How much about being an investor requires being super quick in xls?
Question to people who managed to break into public equity seats coming from IB? How much of your job is process / thought oriented vs simple execution? Is it possible to break in as anything more than a glorified excel monkey?
It's not required at all, just normal because it's the most commonly used tool for performing analysis and a lot of folks in the space come from backgrounds where Excel skills were more ubiquitous. Buffett certainly doesn't use Excel regularly and I know guys at big LOs who only crack it to do forecasts. 99% of their time is spent looking at statements and doing industry research. If you're at a pod or L/S shop sure, it makes sense to have great Excel skills. But being a good investor doesn't correlate with how quickly you can manipulate a spreadsheet.
0 - i think helps with organization / synthisizing data - but know many great investors who are god awful at excel / spread sheets
keep in mind you can have the best formatted excel but the numbers might be miles away from reality. excel doesnt drive the investment decision, it confirms / reaffirms it but the answer doesnt lie in cells on microsoft
Thanks for the feedback. Was thinking along the lines of what are LO or other non pod HFs looking for out of an investment banking analyst if not just xls monkey? How does one position themselves to not be stuck as a process monkey post IB?
The real value that IB people bring to HFs is their work ethic and raw intelligence. Funds realize that higher caliber students typically go to IB now and that you can be trained to learn the investment process. Sure, you might have good understanding of industry dynamics by working on deals or pitches but you’re not true industry experts yet. The other thing I’d mention is that many people who go into IB are broadly interested in finance and have taken the initiative to get involved in the public markets on their own, which can help create a higher floor for new hires.
Also you don’t have to teach a hired IB analyst basic corporate finance. They’ll know how to get diluted shares properly, where to go to get financial information in the footnotes, and have a general understanding of corporate financial strategy and financial analysis. nothing crazy impressive on its own but that’s one less thing a PM has to teach them.
I've heard stories wherein CIOs have thrown turrets, furniture, even hot soup and/or coffee at young analysts for so much as looking at their mouse while building financial models. If you aren't the fastest amongst your peers in IB, you should probably leave finance and take a swing at something in the trades - plumbing, HVAC, electrician, etc.
coming up with good investment ideas is x100 times is more difficult than being quick in Excel
and by good investment ideas I mean alpha, not competing with your grandma's 401k on who finishes the year with the highest %
Warren buffet has never opened excel
He said that? (I wouldn't be shocked if true, just curious if he truly made that statement.)
I worked with someone who years ago was pen pals with Buffet. Before Buffet was famous. Buffet’s letters were full of typos. If he could barely work a keyboard to type a short note I doubt he spends a lot of time building spreadsheets. Besides, that’s not how Buffet invests. He reads. Endlessly. There’s a documentary about Buffet that shows him at a desk that’s piled with reports and filings. Doubt there was anything with a screen on his desk but I don’t remember.
he has said that he doesn't use spreadsheets, and even his biographer admitted she never saw him do a spreadsheet or build a DCF model on paper. But I think this ignores the fact that his brain operates at a different level than most investors, he's very good at mental math, calculating compound rates in his head and can remember almost every number from the financial statements and recall them years later. Him not using excel doesn't mean its a good thing for us to ditch excel, but the message he's trying to convey is that if you need a 2000 row model to underwrite an investment, you're better off doing smt else.
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