Navigating The Floor: A S&T Analyst's Guide

I decided to write this as quarantine sucks and because I felt inspired by @Johnny Cashflow" 's post as to what brings me back to WSO. Plus, strangely enough, I'm seeing more S&T focused posts than ever before. However, while there are more posts, I feel like most of the discussion revolves around "Is S&T dying/dead?" and people asking how best to prep for interviews. The IBers can draw on perhaps the two best posts in the entire universe of WSO as guides:

"What I Wish Every First-Year Analyst Knew"
"Investment Banking Analyst: 15 Things I Wish I Knew"

Folks looking to join S&T, however, have no such guide. Regardless of what branch of finance you will be going into, the above are amazing tutorials on how to conduct yourself at the junior level and I'd urge everyone to start from those. In terms of S&T, I've tried to organize this as best I could and always bear in mind that what I say here simply reflects my opinion, what I've found to be best practice or both during my short experience. Having said that I would love for the more senior folks to chime in and add their own opinions. This is by no means an exhaustive guide but hopefully, it can be useful to some of you and we can add feedback as the discussion grows, I just figured that it was time to give back to a community that has helped steer my own career.

Interviews: How to Prepare

I'm going to focus on cash S&T here.

  • You need to have a view on macro: What's going on policy-wise? What does the increase in the Defense budget mean for stocks? How is the market going to take an incumbent President being re-elected vs a challenger? What is the Fed funds rate? How many cuts/hikes are we expecting this year? Why?

  • You should know the rough levels/prices of all the major indices: DOW, SP500, STOXX, NKY/HANGSENG/CSI. This is obviously dependent on whether you are interviewing for US/Europe/Asia. I don't mean right down to the cent but if I ask you whether "Index A is closer to its maximum or minimum in the last year" I expect you to have a rough idea

  • Know where Oil is trading at and the general trend there. Again, I'd like to know where the current values are vis a vis the general trend->are we expecting a bounce or a drop?

  • Major exchange ratios: EURUSD, GBPUSD, USDJPY and USDYUAN

  • Basic Derivative knowledge: Black Scholes, explain spreads, swaps things along these lines unless you're going specifically for a derivatives desk

  • Be caught up on the latest news. Even just to make general conversation.

  • Know basic Bloomberg functions. One question I've had asked was "how would you go about looking for new clients on BBG?" Knowing functions such as HDS and IP will be very helpful. Also it makes my life easier when I ask you to retrieve data or build graphs on BBG, nothing so far has pained me more than having to hold an intern's hand through basic BBG crap like finding Dividend Yields (seriously)

  • Stock pitches: Generally I would say 3 Longs and 3 Shorts which might seem like a lot but if you're there for a super day where you meet 5-6 people you'll be alright that way. I think it's also always good to have some choice and not always pitch the same thing to 5 different people. It could be a great pick but if we ask each other and it turns out that you explained the same pitch to all of us, it might make it look as though that's all you know. The way I would go and pitch my stock is the following and plan on having enough info to talk about it for +-10mins with another 10mins of questions:

