Why this talk of "exit options" amazes me.

You sound like a f*cking idiot man. You're in college and you're jumping on these forums trying to talk down to people that are probably 10 times smarter than you. Point is hedge funds and PE firms actively recruit IB analysts, the system has worked so far, I'd like to see a young punk like yourself get a job at Carlyle after having worked at J&J's Corp Fin division.

I met with an associate and a vp from a private equity firm the other day and they both told me to suck it up and do a banking analyst program when I graduate. They said it's is so highly looked upon by almost everyone that the exit opps make it worth it, despite it sucking.

Maybe the reality is that it's bullshit, but it isn't perceived as bullshit by others. Therefore, until that perception changes, I'm still going to pursue it, then hopefully move to PE.

The people 10 times smarter than me are either starting their own companies, or they are going into PhD programs and hedge funds, not analyst programs, which they refuse even to consider. The same is true of those who are 20 percent smarter... or 20 percent dumber, for that matter.

I'm not saying that PE and HF don't recruit analysts, because I'm sure they do. I'm saying that there is no reason to, since analyst experience is an obvious negative in the mind of anyone who knows anything about analyst programs. The only people who think differently are people who know absolutely nothing about banking.

Well, this is what i hear and it's all speculation on my part.

1) "Analyst programs are extremely unselective, and the people in them don't learn shit"

I would wholeheartedly disagree with this statement. It's actually very tough to get a job in IBD, especially if you want to get to a good bank. Even in the 'lesser' banks, the competition is stiff. Take for example Deutsche Bank last year. At my school, 160 kids resume dropped. They narrowed the field down to 40 or so kids for first round interviews. Then they took about 10-15 for finals. That's less than 10% of kids who made it to final rounds.

The average training program at any BB spends about $15,000 on each of their analysts. This is for about 4 or 5 weeks of just training, and doesn't include costs to recruit. I'm thinking that not all banks are retarded and just spending money on 'stupid analysts' and unqualified candidates.

The two year analyst stint is a learning experience. You learn by doing, you learn from your mistakes, and your ability is judged on how quickly you can grasp the concepts, 'add value' to a group, etc. They're not there to mold you, but you they're there to see what you can do if given limited guidance.

2) I've always been told that we should think of IBD as the Navy Seals. Sure, the work sucks, you get beaten to a pulp, and you are mentally tried over and over again, but if you survive, you're a 'navy seal'. Anyone in any other industry who sees that would be impressed by your sheer ability to withstand a grueling 2 years. Not many people cut it, and the ones who do often end up their top pick of these so called exit opportunities.

Many people who enter these IB jobs look to these exit opportunities as a possibility. Yes, IBD makes a lot of $, but PE's make more. Ultimately if your goal is to make $, having a job in IBD sets you up for bigger and better things, assuming you get through the analyst stint and you're not completely incompetent.

I think Investment Banking is a good foundation to do whatever you want to pursue later on. Having a name brand bank on your resume doesn't hurt either, and plenty of people go from the IB/Finance analyst stint to working at movie studios, fashion houses, fortune 500 companies, etc.

You may have a point but I'm too busy laughing at the "navy seal" comment above to post a rebuttal.

You seem bitter, and you're exagerating the negatives and under-selling the positives. The firms that provide these exit opportunities to IBD analysts are not dumb.

it's what i've been told. what can i say? lol. This advice was from an old MD at GS, and now the CIO of a securities firm.

"It's actually very tough to get a job in IBD, especially if you want to get to a good bank."

This depends entirely on where one went to school. For example, an 75th-percentile Ohio State grad is most likely going to be smarter and more competent than a 25th-percentile Ivy grad, but the mediocre Ivy kid is a walk-on for IBD and the strong OSU student has almost no chance. From a non-target school, IBD is hard to get, but from the target schools it's taken for granted... and it's not hard to get into the target schools if you're determined at a young age, and if you know how to game admissions.

"The two year analyst stint is a learning experience. You learn by doing, you learn from your mistakes, and your ability is judged on how quickly you can grasp the concepts, 'add value' to a group, etc. They're not there to mold you, but you they're there to see what you can do if given limited guidance."

Ok, but the things one learns "by doing" are the grunt work that most "business" types abhor. I don't think most CEOs need Excel hot-key combinations in order to do their jobs. You're right on your second point, though, which is that IB analyst programs provide almost no real mentoring and professional development.

"I've always been told that we should think of IBD as the Navy Seals. Sure, the work sucks, you get beaten to a pulp, and you are mentally tried over and over again, but if you survive, you're a 'navy seal'. Anyone in any other industry who sees that would be impressed by your sheer ability to withstand a grueling 2 years."

I've heard this comparison before, but comparing IBD to Navy Seal or Ranger training is ridiculous. Five days of grueling physical activity, in complete isolation, with no food other than what one can forage, is actually hard. By contrast, IBD isn't that difficult, in the sense that anyone who finishes high school can do the work and suck up the hours and conditions, which are no worse than were commonplace for working people and slaves in the 19th century. Analyst work is easy; it's just humiliating, and the people who stick with it are those who really want to get rich and see no other options. I don't know why anyone would be impressed by that.

