Investment Banking
An investment bank is comprised of three main areas: investment banking division (IBD), sales and trading (S&T), and Asset Management. The large global banks typically offer all three services, with smaller banks usually focusing more on the investment banking division side covering advisory and mergers and acquisitions (M&A).
define investment banking division
The investment banking division is sometimes referred to as corporate finance and is broadly split into 2 sectors, products and industries. The purpose of both is to provide advisory on transactions, mergers and acquisitions and to arrange (and sometimes even provide) financing for these transactions. This area of banking is the subject of the popular book "Monkey Business: Swinging Through the Wall Street Jungle".
what do investment bankers do?
When companies seek out an investment banking relationship, they are interested in a financial partner that can guide them through the complicated landscape related to financing a business and managing its assets. Investment bankers offer executives strategic planning advice. They often advise company executives about the best times to make a public offering, sell a large company asset, or acquire another business.
Investment Banking Product Group Overview
Investment banking product groups are broken down as such:
- Mergers and Acquisitions (M&A) - advisory on sale, merger and purchase of companies
- Leveraged Finance (LevFin) - issuance of high-yield debt to firms to finance acquisitions and other corporate activities
- Equity Capital Markets (ECM) - advice on equity and equity-derived products (IPOs, shares, capital raises, secondary offerings etc.)
- Debt Capital Markets (DCM) - advice on raising and structuring of debt to finance acquisitions and other corporate activities
- Restructuring - improving the structures of a company to make it more profitable or efficient
IB Industry or Coverage Groups
Industry groups focus on one specific industry (Technology & Media & Telecoms, Financial Institutions, Energy etc) but carry out all the different kinds of deals for firms within that sector. For example, the Financial Institutions (FIG) team will work with clients on raising debt, IPOs, acquisitions etc, but will only work with clients within that sector.
Some firms are known for being particularly good at certain sectors, for example Goldman Sachs TMT (Technology, Media & Telecoms), Morgan Stanley M&A, and JPMorgan LevFin.
Check out the video below to get another perspective.
What is the Importance of Relationships in IB
A primary advantage for accessing the services of an investment banker is the relationships and contacts that an established investment bank can offer its clients. The principle role of an investment banker is to introduce lenders to companies in need of capital. Investment banks regularly cultivate business liaisons with venture capitalists and private investors.
Hierarchy and Compensation in Investment Banking
The hierarchy within the investment banking division is very well defined. The actual role names may differ from region to region and bank to bank, but all follow the same general pattern.
Analyst - this is how you will enter banking once you have completed your degree. The usual way to be offered a place is to complete an internship with the bank at the end of your junior year at school and then to receive a full time offer to come back at the end of your final year, although it is also possible to apply directly for a full-time job. Typically the analyst does all the 'grunt' work on projects such as valuing companies, creating models, putting together pitch books etc. Analysts are well known for working 80-100 hours per week but are well paid for it.
Associate - if you have been working in finance for several years and/or gone to a business school for an MBA, you can break into investment banking as an associate. It is also possible to be promoted to associate directly from analyst level if you stay on with the bank for a 3rd year as an analyst. Your work as an associate will be focused on coordinating the work of the analysts to meet the expectations of the vice president. Associates tend to work as much as or slightly less than analysts , but are paid more for it.
Vice President - vice president is where the managerial work starts to kick in. Your role is to make sure that the work your analysts and associates produce is what your senior vice president and managing directors want. There is a lot of client interaction and the work becomes more client relationship orientated. At some firms this position is called 'Director'.
Senior Vice President - this is basically a mixture between vice president and managing director. The focus is both on executing deals and client relationships and what you actually do will depend on the needs of the group at the time. Also known as 'Executive Director'.
Managing Director - MD is the highest level you can achieve within a bank without becoming a group head or higher (CEO, CFO etc). Almost all of an MD's time is spent on client relationships and sourcing new clients.
Hours
See Investment Banking Hours - What to Expect? for more info.
Preparing for Investment Banking Interviews?
The WSO investment banking interview course is designed by countless professionals with real world experience, tailored to people aspiring to break into the industry. This guide will help you learn how to answer these questions and many, many more.
Click here for our Investment Banking forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of Investment Banking. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with IB professionals:
- 2nd year IB Analyst Taking Questions
- Q&A with WSO Founder Patrick, Part 1 (background in IB and PE, the idea for WSO, Wharton MBA), Part 2 (the past, present, and future of WSO)
- HappyPantsMcgee the Interview.
- Ask CompBanker
- I'm f***ing in, you're f***ing out
- The rufiolove Interview - Part One (WSO, daily life, experiences in the industry, and advice for new hires), Part Two (entering finance, advice for prospective monkeys, and target vs. non-target)
- Recruiting and Resume Advice from the Rockies
- Former MS M&A / KKR here to field questions
- Former BB VP giving advice to all you wannabe bankers
- Ask a 2nd Year IB Analyst
- Interview With ThePillowPocket Founder Chad Riddersen, Part 1 (Big 4, banking, why entrepreneurship?), Part 2 (his ventures and lessons learned as an entrepreneur)
- The Forgotten IBD: Big 4 Corporate Finance
- 2nd Year Analyst Answering Questions
- Ask a 2nd Year IB Analyst
- duffmt6 2nd Year Analyst Unconventional Route Part 1, Part Two
- Answering Australian iBanking Questions - Ever wondered what the industry is like in Australia? This is the thread for you.
- SA Recruiting Megathread - Compilation of the best SA recruiting content on WSO.
- FT Recruiting Megathread - Compilation of the best FT recruiting content on WSO.
Top-bucket analyst in a top coverage group of a BB investment bank discusses breaking into banking with a sub-3.5 GPA, comparisons to consulting experience.
The "overlord of WSO" shares his experiences in investment banking and private equity, how WSO started, and his advice to aspiring bankers.
Words of wisdom for undergrads and newly minted workers from a strategist at a top 5 bank.
Veteran WSO member CompBanker, who has worked exclusively on M&A and leveraged buyouts his whole career, answers questions.
Kenny_Powers_CFA, with 3 years of credit analysis experience, opens himself up to questions.
"Power-user" rufiolove speaks on a wide range of topics and imparts some advice for aspiring financiers.
A senior account executive for investment banking recruitment gives specifics on what a recruiter is looking for, and why they don't care about your cover letter.
Insightful question and answer thread with 10xleverage focused on private equity.
VP left banking to work in natural gas sourcing, explains why, and answers questions.
Analyst gives back to the WSO community that helped him break into investment banking with advice for summer analyst applicants.
Riddersen runs through his experiences as a Big 4 audit associate and an IB analyst, and how he transitioned from IB.
Associate at Big 4 corporate finance group answers questions about the non-accountants under the accounting roof.
2nd year analyst at a top bank headed to buyside answers any and all questions.
Another 2nd year analyst answers all your questions providing feedback.
duffmt6, a second year IB analyst, describes his unconventional route to breaking in
See the full list of Q&A's & Interviews here: here.
Is Banking Right for Me?
-Banking vs. Consulting: A discussion on the differences between consulting and banking, focusing mainly on Goldman Sachs and McKinsey & Company
-Why Banking: A discussion on the pros and cons of Wall Street in a down economy
Getting a Job
-Breaking In: Certified User CompBanker explains his method for obtaining a full time analyst offer at a top-tier, middle market investment bank. A number of WSO users chime in with helpful advice and encouragement
-Human Resources: This thread was started to vent the frustrations of dealing with various HR departments as a prospective IB analyst
-Offer Rescinded: This thread discusses what you can do if your offer was rescinded or you did not get a full time investment banking analyst offer
-Resume Mistakes: LB Banker created this thread to point out a number of mistakes that have been found in investment banking resumes
-Summer Analyst Tips: This is a fantastic thread for all future investment banking summer analysts. The discussion focuses on what to do and what not to do during your summer analyst experience
-IB Background Check FAQ:Wondered what an IB background check entailed? Read this FAQ for all you need to know.
Life in Finance
-Compensation: This discussion started by Monkeygames123 gives an inside view on first year analyst's bonuses in 2009
-Fashion: Targetboy started this discussion about what may or may not be appropriate for a male investment banking analyst in terms of piercing, which turned into a general discussion on presentation on Wall Street
-Health and Lifestyle: WSO users discuss how to try and stay healthy as a first year investment banking analyst on Wall Street.
-Hours and Lifestyle: A candid discussion on the reality of a career in banking, from hours to home life
-Leaving Investment Banking: Certified user Edmundo Braverman discusses leaving investment banking for greener pastures
Investment Banks
-List of Investment Banks: Make sure to check out Wall Street Mentors' "Searching for a Summer Internship" thread, which includes a list of 200 bulge bracket, middle market, and boutique banks as well as an interview with Scott Morris (former CEO of Boston Stock Exchange and Managing Director at Goldman Sachs)
-Elite Boutiques (exit ops): WSO users discuss the exit opportunities for analysts at elite boutiques, touching on the day-to-day and lifestyle as well
-Middle Market Banks: A great discussion on what differentiates middle market from bulge bracket investment banks
Welcome to the Wall Street Oasis Recommended Reading list for Investment Banking. Please e-mail [email protected] if you think we should add in additional publications to our Recommended Reading. If you are interested, please also feel free to click here for a brief explanation of the 2008 financial crisis.
This is a great read for any prospective Wall Street analyst or associate (and for you VPs and MDs that want to remember the good ol' days). It goes in-depth into the highs and lows of an entry-level career on the Street.
Ok, maybe you guys are all really young. But the question should be who HASN'T read Liar's Poker and Monkey Business and why they haven't. Of all the finance books, the above two just mentioned are the MOST read along with Barbarians at the Gate.
Just finished reading Monkey Business: Swinging Through the Wall Street Jungle. I thought it was well written and surprisingly funny. My favorite part was when Rolfe had an epiphany after he beat off at his desk at 3AM during an all nighter. I actually lol'd when I read that. He figured ibanking perhaps wasn't the best career path for him.
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Author Knee, who spent over a decade at Goldman Sachs and Morgan Stanley, describes life as an investment banker. He gives a great, detailed look at what life is like as an investment banker, and more specifically, how the deal process works.
If you are looking for a rollicking but superficial account of the investment banking world, along the lines of Liar's Poker, this is not the book. If you are looking for a deep historical analysis of the growth of investment banking, along the lines of something written by Ron Chernow, this is not the book. But as a thoughtful insiders account with good historical perspective, this is an excellent book.
If you want to understand how Wall Street works - and sometimes doesn't work - getAbstract recommends this informative, insightful and witty book.