  1. Company name and ticker
  2. Very brief company description, eg "the company operates in the life science equipment sector"
  3. Current price and your target price, with percentage upside or downside (obviously this depends on whether or not this is a long or a short)
  4. Explain to me what the business model is and how it fits in with the current macro scenario. Basically what I mean here is are we in a scenario that aides/penalizes value/growth/quality/high dividend stocks?
  5. What is this company's competitive advantage. Here if you can actually distinguish it from peers it very much helps in showing that you understand the industry well vs just this single company. No one will fault you if don't mention some obscure peer but if you can, do mention the different revenue streams among major competitors
  6. Basic financials, top- and bottom-line growth over the next 3 years. Revenue split, do they pay a dividend, how were their last set of earnings/how do you expect the next ones to be (especially important if we are in the middle of earnings season)
  7. Valuation vs peers. So, I have understood that this company is good (or bad) but why is it worth buying/selling NOW? Is it expensive/cheap vs peers? Is there regulatory change approaching? Change in management? Is there a new focus in their business plan? You get the gist, this is your punchline
  8. You should also mention the risks to your base case at the end as it lets people know that you are aware that there can in fact be a downside scenario. This also is the number one question you are going to be asked anyway because people will want to see how you stand by your convictions. On this, never appears to be pig-headed. Yes, your idea is good but no, people don't HAVE to follow your advice and you definitely should not take it as insulting if you experience some pushback, especially on the risks. I always found it to be best to answer like this: "yes, while I agree that that is a possible outcome I also find that the downsides are outweighed by the potential upside of a/b/c". I will say though that some interviewers/clients take things sometimes too far in pushing back but remember to remain calm, acknowledge the criticism and try to steer them back to your base case
  9. Pitching a stock that falls under your desk's coverage. This is S&T, not research, so you'll never have the issue of being afraid of being torn apart on a stock by the analyst who actually covers it but still, If you are interviewing for a specialist role in terms of industry sector or country coverage yes do pitch a pertinent idea because if I'm an industrials specialist sales and you're interviewing for my desk and you pitch me a bank you're going to look daft. Nonetheless, if you're interviewing for like a rates desk or a more complex desk than cash equities do still prepare a stock pitch. Most people you will meet are sensible enough to realize that as a college kid you probably aren't going to know anything meaningful about those products so they're better off asking you something, like a stock pitch, where they can actually understand your line of thinking about a certain topic.

Internships: On the Job

I wrote a post commenting on this so I'm gonna rework that in here. The general gist of an S&T internship is that there is very little valuable, tangible stuff that we can ask you to do to judge the quality of your work. While you'll never be wasting your time (sorry guys) aligning logos on PPT, you'll find that a lot of your internship will be along the lines of "sit here, don't touch this or talk too much but if you do speak, make sure it's something smart". I honestly think S&T internships are the hardest because there is so little we can have you do, as you need FINRA/FCA certification to trade and speak to clients, that means every time you open your mouth you need to make an actual contribution. It is very much quality over quantity here.

Having said that, I've seen my desk give the following tasks to interns:

  • Basic stock/sector-specific research, sometimes trying to recreate a research report by one of the analysts to figure out how you go about collecting data

  • "This is today's trade idea, build me three graphs for a sales desk comment and explain them to me"

  • Building a basic model with our projected earnings for a certain company so we can compare them with the actual numbers immediately when they are released

  • Sometimes one of the seniors will make you pitch him a certain company as a long or short (sometimes against whatever our ER's recommendation is) to see how you'd go about it independently. Sometimes this is a weekly exercise

While nailing the admittedly simple tasks you will be given is important, what is perhaps more important is showing that you understand the NATURE of the job, which is to say attention to detail, soft skills and the adaptability to be able to juggle more than one task at once. It is incredibly simple to draw a line between the kids who possess fantastic technical expertise, but who you know right away will never be put in front of a client, and those who might not be as proficient in terms of the industry/product but just "belong".

As concerns "Desk Mannerisms" I'd say the following are good rules of thumb:

  • If you're an intern on your first day at a desk (or rotation) ALWAYS ask the desk what time they want you there in the morning. I don't care what HR says, you ask the desk-head first and go by what he/she says. If appropriate you can then mention to him/her that HR "says I should come in at 8" if they ask. If your desk says "be here at 6:30", be there at 6:30. Forget what HR told you at orientation. It is better to be reprimanded by HR than by the desk.

  • Be all hands on deck/head on a swivel before market open and until 1:30 hours after that, repeat when market close approaches. And by that I mean don't go bother people/ask questions, just sit there, take notes on what you hear/see and pay attention.

  • Socializing: During the middle of the day definitely try to bond a bit with people. Just be likable, talk sports, weekend/vacation plans (obvi don't tell everyone you're going to get housed with the boys) and general chit chat. The biggest thing is asking people if they can explain a little about their product over coffee. If you're lucky the seniors will take the initiative on this but it looks better if you do it. At the end, when your desk/division asks people for comments on whether you should get an offer or not you'll want people to remember you.

  • Stay up to date on your Research Division: If you feel like you've socialized enough and/or there's nothing to do then read whatever the latest pertinent research is.

  • If someone tells you that you need to do something, 95% of the times they mean you need to do it NOW. I realize this seems silly to emphasize but things on the floor are hectic and as a new guy you really need to put your best foot forward. If you're asked to call the analyst and ask something you do it now. If you need to call a client you do it now. Always make sure that you're at least reactive if you can't be proactive.