"You seem bitter, and you're exagerating the negatives and under-selling the positives."

Positives? The only positive of the analyst program is that it pays extremely well for something that is available out of college. Beyond that, there are no positives.

"The firms that provide these exit opportunities to IBD analysts are not dumb."

Actually, they are. I'm a big fan of the behaviorist approach to assessing intelligence. One who shows dumb (by which, I mean severely and obviously suboptimal) behavior is considered dumb.

These firms would do better to hire from the large pool of under- and unemployed PhDs in the sciences and humanities. While their training is irrelevant to finance, they possess sufficient intelligence that they could acquire all the knowledge that is learned in an analyst program within two or three weeks.

your last point is correct in that "those who stick with it are only those who really want to get rich and see no other options". If you want to get rich quick, and make lots of money by the time you're 28 or 29, this is probably the best route to go. But of course, if you hate your life that much, I'm not sure making a lot of money will compensate.

I suppose your professional demeanor and ability come from your ability to be resourceful and learn on your own. With that, may come leadership, and other 'soft core' skills that inevitably mold a CEO or whatever. This is just a guess.

Are you in investment banking?

I know it's ridiculous. I can't picture many of my colleagues as them either. Some of them, I can definitely picture..especially the ridiculously intense, crazy ones. I guess just as a very general, loose sketch/analogy. it is what it is.

I'm not sure that many analysts are going to "make lots of money by the time you're 28 and 29". Most of them end up becoming credit posers who waste their income on bottle service and overpriced Manhattan apartments, which they finance with (yay!) subprime mortgates. Moreover, promotion to associate is far from guaranteed.

What analyst programs sell is the ability to make, straight out of college, a salary that will impress the parents. What happens after that (usually severe burnout; NYC is full of I-bankers who become garbage collectors) is left unsaid.

"I suppose your professional demeanor and ability come from your ability to be resourceful and learn on your own. With that, may come leadership, and other 'soft core' skills that inevitably mold a CEO or whatever. This is just a guess.

Are you in investment banking?"

I'm not in IBD; I was warned away from it, and I'm very thankful for that. A lot of my friends are investment banking. The stories they tell are shocking. I'm not disgusted by the fact that these banks aren't actively mentoring their analysts, so much as by the way they stand in the way of their analysts' professional development by assigning so much shitty, pointless grunt work. Learning on one's own is certainly an important skill, but it's nigh impossible if one is doing stupid work for 80 hours a week.

Dude, you're an idiot. You denigrate the work that IB analysts do because it's not "grunt work", but where do you think CEOs of companies started out? They certainly didn't graduate from college and enter the "CEO Development Program". Unless they started their own company, they worked themselves up by starting out at the bottom. That's not to say that all CEOs are ex-banking analysts, but it's ridiculous to criticize 1st year college graduates who know nothing about the industry for doing the lowest work available. You learn best by doing, and even though it sucks, any analyst who models for 80 hours a week is going to know his way around a balance sheet pretty well after a few months.

Haha, anyone else find the ex i-bankers working as garbage collectors image funny?

Also you realize no matter what you do, no matter which industry, you will always have shitty, pointless grunt work? In consulting, they recruit hard by telling students all the glamorous, globe-trotting adventures they'll have, whispering advice to F500 CEOs, when the reality is most of the time you are doing the bullshit work...

The rest of your email/points are ridiculous btw.. thought you were a troll at first but you are too ridiculous even for that.

"They certainly didn't graduate from college and enter the 'CEO Development Program'."

The fact will surprise you, but most people who end up rising to the top of any organization are those who were able to find, early on, someone to take them under their wing. This does not discount hard work and talent, but rising requires more than these. If you're talented and work hard, but you're not noticed, you're going to spin your wheels for a long time.

People enter analyst programs because they see the movie, Wall Street, and assume that they will be the next Bud Fox, as if finding a Gordon Gekko and becoming protégé is the easiest thing in the world.

"It's a lot easier, and it requires fewer years, to make partner at a PE shop than clawing your way into a F500 CEO's job."

This is a difficult comparison to make. I don't know anything about what it takes to make partner in PE, but the selection criteria for F500 CEO are generally understood to be political and, beyond that dimension, unpredictable and random. In other words, it's a lottery system. So, of course it's very hard to make CEO because of the incredible number of random bullshit variables.

It's been proven several times over that CEOs at most (80-90%) F500s are no more competent than the average manager within their respective companies. Why companies pay so much for them is beyond me.

"It's fucking hard, it takes years and years and years, and there are way too many layers to climb up through in corporate america."

You've made a point with which I don't disagree. Really, does anyone here doubt that large corporations are full of useless hierarchy and extremely inefficient?

"Which path do you recommend instead of IBD, for the kids who are choosing IBD?"

Recommending career choices for thousands of people whom I don't even know seems like a good way to end up being wrong. The "right" career path is different for each person.

Flaminary, your conclusions are drawn from such crazy assumptions and misinformation.