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This exciting read details the hostile takeover of Arcelor by Indian industrialist Lakshmi Mittal. If you're looking for a glimpse into the world of mergers and acquisitions, this is a must-read. You won't be able to put it down!
Can't get over how much I liked it and thought it should get some special attention. It's like a journal of the whole deal process for the Arcelor-Mittal merger. Talks about the strategies used by the takeover defense, Mittal's team etc. etc. the governments side of the story and the politics involved etc. etc. Reads like a fast paced thriller. It'll be hard to put down and won't bore you. Anyone interested in M&A should get it. Even if you aren't, I think you'll still like it.
I know nothing about - and indeed have very little interest in - the world of billionaires and global takeovers, but I found Cold Steel a mesmerising read.
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For three years Leveraged Sellout regaled us with tails of a life on Wall Street for young investment bankers. No quarter was given to Goldman, Morgan, Bank of America, or, especially, Piper Jaffray. As the book itself says, this story "captures the true essence of being in high finance."
In between his elitism-dripping chapters are quizzes and sections including hilarious comments from the website, just to make sure the humble reader is aware of what a terrific service is being rendered just by reading this little tome. If anyone has ever worked with someone like Logan, I'm sure this book's humor will hit right home. You can even take home a few interesting and valid points if you have the mental detector necessary to find them. [Read More...]
This is possibly the best book covering the technical aspects of investment banking. Whereas many textbooks focus on theory, you can be sure this covers practical application as it was written by Rosenbaum (managing director for UBS) and Pearl (director for UBS), with a foreword by Perella (Chairman and CEO of Perella Weinberg).
Investment Banking provides a highly practical and relevant guide to the valuation analysis at the core of investment banking, private equity, and corporate finance. Mastery of these essential skills is fundamental for any role in transaction-related finance. This book will become a fixture on every finance professional's bookshelf.
This book will surely become an indispensable guide to the art of buyout and M&A valuation, for the experienced investment practitioner as well as for the non-professional seeking to learn the mysteries of valuation.
I give it a 10/10. Features all of the common valuation methods and their application and also a review of the M&A process. It also includes templates (completed and non-completed) for valuation methods.
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A Wiley Finance textbook, Applied Mergers & Acquisitions comprehensively covers (surprise!) M&A. Perella does another foreword for this textbook, which covers many M&A ideas and their application. Check out the CD version for some extra instruction!
A well written and comprehensive journey into M&A...an essential reference for any M&A practitioner...this isn't just a book about great thoughts and process, but rather how to turn insight into deals, and deals into lasting value.
Bob Bruner's book combines the best of academic thinking and business practice on one of the most fascinating and challenging topics in all of business. The area of mergers and acquisitions stretches executives and scholars to consider the whole realm of management practice-from strategy, to finance, to law, to negotiations, to integration planning, to human behavior.
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This textbook is written by the Chairman and Senior Managing Director of The McLean Group, a middle-market investment bank. Mr. Roberts gives an applied look at mergers and acquisitions in the market where the most deals are done.
Have you ever found a book so helpful to your professional development that you found yourself saying: 'Stop reading only at your own peril!' This book is such a book. Although I have lots to manage with my current buy and sell side engagements, I feel like I really owe it to my clients and myself to finish this book before I take another significant action on their or my own behalf.
The vast majority of M&A activity is in the Middle Market, where enterprises are highly idiosyncratic. So, any author who hopes to illuminate this topic in any meaningful way faces several challenges. Dennis Roberts overcomes them all to produce a volume that owners of enterprises will find as useful and accessible as his professional peers.
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This 80+ page guide, produced by WSO and written for WSO's users, is a compilation of the most common technical questions encountered in Wall Street interviews.
Just got the new technical guide. By far much better than vault. Very detailed (80+ pages) with charts, graphs, etc. I'll be reading this at least once this summer in prepping for fall interviews.
The new Wall Street Oasis Technical Guide provides questions and easy to understand answers for all the questions I typically ask when interviewing a candidate. The additional questions expand the guide, and the new charts are an added bonus for easily remembering the crucial concepts. If a student really knows all the questions in this guide, they are sure to nail the technical section of their interview.
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This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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WallStreetOasis.com has collaborated with its most knowledgeable users to provide one of the most detailed, entertaining and insightful publications to hit Wall Street in years.
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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Return to Main FAQ Page
The Wall Street Oasis Company Database includes thousands of financial firms, including investment banks. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Sales & Trading
Trading is one of the key features of the global financial economy. It creates liquidity across the financial markets, is one of the main sources of profit for investment banks and is done by many institutions (investment banks, hedge funds, commodity companies etc.). Traders tend to use technical and fundamental analysis to price assets and to attempt to predict the future movements. If a trader is trading in large enough quantities, their trades can actually move the market, thus giving them a comparative advantage over smaller traders.
As opposed to investment banking, trading tends to be extremely performance orientated and if you perform well, you will be promoted quickly whereas if you consistently lose money or are risky, you will not last long. The most common way to break into trading at an investment bank is out of undergraduate study with a quantative degree and having completed a trading internship.
Types of Trading
Trading can be done in three main forms:
- Market Making
- Agency Trading
- Proprietary Trading
Below is a brief description of each kind of trading.
Market Making
Market making is where a trader finds a buyer and a seller of an asset and does the trade on behalf of each. The trader will buy the asset from one individual, then sell it on to another at a higher price, thereby making a market. There is some risk associated with this, namely that the asset will change in value before the trader can make both sides of his deal. To compensate for this risk and to make some profit, the trader will offer a spread price (bid price below offer price). To be a market maker, it is extremely advantageous if not essential to have a list of clients you know well and can buy (sell) assets from (to) in order to execute fast trades and not have to spend a long time searching for investors.
Agency Trading
Agency trading is the most restricted form of trading. It is literally executing the orders of clients. An agency trader will have a portfolio of clients, and if one of them calls the trader and says he wants to buy x amount of asset y at price z, the trader will execute that order for him on his behalf. There is almost no risk associated with it, but almost no profit. The profit comes from a small commission the investor pays the trader on a per-trade basis.
Proprietary Trading
Proprietary trading is one of the most risky but also most profitable forms of trading. Essentially it is informed (sometimes uninformed) speculation about the movement of asset prices. Prop traders will open a position based on how they think the markets are going to move. If they are correct, they make a lot of money, if they are wrong they lose money. In order to attempt to reduce risk, prop traders tend to hedge their positions either using derivatives or inversely correlated assets. Many firms are dedicated purely to prop trading, and most investment banks and hedge funds have prop trading desks.
Areas of Trading
At an investment bank, traders usually work on their own trading floor and do not interact much with the rest of the departments. Different sectors of trading are referred to as 'desks' and they cover different products or areas. Some examples of different things traders deal in are:
- Equities - stocks and shares of publicly traded companies
- Fixed Income - bonds, securities and any other fixed income asset
- Forex - currency pairs
- Commodities - oil, metals, food etc.
- Derivatives - options, futures, ETFs, and more
Of all these areas, equities tend to be the least risky and least volatile, with derivatives being the most "dangerous". A brief rundown of each sector of trading follows.
Equities
This is what is most commonly referred to by the general public as 'trading', but it is also the kind that is done least by financial institutions. The reason it has lost it's popularity is the lack of volatility and the general lack of profit potential from stocks and shares. It is rare for any equity to move more than 10% in a day, and trading is a very short-term game. People trading equities are highly subject to insider trading laws as well as other regulations imposed by the SEC and other financial regulators. Equities trading desks are split into sector (technology, pharmaceutical etc.) and location (European, Asian, US).
Fixed Income
Traditionally, fixed income meant bonds and bonds only. Nowadays it can refer to literally any asset where the holder receives a fixed amount over a period of time for lending money to someone in some form. One of the most notorious forms of fixed income trading in recent times is CDOs (collateralized debt obligations) which was one of the main causes of the 2008 financial crisis. The prices of fixed income assets are affected by interest rates and the stability of the borrower. Fixed Income desks are further divided up into government, corporate, municipal, mortgage and more.
Forex
Forex is an abbreviation of Foreign Exchange, and as such the forex traders spend their time trading currency pairs. Currencies are always traded against another currency in pairs (i.e. EUR/USD or GBP/USD). The way in which currencies move is simply dependent on the strength of the economy which uses that currency, i.e. if the US announces extremely poor GDP growth, it is likely that USD will depreciate against other currencies. The key concept for forex trading is appreciation and depreciation, which can sometimes seem counter-intuitive at first. If the Dollar depreciates against the Euro, then EUR/USD will go UP as 1 Euro buys more Dollars than it did before.
Commodities
Commodities cover a vast range of assets, all of which are tangible. The most popular one is oil, but there is also copper, iron, wheat, and almost any other product which is homogenous across the world, used for production purposes and produced en masse. Commodity traders have been blamed for the rise in global food prices, as speculation tends to push up prices of assets. Commodities are usually traded as futures, and the futures are not held to maturity, as no trader wants to have 10,000 barrels of oil turn up at their desk when the future expires,
Derivatives
Derivatives are one of the most popular instruments to be traded, due to their highly leveraged nature and small capital requirements. The most common forms of derivatives are options and futures, although there are many many more. As of 2008 it is estimated that there is around $600 trillion worth of derivatives being held and traded around the world, roughly 10x that of global GDP. You can read more about the different types of derivatives by following the links at the bottom of the page.
Click here for our Trading forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of Sales & Trading. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with S&T professionals:
- Exclusive Edmundo Braverman Interview, Part 1 (the Playboy article, dating, divorce, Man Week, diets, fights, writing), Part 2 (the value of a college education, his military experience, travelling, entrepreneurship, drug culture)
- Monty09: The WSO Interview
- Ask Monty09
- Ask Monty09 - energy trading careers, interviews, firms, etc
- Treasury Sales VP Taking Questions
- Q&A with a Fixed Income Trader at a Major Bank
- Open for Questions - Equities in Dallas
- Q&A with Michael Giles, founder & CEO of Roboinvest
- Q&A Interview with SirTradesaLot, Part 1 (background, importance of first job, meritocracy isn't dead, building an investment case), Part 2 (experience vs. brand, how to sell, walk away number), Part 3 (becoming the boss)
- 1st Year London BB Rates Trader Q&A
- Ask an Equity Prop Trader Anything
- Ask Me Anything: I'm a Currency Volatility Trader
- Part 1 - Ask a Sellside Options Trader, Part 2 - AMA - Equity Derivatives Trader - User derivstrading discusses what it's like to work both as a flow options trader and an equity derivatives trader.
