference call? Do they give guidance at all? Do they give details on other important metrics for your space? (this last question is general as I do not know what space you will be working in).
The above should be enough to keep you busy, however the likely scenario is your work will start with some simple data analysis (FactSet/CapitalIQ/Bloomberg) and updating an unimportant presentation document or "maintaining file". These documents are usually large in nature, are tedious and require "grunt work". In addition, you may be asked to sit in on alternative conference calls. Lets say your cover Sector AA and Sector BB is closely related to Sector AA or impacts Sector AA. If Sector AA and BB are reporting earnings at the same time... well your team cannot listen to Sector BB. They may ask you to listen to Sector BB conference calls and take notes. The key here is to take detailed notes, all numbers, guidance why the company missed/beat, what questions the Analysts asked and send the information to the team.
Apologize for the annoying AA/BB comment but should make it clear.
Good luck on your internship.
[Note: If people want a similar detailed plan on investment banking or other parts of finance please PM or comment and a post will be put up if there is enough demand]
Wow thanks!
thanks for the post really helps since i don't have a job yet ;__;
Very helpful, thanks!
I believe you mentioned previously that in this post you would comment on trying to create your own research report and emailing it to analysts in order to impress them for a job. Thoughts?
Will do a longer post here on this. Do not want to clutter WSO with re-posts so here is the cold email template you should use regarding reaching out to VP's and above.
//www.wallstreetoasis.com/forums/random-cold-emai
Back to your question. The first rule of thumb would be no. This is because you want to try and get your foot in the door without any extra leg work that could get you burned. Here is the pro/con of doing what you're suggesting.
Pro: You took the time to write a thought out research report
Con: They don't like the report They find an error in the report They find something in the report they do not agree with (example you email a Bullish analyst with an underperform rating report and do not know it) They don't like the formatting of the report and believe it looks like "slop"
Cons outweigh the pro's on a first glance. This is because without any experience in the space this is a tall task to impress an analyst.
Lets say you're going to go down this road anyway. You mitigate this by doing the following:
Now you've got an equal weight of Pro's and Cons.
Final note. If you get no responses with cold emails, networking and any other measures to get a job on Wall Street then you should go ahead and try this approach. Why does it change? It changes because what you're suggesting is a high risk move. If you get no responses it means you do not stand out enough so you're now forced to try and stand out (eg. writing a long research report properly formatted and error free). Now when they see your email again, or someone new sees your email, be certain they will look at the attachment.
TL;DR. Do not take unnecessary risks to impress if not needed. If you're having a hard time connecting with any jobs then you must try something professional to stand out and that may or may not work on various analysts.
What is your opinion on internships outside of finance? I currently intern at a very large tech company (think Google, Facebook, IBM, etc.) in an analytics role and also have a solid understanding of the energy markets (refinery outages, pipelines, cost of carry, lower demand in China, etc).
My question is- from your perspective would you consider an internship at one of these companies to be impressive? I am from a non-target with an okay GPA (3.38) and I am trying to break into ER which is why I am asking. Thanks!
Based on the commentary it's hard to see what space you are working in, however lets go ahead and assume you're working for say Facebook.
If it is that big of a name yes you have a decent story to sell your "pitch" is as follows.
"I worked at Facebook for a summer and continue to become interested in finance as well given courses in (basic accounting, corp finance etc). After spending time with the firm I learned more about the Internet space and became increasingly interested in following other start up Internet companies such as (name), (name), (name). I would like to continue learning about both finance and Internet companies and this is how I concluded that a career in Internet equity research was the right path for me."
Now if you have a 3.38 GPA that's a tad miss, have said this before but go ahead and take 2-4 community college classes online (get A's and make sure they are transferable, should get you to a 3.5 you won't need more than that). During the interview you can also tell them you took 2-4 cc classes they won't care and won't knock you down for inflating your gpa by 0.05 points.
Now if you don't have time for that you most importantly need an offer. "You're as good as your options". If someone wanted to do equity research and had a job offer from aforementioned Facebook, I now believe him much more. It proves you are a good worker and are smart because you are serious about learning about the Internet space.
Finally, clearly think out bullets post job offer. You want to stand out. The last thing you want to do is have three bad bullets where they think you did nothing all day. Keep track of results. What did you help with and what did it lead to. Your internship will be the most important job bullet on your résumé, won't even be close.
How useful is the CFA (specifically Level 1) for breaking into ER (particularly for non-finance folk)? Or is it pretty much school, GPA, work experience, etc...
Thanks again
No more than CFA level one is needed to break in if you're trying to differentiate. If you have passed level 1, you should not spend time taking 2 and 3 to receive an entry level position. You should be networking and applying to several front office roles.
CFA level 1 could help the following people:
Anything beyond level 1 is overkill. Also CFA level one "candidate" would mean nothing and ding you. Would need to read as "CFA level 2 candidate"
CFA level 1 "candidate" means achieved nothing and pretending to be interested in finance.
Love this one.
Great Summary!
Again, great information, thank you for this. Does your bank or BB's in general hire people into ER during full-time undergraduate/graduate recruiting in the fall or mostly hire from the intern class? What opportunities can a former ER intern expect during full time recruiting (Is IB realistic, and AM, HF)?
Unlike investment banking, ER is less structured. For example if an associate leaves in (insert month)... That slot is going to fill fast. You run a separate franchise so to speak, so it is not a class system. You want to fill that associate spot fast so you can keep putting out notes, the last thing you want is to go through an earnings season with zero support, so the slot will generally be filled within 3 months.
You can certainly be hired from the intern class, every group is different, many put you on rotational programs. However. If an analyst likes you, he is going to get you hired (of course hiring freezes may occur).
Yes you can land a ER BB job from recruiting, say none of the interns take the offer, or don't get offers, then there will be slots open. Always apply.
Mentioned this before but if you want to go into IB choose an IB internship over an ER internship.
Jefferies IBD > BB research
With that said if you have a BB research internship getting a full time IBD internship at say a mid-market would not be far fetched. You will unlikely get into a BB though because the BB would just hire the guy with mid market experience. You also get hurt because if you want to work in say GS IBD... Your shot is lowered. You will not be given the chance to be on an accelerated interview.
As an example: If you did DB for an IB summer analyst and get an offer... You can quickly flip this to accelerated interviews at more prestigious BB's for full time.
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