1) The programs are extremely selective. Not only are a very small percentage of applicants accepted, but these applicants are among the top college grads in the nation. You think it is easy for a mediocre Harvard kid to land a job in banking? See how much difficulty that same kid landing a normal back office job. I went to a non-target school and the big 4 were handing out accounting jobs to people with sub 3.0 GPAs. What exactly are you comparing it to?

2) We learn loads more than pretty much any other career alternative. Yes, some of my time is spent formatting power-point presentations. But I also spend at least a couple hours every day on calls listening to CEOs, CFOs, PE guys, and my own senior people talk about position and selling companies. I pick up so much just listening to these conversations (and even participating myself as well, although infrequently). I compare myself to others that also graduated and the only ones getting similar experience are those busting their asses all day at consulting firms.

the op makes a good point about the importance of a mentor.

"The programs are extremely selective. Not only are a very small percentage of applicants accepted, but these applicants are among the top college grads in the nation."

The "top college grads" are starting their own companies, going into hedge funds directly, or entering the top graduate programs. The only top grads who go into IB are those who know people already and will therefore get a pass on some of the grunt work. Rubbing elbows with CEOs and PE partners isn't the default for an analyst; your family has to know people in order for you to get that.

"You think it is easy for a mediocre Harvard kid to land a job in banking?"

Yes, extremely so, as long as he's well prepared. The IB interview process has a lot more to do with preparation than anything else. If he goes in cold because he's cocky, he's probably toast, but if he knows what to expect his odds are very good.

"What exactly are you comparing it to?"

Med school, the top law schools, hedge funds, R&D groups at top software companies, and PhD programs.

"But I also spend at least a couple hours every day on calls listening to CEOs, CFOs, PE guys, and my own senior people talk about position and selling companies. I pick up so much just listening to these conversations (and even participating myself as well, although infrequently)."

I seriously don't think it's that hard to learn about the business world. It's complicated, but not exactly difficult to figure out. Unless you're very lucky, whatever you're picking up could easily be learned by reading a few textbooks or starting your own company.

Ban the OP plz.

Flaminary, I'm beginning to sense a pattern in your responses. So you're saying that I-banking is uncompetitive compared to MORE schooling (med, law, and Ph.D programs). At some point people need to stop getting an education and start working. Also, these are incredibly different career tracks that attract different types of people. I'd rather be an analyst for 100 hrs a week than a doctor or lawyer for 50 (not that they aren't slaves as well). R&D for a top software company? Do you know how boring that sounds? As for hedge funds, those don't exactly interest me either. You will need to realize at some point that not everyone has the same goals and desires as you do.

I seriously don't think it's that hard to learn about the business world. It's complicated, but not exactly difficult to figure out. Unless you're very lucky, whatever you're picking up could easily be learned by reading a few textbooks or starting your own company.

It is quite clear that you really don't know what you're talking about. The positioning, marketing, and everything that goes into selling a company is extremely complex and you're not going to learn it in a book. Sadly, it is one of those things that you think is easy until you observe someone who actually knows what they are doing.

What is your obsession with starting your own company as well? People throw this around as if it is the be-all and end-all of career paths. The best and the brightest aren't the ones starting their own businesses, it is any idiot who comes up or stumbles upon a good idea. The smart ones who start their own business do it after years and years of experience in the industry. Yup, that "experience" starts with bitch work. Next you'll be claiming that those who went to college are "idiots" because they should be starting their own businesses instead of pursuing a path that is "not hard to get into the target schools if you're determined at a young age, and if you know how to game admissions."

Meanwhile, please enlighten us flaminary, what are you doing that makes us analysts look so foolish for choosing our path?

"Nonsense. I think he brings an important point of view that is often overlooked on this site."

To be fair and complete in self-disclosure: (1) Yes, I am basically trying to piss people off, and (2) nonetheless, what I am saying is essentially true.

I don't disagree with the thesis of my opponents. Analyst programs do, indeed, provide great exit options, especially when compared to the quality of people in them, which is, on average, mediocre.

There are some really talented people in analyst programs, but there are also some really talented state school grads now working as web developers. If he's working 40 hours a week, he has 50 or 60 available to spend reading business/finance textbooks and having conversations with his friends in other industries and, if he does this, he'll know more about business and finance then any analyst... but he still won't have the same exit options.

The reason analyst programs have great exit options is that there is a general perception that the possibilities are limitless-- that if you're seen as having very high (top 1%) potential by the bank, you'll get to rub elbows with CEOs and learn an incredible amount about business and finance within a very short amount of time. It's almost certainly true that this possibility exists, but it seems to be very rare. The ninety-x percent of analysts who don't get that "protege" status end up doing shitty grunt work from which they learn nothing. Then they get fired when it would come time to promote them to associate.

When the analysts start applying for jobs, they tell a story that indicates that, in fact, they were the stars who made top bonus and got to rub elbows with CEOs, even when this was objectively not the case. This makes them very attractive to future employers. The banks, if called to verify, will not contradict their analysts' glory stories because it makes the bank look good to be so generous and to have so much interesting work. It's this sort of "victimless" lie that leads to a lot of undeserving analysts getting great exit options.