- I'm a Algorithmic/Derivatives Trader at a Chicago Prop Shop: AMA
- What it's like to be a prop trader: The Inside Info
WSO legend gives us a look into his past, and the results are as entertaining as they are informative, touching on his military service, travel, women, divorce, rum, entrepreneurship, drug use, and the advantages and disadvantages of not attending college.
Energy trader based in Houston talks about his career path to this point, the energy markets today, and his yearly Energy Rodeo event.
Monty provides answers to questions ranging from trading to Greek cuisine in Houston.
A more in-depth Q&A focused on the energy sector.
Bulge-bracket government bond salesman gives some in depth answers regarding sales careers.
TheKing details how he broke into Wall Street, the 4 types of traits the best traders have, and what motivates him.
From hedge fund intern to NYSE floor broker to BB fixed income analyst to property manager to lobbyist to head of institutional sales, with something to be learned from each stop.
Financial Technology entrepreneur discusses his background in trading and starting an online brokerage, as well as the social investing platform he founded - which recently fetched $125,000 in angel funding.
With almost 15 years of experience, SirTradesaLot's thoughts are beneficial to any aspiring monkey regardless of industry.
1st year London BB rates trader answers any questions related to S&T and his experiences in Europe
An equity prop trader in NYC divulges everything you need to know about prop trading and the lifestyle.
A currency volatility trader in London answers questions about his background, breaking in, strategies, and more!
An algo/deriv trader at a Chicago prop shop, previously in S&T at a BB, answers your questions.
A former poker player-turned prop trader gives a great interview on the inside scoop of daytrading.
See the full list of Q&A's & Interviews here: here.
Is S&T Right for Me?
-Discrimination: This thread discusses different views on discrimination on the trading floor, note the very different views of the many participants in this discussion
-Sales vs. Trading: A number of users chime in on whether they think sales or trading is a better career
-Trading 101: Certified User Bondarb gives trading beginners a, well, beginner's guide to trading
-Trading vs. Investing: This topic covers the difference between investing and trading
Getting a Job
-Degrees: This discussion focuses on whether to pick up a math or computer science degree, while this thread discusses a finance and computer science double major
-Internship Prep: Experienced WSO user derivstrading offers exceptional advice on how to prepare for a summer internship in sales & trading
Interviews: Gekko21, a long-time and respected certified user, gives guidance on how to conduct yourself in a sales and trading interview and how to prepare for different, specific sections of a sales and trading interview
-Recruitment: A WSO user who has recently received an offer shares, in great detail, the process he went through for sales & trading recruitment, with a number of users chiming in with their thoughts
-Undergraduate Classes: A college student asks and gets insight into what the best classes for trading are in college
Life in S&T
-Emerging Markets: This discussion covers what an emerging markets trader actually does, be sure to pay close attention to brotherbear's excellent post!
-Lifestyle: A few of WSO's full-time traders discuss the trader lifestyle
-Location: This topic focuses on the best place to start your career as a trader, focusing mainly on New York City versus Chicago
-Structuring: A number of WSO Certified Users provide insight into the job duties and exit opportunities for structuring positions within sales and trading, be sure to note the variances in opinion and why people see the structuring role differently
Firms
-Prop Trading: This discussions focuses on the best proprietary trading firms of 2010 and, of course, shorttheworld had to start the prestige whoring for the best proprietary trading firms of 2011
Welcome to the Wall Street Oasis Reading List for Trading. Please email [email protected] if you think we should add in additional publications to our Recommended Reading.
Liar's Poker is a fantastic book for getting an inside view into S&T. Whether you're reading it for the first time or the five hundredth, you will still be entertained. Michael Lewis's first book is a must-read for any prospective Wall Streeter.
I regret having not picked up this book earlier. It definitely gave me a better view of what life is like in S&T. Probably the first book any WS-wannabe should pick up.
So memorable and alive . . . one of those rare works that encapsulate and define an era.
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Market Wizards is the first of three books published by Schwager, and many consider it the best. It includes interviews with 17 top traders and how they have been successful. This is a must read for anyone interested in joining a trading desk or just wanting to get a grasp on how the markets work.
Simply stated, this is THE book for anyone who wants to learn about trading or investing -- It is simply a must read.
One of the most fascinating books ever written about Wall Street.
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Another book by famed finance author Michael Lewis, The Big Short is Michael Lewis' hindsight breakdown of the 2007/2008 economic crisis.
Great F*cking book, I read it twice. Yes anyone can start a fund but not everyone can run a fund.
No one writes with more narrative panache about money and finance than Mr. Lewis....[he] does a nimble job of using his subjects' stories to explicate the greed, idiocies and hypocrisies of a system notably lacking in grown-up supervision....Writing in faintly Tom Wolfe-ian prose, Mr. Lewis does a colorful job of introducing the lay reader to the Darwinian world of the bond market.
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This book is a great guide for novices, intermediate, and even advanced investors. It offers a wealth of ideas, from what markets to trade in to your trading strategy. Alexander Elder has, simply put, created a how-to guide for entering into and performing well in the markets.
This is a book written by a mature trader and trader educator, who has seen and done it all and can now give the most balanced, practical and honest description of learning to trade you will find anywhere. I highly recommend it to new traders and improvers alike.
I have been investing for about 45 years and this is the best advice that I have ever come across.
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Re-written by a leading futures expert with experience in both research and trading, this is the updated version of the best-selling guide. You will have a more complete analysis and more methods to look over with this book.
I'll give it two thumbs up as it provides excellent details on the spectrum of technical analysis and provides references for the times you wish to flesh out the details.
Similar to many traders who own Perry Kaufman's 3rd edition of New Trading Systems and Methods, I ignored the publication of the 4th edition. Well, such oversight was my loss. Even a quick perusal of the work reveals a wealth of new ideas, techniques, and concepts. Kaufman offers ample inspiration for exploring trading problems in a new light.
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A fantastic, updated textbook, this is a must-have for any financial markets technician.
The authors deftly straddle the divide between the artistic and the rigorous aspects of technical analysis. The publication of this text is an important financial-market event and the authors are to be congratulated.
I've been reading technical analysis works for forty years. This is the first book on the subject worthy of being called both comprehensive and disciplined. It will be a great asset to both practitioners and serious students alike.
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This 80+ page guide, produced by WSO and written for WSO's users, is a compilation of the most common technical questions encountered in Wall Street interviews.
Just got the new technical guide. By far much better than vault. Very detailed (80+ pages) with charts, graphs, etc. I'll be reading this at least once this summer in prepping for fall interviews.
The new Wall Street Oasis Technical Guide provides questions and easy to understand answers for all the questions I typically ask when interviewing a candidate. The additional questions expand the guide, and the new charts are an added bonus for easily remembering the crucial concepts. If a student really knows all the questions in this guide, they are sure to nail the technical section of their interview.
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This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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WallStreetOasis.com has collaborated with its most knowledgeable users to provide one of the most detailed, entertaining and insightful publications to hit Wall Street in years.
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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The Guide to Trading Stocks and Options will provide you much more than the strategies needed to take advantage of bullish and bearish trends. You will learn how to combine the necessary elements of strategy selection and market timing in the context of risk management, due diligence and exit strategies to form a complete system of trading.
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Return to Main FAQ Page
The Wall Street Oasis Company Database includes thousands of financial firms, including trading firms. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Corporate Careers
See the Corporate Finance Hall of Fame for posts related to other corporate careers.
Click here for our Corporate Career forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of Corporate Careers (including Corporate Development, Strategy, and more) . Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with corporate finance professionals:
- The Other Road: Corporate Development Associate Fielding Questions
- Corporate Finance Q&A with accountingbyday, BJM85, STorIB, and djfiii
- Q&A with Nefarious - a Strategy Associate at a Fortune 500 Company, Part One (how he broke in, day to day, pros and cons of strategy), Part Two (breaking in, exit opportunities, his view on the defense industry & the fiscal cliff)
Associate covers various topics including why he chose corporate development over investment banking, pay scale, and how to get into a leadership development/rotational program.
Everything you want to know about corporate finance, development and strategy in one well organized thread.
Strategy associate at a Fortune 500 Aerospace & Defense company talks about the benefits of working in Corporate Development.
See the full list of Q&A's & Interviews here: here.
Is Corporate Development or Strategy right for me?
-Corp Dev vs. I-Banking: This thread discusses corporate development, but make sure to pay attention to Monkey Island's examination of the difference between corp dev and investment banking
-Corp Dev vs. Corp Treasury: WallStreetOasis users give guidance on the difference between the corporate development and treasury department
Getting A Job
-Careers: This thread was made to focus on careers available to "B+ students"
-Leadership Development Programs: WSO Certified User dublin shares a list of leadership development programs at F500 firms, which long-time user judowned adds a good amount to
Other Corporate Roles
- Corporate Finance Q&A with AccountingByDay
- Corporate Treasury VP answering user questions
- Business Development Guy at Start-Up Fielding Questions
Life in a Corporate Career
Compensation (F-500): Users discuss the possible compensation packaged of the executives and senior leaderships at F500 companies, please note, however, that compensation and titles differ from firm to firm
Corporations
-Corporation Careers (Undergraduate): WSO users try to come up with a list of firms that hire undergrads into their corporate development and strategy departments
Welcome to the Wall Street Oasis Reading List for Corporate Careers. Please email [email protected] if you think we should add in additional publications to our Recommended Reading.
| Easy Reads | Technical Reads | Career Jump-Start |
|---|---|---|
| Onward | Technical Interview Guide | |
| Losing My Virginity | Behavioral Interview Guide | |
| Direct From Dell | A Look Behind the Wall | |
| Snowball | Internship Guide |
Onward is Howard Schultz's explanation of how Starbucks was able to turn itself around without compromising it's integrity. This is a great read for understanding the thought process of a Chairman/CEO of a company going through a rough patch.
Howard Schultz's refreshingly candid, compelling narrative demonstrates what it takes to lead in these extraordinary times. Onward is a rare first-hand account at how one of the world's most iconic brands overcame the challenges that confront us all.
Howard Schulz writes with incredible passion and sincerity in this, his second book. The flow of the read is helped by his collaboration with former Forbes journalist Gordon, but the really compelling element of this book comes from Schulz' transparency in depicting Starbucks transformation during the last five years. He could have easily made this book one big PR job (like so many of these books are), but, instead, he presents real problems and the real, often complicated, solutions employed to solve them.