  • Lastly, always be a decent human being to your colleagues, especially those in BO and MO, you'll be needing their help quite often and guess what, when personnel is stretched they'll prioritize your stuff because they like you.

I hope these tips will serve you well during your internship and will hopefully help when transitioning to full time, at which point it all becomes about client interaction:

Client Interaction

  • Personally I always try to get to know and spend time more with people closer to my age as chances are they'll actually give you the time of day and it'll be easier to get to know them. Plus, it's just more enjoyable

  • While I did just say that I find it more enjoyable to be around people my age, one of the best things that's ever happened to me was finding a sort of buyside mentor figure. Its hard, and it wont happen from one day to the next, but you really need to try and find someone with experience that can take you under their wing in terms of explaining his ideas to you, what he/she looks for in a company, how they view the macro and someone you can bounce ideas off of. The more you-re around clients the more natural this will come. You can also do this with people from different desks, always good to keep your internal mobility options open and if you did come from a rotational program there's no reason to not routinely catch up with other folks you've met at the bank.

  • I feel like for the most part you can be good at this job as long as you remember things like "What stocks does this client care about/did we see flows on these/what companies did he see at the conference/what did we talk about last time etc" without being a stock picking genius. And this is good, because when you're just starting out it is easier to be attentive to clients- needs than it is to come up with amazing investment ideas. This again all ties into the idea of attention to detail

  • Know who you're talking to: Always, always, always, know who you're talking to. Are they a PM, a research analyst or a trader? Your answer should be tailored to your audience. If it's a trader he/she prob cares about what is happening "right now" (eg, why did the stock go from +3% to -1% in the last 10 minutes) or if you're seeing any flows in the name. An analyst or a PM is probably more concerned with your take on the latest company research or a long term view. Doesn't hurt to ask your boss anyway, it shows you want to approach things in the best possible way.

  • S&T is also very much about HOW you say things: Something doesn't "suck" and the company management doesn't have "piss-poor presentation skills". Instead they are "not well suited for the current climate" and the management "failed to accurately convey their Business Plan". Similarly, if you're pitching an idea that goes against your research department's recommendation (pitching a long on one of their Underperforms), I would always mention this to a client. It shows that you are aware and that you still can think on your own. Also, the way to explain these types of situations is to put it as "I think the basic premise is correct but I would overweight these factors instead". At the end of the day, you have more flexibility in terms of timing than your research analysts have so you can make use of this.

  • If you're in touch with a trader about a trade you're doing for them NEVER EVER GO OVER HIS HEAD TO HIS PM. Let me give you a good example of this: Lets say you are buying 100k shares of ABC with a limit price of 10. You get half the order done and then ABC starts trading outside of your limit. You wait 5 minutes, realize the price isn't coming back down and since you have the PM on speed dial you decide to take the opportunity to ring him and ask if he wants to drop the limit and finish the order. Now, you think you're being clever by showing the PM you care about his order but what you're really doing is upsetting the chain of command. If you get an order from a trader, you talk to the trader about it, NOT the PM. The general rule is Sales talks to the PM, Trader talks to Buyside Trader. If you're a Sales-Trader then you can sort of skirt the line, but its always best to check who has a relationship with who. Everyone makes this mistake, even Sales MDs. They think that because they're tight with a PM they can ignore the traders, by doing so everyone gets upset about not being on the same page (insert DJ Khaled "Congratulations, you just played yourself" Meme). You get the idea, if you're in touch with a trader, go to them first, this also applies with trade booking/acknowledgement problems.

Where Do I See The Sector Going/Considerations You Should Be Making Before Jumping Into S&T

Lots of discussion about this these days. Is S&T at risk? sure, are the headwinds it faces stronger than those facing IB/ER and the rest of finance? I'm not entirely sure about that. I'm not trying to write a whole spiel as to why i think that is but rather how you should think about it.