The OP makes good points. Because most users of this site are college students or IB analysts who have not yet become jaded by the job, they fail to appreciate many of them.

As a former IB analyst a few years removed from the job, I can see where he is coming from somewhat. The fact is you don't have to be exceptionally smart to be a good IB analyst, just competent and willing to do whatever the job takes. It's basically monkey work.

The "Navy Seals" comment is BS. Sitting in front of a computer for 48 hours straight doesn't put you on par with the Seals. If you mess something up, you get yelled at and maybe lose out a bit during bonus time. If a Seal messes up, he could literally get killed. However, I could see a GS MD saying this is the case. I-Bankers are some of the most egotistical, self-congratulatory people out there. Plus MDs want you to believe what you are doing is great. That way you stay motivated, work hard, and make them lots of money.

To the OP: The reason "exit ops" are fairly good for i-banking analysts is because they are a known quantity. Employers (many of whom were bankers at one time) know the skills former analysts learned in training and on the job, so they aren't taking too big a chance in hiring them.

I agree that the OP has defended his position rather well. But he hasn't offered an alternative and maybe that's because there really isn't one, this is the way the system is and it will remain so for many years to come.

There's only one thing he says that I agree with: getting into IBD from a top target is uncompetitive.

I personally know kids from my target with 3.1's, no internships, no connections, disciplinary problems (at least 3 were suspended for a term) and a crappy personal skills who got IBD internships and full-time offers at BBs. Yes, BBs.

The recruiting experience, which I was told was "brutal", turned out to be lame, unfair, and downright retarded.

Otherwise, the dude's off his rocker. Ex-bankers as garbage-men? Please.

Im amazed at how wrong flamery guy is and yet he continues on the same path.

As for the learning experience... when looking at what other individuals do for jobs coming out of school, Investment banking offers one of the widest experiences into the business world you can get. Yes you do bitch work.... but what job doesnt have bitch work.

As for the rigorousness of law and med school -- in reality if your a good memorizer these schools are not hard... just a lot of material to absorb... in you arent researching or innovating anything.... law school involves a little more thinking (since its an interpretation and presentation of facts), but even there you do not necessarily need to be a genius.

As for researching... We can go back to the behavorist approach to analyzing it. Why go back to school for 5 or more years (after 4 years of undergrad) so that you can do research on some esoteric topic just so you can make a total of 60 grand (if that) at the age of 26 , 27 etc. While you can go into banking at the age of 22 and make more than that. Truth is everyone has their own interests and aspirations and that dictates their future choices... banking is one of the best places for someone interested in finance and business.

As for PE/Hedge funds... after the market turn it will be interesting to see the outcomes... regardless many of these firms do not hire straight from undergrad so for a majority of applicants (not the top 1 or 2) it is much more realistic to apply for banking in order to move into these better positions.

I am all for freedom of expression, but not freedom to continually display ignorance. It also does not make a lot of sense (behaviorally) to come onto a banking forum and bash banking unless your a little bitter about the industry.

Ignorance goes goes both ways. Most investment bankers would NOT survive medical school. This is not true the other way.

You do have to be great at memorization, but can you apply the material? There is much more rigor at PhD and Med schools than any 15k crash-course on Finance will teach you.

As for the behavorist approach, I'd argue with the needs pyramid approach. After a certain point, money means absolutely nothing. The happiest country in the world is also of third-world.

Money won't buy happiness. It does help though if you're fat.

Yeah, comparing banking analysts with PhD programs and med school is pretty fucking flawed.

I think people need to come to grips with the fact that most of us know fuck all about every possible field out there so it's retarded to try and slam what someone chooses to do after college.

How about this: screw ibanking BS, Study full time and get the CPA in four months, do financial modeling certifications and come out with the same skills as a I-banking analyst? And maybe clear one or two levels of CFA at the same time?

"2) We learn loads more than pretty much any other career alternative. Yes, some of my time is spent formatting power-point presentations. But I also spend at least a couple hours every day on calls listening to CEOs, CFOs, PE guys, and my own senior people talk about position and selling companies. I pick up so much just listening to these conversations (and even participating myself as well, although infrequently). I compare myself to others that also graduated and the only ones getting similar experience are those busting their asses all day at consulting firms."

What is the best place to watch conference calls online?

The question has to be asked...

Why would you come to an IB forum if you have such a distaste for it? Altruism? Show people the error of their ways?

Sounds like you made a decision you regret and are now trying to legitimize it on an internet forum full of people you don't know.

I am 100% sure the OP doesn't work in IB.

im going to clear up the Navy seals comment, b/c it is apparent that many of you are taking it very literally.

I think what the guy basically meant was that finishing the 2 year analyst stint in IB sets you up in the long run, and demonstrates persistence and determination. If you're a Navy seal, and you want to leave the armed forces and find a job in any industry, people will be impressed.

Obviously it's infinitely harder to do the Navy Seals program than an analyst stint, but that's what the MD meant by making such an analogy. Sorry for the confusion.

[This post is fucking long-- sorry.]