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The founder of the ironically named global Virgin powerhouse imparts his wisdom and experiences from a life doing business his way. It's Richard Branson, how could this not be a good book?
Few people in contemporary business are as colorful, shrewd, and irreverent, and probably no one's nearly as much fun to be around. . . . Branson embodies America's cherished mythology of the iconoclastic, swashbuckling entrepreneur.
This is a sensational book. Most autobiographies are boring and so full of only positive stuff about the person that you just know you are not getting the full picture. In this book Branson openly admits mistakes and bad business decisions. He gives credit to others acknowledging Virgin's success would not have happened without them.
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Michael Dell is perhaps one of the greatest businessmen of all time. In a few short years he made Dell a household name rivaling the likes of established firms IBM and Hewlett Packard. This book covers everything from what made him successful as an entrepreneur to how he successfully ran his company.
His book provides the insight into his drive for improvement, his business logic and the learning from his mistakes...
The second part of the book has tremendously practical advice for almost any company. Why make the same mistakes that you could avoid by following his model for success? I daresay there is enough solid information here for any informed person to put into practice what Dell did to make a successful business.
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You should really know why this is important.
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There are many different jobs within a corporation, and thus we advise you to do some research on the particular field you are interested in. There are plenty of books out there on the fundamentals of finance, accounting, marketing, and all the other positions available in the corporate world. The one technical book that we advise any corporate executive-wannabe to check out is Sun Tzu's The Art of War.
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This 80+ page guide, produced by WSO and written for WSO's users, is a compilation of the most common technical questions encountered in Wall Street interviews.
Just got the new technical guide. By far much better than vault. Very detailed (80+ pages) with charts, graphs, etc. I'll be reading this at least once this summer in prepping for fall interviews.
The new Wall Street Oasis Technical Guide provides questions and easy to understand answers for all the questions I typically ask when interviewing a candidate. The additional questions expand the guide, and the new charts are an added bonus for easily remembering the crucial concepts. If a student really knows all the questions in this guide, they are sure to nail the technical section of their interview.
Return to Top
This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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WallStreetOasis.com has collaborated with its most knowledgeable users to provide one of the most detailed, entertaining and insightful publications to hit Wall Street in years.
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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Return to Main FAQ Page
The Wall Street Oasis Company Database includes thousands of financial firms, including F500 firms. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Private Equity
Private Equity is one of the most vaunted types of work in finance. PE interviews are notorious for difficult questions, so we have developed a private equity interview prep pack (here) to help you prepare.
The typical route into private equity is after having spent 2 years at a top investment bank and/or completing an MBA at a top business school. For an excellent insight into the Private Equity world, read "Barbarians at the Gate" which details the LBO of R.J.R. Nabisco by KKR in the 1980s.
What Is Private Equity?
Private Equity is not very well known outside of the finance world, but it is one of the key players in global business. Private Equity firms are part of the fabled 'buy-side' and some of the largest firms (megafunds) are:
- Kohlberg, Kravis & Roberts (KKR)
- Blackstone
- Bain Capital
- Carlyle Group
Private Equity Definition
The definition of private equity is simply money invested into a private company, or the privatization of a company through the investment of outside money. Basically, what private equity firms attempt to do is to invest into a company, take a majority stake, improve the company and then exit their investment at a large profit. In order to magnify returns, PE firms make use of leverage (borrowed money) to conduct Leveraged Buyouts (LBOs).
Private Equity firms can either focus on a specific sector (Energy, Technology, Healthcare etc.) or operate across a broad spectrum. The larger the firm, the more likely it is to cover more sectors.
How Do Private Equity Firms Work?
PE firms will typically acquire 100% of the target company and make use of a combination of cash and debt to finance the acquisition. The advantage of using debt is that the firm has to invest less of its own cash, and therefore the return on equity is higher and they can undertake bigger / more investments. When the target company is acquired, the future cash flows are used to pay off the debt used. If the PE firm in question is using leverage, they will require a financial sponsor (typically a bank) to loan them the money.
The aim of the investment by the PE firm is to take a business, increase its value and then sell it's share in the business. Typically, PE firms will target 20% return per year. The way the firm will improve the business can be anything from replacing the management, reducing costs, improving efficiency or many other possible actions. Private Equity investments are usually not that risky (at least compared to VC) because the target firm is usually quite large and is unlikely to collapse in value.
What Do You Do In Private Equity
As a junior employee in PE, your work is actually quite similar to that of investment banking, but the hours are (usually) less and the pay is (usually) more. The work will involve valuing companies, modeling for mergers / LBOs, conducting DCF analysis etc.
Click here for our Private Equity forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of Private Equity. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with PE professionals:
- The TheKing Interview, Part One (breaking in, compensation, who's a good fit), Part Two (education, advice for students, his next step)
- Associate in Private Equity FoF - will answer questions
- Private Equity Recruiting Q&A
- Former MS M&A / KKR here to field questions
- Q&A with WSO Founder Patrick, Part 1 (background in IB and PE, the idea for WSO, Wharton MBA), Part 2 (the past, present, and future of WSO)
- Q&A: PE Authors Talk Dividend Recaps, Blackstone, and Future of AM
- Emerging Markets Investment Guide
- Ask Me Anything: I'm a PE Analyst in Shanghai
- AMA I'm a MM PE Associate - Graduated from a target in Europe and did BB IB and is now an Associate at a MM PE firm, ask him anything!
- MM PE Fund Associate Taking Questions - Ask this MM PE Fund Associate all your questions and have them answered.
One of the top WSO users explains how he broke into private equity, who is a good fit for PE, his advice for college students, and 3 tips for picking up chicks.
Associate talks about the fund of funds side of private equity, including a "day in the life" schedule.
Information on how the recruiting process operates and how it has drastically changed recently.
Insightful question and answer thread with 10xleverage focused on private equity.
The "overlord of WSO" shares his experiences in investment banking and private equity, how WSO started, and his advice to aspiring bankers.
The authors of King of Capital reveal why they gravitated towards Blackstone, what Steve Schwarzman's personality is like, and where they believe the industry is headed.
A live and ongoing discussion and resource for anyone seriously considering investing abroad.
A private equity analyst answers any and all questions you may have!
See the full list of Q&A's & Interviews here: here.
Is Private Equity Right For Me?
-Banking vs Private Equity: BananaStand starts a discussion on moving back to investment banking, the sell side, with WSO users chiming in on the process and reasons for the move
Primer on Private Equity:A primer on theprivate equity agency business.
Getting a Job
-Breaking In: Certified User CompBanker offers advice on moving to private equity, the buy side, which turns into a strong Q&A session
-Breaking In (MBA): This discussion focuses on how to break into private equity, post-MBA, and where to look for these jobs
-CFA in PE: This thread discusses the benefits of the CFA, or Chartered Financial Analyst, in private equity recruiting
-Degrees: Blueadams asks which is the best non-MBA masters program for private equity, with a number of users giving advice
-Interview Question: WSO users discuss a PE interview question, "If you can only know 3 things in an analysis?"
-Interviews: RansomMonkey shares his thoughts on private equity analyst interview
-Recruiting Season: This starts as a discussion about 2011 private equity recruiting, but turns into a discussion on the merits of private equity and the lifestyles of people at different types of firms
Life in Private Equity
-Compensation: This thread focuses on how much private equity analysts or associates make in compensation after jumping to the buy-side
-Life in PE: 10xleverage, a former analyst for Morgan Stanley M&A and KKR, takes the time to answer a diverse array of questions about private equity from WSO users
-Life in PE: A number of WSO users and Certified Users discuss their interest, or lack thereof, in their private equity careers
-Middle Market vs Megafund: A candid, interesting, and informative conversation on all aspects of life in private equity
-People: Certified user ke18sb starts a discussion on whether or not people from a "WASP" background in private equity are at an advantage
Private Equity Firms
-Assets Under Management (AUM): Despite the large amounts of monkey poo, a number of WSO users participate in a great discussion on how to define a firm's assets under management. Note that the definition of AUM isn't set in stone
-Megafund Sweatshop: WSO users discuss the hours worked by megafund private equity analysts
-Real Estate Private Equity: This thread touches on the realities of the future of the real estate private equity industry
-Small Firms: WSO users discuss the day-to-day for a private equity analyst or associate at a small firm
Welcome to the Wall Street Oasis Reading List for Private Equity. Please email [email protected] if you think we should add in additional publications to our Recommended Reading. Don't forget, after years in the making our private equity interview Prep Guide is now here!
The Easy Reads section contains books meant to give a general idea about a career or industry. Technical Reads are meant for people with some business experience or with some exposure to the industry, and it may include more technical writing. The Career Jump-Start section focuses on literature that will help you get a job, including: interviews guides, firm/recruiter lists, and/or compensation data.
Two former reporters for The Wall Street Journal chronicle an epic transaction: the leveraged buyout of RJR Nabisco. The authors take you through the personalities of many of the men involved, as well as the process. Despite the detail, this is still a great read for novices. Spoiler Alert: KKR wins.
Read Barbarians at the Gate if you haven't already.
The fascinating inside story of the largest corporate takeover in American history. It reads like a novel.
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This book is, essentially, a history of private equity with a focus on Schwarzman and The Blackstone Group. If you're at all interested in private equity, while this book can get a bit boring in parts, it's definitely one you should check out.
Good read. There's a great history of private equity, w/ entertaining and motivating profiles of personalities and war stories. It seems that all of the successful people in the book are inwardly-focused, but expressive. It sounds conflicting, but that's the best way I can describe it. Very confident in their intuition, and comfortable persuading others towards it, regardless of their normal social abilities (it appears that some are socially comfortable, while others are typically more introverted in non-business settings).
The authors ... [take] us from the early days of the Blackstone Group, when the firm was just two guys and a secretary, to the buyout boom, when Mr. Schwarzman's conspicuous consumption became a symbol of the new Gilded Age. In between, the book dives deeply into the firm's signature deals -- Celanese! Nalco! Distressed cable bonds! -- that made Mr. Schwarzman and his partners so rich. It also delivers some fun details about many of the now-famous Wall Street players that did tours of duty at the firm.
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Co-authored by Founder and President of Chicago PE firm Prism Capital Robert Finkel, this collection of interviews with top private equity managers is sure to intrigue and excite anyone interested in the private equity space.
I have been a partner in the Venture Capital business my entire career - over twenty years. I have kept a personal list of "lessons learned" from my investment experience; and, I have read many of the books in the category. By far, this is the very best book in all respects.
