Eight Habits of Top Bucket IBD Summers

When I was starting out in finance a while back, WSO was an amazing resource and really helped me so I thought I'd give back. This is my first real post on WSO and I don't think I've seen one of these posts recently so I thought I'd put it up.

With the start of the summer, I've received a lot of emails recently from incoming summers (analysts and associates) about how they can best do their jobs. Over the years, I've worked with some great analysts and associates and I've noticed some good habits they've had. Some of these may be obvious, but sometimes it's nice to hear someone else say them out loud so here goes:

1. Mark-up My Mark-up


When you get a mark-up, nothing bothers the mid-level bankers more than simple misses (auto-ding to bottom bucket). Make a point to highlight or cross off items in the mark up as you go through them. Often I see people say to themselves "I'll fix this later" only to get swamped / jammed and forget. Senior banker time is precious and they need us to focus on the details so they can win business. Help them out, don't get in their way.

2. Always Ask for a Deadline


Nothing sucks more than "miscommunication" about deadlines, whether thinking it was sooner (seems like an ASAP fire drill) or later (getting serious heat because something needed to be finished and isn't). Make sure you understand when the person above you wants to see it, NOT when the meeting is happening. As perfect as you think the deck is when you return it, I have never seen a summer / incoming junior banker produce work that didn't at least need a few turns. And if asked how long something will take: Under-promise and over-deliver. Leave time for the fact that you probably aren't as fast as the person asking for the work. Leave time to check for errors. Leave time to correct the errors (it will always take longer than you think). Having said that...

3. Check for Errors - Pt. I - Tick and Tie


Print out materials you are about to submit and go through them. Are the share prices all based off the same date? Does your valuation say 8.0x EV/2015E EBITDA on one page and 7.8x in another? You should probably find out why and fix that. Also, compare against previous versions if you're updating. Did the multiple drop two turns since the last time because you forgot to PF for a recent transaction (use "CACS" on Bloomberg) which increased forward estimates but were not reflected in your EV calc? This is the easiest way to avoid mistakes. If you are new to a book, check your comps against previous comps (best), recent research (price adj. to current price), and CapIQ (worst). Check to make sure your footnotes are updated and show up on the page ("Oh the footnote is behind the chart because the CapIQ refresh is covering it" is not a great answer).

4. Check for Errors - Pt. II - Simple Calculator Math


Since you've printed out the materials you should pull out a calculator and go through the pages. Does net debt 2016E = net debt 2015E - LFCF2016E? Are there any weird numbers? EBITDA is growing, but EV/2016E is higher than EV/2015E? Also, compare to pre-turn numbers. After the changes in assumptions, would you expect key numbers to go up or down? If there is a significant change that makes sense, put together a reconciliation (because I promise you, the senior bankers will ask, and it will help you check to see if you're right or not). Ex. Did the multiple go up two turns legitimately? Why? Well, the share price has been trading up on market sentiment. The market believes that the management team can actually achieve its plan, so despite the fact that forward estimates haven't changed, valuations have gone up dramatically increasing the mulitples. The shares are up to $20 from $15 since the last time we did these comps. With an FDSO of 100MM, the EV increased by $500MM. EBITDA is $250MM so the multiple went up two turns from 10.0x to 12.0x.

5. Check for Errors - Pt. III - Try To Understand What the Hell is Going On


Why are we putting this page together anyways? This is one of the last steps to being a better banker (and maybe one of the harder ones). We spend so much time grinding and are so tired afterwards that it's tempting (especially at 3 am) to just fire it out and try to GTFO. Some of the best analysts take the extra 10 to 15 minutes to go through the page (better if done at the start rather than the end) and ask "why would I care about this page? What's the point?" This also helps find errors as well. "We thought this deal would be LFCF Accretive because of the attractive EV/EBITDA multiple, why is it dilutive? High capex program in 2016."

6. Summarize Key Points


Related to #5. You invested so much time in building a model. Treat your Directors / VPs / Associates as clients. Don't just shoot them a model saying "Done!" Instead, highlight key points they might want to know about: "Just wanted to highlight that LFCF is low in the near term because there is a large capex program, as a result leverage spikes above the 3.0x the client said they wanted to try to stay below", "Wasn't sure how to think about synergies so I modeled in 10% of opex, but we can flex to whatever you think is appropriate".

7. Be Organized


90% of this job is being organized. Often senior guys are so focused on the client at the meeting they don't take notes and have trouble recalling specific details. You can be a hero if you take good notes during the meeting and send shortly after. Send emails with meaningful headings, not just "Model Update" but "[Client / Project Name] Model Update for 6% Growth Case". Your mid-level bankers have multiple responsibilities and making it easier for them to digest is HIGHLY appreciated.

8. Summer / Incoming Associates: Earn Your Title


Summer / Incoming Associates: for all intents and purposes, you are an analyst. You aren't a proper associate until you can check analyst work. And you can't check analyst work unless you understand how to do it. And you can't possibly understand it until you've done it (and done it well). Respect the senior analysts because they have a lot they can teach you IF they like working with you. Good senior analysts run circles around MBA Associates. Respect them and don't be a douche.

This is hardly a comprehensive list, but it's a good start. Would love to hear any other suggestions from other bankers. Wouldn't mind some advice myself (SB's for good suggestions). Can always be a better banker.

Hope you find this helpful and best of luck. It's a jungle out there.

Mod Note (Andy) - Throwback Thursday - this originally went up 6/28/2015.

Comments (33)

Jun 23, 2015

SB'd. I don't work in Finance, but absolutely crucial advice for anyone.

Jun 23, 2015

In the midst of my internship now and every one of these points are 100% relevant. Great post.

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Jun 23, 2015

wow great info, thanks for posting!