"The reason "exit ops" are fairly good for i-banking analysts is because they are a known quantity. Employers (many of whom were bankers at one time) know the skills former analysts learned in training and on the job, so they aren't taking too big a chance in hiring them."

I can see this being the case, but wouldn't it work the other way? People who went through analyst programs would know how little is learned in the ordeal. Also, what I've observed is that people come out of analyst programs with very negative attitudes toward work, and I'd consider that a substantial drawback in hiring.

In any case, I'm pretty sure the PE/HF guys, if they did banking, skipped the analyst level and went MBA -> associate instead. Either that, or they were traders.

"Otherwise, the dude's off his rocker. Ex-bankers as garbage-men? Please."

I know an analyst who became a garbage collector. I know another who washes windows. This isn't a common career path, and maybe I shouldn't have represented it as such, but it does happen. They have a miserable go of the IB thing, they burn out, and they work undemanding jobs for a few years until they can re-center themselves. This will surprise the people still in college, but extremely shitty jobs (-2 or -3 sigma) take a long time to recover from. They're much worse than shitty high school jobs (e.g. retail) because of the emotional investment involved.

"As for the learning experience... when looking at what other individuals do for jobs coming out of school, Investment banking offers one of the widest experiences into the business world you can get. Yes you do bitch work.... but what job doesnt have bitch work."

Consider one (radical) alternative: start your own company. You'll do all the grunt work... and all the interesting work. You'll get a full mix and, probably, not mind the grunt work so much. In this scenario, grunt work's something that has to be done, but not your entire reason for going into work each day. If you build a city, you have to maintain a sewer. But if you're an analyst at a large bank, you work on 10 people's sewers and never get above ground.

Every job has grunt work, but it's rarely more than 30 to 50% of a person's time, even at the entry level. Analyst programs are 200+% grunt work. The psychological ramifications of this are nasty.

"As for the rigorousness of law and med school -- in reality if your a good memorizer these schools are not hard... just a lot of material to absorb"

They aren't extremely difficult programs once a person is in, but top law programs and almost all US medical programs are more selective than analyst programs, or for that matter, MBA programs.

"It also does not make a lot of sense (behaviorally) to come onto a banking forum and bash banking unless your a little bitter about the industry."

A lot of my friends are in it and the stories they tell me are disgusting. I don't know how they put up with it.

"Why would you come to an IB forum if you have such a distaste for it? Altruism? Show people the error of their ways?

Sounds like you made a decision you regret and are now trying to legitimize it on an internet forum full of people you don't know."

A large number of my friends are in investment banking, not because they want to be, but because they see it as the only way to get into private equity and venture capital. Some of them believe (falsely) that they need IBD experience in order to get into MBA programs. It makes me ill when I see some really smart, good people getting pwned by the dysfunctional work culture of investment banking.

I have absolutely no interest in PE so I'm not really bitter on any personal level. I'm not an investment banker, so none of this really matters to me. I'm just disgusted by the culture of investment banking and the sorts of hideous personalities that seem to dominate it. The thought of these fuckers running the country makes me want to puke blood.

"I am 100% sure the OP doesn't work in IB."

You're correct. I worked in something very similar to IB for about a year and left before it destroyed me.

"Go to any top college and look at where students are placed."

Your point is correct, but (1) students from non-top colleges rarely get into IB, and this barrier creates the impression that IBs are staffed with elite college grads, while (2) even still, above-average students from those top colleges generally, but not always, eschew IB.

"Likewise, top MBA programs look very favorably upon work experience at the companies."

This is debatable. The top MBA programs generally like to take certain proportions of their classes from banking, consulting, etc. Banking gets about a quarter of the spots, but it also has most of the applications. It's probably easier to get in through a sector (e.g. high-tech or non-profit) that doesn't send a lot of students to MBA programs, because the application/position ratio will be much lower.

"The fact that they are difficult to get into further enhances their value."

Analyst programs are not that hard to get into. They're selective compared to, say, cashier positions at the local grocery store, but not in an absolute sense.

Because there have been a lot of claims that I don't know what I'm talking about, I'll show that I do by letting you in on a little history. This will shine some light on why analyst programs exist.

Investment banking opened up formally as a career field in the 1930s when it was separated (by law) from commercial banking, but the original culture of it (which is very different from that seen today) dates back to about the turn of the century. Investment banking was described as "white shoe", meaning essentially that professional decorum was respected, and that it was a relatively easy, if somewhat boring, career available to the graduates of top schools. In essence, it was a WASP safety career, but the lifestyle wasn't bad. 30 hours per week was enough not to get fired, and 45 would basically ensure every promotion, so long as a person fit in socially. Clients were usually college friends of the bankers, so deadlines were soft and working relationships were mostly congenial.

Most people are familiar with "white shoe" in the context of law firms. The same easy lifestyle and congeniality had long been associated with Manhattan law firms... until the late '80s, when biglaw became just as hideous as banking, but without the upside.