The Masters of Private Equity and Venture Capital is a great book for anyone (student or professional) interested in the VC/PE industry. It was written by two individuals: a talented business journalist, skilled at explaining business ideas, and by a private equity master, who is known, proven, and well respected in the industry. The book offers insights, advice, and lessons directly from the proven leaders who run the PE/VC industry. I first read the book after graduating undergrad, using it as a reference tool when networking with industry execs. As a young professional, I often refer to the book, prior to business meetings with clients.
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Lerner's Casebook covers everything from how a private equity firm's funds are raised and structured to international deals to how the industry changes. Regardless of where you are in you PE or pre-PE career, this is a must-have reference resource for every prospective analyst or MD.
Definitely check out Josh Lerner's 'Venture Capital and Private Equity: a Casebook.' He's the legendary HBS professor in the space with knowledge out the ass. It's technical, offers real-life, international cases, goes into returns, raising and structuring funds, and different valuation strategies. The book is a painful tome you'll never get through, but it's nice to pick-and-choose ad hoc to get kernels of knowledge you want/need in real time.
If you are somewhat knowledgeable about private equity then this is a "must read". If you are a beginner make sure you become familiar with the ins & outs of private equity/venture capital before reading or else you may miss a lot of the value of this book.
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Executive Chairwoman of Bain & Co offers solid advice in this "Memo to the CEO" installment. Short and sweet, this is a must-read for any senior-level exec looking to learn about private equity. It's also recommended for prospective PE applicants and entry-level PE analysts and associates to get an idea of how the deals they work on function at the upper levels.
I just started reading this a couple nights ago; it's a very quick read and is extremely practical. It obviously has its roots in the private equity investment criteria, but you can definitely see how the fundamental qualities stressed in the book are also important traits to assess in public companies. As someone who used to cover public companies but recently moved to private equity, I think it's very relevant and useful in helping someone become a "smarter investor" (as well as a better executor, for those of you that aspire to be C-level personnel sometime down the line).
Two business experts from Bain & Company believe that successful practices adopted by PE players can be applied to different industries around the world. After having abundant consulting experience of working with PE players, they maintain that there are at least six deceptively simple rules in which PE players set a concrete and inescapable benchmark for corporate performance.
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Thoroughly revised and expanded to reflect business conditions in today's volatile global economy, Valuation, Fifth Edition provides up-to-date insights and practical advice on how to create, manage, and measure the value of an organization. Along with all new case studies that illustrate how valuation techniques and principles are applied in real-world situations, this comprehensive guide has been updated to reflect the events of the real estate bubble and its effect on stock markets, new developments in corporate finance, changes in accounting rules, and an enhanced global perspective.
There is extensive and detailed instruction for a big team analyzing for a big project, whether it is capital budgeting, capital structure, merger, acquisition, restructuring, bankruptcy or any other valuation topic. It is comprehensive and clear. If you work on this kind of project, you need this book. If you don't work on this kind of project, it can still give you a tremendous amount of insight into the factors that contribute to shareholder value.
The best valuation book just got better. This edition's greater emphasis on what drives value and how to measure it will improve the way practitioners conduct financial analysis and, ultimately, make strategic decisions. It is required reading for all executives.
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This 80+ page guide, produced by WSO and written for WSO's users, is a compilation of the most common technical questions encountered in Wall Street interviews.
Just got the new technical guide. By far much better than vault. Very detailed (80+ pages) with charts, graphs, etc. I'll be reading this at least once this summer in prepping for fall interviews.
The new Wall Street Oasis Technical Guide provides questions and easy to understand answers for all the questions I typically ask when interviewing a candidate. The additional questions expand the guide, and the new charts are an added bonus for easily remembering the crucial concepts. If a student really knows all the questions in this guide, they are sure to nail the technical section of their interview.
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This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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WallStreetOasis.com has collaborated with its most knowledgeable users to provide one of the most detailed, entertaining and insightful publications to hit Wall Street in years.
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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This guide can help you land your dream job in private equity or venture capital by demystifying the notoriously opaque private equity and venture capital recruiting process. The key to breaking into private equity is to plan ahead because private equity recruiting is both highly competitive and formulaic.
Daniel Sheyner has written an extremely comprehensive, accurate, and informative synopsis of the private equity industry and getting in its iron doors. It's the best report of its kind that I have seen.
The Wall Street Oasis private equity & venture capital guide is an excellent overview of how to land you dream job in private equity. In short, it summarizes what it takes to get your foot in the door.
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Return to Main FAQ Page
The Wall Street Oasis Company Database includes thousands of financial firms, including private equity firms. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Hedge Fund
Hedge Funds are a frequently misunderstood area of finance, yet they are one of the main movers of global markets and one of the key influencers of global liquidity. In order to join a hedge fund it is usually necessary to have experience in either trading, equity research or investment banking experience, although some hedge funds do recruit directly out of graduate school. It is less necessary to have obtained an MBA to get into hedge funds than it is for private equity firms, but a CFA may be of some use. Some recommended reading material on the lifestyle and general activities within a hedge fund are Money Mavericks, The Big Short and When Genius Failed.
What is a Hedge Fund?
A hedge fund is a pool of money from investors which is used to invest in wide-ranging areas of finance, i.e. in different asset classes, different regions etc and is part of the buy-side. Hedge funds are largely unregulated and have the ability to invest in many different ways, one of the most important being to short assets either through borrowing or through derivatives. Traditionally they were called hedge funds because they used derivatives and securities to hedge all their positions, but nowadays hedge funds do not do that to such an extent and are more speculative. Hedge funds will invest in all kinds of assets, including:
- Bonds
- Equities
- Derivatives
- Real Estate
Hedge funds typically invest aggressively and will be quick to move their money around to adapt to market conditions. They frequently borrow money and leverage up their capital in order to enhance returns, but this will also magnify losses so it is a double-edged sword which must be treated carefully. Hedge funds cater to ultra-high net worth individuals and institutions managing funds on behalf of clients (mutual funds, pension funds, insurance companies etc.). The typical amount required to deposit in a hedge fund is $1-5mm ($1 million to $5 million) and there is often some sort of lock-up agreement saying you have to keep your money in the hedge fund for a designated minimum period.
Some of the most well-known hedge funds are:
- Citadel LLC
- Paulson & Co
- Fortress Investment Group
- Soros Fund Management
- Long Term Capital Management
Types of Hedge Funds
There are 4 main kinds of hedge fund:
- Directional
- Global Macro
- Event Driven
- Relative Value
Below is a brief description of each kind of hedge fund.
Directional Hedge Fund
These are probably the most algorithmic orientated hedge funds. Their basic aim is to determine current market trends and to trade on them, i.e. if the market is going up, they will go long etc. If the hedge fund is large enough it can actually influence the market to continue to trend, and this gives it a lot of power. Directional hedge funds have the most exposure to the global markets and can either be immensely profitable or hit very hard by sudden volatile fluctuations in the markets. These types of hedge funds will usually invest in any kind of asset, as long as it is trending strongly and they can make a profit out of it.
Global Macro Hedge Fund
Hedge funds which operate on a global macro strategy will trade according to events in the global economy, usually in currency, bond and equity markets. They will trade on information such as government fiscal & monetary policy, geopolitical events and much more. Global macro funds attempt to seek out global imbalances and investment opportunities and to take advantage of these inefficiencies. Due to the fact that their investments are spread throughout the world, they are susceptible to events in localities such as banking collapses, political risk etc, exchange rates etc. A famous example of a global macro fund is the Quantum Fund (run by George Soros) which forced the devaluation of the British Pound in 1992 and made over $10 billion in profit.
Event Driven Hedge Fund
Event Driven funds invest based on the likelihood of some given event occurring and then profiting out of it. For example, an event driven fund speculating on the future of the Eurozone would invest in European government bonds and a currency pair involving the Euro. A well known example of Event driven hedge funds are those which did not buy into the hype over CDOs in the mid 2000s and instead bought CDS's on those CDOs and profited massively when they defaulted, i.e. Paulson & Co. Event driven funds will invest in all kinds of events such as IPOs, scandals, mergers, wars, political turmoil etc.
Relative Value Hedge Fund
Relative Value funds are perhaps the easiest to understand and the least risky to operate. They essential engage in value investing based on fundamental analysis, i.e. buying securities which are valued incorrectly in the market and then taking their profit when the prices correct themselves. The difference between hedge funds and mutual funds when it comes to value investing is that hedge funds can also short assets that are overvalued and be more speculative through the use of derivatives, as well as investing in a far broader range of assets (i.e. real estate).
Working in Hedge Funds
Hedge funds employ a great range of different people, from equity researchers to asset managers to prop traders. Any background in finance can be used to get into a hedge fund, although experience with the markets is obviously preferred. The most common route into a hedge fund is to complete 2-3 years in an investment bank (either in IBD, trading, asset management or equity research) and then to be recruited via a headhunter into a hedge fund. Typically, trading and equity research is preferred over IBD and asset management, although it is not impossible to move.
The work you will do in a hedge fund is extremely variable and will depend entirely on the role you do. You will typically work a few hours either side of market hours (i.e. 8am to 6pm). The compensation in hedge funds also varies, with a large portion of it being based on performance bonuses (more so than in private equity or investment banking).
Return to the Finance Dictionary
Click here for our Hedge Fund forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of Hedge Funds. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with HF professionals:
- The BlackHat Interview, Part 1 (background, breaking in), Part 2 (working in HF, money & motivation), Part 3 (career advice, how he advanced), Part 4 (his future, misc. tips)
- Q&A Interview with SirTradesaLot, Part 1 (background, importance of first job, meritocracy isn't dead, building an investment case), Part 2 (experience vs. brand, how to sell, walk away number), Part 3 (becoming the boss)
- Q&A with Heister, "My Total Worth is North of $50 Million"
- Hedge Fund Guru Answering Inbox Questions Here.
- 3rd Year HF Analyst Q&A
- Strategist Q&A
- Former Big 4, now buy-side analyst, ask me anything
- 1st Year HF Analyst, Ask Me Anything
- I'm a Hedge Fund Analyst Ask Me Anything
- AMA 2nd Yr Hedge Fund Analyst
- 1st Year HF Analyst Taking Questions
BlackHat, one of WSO's top contributers, gives a all-encompassing view of his career and the hedge fund industry.
With almost 15 years of experience, SirTradesaLot's thoughts are beneficial to any aspiring monkey regardless of industry.
"WSO Chatroom extraordinare" Heister helps clarify how to break in with less than stellar credentials and reveals where the majority of his net worth is invested.
Private messages are answered as Mr. Pink Money details how to become a portfolio manager, 4 keys to a successful long position on merger arbitrage, and when to make the jump from the sell side.