  • I've said it before and i'll say it again: Programming is overkill for most S&T positions. VBA isn't programming and I guess that can be somewhat helpful but I wouldn't put all my eggs in that basket if you're trying to get a job. Frankly, unless you're on some Exotic desk, no one's going to care

  • Languages are far more important I think. If you're in Europe you basically have to have knowledge of a second fluent language to even be considered. In the US this is by far a less stringent requirement, yet knowing Spanish (LATAM) or an Asian language will undoubtedly be useful. I don't think European languages in the US are that useful because your EU equities desk in the NYC offices will be super concentrated so it is unlikely that they realistically need French/Italian/German speakers. I think this is also why programming is emerging more in the US than in Europe. Firms simply need another metric by which to cut the massive stack of CVs they get flooded with. In Europe, asking a 19 year old to know at least 2 languages fluently, have great grades, technical expertise AND know how to code is a bit much.

  • On the Back of the last point. I'd say S&T is more qualitative in Europe than in the US. This is because knowledge of a second language also implies you know the workings of that country much better than an outsider. This means you know how left/right leaning the different newspapers are and what face value to give articles, you know how the different watchdogs operate and what regulation is like. The US all speaks one language, one set of rules, reporting requirements are much more stringent and things are far more institutionalized. In Europe, its not like that yet and Asia is even further away from US standards.

  • Let's be real, IB and ER have better exit opps these days. Why? for the same reason everyone always mentions, the breadth of your work teaches you skills that are more transferable to other parts of finance. So yes, IB will be paid slightly better than you and you probably won't be a modelling wiz but do you really care? I mean salaries are for the most part standardized into your associate years. And if they aren't, are you seriously going to complain about making 20k less than someone your same age who is working 120 hours vs your 60/70 hours and gets called into the office on weekends? I don't know about you guys but part of the point of being in a high paying job for me is having time to enjoy my salary. Plus, even at a junior level in S&T you actually get to pitch your own ideas, that won't happen anytime soon in IB.

  • At the end of the day though, I simply cannot see how you would ever replace the relationship aspect of the business. Trading will probably keep on getting automated but we'll reach a point where you simply can't keep cutting down. Ok sure, ETFs are replacing active investors but lets see ETFs handle a bear market first. I'm very much convinced this is all part of a cycle anyway: ETFs have replaced the underperforming Actives, the market will eventually become saturated with these until inefficiencies will begin to emerge and Active investors will make a comeback. I could also see Sales turning into some type of advisory role, covering more than one product. Either way, if you're not just after the money I think you'll find that S&T definitely makes for a pretty fulfilling longterm career choice.

  • Finally, if you want to make the jump to the buyside you have to learn how to think like an investor. Going back to the Stock Pitch, it is relatively simple to understand if a company is good or bad but why now, why should you or clients invest now? Always remember that being too early is no different than being wrong. Something that's worked for me is making my own conviction list that I routinely revisiting it and explaining the changes I'm making and why. You could start doing this on a quarterly basis so its not too hectic and it'll teach you some discipline in sticking by your recommendations.

Guys, those are my 2 cents about S&T. Ended up coming out to be quite long as I kept on remembering stuff to add. Hit me with all the MS you've got and I hope this'll help someone land an offer, and if anyone wants to reach out via PM please feel free to!

Comments (23)

Mar 30, 2020 - 7:11pm
bfd, what's your opinion? Comment below:

Great info.! Thanks for taking the time, there's no way these tips don't increase someone's chances of getting an offer!

Most Helpful
Mar 30, 2020 - 8:20pm
Jamoldo, what's your opinion? Comment below:

OP - This is a great post.

To young folks who may be intimidated by the OP's post. You don't need to know much in depth. The price of oil for example. Know that Russia/Saudi are pumping a ton. Rising supply lower price. Oh wait its a recession that means prices go lower. That's it. have some trade ideas? 1-3 bullet points and admit you could be wrong. These guys are wrong more often than not. It's ok.

I will add given my background running a book at a HF that my sales coverage broke down roughly into 4 groups:

  1. Ex traders/PMs - Very good product wise, savvy, easy to talk to as they've run risk and know product and flows. they get it. Not necessarily the best at their job (which is MOVING PAPER).

  2. Experienced/very intelligent people - a lot of these. People who have seen it all, survived, know how to navigate things, connect you to others at banks. Understand the flows, give some intel, can summarize things, pleasant. Can Move Paper.

