Terrible business but superstar job?

Guys — always been wondering (as an incoming SA):

Isn't it bit paradoxical investment banking is the "best" job out of undergrad ... 

but the valuation of investment banks are punished and most banks want to move away from it?

p.s. i don't mean best in a i'm better than you kind of way, more that there is observed demand for it, and a lot of people do recommend the path to college kids


Investment banking indeed presents a paradox where it is often touted as one of the best jobs out of college, yet the industry itself faces challenges that might not reflect this sentiment. Here’s a breakdown to clarify this:

  1. High Demand for Graduates: Investment banking is considered a prime job right out of college due to the skills it imparts and the doors it opens. As noted in the WSO threads, many value the rigorous training, the analytical skills developed, and the prestige associated with the role. This makes it highly sought after among new graduates.

  2. Skill Development and Career Progression: The role is often seen as a stepping stone to numerous other high-profile career paths in finance, such as private equity, venture capital, and corporate development. The experience gained is viewed as invaluable and can significantly enhance a resume.

  3. Industry Valuation and Strategic Shifts: Despite the personal benefits to individuals working in investment banking, the industry as a whole faces challenges. These include regulatory changes, market volatility, and a public perception that may sometimes be less favorable. Banks themselves might be diversifying their services and focusing less on traditional investment banking due to these pressures and the overall profitability of other divisions like asset management or consumer banking.

  4. Cultural and Lifestyle Considerations: The lifestyle associated with investment banking is often cited as a major drawback. The long hours and high-stress environment can deter some, despite the financial rewards. This aspect might contribute to the industry's challenges in maintaining a uniformly positive reputation.

In summary, while investment banking offers significant advantages for individual career growth and skill development, these benefits exist within a broader industry context that is complex and sometimes contradictory. The high demand for these roles among graduates does not always align with the broader market dynamics and perceptions of the banking industry.

Sources: Here's why Investment banking is the best career path ?, Is investment banking not as prestigious as most people think? Are kids that break in sub-par?, A Career in Investment Banking is Retarded, The Allure of Investment Banking, Investment Banking is Broken

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Are valuations punished? GS and MS trade at higher PE multiples than JPM.

Perhaps “society” hates on IB, but I don’t see this playing out.

Further, who the fuck cares about valuation for a job? It’s valued for the opportunities the IB platform provides its candidates and what it imparts on them as they become professionals in the field.


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