BlackHat returns for a round of questions regarding work environment, career paths, a day in the life, and does the CFA help?
Background, how he got a hedge fund job, sell side vs buy side, and much more.
Buy-side analyst with an accounting background answers questions regarding interviews, headhunters, and more.
Finishing 1st year analyst answers questions related to banking, job search, interview process, etc.
A long/short equity analyst at a large hedge fund answers any and all questions!
An analyst at a multistrategy megafund doing fundamental long/short answers your questions.
A 1st year analyst at L/S HF from a non-target takes your questions.
See the full list of Q&A's & Interviews here: here.
Is a Hedge Fund Right for Me?
-Hedge Fund vs. BB IB: Users discuss whether to join a small hedge fund or top investment bank
Getting a Job
-Banking to HF: A new user asks about the process of switching from investment banking to a hedge fund, keep in mind that with so many different, smaller hedge funds out there, there is no set path
-Breaking In: WSO users discuss the different paths to getting a job at a hedge fund
-Breaking In: Another great thread on breaking into a hedge fund
-Offers: This thread will give some insight into how to choose what type of hedge fund you want to work for
Life at a Hedge Fund
-Compensation: This discussion focuses on compensation at hedge funds at more senior levels
-Compensation Issues: Experienced WSO users discuss what is acceptable compensation at a hedge fund
-Hours: A number of users share what their typical hours were at a hedge fund
-Lifestyle: Certified User Mr. Pink Money shares some insight and answers questions regarding his experience with life at a multi-billion dollar hedge fund, with input from a number of experienced WSO users
-Lifestyle: This discussion centers on what a typical week is like for a hedge fund analyst, with insight into hours, the work, and the responsibilities of an entry level position
Hedge Funds
-Favorite Hedge Funds: WSO users share their favorite hedge funds for various sectors and reasons
-Quant Hedge Funds: This discussion gives some insight into the available opportunities for someone who wants to work for a quantitative hedge fund
Welcome to the Wall Street Oasis Reading List for Hedge Funds. Please email [email protected] if you think we should add in additional publications to our Recommended Reading.
This easy-to-read history of some of the top fund managers is a great way to start learning about hedge funds. From Soros and Druckenmiller to Robertson and Tudor Jones, start learning how to be the best from the best.
If you have read "Too big to fail", "House of Cards", "Big Short", "Lords of Finance", "Fool's Gold", etc. you will like this book better. More wisdom based on incredible research and interviews. I was initially resistant to Mallaby's recommendations about financial reform, but he sold me based on reasoning well supported by evidence. The clearest, most readable and reasoned discussions of the efficient-market theory and Soros' reflexivity. If you don't know those terms, read this book anyway. He will at the end and you'll be glad whether you interest is investing or just voting. This is scholarship dressed up as popular non-fiction. On a par with Tom Wolfe and Malcolm Gladwell for bringing non-fiction to a wide audience.
I thought this was a great overview of the hedge fund industry. In truth the older stuff, like A.W. Jones, is vastly less interesting to me that the more current history, I could have used a bit less of that, but it does provide valuable context I suppose.
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Drobny updates his popular book, which lifted the veil on hedge fund managers' trading strategies. Everything is fairly simply laid out, making it a good starting spot for potential investors and those just curious as well.
Couldn't come at a more appropriate time... sheds more light than ever on the minds behind the largest global macro funds... reveals the intricacies of thinking like a hedge fund manager.
Read this before I started working in the capital markets and have continued to re-read it each and every year. The set-up is very similar to Market Wizards by Jack D. Schwager, but provides a new insight from global traders' point of views, all who come from various disciplines.
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This book is a guide for hedge funds, that is for how not to fail as a hedge fund manager. Biggs covers many different things to do and not to do, from the personal side to the professional side.
I previously worked in the hedge-fund industry and now teach college students about finance. Therefore, I found Barton Biggs' anecdotes both instructive and amusing, having seen some of the poor lifestyle choices that some hedge fund managers ("hedgehogs", according to Byron) make. However, the book's strength is not an "inside look" into the world of hedgehogs, but a series of instructive vignettes about how to be an "investor".
Here's the bottom line. If you could find ten books like this, you would be better off owning the knowledge in them, instead of getting yourself an MBA in finance from any of the top business schools in this country. A book like this is that important, that influential, and that informative. You would have to own the knowledge in this book, not just read it casually. You would need a pen to underline, to take notes, to write in the margins, to make this knowledge yours, and then with some experience, you would become AN INVESTOR. Good luck, and I say that respectfully.
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This is a fantastic book for getting acquainted with hedge funds. While some might say this is geared more towards investors and less technical in nature, it is a great start to learning how hedge fund managers go about making investments and different types of investment strategies.
This book delivered what I was looking for and more. I needed an introduction to hedge funds and the industry and the book does an excellent job of providing this information in complete and concise detail. In addition, the book also gives a good overview of portfolio theory and how it relates to actual practice. There is also a section that describes the prevalent hedge fund strategies with historical performances. I highly recommend this book to those interested in starting their own fund or wishing to work in the industry.
This book was what I was looking for. It's a nice introduction to hedge funds and the industry. The book does an excellent job of providing the information in complete and concise detail. I bought my copy used so I'm even more happy with it.
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If you haven't heard of this book, you are either brand new to hedge funds/investing or are going to need more help than a review from us can give you.
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We would refer you to the description under Security Analysis, but that just wouldn't be original. To sum this book up in short, we bring you the wise words of Warren Buffett: "By far the best book on investing ever written."
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Want a competitive advantage in the hedge fund job market?
The hedge fund careers Guide gives you an inside look at the hedge fund industry to give you that advantage. This guide will walk you through all aspects of the industry and better prepare you for your job search process.
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This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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WallStreetOasis.com has collaborated with its most knowledgeable users to provide one of the most detailed, entertaining and insightful publications to hit Wall Street in years.
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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The Wall Street Oasis Company Database includes thousands of financial firms, including hedge funds. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Equity Research
Click here for our Equity Research forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of equity research. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with ER professionals:
- Equity Research Q&A with Flake
- Non-BB Equity Research Q&A with First Year Analyst
- Unbelievable! Detailed WSO Success Story: How I Broke into Equity Research
- Equity Research Q&A with bearing
- Interview with a Senior Institutional Research Associate (Part 1/2),
Part 2/2 - Equity Research Associate Canadian Big 5 Bank Q&A
- First Year ER Associate AMA
First year bulge bracket researcher who moved from a back/middle-office role fields questions related to entry-level topics.
A complementary view to the above Q&A, with a non-bulge bracket equity researcher providing a day in the life and other insight into working at a smaller shop.
An inspirational recap of one WSO monkey's journey to the elusive offer, including background, resume advice, and specific tips to improve your own chances.
A 3rd year associate provides his tips for college students and young professionals looking to work in ER, as well as information on graduate school and exit opportunities.
A Senior Institutional Research Associate describes his non-traditional path and provides insights on his career and general advice for students.
An ER Associate at a Big 5 Canadian Bank offers his insights on his background, how he broke in, and advice for undergraduates.
Former engineer -> MBA -> ER Associate takes your questions.
See the full list of Q&A's & Interviews here: here.
Is Equity Research Right for Me?
-Here is How Equity Research Works: An ER Associate explains the ins and outs of how equity research works.
-Equity Research Fit: A new user asks about moving to equity research straight out of undergrad and receives good advice on the equity research industry and what traits make a good research associate
-Research Respect: WSO users discuss why research gets so little respect on Wall Street and give a glimpse into the good and bad of equity research
Getting A Job
-Certifications: This discussion focuses on the Series 7, Series 66, and other regulatory exams and why you shouldn't get them while in school. And here is another great discussion on the Series 86 and Series 87 exams
CFA Level I: A law school student with a deferred job offer asks about taking the CFA to break into the industry
-Best MBA Programs: WSO users discuss the best MBA programs for equity research
-Interviews: This thread spotlights interviews at equity research firms and how they vary greatly based on the firm and analyst
-Recruiting / Firm Testing: A new user going through the written test phase of recruiting gets advice on what the test might cover for a prospective equity research associate
Life in Equity Research
-Compensation: WSO users share information onequity research compensation and career path, as well as a number of other topics
-Compensation (Experienced): This discussion centers on the expected compensation for an experienced, first year equity research associate as well as ways to move to different divisions at a bulge bracket bank
-Equity Research FAQ: WSO users create a list of frequently asked questions about the realities of a career in equity research
-Life in Equity Research: Certified User The_Inscrutable_Chicken takes a number of questions and gives insight into life in equity research
-Life in Equity Research: A former hedge fund portfolio manager, partner, and strategist who is currently a strategist at a sell-side research firm answers questions regarding the career paths and life in equity research, as well as his take on the sell-side vs. the buy-side
-Future of Equity Research: WSO users discuss the future of equity research and the job market for recent graduates
Equity Research Firms
-Bulge Bracket vs. Boutique: A discussion on the top equity research firms turns into a discussion on bulge bracket vs. boutique equity research firms
Welcome to the Wall Street Oasis Reading List for Equity Research. Please email [email protected] if you think we should add in additional publications to our Recommended Reading.
If you want to test your interest in the vast world of equity research, this is the book for you. Kessler goes into detail about the ups and downs (most glaringly the downs) of a career as an equity research analyst.
Bottom line: unless you are Jack Grubman, Frank Quattrone, Henry Blodget and some of the other pieces of Wall Street Meat that Kessler writes about who went down with the ship, you will find this an amusing book, a nice diversion from a long, long time ago on which to reflect. Kessler knows all the buzz words; he knows the players and (somewhat inadvertently) he lets us know him.
A scathing critique of everything wrong with Wall Street ... and what's wrong with a few of the critics as well."
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Confessions is similar to Kessler's Wall Street Meat in that the author had a negative view of his time on Wall Street. However, the author does note that there have been improvements in the system, though there are still some loopholes that need to be fixed. Reingold also gives the reader a good look at what made him successful on Wall Street, which will be valuable to many in getting their careers going.
It's a terrific memoir. This honest and irreverent behind-the-scenes account of life on Wall Street is highly recommended.
In the first 300 pages, Reingold does an excellent job of walking the reader through the development of his role as an award-winning analyst, first within the fledgling MCI, and then on Wall Street with Morgan Stanley and finally with Credit Suisse First Boston. Reingold's long-time rival and nemesis, analyst Jack Grubman of Salomon Smith Barney, serves as the perfect foil for exposing the abuses and excesses of an industry that continued to blur the line between the analyst side of the house and the investment banking side. The SEC emerges as an 'unindicted co-conspirator' for its years of inaction and complacency in turning a blind eye to escalating levels of abuse.
