David Einhorn's IB Experience

Got my hands on a PDF version of Einhorn's book. Thought I'd share the part where he talks about his investment banking days. A good re-read for those of you who have already read his book:

I started to look for a job through on-campus recruiting. I met with a lot of companies, including The Company—the Central Intelligence Agency. I received a few offers and decided to take the one as an investment banking analyst at Donaldson, Lufkin & Jenrette (DLJ), even though it offered the lowest salary. I chose it because I liked the people I met during recruiting. I later realized I needed to work on my judgment.

I had two miserable years at DLJ, which provided a different kind of education. Working there felt like pledging a fraternity, except the hazers had no interest in even pretending to be friends. I won’t go into the gory details, but a few years ago John Rolfe and Peter Troob wrote Monkey Business, a graphic account of life as a junior investment banker at DLJ. Their description is consistent with my memory, including the true-to-life, hysterical description about managing the copying-center personnel. The main difference between their experience and mine: I was one level on the totem pole junior to them, which made life that much worse.

Part of my problem was that I did not have any idea what the job entailed when I started working there. When DLJ recruited its analysts, it sought a mix between finance/economics types and liberal arts types. As a government major, I fell into the latter group. I did not have any friends who had taken junior investment banking jobs, so I did not understand what the company’s representatives meant when they asked me during the recruiting process, “Are you willing to work hard?” I gave the right answer, but I didn’t realize I had just committed to 100-hour-plus work weeks. When I grew up, Dad made it home for dinner every night, and, I believe, so did all of my friends’ dads. I had never heard about jobs that required sitting in the office all day waiting for assignments that were gen- erally passed out around dinner. The work lasted into the wee hours and often overnight. I did not understand the concept of staying in the office until everyone senior to me left—even when I had nothing to do. Further, I did not understand that being an analyst was a rite of passage that required “sacrifice” for its own sake, even when it provided no benefit to the project at hand. But I did it anyway because that was the culture.

I would often sleep on a pillow under my desk while the word-processing department prepared documents or the copy center made them into presenta- tion books. Cheryl, my wife, would bring me a clean shirt in the morning on her way to work. I had certainly never before heard the adage, “If you aren’t coming in on Saturday, don’t even think about coming in on Sunday!” I started in August 1991 and by Thanksgiving had lost fifteen pounds.

After two years, analysts were expected to need a break that would be provided by business school. I had no intention of continuing my life as an investment banker, so I decided not to go to school. When a headhunter called and asked if I would like to interview at a hedge fund, my first response was, “Yes.” Then I asked, “What’s a hedge fund?” That is how Siegler, Collery & Company (SC) found me.