Questions on S&T
I've found plenty of information on IB, but I can't seem to find too much regarding S&T. I have a lot of questions.
1. Is getting into S&T easier or harder as opposed to IB? (Or the same?)
2. For I-Banking, I've read that most analysts have finance/econ related degrees. Does the same go for S&T?
3. I'll most likely be attending BYU next summer. I know getting into IB from BYU is somewhat of a challenge; does the same go for S&T? Just as an example, say I major in Finance, get maybe a ~3.7, have good EC's, get decent internships, and network well. How would my chances look for both IB and S&T?
4. If I get into neither IB nor S&T, is working for a few years and re-applying feasible? If so, what should I do for work?
5. What are the basic characteristics for someone successful in sales and someone in trading?
6. Say I double major in accounting and finance and work for a Big 4 for 2-3 years. If I were to then go to a top 10 and get an MBA, how would my chances look for getting into IB/S&T as an associate?
7. What are some exit opps. for S&T?
8. Would knowing Chinese, or another foreign language, fluently give me an advantage?
>1. Is getting into S&T easier or harder as opposed to IB? (Or the same?) S&T is easier to get an interview, harder to get an offer. IB is harder to get an interview, easier to get an offer. But net net they're roughly the same; as someone who got hired into S&T but would have looked hard at IBD if he'd gotten an interview, I am inclined to think IBD is harder.
***Both are difficult.
>2. For I-Banking, I've read that most analysts have finance/econ related degrees. Does the same go for S&T? No. You see a lot of STEM degrees and some finance degrees. Really depends on the location (Chicago or NY) and the kind of firm. It's good to have taken Econ AP and maybe a finance course and know the basics of compound interest, but it's easier to learn finance than Math.
>3. I'll most likely be attending BYU next summer. I know getting into IB from BYU is somewhat of a challenge; does the same go for S&T? Just as an example, say I major in Finance, get maybe a ~3.7, have good EC's, get decent internships, and network well. How would my chances look for both IB and S&T?
Probably pretty good. I'd double-major in Accy; BYU has a top five program and you can always go Big Four for a few years worst case.
>4. If I get into neither IB nor S&T, is working for a few years and re-applying feasible? If so, what should I do for work?
See #3.
> 5. What are the basic characteristics for someone successful in sales and someone in trading?
When you ask them, "are you a good decision-maker" they have an immediate answer for you. That and competence. (For the record, my immediate answer is "NO. I'm a quant. I just need to be good at coding and modeling.")
>6. Say I double major in accounting and finance and work for a Big 4 for 2-3 years. If I were to then go to a top 10 and get an MBA, how would my chances look for getting into IB/S&T as an associate?
Top 7, decent, Top 10, maybe not so decent.
> 7. What are some exit opps. for S&T? It's hard to get out. I see a lot of people who are stuck. I worked with a fairly senior trader at a ~top five vol shop who was over the moon that she got into Northwestern Kellogg. She was from Harvard undergrad with a 3.7 and got shot down everywhere else in the M7.
She's now accepted an offer as an entry-level consultant earning 1/3 her previous pay with a Big Four consulting firm.
Sales you can probably always go to marketing via an MBA to some extent.
Sell-side trading teaches you some minor decision making skills, but they really don't get that many transferable skills.
Quants and Developers probably have the most transferable skills, although it doesn't feel like you're getting them at the time. But you can pick up your skills as a desk developer and go be a data scientist or web analytics guy elsewhere pretty easy. I know guys who've gotten hired by Palantir out of middle-office roles at BlackRock. But if you want to do consulting or management, CS may not be the best route.
>8. Would knowing Chinese, or another foreign language, fluently give me an advantage?
Probably not. There are 1 billion people who speak Mandarin or Cantonese like a native and speak English better than you'll ever speak Mandarin (let alone Cantonese).
I will have to disagree. Although options are not clearly defined, if you know your stuff you will get to know the right people and knowing the right people will get you the right opportunities in entrepreneurship/startups, where it's about generating ideas, working with limited resources and making decisions, things that trading would teach you. I know people who went to MBB from flow trading in lower tier BB. I also know somebody who's going to HBS. If you are senior (MD/head of desk) you can jump ship to hedge funds as a PM.
So it all depends on your personality. Keep in mind though that these examples refer to people from BB only. Starting at a prop shop would make a lot of these places much less likely to be reached.