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This book is one of the first to offer a glimpse into life as a buy-side or sell-side research analyst. This is not a book for someone completely new to finance, but if you have taken some college-level coursework this will build upon that, giving you a practical method to approaching life as a research analyst.
Jim's book is an excellent window into the world of securities research. Very few works cover the complete life cycle of an analyst and the necessary balance between theory and practice. This is one of them.
My friend Tom Brakke, liked this book and said I would too. He was right, and soon afterward, I heard the author speak at the Baltimore CFA Society. Hearing James Valentine speak is an advantage here. He summarized what is most important, which if you are reading the book, it would be chapter 20 (out of 27). It is his FaVeS framework: Forecast, Valuation, and Sentiment, in that order of importance. Remember that as a key to the book if you read it; it tells you what to focus on as an analyst.
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This is the classic book by Warren Buffett's mentor at Columbia, Benjamin Graham, and his colleague David Dodd. While originally written in the1930s, many of the investing principles remain the same or similar.
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Warren Buffett says that this book is "by far the best book on investing ever written." It is a must-read for equity research analysts.
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This textbook/practical guide offers everything from a to z on analyzing equities. Be careful, though, those with no finance background may find this tough and those with a lot of experience may find it slow. One reviewer notes that this is mostly helpful for sell-side research associates.
'Applied Equity Analysis' is a how-to manual on evaluating stocks based on his 20 years of experience at JP Morgan. The book is very well-written and readable since the author employs plain english (no pun intended) to make his three major points: 1) accounting numbers--while by no means perfect--are excellent tools in evaluating stocks, 2) accounting-based stock valuation is superior to (but does not neccessarily supplant) cash flows, and 3) competition ensures that eye-popping financial performance doesn't last forever.
There are reams and reams of investment valuation books on the market -- that is obvious. In my opinion, the three no one should be without are Applied Equity Analysis, Stephen Penman's monster tome "Financial Statements and...", and lastly, Aswath Damadoran's book, "investment valuation." Most hyperventilating MBAs default to Damadoran; I really enjoy the simplicity behind Applied Equity Analysis. Caution: [none] of the three are what you'd call 'light reading.' If you have any money left, honorable mention goes to Cooke's 'Security Analysis on Wall Street.'
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This 80+ page guide, produced by WSO and written for WSO's users, is a compilation of the most common technical questions encountered in Wall Street interviews.
Just got the new technical guide. By far much better than vault. Very detailed (80+ pages) with charts, graphs, etc. I'll be reading this at least once this summer in prepping for fall interviews.
The new Wall Street Oasis Technical Guide provides questions and easy to understand answers for all the questions I typically ask when interviewing a candidate. The additional questions expand the guide, and the new charts are an added bonus for easily remembering the crucial concepts. If a student really knows all the questions in this guide, they are sure to nail the technical section of their interview.
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This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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WallStreetOasis.com has collaborated with its most knowledgeable users to provide one of the most detailed, entertaining and insightful publications to hit Wall Street in years.
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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Return to Main FAQ Page
The Wall Street Oasis Company Database includes thousands of financial firms, including equity research firms. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Venture Capital
Click here for our Venture Capital forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of venture capital. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with VC professionals:
- Venture Capital Associate Fielding Questions
- Brad Feld: A Quick Q&A
- So Many Eggs in Vee Cee
Previous stints in banking and a hedge fund allows this venture capital associate to compare the three, and also speak on hours, type of work, and the perks of VC.
Co-founder of a VC firm shares what he attributes his success to, advice for breaking in, and what "sleeper" future opportunity he's keeping his eye on - it's not big data.
Newly minted VC analyst discusses the rocky beginning there and what venture capital actually means.
See the full list of Q&A's & Interviews here: here.
Editor's Note: Due to the amount of information in JimmyDormandy's thread, "Venture Capital Associate Fielding Questions", we've decided to simply direct you to that thread. If you're interested in venture capital, make sure you pay close attention to his advice.
Is Venture Capital Right for Me?
Starting a Firm: Long-time user SirBankalot asks why more people don't start their own venture capital funds
Getting A Job
-Breaking In (Undergrad): This discussion focuses on the qualifications for an entry level job analyst job in venture capital
-Breaking In (Experienced): A new user asks what would be the best path to secure a job in venture capital
-CFA and MBA: This discussion focuses on the respect given to a CFA or MBA in venture capital
-Internships: WSO users discuss the opportunities for a undergraduate venture capital internship
Life in VC
-Exit Ops: This discussion centers on the exit opportunities available to venture capital analysts, while also offering information on an analyst's duties
-Exit Ops: WSO users give some insight into career opportunities after a venture capital analyst stint and the responsibilities of a VC analyst
-Life in VC: A venture capital analyst takes questions about life in the industry and how he found an analyst position at a venture capital firm
Impressing a VC as an Entrepreneur
-Advice on an initial call: VC Analyst describes the initial call to a VC firm as an entrepreneur here
Venture Capital Firms
-F500 Venture Capital: This discussion lists a number of Fortune 500 firms with venture capital divisions
-Top Venture Capital Firms: WSO users give their thoughts on Andrew Metrick's list of the top venture capital firms, as well as adding their own favorite companies to the list
Welcome to the Wall Street Oasis Reading List for Venture Capital. Please email [email protected] if you think we should add in additional publications to our Recommended Reading.
The Easy Reads section contains books meant to give a general idea about a career or industry. Technical Reads are meant for people with some business experience or with some exposure to the industry, and it may include more technical writing. The Career Jump-Start section focuses on literature that will help you get a job, including: interviews guides, firm/recruiter lists, and/or compensation data.
This will be an exciting starting point for those that may be interested in finding their way into venture capital. It gives an insider's perspective on everything from what makes a good VC firm to how to be a good venture capitalist. If you're not sure you have what it takes, you'll find out by the time you're done with this book.
Jeff Bussgang has written the definitive book on how venture capital works. I've read a lot of books on this subject, was an entrepreneur for 10 years and have been a VC for 15 years. Jeff's book is by far the best to date on this subject.
As someone unfamiliar with the industry, I found Bussgang's book to be an excellent oversight of how VC works. If I were to go and actually pursue a venture capitalist, I'd want more details, like a database of VC companies or a step-by-step plan on what exactly I need to put together in my pitch. But Mastering the VC Game was a most approachable starting point.
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What better ways are there to learn about an industry other than to read about the "creator" of that industry? There aren't many. Ante's book is an interesting look at how a French General became the father of venture capital
One of the premier technology and financial journalists working today, Ante has written the definitive history of the birth of venture capital through the extraordinary figure of Georges Doriot. Anyone who is interested in innovation, entrepreneurship, or the roots of America's start-up economy must read this book.
Georges Doriot's remarkable ability to inspire entrepreneurs and his keen understanding of the business development process allowed him to create and shape the venture capital industry. Spencer Ante's brilliantly written book is a must-read for anyone wanting to understand this unique individual and his key contributions to the development of our modern economy.
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We already put this down under the private equity recommended reading, but it needs to be added again. Co-authored by Founder and President of Chicago PE firm Prism Capital Robert Finkel, this collection of interviews with top private equity managers is sure to intrigue and excite anyone interested in the private equity space.
I have been a partner in the Venture Capital business my entire career - over twenty years. I have kept a personal list of "lessons learned" from my investment experience; and, I have read many of the books in the category. By far, this is the very best book in all respects.
The Masters of Private Equity and Venture Capital is a great book for anyone (student or professional) interested in the VC/PE industry. It was written by two individuals: a talented business journalist, skilled at explaining business ideas, and by a private equity master, who is known, proven, and well respected in the industry. The book offers insights, advice, and lessons directly from the proven leaders who run the PE/VC industry. I first read the book after graduating undergrad, using it as a reference tool when networking with industry execs. As a young professional, I often refer to the book, prior to business meetings with clients.
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When the Executive Chairman of Google writes a foreword for a book on venture capital, it's time to perk up and pay attention. Draper, one of venture capital's legendary "founding fathers" and an active VC for over 40 years, writes of his experiences with entrepreneurship and venture capital. This is not just another insider piece, this is THE insider piece you've been waiting for.
Whether you've experienced the joys and pains of Silicon Valley directly or just want to learn from those who have, you can't do better than this firsthand account of the storied three generations of Drapers. Bill has done a huge favor for those of us who are passionate about technology and innovation by chronicling their experiences. Theirs is a tale worth knowing.
Bill Draper, who began investing back when Silicon Valley was only known for its fruit orchards, tells the story behind some of the most pivotal companies of the last half-century and offers a fascinating look at the inner workings of the venture capital industry.
No single venture capitalist more embodies the best in venture capital; Bill Draper sets the bar high. It is not just his demonstrable success in business, but it is also his high ethical standards that earn him the respect and the following that he has in the world of business.
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This "toolbook" covers just about everything you need to know for getting a VC firm up and running. With the help of numerous, detailed charts, case studies, and term sheet exercises, Berkery gives a colorful and interesting explanation of the basics of VC investing.
Every few pages new ideas would compel me to go to my computer and add stuff or rewrite my business plan, for example, Berkery emphasizes the need for clear milestones. Preston mentioned milestones but didn't make it clear why they are so important. The financials that were briefly presented in Preston's book are thoroughly presented in Berkery's book, for example, what gross margin investors look for (80% or more) and why they need such extremely profitable products or services. Plus you learn the jargon or key phrases of venture capitalists, e.g., 'a large but well signaled market,' the importance of 'market power' and an effective 'route to customers.'
The book is incredibly clear...I agree it is not a "VC for Dummies" book, yet a a total novice would indeed be able to navigate the content quite easily. The author has a gift for anticipating reader questions and possible confusion points...probably because he also teaches entrepreneurial finance and has seen all the questions before.
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Wilmerding, a leading VC with Boston Capital Ventures, gives us the first book on term sheets and valuations of its kind. This is a must-have legal and business aid for anyone interested in venture capital for an investment or a career.
This is a first rate book-regardless if you are a seasoned venture capitalist or first time entrepreneur. Having been a venture capitalist for 22 years now, the term sheet in this book is boilerplate-but it is 1 of the 4 boilerplate term sheets every legitimate lawyer/venture capitalist uses as a term sheet-and available for the first time ever in the "public domain." In addition, what makes the book so valauble is the line by line wording and analysis for entrepreneur favorable, investor favorable and neutral. I highly recommend this book to every entrepreneur, venture capitalist, and executive of every level-it is a MUST have on your bookshelf as a timeless reference.
