What do you actually learn in 1st year of IB, that a trader does not learn?

The reason i ask...as a rates trader, i learned how to read the global macro news feed, combined with watching how price action in the market develops, and create a set of risk vs reward scenarios, to come up with trade ideas.  This is a very niche skillset.  Sure, we use excel to perform relative value research / analytics, but nothing too crazy.  All this in an effort to learn when is it possible to predict short term future price action.  90% of the time there is no way to predict future price movement...however, that remaining 10% of the time a good trader can predict future movement with 70% accuracy....and over time that's enough to make good money.  Shifting those % numbers a few points left / right makes the difference between a great trader, an average trader, and a bad trader.

So, with that being said, what do IB analysts learn?

IB analysts often leave IB after 1-2 years ang go into corp strategy / corp finance / tech product management...could a trader do that?  what is the skillset for those type of moves?

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Comments (8)

  • Associate 3 in IB-M&A
May 26, 2021 - 8:18pm

Very detailed financial analysis, often pretty bespoke to each company/situation, and lots of powerpoint slides to make the Excel readable and tell a story. The skillset is very different than trading, there is little focus on pricing/future predictions/macroeconomics, which is why people do not move between the divisions much at all.

May 26, 2021 - 9:36pm

i feel like an idiot asking this....but what is "bespoke financial analysis" ?

just google it...you're welcome
  • Associate 3 in IB-M&A
May 26, 2021 - 10:51pm

Company 1 and Company 2 want to merge, so you do a lot of Excel modeling for what their financials and market positioning will look like post-merger (accretion/dilution, who owns what % of company, deal structuring and how you will pay for it). A lot of this stuff is highly specific to each company/deal, thus "bespoke" because it's all custom and takes hours to do - you can't build out some Mega Model in excel and have it work for all deals.

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  • PM in HF - Other
May 26, 2021 - 9:36pm

S&T is not going to teach you most soft skills or to be polished. Lots of traders struggle with that as they move along their career since they ignore those skills.

Countless hours of ppt/excel, getting chewed out by your MD with logos in bad order/change this slide, dates match up etc...Say what you want the IB/Consulting abuse these ppl take who say they are glorified ppt monkeys in reality is making them beyond polished/c-exec skills you would never see in your career 10 years in otherwise.

If someone says what about structurers...ignore those folks since they structuring exotics aint far from banking and the hours are more towards banking. 

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May 26, 2021 - 9:42pm

In S&T you analyze tradeable securities, in IB you analyze companies. I don't know shit about how to trade the securities of my client in the market and I would assume the S&T desk doesn't really know shit about what the client does, their growth trajectory, business-specific risks, primary value drivers, etc.

May 26, 2021 - 9:45pm

and how does a 1st year IB analyst learn "to analyze growth trajectory, business-specific risks, primary value drivers, etc" ?

just google it...you're welcome
  • Analyst 1 in IB - Cov
May 27, 2021 - 12:15am

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