IB for dummies

Don Corleone:

Great GPA ; Mastery of Excel, Powerpoint, Word. an ass made of leather that can sit in chair for long hours.

IB is not a job where a guy with higher IQ beats the one with lower IQ.

For someone @ very early stage in career ( or start of career in IB ) ability to work long hours , not making spelling, formating, calculation mistakes in models/ pitchbhooks and ability to keep ur mouth shut at all times will take u far.

just like real estate guys sell houses, investment bankers sell companies. we have a fancy name for it : Merger & Acquisition.

Say u wana buy a house in XYZ neighborhood. u dont know the right price of house, so how do find out how much it is worth?

1. Look at similar size lots / bed rooms / garage houses in neighborhood and what price their owner paid : If avg is 350k, its safe to assume, ur house is in that range as well. Similarly, when selling/buying a business, we dont know the exact, precise value of the business, so we try to find out what other similar businesses (similar risk profile, industry, size, etc.) were sold @. Say, other similar companies that u analyzed were sold @ $5m, then ur biz is worth 5m.

Another one, a more academic and theoretic way is what we call DCF (discounted cash flow) Suppose u have a hen. she will live for 10 years. Every month, she lays 40 eggs. price of 1 egg is $1. how much is that hen worth ?

ur trying to find the "present value of future cash flow" ur hen will generate for u. same shit with a business. How much money can ur business generates over its lifetime and then what is the present value of that business.

its not complicated AT ALL. the way i see it is this : if a banker cant explain in 60 seconds what EXACTLY he do for living, then even he dont know what the fuck he's doing.

its glamorous career ; ton of money ; bitches love it.

Don Corleone:

its glamorous career ; ton of money ; bitches love it.

You slave 90 hours a week to strut your shit for 5.

Lilo:

:) Thank you guys, especially Don Corleone :)

I am contemplating the idea of working at IB but its just an idea for now, partially influenced by the fact that I am soon starting postgraduate course at LSE where everyone seems to be obsessed with IB. I have previously obtained law degree and I have four years of work experience, the last three of which I spent working as legal associate with major international US based law firm. I did lot of work on stuff like M&A, due diligence, huge share purchase agreements and etc., and a few times we had IBs for clients or parties involved, but I never really got to understand their part in it all. A friend of mine just recently suggested I should give it a try, considering I will be at LSE, and apparently the pay is awesome. The long hours are something that does bother me having seen the sunrise from my office on far too many occasions at my previous job. But I've heard that not everyone works 90 hours a week and that there are also good days. I am just under impression that one must be exceptionally good with numbers to work in IB. Is that correct?

Thanks

Lilo:

:) Thank you guys, especially Don Corleone :)

I am contemplating idea of working at IB but its just an idea for now, partially influenced by the fact that I am soon starting postgraduate course at LSE where everyone seems to be obsessed with IB. I have previously obtained law degree and I have four years of work experience, the last three of which I spent working as legal associate with major international US based law firm. I did lot of work on stuff like M&A, due diligence, huge share purchase agreements and etc., and a few times we had IBs for clients or parties involved, but I never really got to understand their part if in it all. A friend of mine just recently suggested I should give it a try, considering I will be at LSE, as apparently the pay is awesome. The long hours are something that does bother me having seen the sunrise from my office on far too many occasions at my previous job. But I've heard that not everyone works 90 hours a week and that there are also good days. I am just under impression that one must be exceptionally good with numbers to work in IB. Is that correct?

Thanks

however, what u NEED to know EXCEPTIONALLY well is MS Excel. dont get intimidated by numbers, most of em are BS anyways. Excel is not hardest thing, its a matter of practice. more u do it, more comfy u get and less mistakes u make. Mistakes are costly in IB...almost always, will cost u ur reputation and ultimately ur job.

Long hours are given ; dont listen to anyone who tells u otherwise. Normally there are 4 levels in banking 1. Analyst (fresh outa college, couple of internships ) they know how to do 2 + 2 = 4. employer expects them to keep their mouth shut and do what theyre told. depending whether boutique or bb u start with 65k - 80k and bonus of similar range. Analyst is the lowest of the low on the todem pole........notice how there is "anal" in analyst. There's a reason for that.

2. Associate : after 2 yrs analyst, ur employer is not comfy that u wont fuck up in excel ; can rely on u to do basic tasks like write a pitchbook, prepare a presentation and a model ( ALL WORK MUST BE FLAWLESS ). If you're exceptionally well as analyst, they'd keep u for 3rd yr, if not....go for mba and come back as associate ( this is @ BB, not boutique)

3. freshly minted MBA, a new swagger, familiarity with excel, finance and ib life, next level is VP, which can take 3-4 yrs depending on progress

4. MD : you're the boss.

LSE is legit school. and ur law degree helps in the sense that, im assuming u can sit in chair for long hours and read mindlessly. That helps. dont worry if ut not THAT great with numbers, i know bitches who majored in renaissance history and now working in IB ( and no they didnt suck cock to get there ; nor were they eva mendez )