  3. People persons - know nothing about the product. But hustle. Literally. And there are lots of these. Believe me. Have survived politically or because clients love them or because they are at the right shop (ie everyone trades with JPM/GS because they bring deals and so have to). These folks can MOVE PAPER.

  4. Worthless - Know nothing, can't move paper, literally can't really do anything. Take forever. Somehow still in a job. There are lots of these. Fewer than before but they exist. BTW - I'm not talking about junior people (everyone deserves a chance to learn and it can take time and that's totally cool).

Honestly for me and many others the best sales people can MOVE PAPER. You can get a bid or an offer when you need it and won't be gouged. You will get connected with others in the bank/desk if you need some info or clarity. The rest of it is gravy. Seriously.

Good Luck

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
  • 19
Mar 30, 2020 - 8:54pm
bfd, what's your opinion? Comment below:

Man... just cuts through the clutter... kind of sounds like a stock pitch you have to make while in S&T: just crystal clear bullet points.

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Mar 30, 2020 - 9:20pm
SSC4you, what's your opinion? Comment below:

Hey OP.

First thanks for taking the time on the post, great read and I took away a lot of great stuff. I have a couple questions if you don't mind asking. 1) From friends and networking with previous interns i have heard that a common theme is a morning markets write up to your team (as an intern/junior). Thoughts on this? I feel like everyone is blasted nowadays with morningbrew/wsj and the likes so im curious to see what you think, and if you think its a good idea how should i source my info to make it not what the traders have already read 2) With my shadowing/networking/coffee efforts on my team should i start with analyst and work up the hierarchy chain/ or instead keep an eye out for who seems available and poach as i go? 3) What are your thoughts on originality/having an opinion that you can elaborate on vs being right. Let me explain... say i have an opinion that i am passionate about and have done my research on and i come to you and pitch but i end up being wrong in the outcome. How would you take this in comparison to me pitching something i gathered from cnbc that is common knowledge is correct

Again thanks a lot

Apr 1, 2020 - 8:25am
FaberGrad, what's your opinion? Comment below:

Hey, glad you enjoyed the post! I'll try to answer point for point:

1) Yes this is a common task, but more for the analyst guys with some degree of familiarity because you need to know where to find info (not just BBG and Reuters) and to have some background knowledge to interpret it without research holding your hand through it. Examples of the latter would be earnings. Imagine a company reports poorly and you, not knowing the company's history and your analyst's thoughts, write "Company reports losses - NEGATIVE" and blast it out to your desk when really, earnings were expected to be much worse and the reported figures are actually decent. Also, as you correctly pointed out, nowadays people are constantly blasted with written info. Due to this, I don't personally think there is much value in an intern/junior analyst doing this for the team seeing as a) if you publish this before your morning meeting with the research guys you might misstate things (eg, you said something was "unexpected" but really, it wasn't) b) if you write it after the morning meeting it might be old news. You will also get clients who answer you with a great "Thank you, I also have Bloomberg" if you become a spam bot haha.

Still, lots of desks have interns doing this, but its kinda a tick the box type of exercise so they can give you something to do early in the morning and you familiarize yourself with the process. Often times you will get VERY specific instructions from your desk on how to do these such as "at 7:30 everyday i want you to go to this website, download the report, parse it for these sectors/companies and simply paste this into the desk's BBG chat". I had to do this for a Nat Gas desk in a previous internship. While your upside from this task is not great, you can always use it to try and figure out how other news ties into this and ask your desk questions like "hey so I so it said they were planning cuts but this says OPEC is moving the meeting date, what do you make of this?". That'll show that you actually read things before sending them.

Having said that, there is a great takeaway from this which is, if you know a client cares about a specific name you can just call him up and tell him "hey, this just came out, seems to me that this is positive, analyst hasn't commented yet but if you want I can organize a confcall". Especially at the junior level, clients will understand that you aren't an expert but will be appreciative that you're trying to help by flagging their interest to someone who can help.

2) Yes, sounds like a great idea. He/she will be closer to your age so in a better position to teach you the best approach and likely tell you about the desk dynamics and who best to ask.