In reality, here is what you need to know: if you join a desk with thoughts about 'exit opps' and non-trading related greener pastures - I believe you are already fucked.
^I agree w/ most of the points above, but I would try learning Mandarin if you have some time to take some extra classes. I've learned the basics for Mandarin and Spanish and it always comes up in interviews. Very rarely will you find an American student that can fluently speak 3 useful languages. Employers will respect the hell out of you if you can only speak them fluently, though.
Thanks for the answers.
^IlliniProgrammer, in your response to #2 you said it's common to have STEM degrees. Do any particular STEM majors stand out? Would you say I have a better shot at IB/S&T with a Finance and/or Accounting degree as opposed to, say a CS degree? I love CS and wanted to major in it for the longest time, but I hate the idea of being a programmer professionally..
In your response to #3, you said I should double major in accounting in addition to finance. I've heard that accounting is slightly harder. Would someone with a slightly lower GPA with a double major in Fin/Acc look better than someone with just a finance major?
Thanks!
Curious as to why you love CS but hate the idea of being a programmer professionally...
^peyo212, at least in my opinion, there are better things to do. Yes, I do love CS, but sitting in front of a computer screen for hours on end with limited human interaction, mediocre pay, and little prestige doesn't seem very appealing as a long term career, at least to me. Not to mention, some fields in CS can be very volatile career-wise (not good for supporting a family). I'd be fine working for a few years straight out of college, but working as one for the rest of my life is daunting. (No offense to any programmers reading this)
Anyways, could someone answer the questions in my previous post?
You should try it for a few years out of college. You just might like it enough to stay :)
Also, CS majors have get hired into all sorts of industries, so it's always a strong degree to have on your resume.
At banks, the good programmers tend to turn into financial engineers, strategists and quants (occasionally managers and software architects for those who dislike finance). They still tend to work for the traders, true, but they earn really good money and have some of the easiest jobs at a bank in terms of total stress per $.
At the quant and systematic hedge funds, the quants ARE the traders. And a good sell side programmer can make it there as a quant over ~5-10 years.
Then don't go be a finance major at BYU. Go be a finance major at Wharton. Sorry, hate to be an asshole, and I'm not trying to dump on BYU or other schools, but any prestige you get coming out of BYU working outside of UT, or any prestige you'd get coming out of UIUC outside of IL is largely going to come from your own competence as an individual. I've been in your situation as an undergrad at a mass-education top 50 public university in a top ten program similar to yours, so I'm both being an asshole and empathizing at the same time.The kindest thing you can do for yourself right now is to stop worrying about prestige and start worrying about creating value. Either as an entrepreneur or by pursuing a career. Accy and Finance give you great careers; CS and Engineering do too. But it's easier for an engineer who wants an MBA to get into an MBA program five years out than a random finance person (especially a trader) who wants an MBA.
Instead, study in a field where competence is key and where your set of intellectual strengths plays well. That's actually Engineering or CS for many people who'd choose business as a career. I'm great at discrete math, patterns, modeling stuff at 7-10 different levels, and induction. I suck at continuous math. So for me, CS was pretty natural.
Also a STEM degree sets a great foundation for moving less quantitative later- and most careers and educations after HS tend to move from more to less quantitative. There's a lot of stuff in Finance that you can't do without a strong math/stats/design background, and engineering gives you that. So an MBA or Finance degree is really a natural move for an Engineer. Actually my graduate program has more Engineering undergrads than Finance and Econ undergrads combined. And a lot of folks are of the view that its easier to get into HBS as an engineer at Google than as a trader at Morgan Stanley.
CS/Engineering- and being a top decile worker- is your best route to prestige and a good career. But finance and accy are great majors too if that is what you want to do. Either way, if you come from a solid but not amazing school, prestige is a result of what you produce, not what you study. Not that I don't start scratching my head and wondering "uh oh is he smarter than me? And he's probably an Eagle Scout" when someone drops BYU.
1.) You have to do what's practical. Don't study performance music unless everyone whose heard you play is pretty sure you can land at the CSO or New York Philharmonic. 2.) Beyond that, you have to do what youre hood at and what you enjoy and worry about the prestige later. If you're good at programming be a programmer. Had I chosen Accy in undergrad, Id have never made it where I am now. I'd have burnt out a long time ago.