In the 1980s, a few things happened, some good and some bad. For the good, interest rate changes led to unprecedented excitement in bond trading at the same time as derivative securities came to the fore. Second, banks became much more involved in proprietary trading. On the bad side, clients became much more demanding of banks (and law firms), to the point of being abusive in some cases. All of these changes led to a significantly more competitive environment in the finance world. For finance to be a WASP safety career was, clearly, untenable. It was no longer OK to have a trader who couldn't do bond math, since trading now required a mathematical mind instead of broad shoulders and a loud voice, or to ask a client to revise an unreasonable deadline. Banks needed to hire new types of people, including the very smart and the very hard working.

First, they needed people who were mathematically capable enough to understand the new derivative securities, so they hired academically distinguished people (mostly PhDs in the physical sciences) into quantitative research ("quant") programs.

Next, they needed really good traders, whom they hired (initially; this is no longer as true) through their gaming groups. A lot of 1980s options traders got their jobs through bridge and poker games. Surprisingly, it wasn't always the best players they tried to recruit; it was the very good players who were made their plays quickly.

They recruited quants by promising a research environment and the opportunity to work on interesting problems. They recruited traders by telling them that they would be paid handsomely to play a game. Quant and trading positions are quite desirable, and these promises are, on the whole, rather accurate, so they had no need to exaggerate or misrepresent those careers.

The increasingly quantitative nature of trading was one of the major good changes, but, while interesting from a historical perspective, it isn't really relevant to "banking", since the label "banker" usually excludes quants and traders. In traditional "banking" areas like M&A, the changes were mostly bad...

It turned out that the PhDs and pro game players were, while very talented in trading/quant roles, not very useful at the details of client-service as they were somewhat task-averse: being used to work they found rewarding, they would work very hard when they were interested in their work, but could not be asked to do loads of boring work under deadline pressure. While they had strong work ethics in general, very few of them had the sort of unconditional work ethic that turns out to be very rare in educated, affluent people.

Thus, there was a need for a third type of person: the yes-man with such an unconditional work ethic that he would do whatever was asked, happily and without question, just because it was "his work" and to turn in an assignment one day late would be akin to disaster. Though not all analysts are like this, analyst programs were created to recruit this type of person. The disastrously bad work flow-- whereby no work is given until 5-7 pm, but when given, must be done immediately without rest-- is not some consequence of the industry but an intentional ordeal. Banks want to weed out all but those who have a deep-seated psychological adherence to deadlines, not because those people have better work ethics under normal conditions (they don't) or are any smarter (they aren't) than the rest of the population, but because of the perception that they will not fail during a live deal when their diligence is most needed.

In practice, my personal opinion is that while an analyst stint shows that someone once had a steadfast adherence to deadlines-- otherwise, he wouldn't have survived-- there's no evidence that he still has this trait. Analyst programs burn people out pretty badly, and these kinds of traits change drastically after burnout.

Anyway, I said earlier that banks could recruit for trading and quant positions without falsifying the nature of the work, as these were objectively desirable positions. Analyst programs are a different story, because no one's turned on by the job description: "Do the grunt work that no one else wants to do." Banks needed to recruit a rare sort of person, and to market the position using smoke and mirrors.

In recruiting, they targeted lower-middle graduates of elite colleges, going on the assumption that they would be the best people-pleasers, having managed to overcome their mediocre intelligence to get into top schools anyway. Poor students (bottom fifth) were generally assumed to lack a work ethic and rejected, but above-average students were viewed with suspicion, being considered not to be pliable enough to authority for their purposes.

To market analyst programs, banks created the image of the program being something entirely different from what it was. They presented it as an opportunity to travel the world, rub elbows with CEOs, develop leadership skills, and reach a level of career establishment otherwise unavailable to someone in his or her 20s. Recruiters for analyst programs presented also presented the program as "prestigious", as if it were the natural extension of an Ivy League education.

What's amazing, and appalling, is that the marketing ploy worked very well. A large number of people carry an image of analyst programs as being significantly more selective and interesting than they are, including recruiters at PE firms. The fact that every analyst claims to have received the top bonus and to have been a star, the effective result being that 90-95% of analysts were in the "top 5%" of their class, adds to this.

Of course, if these recruiters knew what actually went on in analyst programs, they'd probably recognize analysts as damaged rather than educated.

What you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone on this forum is now dumber for having read it. I award you no points, and may God have mercy on your soul.

I still don't get your motivation.

It was not rambling, nor was it incoherent, at least not by the standards of message board posts.

It was way, way too long-- so long that I expect less than 1% of people who come upon it to read it in full, which is probably a good thing.

Two mistakes you made while trying to make your point:

1) You tried to portray investment banks as some kind of cryptic agency attempting to hoodwink college kids into adopting this lifestyle. The reality is that most monkeys willingly accept this lifestyle for the aforementioned "exit options".

2)You're an outsider so I don't blame you for assuming that analysts are somehow "damaged". I would imagine that most analysts find their post-banking jobs ridiculously easy having gone through the grind of the analyst years.

I do agree with you on some points though, mainly that the grunt work probably doesn't elevate analysts above any other candidates applying for HF/PE jobs.

"You tried to portray investment banks as some kind of cryptic agency attempting to hoodwink college kids into adopting this lifestyle."