3) Tough one as we'd all love to always be right and never lose our clients money. I think the fact of the matter is though that its the buyside thats being paid to make returns, not you. What i mean here is they probably have all the BB sales guys calling them about the same idea. What makes the difference is how you articulate it because 2 different brokers can both get from A to B. The difference is showing that you are aware of all the considerations you should be making in doing so. In other words not just "hey man buy this, earnings are expected to be good!" but rather "hey man, buy this, earnings are expected to be good in a scenario when peers are struggling and i think the performance discrepancies are going to keep growing because of XYZ".

The tough part of the job is letting go of your favoritism and for this you can use the investment horizon as an advantage: a company can be poor overall but great right now and vice versa, just make sure you stress this to a client, it shows you can look at things from a different perspective. If you get something wrong, chin up, it happens man just learn from it and move on and resist the temptation to try and double down early in your career in order to fix a wrong call. Still, as long as you can elaborate and walk someone through your reasoning, people will be happy to hear you out and who knows, they could apply your logic to something else!

I hope that helps

Mar 30, 2020 - 9:34pm
AverageJoe1, what's your opinion? Comment below:

Great post wish I had this sort of guide when I was in undergrad trying to break into the industry.

Mar 31, 2020 - 4:03am
bonkey56, what's your opinion? Comment below:

Nice post - what would you say is the outlook of cash equities sales given corona? Cash equities sales gets a lot of stick as it is (with the its dying comments etc), but would it be a good place to start a career FT this year?

Mar 31, 2020 - 1:11pm
FaberGrad, what's your opinion? Comment below:

Hey man. I don't think anyone is making cuts to divisions as a result of COVID 19, the market turmoil is too contained to a short timeframe to attribute any changes to a bank's corporate plans (cutting cash sales vs pushing IB etc) imho. This isn't a systemic crisis for the banks like post-Lehman. Of course, this might change so knock on wood i guess!

I think that part of the reason cash s&t gets a bad rep (apart from the usual keyboard warriors who tell you anything less than GS M&A is a failure) is because of the #3 people in Jamoldo's comment above, and as he says: "there are lots of these". These people found a way of being successful in their position without having a great understanding of the underlying concepts. People on the outside then extrapolate this to mean that "cash S&T is a worthless career because all you have to do is know how to play golf and remember your clients' kids' birthdays to be successful". This is obviously an overstatement and frankly, as concerns my own experience, these are for the most part at the senior level (there are some grossly unprepared junior people too to be sure) and they are slowly being phased out by the simple fact that it is SO hard to get in the door at any bank in any position nowadays that candidates can no longer bank on their people skills to get a job.

So yes, i think cash S&T is a perfectly acceptable place to start a career, all the more if you can land on a regional coverage desk like LATAM or APAC etc because, as I said in the post, you learn everything about the way things actually work somewhere, and that's something no one will ever be able to take away from you and your insight will always be valuable.

Mar 31, 2020 - 1:46pm
Jamoldo, what's your opinion? Comment below:

To this I will reply that knowing how to play golf and remember clients kids birthdays and similar things are actually CRITICAL people and life skills. Especially if you are in any service/sell side position. Stuff like that is what really sets many people apart at higher levels because things get personal. Trading products, M&A analysis etc, all of that is commoditized and one can throw a measly few hundred grand a year at some whippersnapper to do that stuff.

So, then all else equal the client chooses based on price, perceived value (bank franchise and services, strength of team), and literally who makes the client feel good/confident etc.

There is some thread somewhere where some talks about how many PMs or founders of HFs are weird or psycho or maladjusted. It's not dissimilar at many senior ranks in other parts of the industry. So the guy that is providing a service to them that makes them feel confident and good? GOLD.

In the end, all else equal people do business with people they like and trust. That's why number 3 guys have survived and a fair few have thrived. Credit to them.

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
  • 10
Apr 1, 2020 - 1:08pm
bonkey56, what's your opinion? Comment below:

Thanks for the reply, appreciated.

Desk would be in London, UK.

Think my main fear with corona is that it hits the economy harder than a lot of people are predicting, it just has not been seen yet (so far if anything a benefit to banks through short term vol for trading, seen some banks trading revenues increase i.e. Credit Suisse reported as so).

Government loans and handouts to companies (as is happening in the UK, where I am based), are only buying time & further leveraging the government - once the defaults inevitably happen, the effect will get back to the banks with a credit loss cycle.