Point 1 here is just really bad, soul-crushing advice. Find any successful person, including those in music and performance art, and they all will have stories of people telling them they sucked or werent good enough for XYZ. Seriously it is probably the most universal experience among people from different fields who accomplish things with long odds. I saw an interview with Charlize Theron recently where she said that literally the hardest part of making it as an actress is how often people along the way tell you that you arent good enough or shouldnt even bother trying....she is worth 100MM+ now, so might want to listen to her as opposed to Illiniprogrammer. Nobody knows anything...you should never base decisions entirely on other people's opinions.
I know that this is an old thread but having some naive college student be given this type of advice (by another student) and have him take it seriously is too much.
This is an excellent point and can't be overstated enough. I can hardly think of a major success story that doesn't come about as the result of someone going after a career or a goal that everyone in their life told them was unrealistic or completely impossible.
No, just because he isn't touting a unicorn that shits skittles, doesn't mean its poor advice.
Only 5% of people out of target schools make it into high finance and 70% churn out within 3 years. Of those that survive, less than 1% will make managing director. You want to talk odds about getting over $20-25MM? You would do well to forget that there are people in the world with that kind of money.
There are endless stories of people being destroyed by taking on massive debt through school. By the way, that dream of making it into high finance. Lands you +80hr/weeks, 110k in NYC (basically 65k everywhere else), look at people who are only moderately successful with massive debt. They might as well have stayed home playing Halo.
Hate to dig up this old thread but I'm looking into this more and didn't want to start a new thread.. Is it feasible to get into trading with a CS degree from a school like mine? Also, do most traders have graduate degrees?
You have to be more specific - what role in trading you are thinking?
Nevertheless, you'll struggle at landing interviews from BYU (I'm no expert though but that seems like a proper non-target to me); but once you are past that stage it's all up to you and your coding skills (if you are for a quant position - but again you have to be more specific), so networking will be let's say "quite useful" in your situation.
CS is a great degree, if you really want school to be your answer than look into the various financial engineering programs at Princeton and Columbia.
That said, I would urge you to peruse salaries at tech companies via glassdoor. The top 5 tech firms make nearly triple what the top 5 financial firms do and tech is wide open with opportunity. Whereas finance is extremely competitive and currently facing margin compression.
If you want to talk salaries, go look at managers, senior engineers, directors in tech. They make as much or more than the peer equivalent on wall street. Only difference is there aren't traders raking in millions per year in tech, that said there aren't startups on wall street either, but both are just as unlikely.
Also, you are talking about living in a place like Seattle, Cali or Austin instead of NYC. Do the math on how far those "mediocre" salaries go and I think you'll be pleasantly surprised to learn that you will be earning equal to wall street.
The problem is that there's a lot of survivorship bias going on here. What about all of the people earning less than $50K, though? You never hear about all of the failures. You never hear that much about all of the stories out there that turn people into Occupy Student Loans protesters. CEOs and successful startup founders will tell you to take risks and dream big. White collar people and even most front office people on wall street will tell you to be more pragmatic. But you never hear from all of the food stamp people out there who took risks and failed (survivorship bias).
If you want to maximize your odds of success, sure, you have to go for it. If you want to minimize your odds of turning into an OWS protester or being on food stamps, however, you have to be more practical.
This industry and this forum is luckier than average- but human nature is for everyone here to assume they have average luck. In hang gliding, there's an old saying that there are old pilots and bold pilots but there are no old bold pilots. So follow a pragmatic strategy with your work life and career, and have fun and take risks in your free time. Work is not designed to give your life meaning or purpose. You get that from outside of work.
In any case, life is short and then you die. In 100 years, this decision in all likelihood won't matter. Kids these days barely even recognize names like Vanderbilt or Morgan and they certainly aren't enjoying their money today.
Also who is Charlize Theron?
Well, IP and Archer we will have to agree to disagree. In my own experience i was told by a million people that my background made my career plans unrealistic and that I needed to go get XYZ credentials which i didnt have and i should be practical about my goals etc etc...all of that was wrong and thankfully i didnt listen to any of it and instead looked at people who actually were successful and tried to emulate them instead. Even now I hear the same stuff on this board from students even after i tell them that i have actually done much of what they hope to do..they say things like "well back then (8 years ago) it was different, you dont know how it works now, etc etc"...its actually pretty funny you would think i was 80 years old. This is a losers mentality...I am not saying to pray for rainbows and unicorns or that things are easy, quite the opposite...but i havent known to many people to say "wow I'm really happy i settled for some crappy job and didnt go for what i really wanted".