There wasn't a "cryptic" conspiracy. What happened in the 1980s was that banks realized they needed really smart people, and that they also needed grunts who were willing to suffer almost unlimited punishment... and that it was costly to try to make people fit both bills.

They opened up quant positions, and reinvented trading roles, in order to get the smart people. Generally, the work in these positions is pretty interesting even at the entry-level, and hours top out around 50-60, except for the people who voluntarily work longer hours, because banks don't want to lose them.

They created analyst positions to recruit (and torture-test) the dumb, obedient people. Here, the work can be mind-numbingly boring, and the hours can be unhealthy, because this only makes the test "better" at weeding people out. Of course, in order to recruit for these programs, banks needed to create a fiction wherein they represented the programs as (1) more selective than they really are, and (2) providing more opportunity than they really do. None of this requires conspiracy, because it all emerges from banks following their rational self-interest.

That's, in essence, what I intended to say in my way-too-long post above.

I'm sure that most analysts know about the horrible lifestyle going in. The people who have been "hoodwinked" are recruiters at private equity shops who actually value this rather useless work experience, for reasons that are completely unknown.

"You're an outsider so I don't blame you for assuming that analysts are somehow 'damaged'. I would imagine that most analysts find their post-banking jobs ridiculously easy having gone through the grind of the analyst years."

I think that a really unpleasant professional experience, especially immediately out of college when a person has no other experience, can definitely damage a person. People who've been through shitty jobs often develop a lot of negative attitudes toward work, such as that work should be used as a weapon, or that it's pointless and not worth doing. A specific example would be that, since most work assigned to analysts is boring grunt work, they usually become very good at avoiding work after two years. I'd rather hire someone who takes initiative than someone who has figured out how to evade work. So I really wouldn't want to hire someone who had been in this sort of environment, because he'd piss his co-workers off with his attitudes and ruin morale.

Paulson former banker runs the Treasury no? The next candiatate to become the "governor of the bank of Canada" currently is Deputy Finance minister, and he became a MD at GS Canada at like 27.

Since you think starting your own company is so cool and lovely and awesome, lookup a movie called "startup.com". A dot-com that went through a rollercoaster, you know who the CEO and founder was ohh yah "a former GS banker and harvard grad", since then he started many other startups.

In Canada, all the top 3% of students in Business Schools and Engineering school's try to get into finance. Alot of top student's at Wharton/Haas/Michigan go to top BB.

All these examples do not match your model, which is such a generalized, stereotypical position, "all bankers are stupid machines", just because you knew some semi-smart people who choose to.

Bottom line, all Analysts and prospectives know it will be grunt work, it will be pain, it will suck. But they want a teacher and to learn those first couple years out of school.

Same reason people begin in Sell-side research over Buy-side, to learn modeling, how the business is, how to move up, what is needed, its it safety net.

Also your arrogance to say learning business is so simple, and that a CEO for a F100 company has nothing special to teach you, is insane.

If all you say is so true, you would not be on here whining, you would be out somewhere making your own startup and "adding value to society, and getting rich" compared to the rest of us.

lmao i just love the breakdown of investment banks by flaminary

Quants are the smart guys who trade..... analysts are the dumb guys who do bitch work.....

Are you writing a fictionary tale on investment banking or just find it easiest to over simplify everything into a two sentence summary....

I have to say these are some of the most interestingly wrong posts I have seen.

Wow, orignal poster get a rejection letter for a bank or something? Seems pretty bitter.

The fact of the matter is that you will be doing "grunt work" the first two years out of undergrad no matter what career you choose!!! Hell, 80% of workers in the US spend their entire LIVES on meaningless grunt work.

We choose the analyst route because we prefer to get P-A-I-D. Not only is the analyst program a great way to meet young motivated peers, it also acts as a weed out program for future employers to see who has "it" and who doesnt.

If you think IBD is a dead end job for Ivy league shmucks, then dont pursue it!!

flaminary, congrats on getting so many reactions so quickly!

Some of what you say is true (although one-sided), some is ill informed. I hope I'm adding something that hasn't been mentioned yet.

In IB we get a very interesting "macro level" view of the economy, industries and company strategy & finances. None of my friends who are in all sorts of jobs (consulting, industry grad programme, startup...) or further education (msc, phd, law...) get such a broad high level view. As a result, I just can't see myself going into any job dealing with "smaller" or "lower level" issues. This therefore excludes law, research, industry training program etc.

You know, the best answer to this post is to say the OP is a moron. Yet, it's almost like if we did call him that, he'd be like 'god, you guys are muppets and slaves to the master and can't see the light...'

But, ultimately, there is no way around it. This guy is a complete tool, has no idea how the business works and is making up an array of spurious assumptions. Congratulations.

What's basically being said here is that Trading and Quant are much more interesting career choices for college graduates compared to IBD, which is described as pointless gruntwork. But I haven't really seen anyone who disagrees with this present a strong defense of IBD and a rebuttal to the OP's points, just people calling him idiotic and a tool, which sounds very childish and contributes nothing to the discussion. On the other hand, the OP has gone to great lengths to explain his point of view. Cmon IBD'ers, step up to the plate.