I additionally do not think that the UK banking sector is as prepared as necessary - the stress tests done "shows the UK banking system would be resilient to deep simultaneous recessions in the UK and global economies that are more severe overall than the global financial crisis, combined with large falls in asset prices and a separate stress of misconduct costs. It would therefore be able to continue to meet credit demand from UK households and businesses even in the unlikely event of these highly adverse conditions. In the 2019 stress-test scenario, world GDP falls by 2.6%, UK GDP falls by 4.7%, Bank Rate rises to 4% and the UK unemployment rate rises to 9.2%."

Seeing potential falls in GDP globally far higher than that number (i.e. for US 34% and 15% unemployment with GS report ) , UK GDP will also be heavily hit and the situation for banks will be far beyond what has been stress tested.

Believe it will one heavy credit loss cycle unlike anything seen before and given have the offer to start FT as a graduate, unsure whether I should start looking around as even fear it could be taken away & if not, will be a bad place to start salary wise (decreased bonuses etc).

Mar 31, 2020 - 5:46pm
tml08, what's your opinion? Comment below:

Re: "I would love for the more senior folks to chime in and add their own opinions."

Note: My firm is very "old school" which means they care more about putting up trades than what grade you got on your report card from BlackRock. I don't work at a BB.

Easy stuff that goes a long way 1. Show up first 2. Always say yes to a drink 3. If your desk has a softball team, get on it

What to do to get noticed? This is what worked for me 1. Showing up first. Face time gets a bad rep but honestly it's such an easy way to get noticed, so just do it.

  1. Putting up trades / printing blocks / MOVING PAPER (as a previous poster put it). This means getting a big order. If you get a $10m trade on a pitch ... great, If you find a buyer for a 1m share sell order on the desk (that means the desk has the order ... "it's in hand") ... amazing (especially if no one else could), if you get a >$25m indicative lead order for a potential financing that positions your firm to lead the transaction (read: origination) ... legend.
  2. Note: Like I said, this is how it was at my shop, I can't speak for a BB.
  3. Know the bigger picture. What does your desk care on? If a company is a "house name" (this means a company that the desk is trying to trade) then try to get your clients to buy the name. And write a pitch and share it with the desk, you'll get credit for sharing and being a good team member. This shouldn't be a surprise. You want to do well? Make your boss look good. If your boss has a mandate to trade a name, pitch that name. Don't pitch it's comparable because it's cheaper.
  4. Note: Some professionals may have a different view on this. Some professionals will say you need to be a "trusted advisor". Frankly, you do hear market participants complaining that S&T has changed from a "trusted advisor" role to just doing what's best for the firm. So, a potential difference of opinions on this point is to be expected.
  5. Get on the phone. Again, maybe this is "old school" but I really believe Bloomberg messaging is a cop out. Picking up the phone is scary, but it gets you information, and in my opinion it's a lot more about information than stock picking. Find proprietary information. PMs know that stock XYZ is a consensus long. They don't know that smart account X (note: never disclose the actual name of the account - fireable offence) who was short oil names going into the crash is now getting short copper names. Getting information is a virtuous cycle and it's a lot easier than picking the next Amazon. Which brings me to my next point ...
  6. Always say yes to a drink. Again information. Also, if it's your own colleagues it gives them confidence that you'll entertain clients and that clients will like you.
  7. If your desk has a softball team, get on it. Similar to #5, shows you'll entertain clients and that clients will like you.
  8. Hustle. S&T is a hard job. There's a lot of rejection as you might expect, so you need to show you're a hustler. That means don't read the 'daily mail' cause it's 2 PM on a slow day. Go visit a client, pick up the phone, read a research report.
  9. Coffee runs matter. I heard this from MDs during orientation over and over again. Yes, it's beneath you, but you're getting paid 6 figures, and if you can't go get coffees and get the orders right, and get the change right, then why would I give you a trading book.
  10. Stock picking. I deliberately put this near the bottom. That's because as an associate I thought I would get ahead by writing amazing stock pitches. Don't get me wrong they definitely helped with my credibility (clients and my desk), and it is very interesting, but that's not the job. Again, like the previous poster mentioned. It's about MOVING PAPER.