And IP Charlize theron is an actress who has won multiple academy awards and is one of the highest paid entertainers in hollywood. Not sure if they have movies where you live but she is a pretty recognizable international film star.
I don't know why the culture here is to equate pragmatism with mundane or "crappy". I grew up on financial "war-footing" and that mentality has served me very well throughout my career & life. Between the two mentalities I can pretty much guarantee you there are far more success stories following my mentality and path than there are from the "Fake punt pass all day" crowd. I would go so far as to say that anyone with any shred of ambition using my mentality will be successful, period.
To each his own.
There is nothing i am advocating thats anything like "fake punt pass"...I am advocating not listening to other students who havent even yet been successful themselves telling you what you can and cant do. Im sorry but if you think the advice of "dont try to make the new york philharmonic unless everyone who has heard you play ever says you are a shoe in"is good then i think we will part ways in terms of thinking. I do not know your background but i dont know any successful people in any field that is competitive who could have achieved what they did it if they followed that advice. Even michael jordan wouldnt have been a basketball player if he followed that advice he'd be a blue collar worker who gave up hoops after he (famously) got cut from the team as a high school freshman.
As for me, I got exactly where I am by listening to what people thought was pragmatic and lining up not just Plan A, but Plan B, Plan C, and Plan D. I work 55 hours a week, I'm on the buyside, and I've got an awesome team. And on the weekends, I get to explore underwater wrecks most people will never see, or quietly soar with hawks if I feel like taking to the air (and the wind cooperates). Most importantly, I'm incredibly happy with my life. If I died tomorrow, I would not feel that I missed out on the human experience.
I've had this conversation about happiness with Bondarb before, and he's been a little evasive. I hope he is happy.
Work can take care of the first two levels of Maslow's Hierarchy- maybe the third if you really like the people you work with. In finance, work won't take care of the last couple of levels- that's something you need to do on your own- and that's why it's so important to find a job that offers free time and reasonably low stress.
Settle for a job that you can do well, that you can reasonably enjoy, where people doing it are relatable and enjoyable to work with in the long term, and that can offer good pay and reasonable free time. Then use your free time to find your purpose in life. That's how you find happiness- at least in finance or most business professions.
Sorry, but if you go to NYU to study concert piano, take out $100K in debt, and suck at the piano, you're more screwed than Mathilde in The Necklace. Maybe when you're 47 (Income-based repayment is 25 years) you'll finally be out of debt.Working in this business, you don't hear from these people in person, but they CLEARLY exist and exist en mass- just turn on the Suze Orman show any given night and there is another sob story about some 40 year old who is still paying off student loans and can't make ends meet because she pursued her passions without trying to figure out if they could work. That's how Bondarb and everyone else giving the "chase your dreams advice" might have turned out if the dice had landed differently.
I'm not saying don't go be a firefighter or an actor or an artist if that's what you want to do. But don't go $100K or $150K into debt to do it (Fortunately you don't have to for either). And get a job as a waiter in the meantime if you need to make ends meet. Take risks, but make sure they're calculated, and don't bet more chips than you own.
Bondarb I think my point was that you should have some reasonable shot at earning a living and paying your student loans- that's all. In traditional performance music, unless you're with a major metropolitan orchestra (like the CSO), it's very tough to make ends meet. And there's also a lot of false affirmation with the arts. Sure people will occasionally tell you that you suck, but there should be a clear signal that wherever you're going you'll be able to earn a living wage. If your passion is the violin, that translates into a reasonably clear signal you'll make the CSO or the Philadelphia Symphony Orchestra or the like. This signal is arguably easier to come by if you are studying Accy (where you just have to be able to pass the CPA exam or at least do basic bookkeeping) than if you are studying Performance Music (where you really need to be in the top 5%, maybe top 1% of musicians out there to earn $45K + benefits).