This primer should be required reading for every entrepreneur. It is short, authoritative and worth its weight in gold.
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This book aims to be the most comprehensive on venture capital due diligence. As far as VC books go, this is about as good as it gets!
I think Mr. Camp does a nice job of organizing the key due diligence questions into logical groups (legal, financial, etc.) Indeed, I think a good exercise would be to turn the questions in the book into a template for use during due diligence. I disagree with the earlier comments that there is little value because of his use of secondary sources. I think the opposite...a well-referenced book is always valued. In fact, I'll be looking into some of the references myself! Overall, nicely done.
This is one of the very few genuinely good and resourceful books on venture capital because it not only discusses a broad range of topics, but it does so in detail. I especially enjoyed the thematic approach Mr. Camp used to tie in venture due diligence for entrepreneurs. However, it comes up short on discussing other important topics like in-depth valuations, prospecting for money, and how to grow your business.
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This guide can help you land your dream job in private equity or venture capital by demystifying the notoriously opaque private equity and venture capital recruiting process. The key to breaking into private equity is to plan ahead because private equity recruiting is both highly competitive and formulaic.
Daniel Sheyner has written an extremely comprehensive, accurate, and informative synopsis of the private equity industry and getting in its iron doors. It's the best report of its kind that I have seen.
The Wall Street Oasis private equity & venture capital guide is an excellent overview of how to land you dream job in private equity. In short, it summarizes what it takes to get your foot in the door.
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This 80+ page guide, produced by WSO and written for WSO's users, is a compilation of the most common technical questions encountered in Wall Street interviews.
Just got the new technical guide. By far much better than vault. Very detailed (80+ pages) with charts, graphs, etc. I'll be reading this at least once this summer in prepping for fall interviews.
The new Wall Street Oasis Technical Guide provides questions and easy to understand answers for all the questions I typically ask when interviewing a candidate. The additional questions expand the guide, and the new charts are an added bonus for easily remembering the crucial concepts. If a student really knows all the questions in this guide, they are sure to nail the technical section of their interview.
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This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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The Wall Street Oasis Company Database includes thousands of financial firms, including venture capital firms. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Real Estate
Click here for our Real Estate forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of Real Estate. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with RE professionals:
- Real Estate Q&A
- REPE Answers
- Head Research Analyst Ask Me Anything
- Day in the Life of CRE
- The 5 Things that Determine Your Success as a Commercial Real Estate Broker
- What Broker Events Are Like
- Q&A with a Buy-Side Analyst at Real Estate Investment Development Firm
A real estate banker gives his views on the best job to teach you how to build your own RE portfolio, what RE firms are the best, and whether getting pidgeon-holed is a concern.
Current opportunity fund associate, originally from a non-target university, answers many career and RE-specific questions.
The Head Research Analyst of one of the best commercial real estate firms answers all questions!
Commercial real estate head research analyst provides a glimpse into his day in the life.
Certified User CRE divulges the five things you need to do to succeed as a real estate broker.
Certified user CRE provides a glimpse into the opulent world of broker events.
A buyside analyst at a real estate investment and development firm answers your questions about the industry, breaking in, and his daily life.
See the full list of Q&A's & Interviews here: here.
The Wall Street Oasis Company Database includes thousands of financial firms, including those specialising in real estate. This database allows you to filter and search by zip code, industry and keyword. Included in the database are thousands of compensation data points as well as company reviews and interview insights by firm. Please click here to check it out: WSO Company Database
Asset Management
Click here for our Asset Management forums. It is where we discuss the industry as well as different firms and groups.
These are a collection of some of the best discussions created for and replied to by members of the WSO community on the topic of Asset Management. Keep in mind this is by no means a comprehensive list and reading old and current posts will help you learn more about the industry. If you think we missed one that should be included here, please e-mail [email protected] the request.
Q&A & Interview posts with AM professionals:
- The Frieds Interview, Part One (background, 7 pieces of non-target advice), Part Two (a typical day, mentorship, low/high points, New Jersey), Part Three (future, politics, "MBA Is A Joke")
- Research Associate at a Major Mutual Fund, AMA
One of WSO's top users and authors, Frieds has worked in asset management and delivers an entertaining spin on career advice.
Research associate at a mutual fund with 100b+ AUM does an AMA, ask away!
See the full list of Q&A's & Interviews here: here.
Is AM Right for Me?
-Job Function: This thread starts as a discussion on when to use discount brokers, private wealth managers, and private bankers, but also gives a good idea of what exactly each type of firm does
-Which Job?: WSO users give insight on which jobs offer the best work / life balance in asset management
Getting a Job
-Certifications (Undergraduate): WSO users offer advice on certifications worth completing for asset management while an undergrad
-CFA: This thread focuses on exactly how the Chartered Financial Analyst, or CFA, can help your career. Note that everyone has slightly different feelings about the CFA
-MFE for AM: A new user asks how much a Masters in Financial Engineering will help for asset management recruiting
-Moving Up: WSO users discuss a career switch from back office to front office in asset management. Long-time WSO user jqbuyside chimes in with some very good advice.
Life in Finance
-In the Office: This discussion focuses on the amount of face time necessary in asset management if you want to fit in
-Math: WSO users discuss the levels of math needed to be successful in asset management, touching on a number of different areas
-Turnover: This thread covers turnover at pwm and private banking firms
AM Firms
-Citi vs. PIMCO: This discussion revolves around whether to take an SA at Citigroup or PIMCO
The Best: WSO users debate the top asset management firms, and, as usual, there is no clear winner
-Starting Location: This thread touches on the best places to start a career for Asset Management, while this thread discusses the main asset management centers by city and region
Welcome to the Wall Street Oasis Reading List for Asset Management. Please email [email protected] if you think we should add in additional publications to our Recommended Reading.
This is a good place to start for all those prospective monkeys interested in asset management. While a bit discombobulated at times, overall the author does a good job of weaving stories into lessons about the industry.
Searching for Alpha is right on the mark and essential reading for anyone whvo wants to go beyond stock-picking and think about how to construct a total portfolio to fit their own risk and return objectives.
A terrific read! Searching For Alpha is intelligent, well written and very timely. Author Ben Warwick has a gift for weaving people, anecdotes and financial theory into a fascinating history of the investment business.
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Bernstein is an unlikely finance author, what with his side job of being a... practicing neurologist. He wrote this book from information and ideas he accumulated over years of investing. It's a great place to get your foot in the door with asset allocation, it's written for the layman but with enough substance to keep a finance student on his or her toes.
As its title suggest, Bill Bernstein's fine book honors the sensible principles of Benjamin Graham in the Intelligent Investor Bernstein's concepts are sound, his writing crystal clear, and his exposition orderly. Any reader who takes the time and effort to understand his approach to the crucial subject of asset allocation will surely be rewarded with enhanced long-term returns.
In a time when we are all more intimately involved with the management of our retirement accounts, I cannot recommend this book highly enough to anyone and everyone. You cannot afford not to be familiar with the contents of this book. Highly recommended.
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There aren't many bigger names in finance and investing literature than Damodaran. What better way to get started learning about asset management strategy then by learning what doesn't work?
This is a thick book, but it reads pretty easily... He starts each chapter with a "fable," a story of some gullible investor who follows one of the conventional strategies for stock profits (for example, buy low p/e stocks) and, after losing money, finds out it's not that simple.
Damodaran has comprehensive command of his material and presents concepts in a very readable manner. If you are looking for an in-depth treatment of investment strategies, this is a great book.
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Swensen clearly and effectively illustrates the institutional investment process, specifically "the Yale Model", which he helped to pioneer while at the Yale Endowment (where he worked for over 20 years). In the ten years from 1999 to 2009, he saw annualized returns of approximately 11.8%.
David Swensen's creative and disciplined approach to investment has given Yale the resources it needs to augment its capacity for excellence in scholarship and teaching. Those who absorb the wisdom in this book will likewise strengthen the institutions they serve.
This survey of endowment investing offers an incisive framework for how to think about investable assets of charitable institutions. The value of the book is that Swensen has thought long and hard about how endowment investing differs from personal wealth management and how those differences ripple through almost all aspects of overseeing and implementing endowment investments.
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Widely acknowledged as the "other 15%" of Warren Buffett's investing strategy (the 85% belongs to Graham, of course), this is a must-read if you plan on building your own Berkshire Hathaway.
I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits...A thorough understanding of the business, obtained by using Phil's techniques...enables one to make intelligent investment commitments.
Philip Fisher like Munger is a MASTER INVESTOR worthy of spending whatever time you can spare studying. If you want to walk in the footsteps of a MASTER, you must study the MASTER, and Fisher has a tremendous amount to offer.
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This 80+ page guide, produced by WSO and written for WSO's users, is a compilation of the most common technical questions encountered in Wall Street interviews.
Just got the new technical guide. By far much better than vault. Very detailed (80+ pages) with charts, graphs, etc. I'll be reading this at least once this summer in prepping for fall interviews.
The new Wall Street Oasis Technical Guide provides questions and easy to understand answers for all the questions I typically ask when interviewing a candidate. The additional questions expand the guide, and the new charts are an added bonus for easily remembering the crucial concepts. If a student really knows all the questions in this guide, they are sure to nail the technical section of their interview.
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This 56 page guide, produced by WSO and written for WSO's users, is a compilation of over 100+ of the most common behavioral / fit questions encountered in Wall Street interviews with detailed advice and examples.
All I can say is I wish I had the Wall Street Oasis Behavioral Guide before I went into my banking interviews. I was well prepared for some of the fit questions that came my way, but others challenged me. With the extensive number of questions in this guide and the sample answers, I would have felt prepared to handle almost anything.
I didn't read Wall Street Oasis Technical and Behavioral Interview guides until after my first year in my MBA program, and frankly they contained everything I had spent the last year learning to get a job on the Street. I highly recommend them to anyone preparing for an interview, finance or other. It's a heck of a lot cheaper than an MBA (not to mention faster and more to the point).
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WallStreetOasis.com has collaborated with its most knowledgeable users to provide one of the most detailed, entertaining and insightful publications to hit Wall Street in years.
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This is a complete guide to getting through your summer internship in finance or consulting. Whether you're wondering what to wear, how to do your work, or how to manage your money, this 30-page guide has it all. Following this guide will make getting through the summer as painless as possible, so that you can have the exciting, rewarding experience you deserve.
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