Last, but definitely not least ... 10. Do what computers can't. The OP talked about S&T headwinds. If you want to stay relevant do what computers can't. Your clients can trade 50,000 shares of Microsoft in their machine. They can't participate in an offering for a pre-revenue company that never trades, in their machine.

Note on #4: I wouldn't sweat so much about how to craft the perfect email. I can't count how many times I was speaking to a client and they told me they didn't read an email I sent. Pick up the phone! Another note on #4: Yes, building a relationship with young analysts is a good place to start. But don't forget to get on the phone with the decision maker (PM or CIO).

I hope that's helpful. Like the OP said, I wanted to give back to the community. And also like the OP said this ended up coming out to be quite long. lol

Ps. Oh and pro tip: Listen! You're on a trading floor. Get your broker ears on. Listen for trading flows, good ideas, colour, is your desk putting a block together, and breaking news. And listen to your clients. It's easier to sell them what they want to buy. Instead of convincing them to buy your great idea.

Mar 31, 2020 - 7:18pm
LongBondsAway, what's your opinion? Comment below:

Thank you for posting, very helpful!

Do you have any advice for experienced IB analysts looking to transition to S&T? I would greatly appreciate any insight on how to best position myself.

For context, my firm is a small IB shop that doesn't have a S&T division.

Thank you in advance.

  • 1
Apr 1, 2020 - 8:44am
FaberGrad, what's your opinion? Comment below:

This might be the first time i hear of someone on WSO wanting to make this transition and not the other way around haha. Honestly, I don't know if i can be of much help as i don't really have any experience here. Maybe a couple of considerations I would make are:

-You mention you are at a small shop. Does that mean you are in a specific sector/niche group within IB? if so are you sure you want to make such a large transition to S&T rather than just wanting SOME exposure to capital markets? if so you could try and move to ECM or DCM and then decide.

-If you already have exposure to ECM and/or DCM, then i can't really see the transition to S&T being too hard for you. Hop on some networking calls with folks on the desks you're interested in and try to articulate to them that you understand the premise of the job (obviously easier to do when going from ECM to cash equities or DCM to FI) and what you'd like is some more hands/on experience with the markets.

The young age definitely makes things easier and while I can't see the transition being too hard (also because it seems to be generally accepted that the other way around is much harder) you might have to go through business school. There is for sure someone more qualified than I to answer this question though

Apr 1, 2020 - 2:48pm
LongBondsAway, what's your opinion? Comment below:

That's interesting, I assumed there would have been more folks trying to make the jump to S&T.

My firm specializes in commercial real estate, but I cover the non-CRE side. The majority of my work is ECM/DCM with a little M&A and restructuring.

I am shooting for cash equities since a lot it has already been automated -- whereas the liquid fixed income products still have room to go. Is that the right way to think about it?

Having fintech experience and being proficient in several programming languages, I can say that the overwhelming majority of this AI/ML stuff is BS. There is a point when too much automation becomes inefficient. Finance/banking was just the low-hanging fruit for tech.

Would love to chat more on this. Would you be open to connect via PM?

  • 4
Apr 1, 2020 - 8:25pm
tml08, what's your opinion? Comment below:

I've seen junior bankers transition into S&T by joining their firm's S&T rotational program.

A lot of salespeople are ex-research or ex-banking, so it shouldn't be hard. You don't need to "position" yourself. You have the technical skills. You just need to show a desk you can handle clients and bring in revenue. The best way to do that is by networking (read: go drinking).

I transitioned from ER. I did that by visiting the desk, going for beers with the desk and getting on their softball team.

Your firm doesn't have S&T, so you'll have to leverage your own network or use linked-in. You need to hustle to get in, because that's what they're looking for ... hustlers.

  • Summer Associate in Other
Apr 3, 2020 - 11:13pm

I have an internship on a sales desk this summer [not trading]. Should I expect to to participate in some of the tasks you mentioned such as basic stock/sector-specific research / trade ideas? If you have any other insight into the tasks/responsibilites of sales desks interns I would appreciate it.

Also, if you have any general advice on how to prepare for a sales desk internship in regards to books to read, skills to learn that would be great

  • Prospect in RE - Other
Jun 23, 2020 - 8:16am

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  • Prospect in CorpDev
Jan 8, 2022 - 7:13am

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