Plse stop with this "happiness-contest" thing and accusing me of being unhappy...i am "evasive" about the topic b/c i am not selling lifestyle self-help manuals and b/c no one cares about your hobbies when asking for business advice. I dont want to get into a douchey dick-measuring contest but I will take my setup over your 55 hr/week office-drone life where u get to do some hang-gliding on the weekend...replace hang-gliding with golf and you have literally the exact stereotypical, boring-ass life i have strived to avoid.
Yeah this mentality that you shouldn't try to do something because someone else told you you'll never be that good at it is really pretty bad. Unfortunately it's pervasive not only on this board but IRL as well.
If you think for a moment, you'll realize a lot people are just out to level the playing field. This might seem cynical or arrogant, but it isn't. People who insincerely tell you "you'll never be able to do xyz" and "you're really good at xyz" are often the same. In theory there probably is an absolute scale on which people's abilities at xyz can be measured, but the people making the aforementioned statements generally 1) have no clue about the metric and consequently 2) attempt to equalize everyone's abilities with respect to that metric.
For example, someone mentioned Halo. I used to be somewhat proficient at Halo - despite never owning a console besides SNES growing up I got used to playing FPSs around friends regularly. Because Halo was always more fun playing against people you know, I rarely played online. But on the rare occasions I played on xbox live, I held my own more often than not. But if someone rather arbitrarily declared I was really good after playing with me for a game or two, I'd dismiss it. Even though I was okay, I was probably still noobish compared to ALL halo players, so by declaring me to be really good, they're just rendering the absolute scale useless and quite possibly attempting to validate their own lack of proficiency in the process.
Okay so that was kind of a silly example - no one actually tells you you're good at video games most people just want to give you a good ass kicking wherever and whenever possible. But the point applies far more generally.
People who say you can't do xyz in finance probably haven't attempted to do it themselves or they failed, perhaps not for a lack of effort but rather due to finding out it wasn't what they wanted in the first place. Why would you listen to them? The people who actually did it and still enjoy it are more likely to give advice to those starting out.
Okay yes survivorship bias is a thing, so what? Are you really going to attempt a probabilistic cost benefit analysis of future outcomes or are you actually going to live in the present and do stuff, knowing that yes failing is within the realm of possibility and barring slippery slope arguments or taking things to their logical extreme, does not automatically render you below the poverty line or an OWS?
Well you still have scuba diving and motorcycle racing. And I really enjoy working with the people I work with, which is something that can't be said of many people in finance. I really think that happiness depends on being content with what you have and pushing the boundaries of the human experience.
Why is it that when I say I'm happy and I wish you happiness, you switch to tearing everyone down? I really do wish you happiness- your posts on WSO would be nicer if you were happier.
I have to agree with IP on this one. I played an instrument for 10+ years and decided to quit so I could focus on my studies in college. I came to terms with the fact that I would never be a top professional and would never earn a respectable living with the instrument. I think it was the right choice, since I was able to get good grades in a STEM/finance double major and land a S&T internship last summer. I'll be starting as an analyst on a derivatives trading desk in a few weeks. I have no regrets about my decision and am happy about how things turned out. Besides, I went to a small state school, and I had to live and breathe finance in order to get this type of internship (no OCR, barely any alumni, no name-brand recognition, etc.). I think if you attend a target school, it provides better insurance for topics such as music and history, which those people deserve, since they attend those school. But, given my circumstances, I had to make the more practical decision. And lets be real here, breaking into S&T is significantly easier than becoming a top-paid, world-class pianist or violinist. However, I would say becoming a top HF PM is as hard as becoming a famous, professional musician. We all know many make it into S&T but many of them never make it to the buy-side.
You are the poster child of a mediocre shit of an existence... lmao
Good job kid, great career field and wish you all the best!
I could also add that I quit the instrument since I realized I wasn't truly passionate about it (my parents kept me at it for all those years) and that lack of passion would not have lead to a fruitful professional career. To be perfectly honest, I guess I am pretty mediocre...but I just want to enjoy my work and be good at it. Then I hope I'll be happy. Everyone defines happiness differently and it is incredibly subjective.
See this is good...you made decision based on your own calculus and decided to move away from music. That is fine...when I was younger I wanted to play centerfield for the Mets so we all have to be practical. My whole point was that one shouldn't make these decisions based on other people if they have passion for something and one CERTAINLY shouldn't sit here and tell other kids that they can't do something if they themselves haven't succeeded and don't even know what it takes to succeed. The music was a metaphor for the OPs original business question...and of course I am not saying that everyone who picks up a saxophone should keep playing until they are winton marsellus or they are in the poor house whichever comes first.