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Best Response
Jun 24, 2015

To adress Point #1, I highly recommend getting multiple markers in different colours. Going through the first round of mark-up processing I use a green marker, second round is a purple marker. It's easy to lose track otherwise.

I'd also like to add that you should ALWAYS write down your assignments as they are being explained, and don't be afraid to ask them to slow down a little bit when explaining/ask them to confirm the assignment. It's very frustrating for both parties if there is miscommunication, and it is easily avoided.

Jun 24, 2015

Excellent post +SB

Jun 24, 2015

Great list, especially dedicating 3 points to check for errors.

"There's always money in the banana stand" - George Bluth Sr.

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Jun 24, 2015

Ha. Thanks. I wanted to be really specific there. I hate it when I was a junior and people said check for errors. It's hard to check in your own work so I picked up some "methodologies" / good habits from other people.

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Jun 24, 2015

One tip that has helped me greatly: Always print it out and analyze it before you submit it. For whatever reason, it's easier to identify errors when you're looking at a physical, tangible copy.

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Jun 24, 2015

Sometimes colors and text positions change slightly when printing. Would be terrible to catch these details during the final print.

Incoming Ash Ketchum, Pokemon Master
Literally a problem, solve for both X and Y, please and thank you.
Hugh Myron: "Are there any guides on here for getting a top girlfriend? Think banker/lawyer/doctor. I really don't want to go mid-tier"

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Jun 29, 2015
Red3:

Sometimes colors and text positions change slightly when printing. Would be terrible to catch these details during the final print.

Can't stress enough how bad a last minute re-print blows. Definitely look carefully through hard copy, multiple times, before hitting print on the finals.

Jun 25, 2015

You should look at yourself as an Analyst and try to do everything the Analyst does... Expectations will be lower but that should be your bar.

Also, just because you don't get asked to do something doesn't mean that you aren't good or that they don't trust you.. It probably just means there isn't time to teach, edit, and then turn.

Finally, realize that expectations are unreal sometimes and the ability to triage tasks and prioritize is probably the most important skill in banking. If you are unsure, ask! If you ask and still fk up then you are definitely bottom bucket.

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Jun 25, 2015

I love #5. These are not data entry jobs even though they may feel like it for long stretches. Question the numbers is they don't seem in line. Ask yourself do these numbers make sense with the story being told, if not find a time to run it by someone around you or potentially your manager.

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Jun 26, 2015

If you get a MBA and go back into corporate I-banking you are doing it wrong.

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Jun 27, 2015

RT

Jun 28, 2015

Very insightful, thank you for the post.

"same day, different shit"

Jul 1, 2015

Pity, but it's great advice. Pity because it's sad what things need to be focused on in IBD/ER/other roles where presentation matters big time.

Jul 5, 2015

All are great points. One thing I would add is that as an SA you should be aware that everything you do gets checked for errors. This means two things. First, everything should be formatted nicely. Not just the tables that go in to the presentation, but the backup excel as well. You do not want to have an analyst (or higher) look at your backup to the slide and have to spend time figuring out what the hell is going on because you haven't formatted it in a way that's easy to comprehend.

Second, add the source in a comment to every hardcoded number. If you're doing comps it takes you one second to press shift+F2 and add on which page in the AR you found a number. If the analyst you're working with wants to double check the number, it takes him a lot longer to find it if you didn't put a source, and if he can't you're fucked. Make the analyst's job easier, not harder.

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Feb 12, 2016

Didn't mean to throw sh!$, mishit button

Feb 12, 2016

Glad this was bumped. Incredible post

Jul 21, 2015

Signs of a SHITTY summer analyst.
1. Shows up later than they say they will on a weekend
2. Complain... about pretty much anything
3. Don't learn from your mistakes
4. Reply to emails from superiors before an Analyst/Associate or talking to the Analyst/Associate
5. Getting up and walking around when going through something with your analyst/associate. Also includes, doodling and texting

Signs the above apply to you:
1. Your team no longer gives you work, to he nice they will say "oh its okay, you are busy" or "this has to go out asap"
2. Your analyst will stop talking to you and replying to you
3. Turning pages with your analyst/associate takes all day
4. See above... expanded to... you no longer get comments the team just moves on without you and makes changes on their own

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Jul 29, 2015

I think this is a really good point. No one is incentivized to tell you you're doing a crap job (no upside). The only true measure of doing well (knowing you are truly top bucket) is people just give you more work.

Feb 12, 2016

Thanks for all this advice - landed a return offer at BB!

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Aug 3, 2015

Everyone; do not miss this. GL you all.

Feb 12, 2016

They are that bad. From what I understand about my firm's bonus structure, a vast majority (80% ish?) end up in the middle bucket. You have to either really excel or really suck to get above/below that.

Feb 12, 2016

bump

Feb 27, 2018

This is an excellent list - as most of yours are. Would love to see you do another one/elaborate more on the Associate role next time you get the urge to contribute.

Thanks!

Feb 27, 2018
Feb 27, 2018

lol - guess I need to work on my due diligence skills. +1 SB for you my friend. thanks for your contributions

Mar 1, 2018

This is excellent advice! Thank you so much for posting! Really informative. Bookmarked it.

Timing Is Everything.

Mar 1, 2018

One thing not mentioned in OP but I think is crucially important is to be a part of the team and understand the social dynamics / culture of your group. Work comes first but any time you are invited to do something by anyone at the firm go do it.

Associates / VPs are even understanding when it comes to firm scheduled social events throughout the summer; they want you to go to them and may even allow you to push off work until the next morning.

If your technical skills are lacking, ppl will try to help you if you are social / like-able and have a true desire to learn and get better. This will help your reviews and the impression you make on those around you.

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Mar 1, 2018
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Feb 10, 2019
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