I find trading orange juice futures for the rest of your life more boring than selling companies.

Flaminary, what exactly do you do? If you are a college student you have no right or reason to comment on "exit ops".

All work post undergrad are mostly drudgery, it's not like you will get a great experience if you worked anywhere else in finance.

Starting your own company? Do you have any idea how many skills it takes to start one? You need finance, accountancy, law, enterpenural skills, etc.

I wholeheartedly agree with the OP. You should consider auditing in Big 4, where you do meaingful work and learn how businesses operate.

Auditing? My god, talk about boring. Anything to do with accounting is out of the question.

Why all this talk about entrepreneurship and starting your own company blab? It's not easy being big when you start small, I know, a lot of my friends know. We want steady income, and getting sales/users ain't no walk in the park. Most businesses fail within two years. That is why something like S&T or IBD is appealing: performance driven, kind of like start-ups. I wonder if the OP actually has experience starting something because I do. Otherwise, he/she can't really vouch for it.

Most people I know start doing trench work (aren't all entry level jobs the same? Makes no difference, some pay much better than others - if you're smart and get into it). Then those who actually gain enough experience, capital, NETWORKS, etc. actually go off and do their own thing, like starting a business. I don't see why IBD deserves so much hate.

You'll find plenty of people in Singapore, Hong Kong and China who do just as much grunt work, work just as long and get paid peanuts. And guess what? Their life goes on.

Admittedly, I've seen analysts who quit after 1 or 2 yrs because they realise living the lifestyle turned out to be a lot more demanding than what they expected. But none of them had any sort of mental breakdown or went off to clean windows. Many entered other industries or went into in-house M&A and are doing very well.

I can't believe I just read this whole thread. But since I did read it all, I will give my two cents. First of all I agree with snazzy, the OP is busting his ass to prove his point and all I can see is people calling him a moron, way to prove his point fellas!

On another note OP you say that people that do R&D and work in law have better career or something like that. My brother does M&A law, he spent 3 years of hell, long hours etc... His advice: Bite the bullet, the 3 years of hell are totally worth the exit ops. (sounds familiar?) My father has been in R&D for the past 30 years of his life, he loves it. He gets a decent salary, but if money was his interest he wouldn't be doing R&D. You do research because you like it, and it definitely isnt for everybody. He still spends 80 hours per week sometimes working on something, but that is out of his own will.

Then you call Bankers stupid, sure there are idiots everywhere. It still is a really hard profession to get into, and the process is rigorous enough to provide some kind of filter.

I don't really know where I am going with all of this. But my main point would be: Banking is a bitch job, you suck it up two years and then you go on to do things that interest you. There are some navy seal references, I'll make another military one: Banking is like boot camp for life. You do it, and if you can pass you are set for life.

And last but not least, starting your own startup? Please! You just nullified all your points by saying that. You start a start up after being in the business and in the working world for a long time. Thats what people do, you don't get a youtube every day... All the failures at my undergraduate school only talked about starting their own company, now they are working in dead end jobs and definitely don't have a chance of going into banking.

I want to work now! No, really. I want those 100+ hours/week.

Disjoint,

You're still at LSE right ? Have you ever worked in Banking ?

OP, what industry do you work in?

Flaminary, it is quite clear that this post was made to incite a riot and get a rise out of the people on this board. I understand that this is your main motivation in your post and therefore attempting to change your point of view is worthless because you will continue to refute anything opinion that is pro-banking, regardless of its validity. As such, my purpose is to make sure that others aren't misled by your amusing yourself.

I think the best way to place a value on the analyst program is to take a look at John Doe college grad and see what value has been added after his two years in banking.

After spending two years in banking, John has experienced a truly rigorous lifestyle in which there is little else besides work. However, he will never be questioned on his work ethic and for at least the next 5 - 10 years of his career, he will be seen as incredibly hard working. He will have built a network, if not of senior level people, of other individuals such as himself that will also be entering into various prestigous and high paying fields within the financial services realm. He will have indepth knowledge of finance, as he has spent endless hours modeling companies and shifting through companies' financial statements. He will have increased knowledge of the business world, far above his peers that chose back office jobs. And most importantly, John will have work experience that keeps him competitive for positions at hedge funds, VC/PE firms, or MBA programs.

Tell me of another career path that offers all of this? (And don't say consulting because their sacrifices are arguably just as much as bankers).

As to your point about people getting burned out and hating their jobs:

This may be true, but it is also true for almost any profession out there. Just because some people get burned out and can't handle it doesn't mean it is a poor career choice.

Heck, maybe we should all start our own business, it is clearly the path to intelligence and riches. These are the people I want to take me in as their protoge. I'm going to go down to the local pizza joint where some greek guy who doesn't know english has built his empire (named "Mike's Pizza") where he basks in his glory while simultaneously serving his killer creation dubbed "Two slices of cheese." Entrepreneurship is obviously the path for the truly elite.

no exit opportunities.. that's bush league psych-out stuff! Laughable man, HAH!

One thing I've gathered from this thread is that CompBanker is definitely a B4L