I suppose I agree with you on this too. I didn't completely move away from music, I just stopped the rigorous practice that is required to make consistent progress. I still appreciate learning the instrument and play now and then at my leisure. I assume you do the same thing with baseball. W.r.t. giving advice to others, I think it all boils down to your personal experiences and how you succeeded. Anyone asking for advice should listen to as many different perspectives as possible and synthesize their own plan of action given their specific circumstances. That's pretty much what I did when I first found WSO.
This is shaping up to be one of my favorite threads, and you know what, I don't think @"Bondarb" and @"IlliniProgrammer" are giving conflicting advice. Bondarb is basically saying be long vol in your life, and IP is basically saying think about how much premium you are paying to be long vol.
Bondarb says: don't give up before you've even tried, just because people have told you how long the odds against you are.
IP says: recognize how long the odds are, especially if you haven't received confirmatory evidence about your potential for success. there is selection bias given that successful people like Bondarb will broadcast their successes more loudly than the failures will broadcast their failures. and be wary of chasing the long odds if the costs of failure (which is the higher probability scenario) are horrendous (i.e. starving artist lifestyle).
I'm glad Bondarb now agrees with me. I wish he hadnt resurrected a year old thread to attack me.
Bondarb picks his hours, therefore he is superior to everyone. Makes sense.
U mad u don't get to set ur own hours?
I simply find it comical how he's ten years older than most here and still visits the forum to bash people.
This is an interesting conversation - especially the music bit!! Just so happens I was a pianist since very young, and went on to study with some notable teachers (one who won several of the biggest-name competitions out there). I even got awarded a scholarship to pursue music at a great school but I decided to leave it for something more practical after getting to a higher echelon and seeing that even people who were genius - brilliant - didn't get the recognition and lifestyles they wanted. Even my very own teacher who was at a high part of the spotlight of the industry at one time told me that he had seen others who were better than him go unrewarded - he said music was a hard life...and I saw him struggle. Of course all this may be a bit off topic and since music is more subjective than other fields it isn't so correlated but thought I'd throw it out there.
I've really gone out of my way to talk to a lot of successful people and I'm not just talking about rich people (WSO is obsessed with that). Many guys I talked to never knew or thought they'd be as successful as they became. They just did it because that's what they did. Several years back when I was an intern, I once asked Paul Amos (one of the founders of the Aflac Insurance company) if he ever knew or thought Aflac would be what it is today. He chuckled, grinned, and said "no, I had no idea". I can throw out countless other examples but I definitely think anyone should give their dreams a try - nothing ventured, nothing gained.
I'm still a young buck but as I'm getting a tad older I'm starting to change my mind on several things, one of them being life and success. I think my generation is too surrounded by "I want money, and I want it now!" without really thinking things through. I know a very old broker had several seats on the Mercantile Exchange (each one was worth over 12 million at its height) and started one of the biggest brokerages in natty and oil that's been around for decades. I used to ask him a lot of questions about life when I got the chance, and I remember him being a big donor to a lot of military organizations, etc. I asked him all about how he got into brokering and his story of rags to riches but near the end he said he always loved the military and wanted to go in when he was younger but was unable to. I asked him "Well certainly you wouldn't have done that now knowing how much of a success you've become" and he smiled and say "I would have still gone to the military instead". Life isn't all about money (although you definitely have to take it into account - I won't argue that); there's much more to life than that. This is something I'm just now coming into understanding and this is sort of what IlliniProgrammer has said. I think people my age need to stop being so worried about making this dream gagillion dollar salary/bonus by the time they're 25 so they can go get a Ferrari, act like a fool, blow splooge over anything with a wet vertical smile, and then try to copy something Dan Bilzerian posted. I have 2 good friends, one a cop and another in the military and they're both having a blast, with the latter traveling the world.
That being said, I may be coming to the end of my career in finance (it's been a short one) to go do something I've wanted to do for a while and if it doesn't work out, it's fine, I can do something else. I'm happier now after the thinking I've done from the last paragraph.
Definitely a cool discussion here with some interesting information.
I don't think anybody (IP or Bondarb) is right or wrong, both of you made valid points. There are just different kinds of people. If you want great outcome, you shouldn't be afraid to take great risk, that's it. As Jeff Bezos put it: he applied the "regret-minimization framework" - Had he tried to start Amazon but failed, he would have no regret; but if he didn't try, he would regret it forever - so he quit DEShaw (lol) to start Amazon because that was the ONLY logical thing to him. You think he would have waited for 100 people telling him twice every day that his idea is gonna make him billions? He more than likely heard the exact opposite from most people, but he did it anyway (= definition of a great entrepreneur).
If on the other hand somebody wants to have a nice family life with a steady income, that's fine, but the dumbest thing in the world he/she could ever do is to take great risk for some ridiculously competitive ventures/jobs/whatever.
I'm a grad student myself and I really have no idea about S&T exit opps post Volcker... But it seems to have become a heated discussion here so I thought I post my view on this haha
sorry to resurrect this topic but it was simply too good not to bring it up for the other users to benefit as well.
personally, I am taking the steady income route with some calculated risks (that may or may not pay off - we'll see 5 years along the road) - at least I did not have a super high risk/reward bet such as entrepreneurship/etc to pursue at all costs - which, as it has been heavily stressed, cannot have reliable job stats and shouldn't be done when leveraged.
what about others?
S&T question, help please. (Originally Posted: 01/07/2013)
If given company X, Y and Z, how would you go about comparing them? Which company would you choose?
are they asking you valuation? like DCF or comps? or would they give you a different set of information?
Depends on the industry, what you're looking for (value, growth etc), time horizons and a multitude of other aspects.
First thing to note is that unless the companies are of a similar size in similar industries, you cannot fairly compare them. Next you find a set of metrics which are relevant to that industry. Price to Earnings is the most quoted one but some other key metrics are EV / EBITDA, Free Cash Flow Per Share, Price to Book. You can find a lot more in the WSO Finance Dictionary.
Basically the concept is that you are trying to find some standardised measures which allow you to strip out the background noise and focus on the fundamentals of the companies and compare them in a fair, relevant way. DCFs are very bad at this in my opinion because your assumptions have to be absolutely spot on and this is very hard to do.
This is all for real world application. The phrasing of your post sounds more like a college / interview scenario in which case they will give you a set of financial statements, some background information on the company and maybe some comps.
S&T question, thought process. (Originally Posted: 01/07/2013)
turns out S&T & IBD give you a some questions during interviews that don't really matter about the answer, but only the thought process behind your conclusion. several i've read about are along the lines of "why are sewer lids circular, and not rectangular?" "of what percentage is the US covered with man-made structures?" “An apple costs 20 cents, an orange costs 40 cents, and a grapefruit costs 60 cents, how much is a pear?”
so point being made, they want to hear your thought process, what kind of buzz-words do they want to hear? how much should you verbalize? any other tips for a confused potential intern?
thanks in advance
They want to hear a structured logical conclusion. For example, I have a hypothesis A because of reasons X,Y,Z
i understood that much, but for example, the pear questions. "I believe pears should be worth 50 cents because apples have 5-6 seeds, and grapefruit contain 12 seeds, so since pears have 10 seeds, they should be worth around 50 cents on the basis of amount of seeds per fruit."
is that shit? or decent?
mind rephrasing to something you'd feel would be good?
That's an interesting answer to the problem, I honestly don't know how an interviewer would react to that answer, but you would definitely want to state your thesis first. For example, the first thing you would say is "I believe the value of a fruit is measured by the number of seeds in it" By stating this hypothesis, the interviewer knows what you are doing and trying to prove. Then you can go on by stating apples have such and such seeds which comes up with an estimate of the pear's value.
thanks for the feedback, its much appreciated. what about the sewer question? if i got that in an interview, i'd be caught blank for a moment, i have no earthly clue how i'd state a thesis there, any idea there man?
i think that was a microsoft engineering interview question, and you would have to have some mathematical knowledge I believe, so I doubt you would have a question like that. I'm pretty sure the answer tho is that if you take the circular sewage lid and turned it on its side, it wouldn't be able to fall through the man hole while any other shape it would be possible
thats a valid point.
anything else you'd stress that i should do in the interview besides state my hypothesis & back it up with X, Y, Z?
any help is appreciated.
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