WSO Podcast | E240: Middle East Career | FOMC Rate Hike | IB Rankings | Weekly Wrapup
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0:00 FOMC Rate Hike
14:30 Middle East Career
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WSO Podcast Episode 240 Transcripts:
Patrick (CEO of WSO): [00:00:04] Welcome to the WSO weekly wrap up where I talk with my team about the five most trending discussions in the Wall Street Oasis community. Enjoy! All right, everybody, welcome to another episode of The weekly wrap up. It is what day is it today, guys? Thursday, March 23rd. Matt's going to kick us off with the first topic.
Matthew: [00:00:25] Perfect. All right, guys. Glad to be back here. First off, we should discuss from last week. We were trying to anticipate what Jay Powell was going to do with the FOMC this week. So yesterday and it looks like we were right. So as a 25 basis point hike that was announced with possibly a future hike coming, and I believe June is the next FOMC meeting. So we suggested it was going to be a 25 basis point hike. And I know myself, I was suggesting maybe a pause then. So it looks like we were at least half right. Pat, any thoughts on the current state of the markets? You know, anything from what Powell mentioned? What's your feedback on that?
Patrick (CEO of WSO): [00:01:03] Yeah, I think it's just a very strange time because you have like such mixed signals coming in from everywhere. You have strong labor market, you got inflation that doesn't really seem to be cooling as fast as we would hope. So there's kind of like that pressure. And then, of course, all the the bank failures and all the the stress there is kind of the counteracting data, which is obviously putting the Fed in even a tougher position. So I think that's probably why we got the 25 beeps and not the zero because of the hot readings.
Matthew: [00:01:35] Well, I think I saw something where they mentioned Jay Powell and the crew there were definitely thinking of a pause. But I think because it was specifically that hot inflation number, it's been too stubborn.
Patrick (CEO of WSO): [00:01:46] In the jobs that just like…
Matthew: [00:01:47] It's the jobs, the way I think that he wants to see jobs come down because that should trickle to a decrease in like a deceleration in inflation.
Patrick (CEO of WSO): [00:01:58] Service level, services.
Matthew: [00:02:01] That’s service based, it's all service based thing. So I think their idea is still deliver the 25 beeps. It's going to hurt banks. But I think they're willing to backstop a lot of the deposits. They're not coming out and saying they're going to do a full blanket approach, but they have to anticipate there's probably going to be some more pain that comes off the back of this raise and maybe a future one. So they're willing to help out a bit.
Patrick (CEO of WSO): [00:02:24] Nabil, what do you think? Because late last year we were talking about like when you might start putting some money to work, are you feeling it's time or what are you feeling like?
Nabil: [00:02:31] No, no. I think there's more pain. Yeah, there's more pain. It has to be, because it's interesting. Because the rates now terminal rates are five and Jay Powell actually mentioned that base case is going to be 5.25. So there's still a 25 on the table. Even if they don't have it like the market's still going to crash because this effect of rate hikes takes about eight months to go to real estate and you're seeing all the rates crash already. They've stopped dividends. They're going to people have stopped paying rent like it's all going to flow in Once that happens, like even today, like I think banks are falling, right? I didn't see property, but it came on the news feed or something that banks are still falling. So these small hikes are just going to have a major impact. Once that happens, the whole tech bubble needs to burst. And then I'll think about like putting money because look at Nvidia, just look at Nvidia like 150 PE or something, crazy. There's no way that's not about it.
Matthew: [00:03:29] This is interesting. I would say I think I'm one like, I'm on the complete opposite side of you on this opinion. I think this is the time when you have to be allocating capital. The way I see it, I'm thinking much more of like a 5000 foot approach. As simple as this, you take a look at the S&P 500 chart the past five years and I say to myself all this negative stuff has happened to the world whether it's Covid, wars in Ukraine. What else financial crisis in the US. And I'm saying to myself, the chart's not looking that bad. It's kind of having that base, you know, bottom pattern forming that, like, what worse could possibly happen to make things go much slower? We're only at about 22 to 25% off the highs right now at the current levels. And I'm thinking to myself, all this negativity has happened and we're here like, how much more could the negative train keep going? I don't think it does. I think when you're in this space, there's a lot of fun where I feel like we're at peak fear, peak fud right now for a lot of different industries. And I think depending on your time horizon, it is probably a good time to start building a position. I'm trying to my thesis is capture the meat of the move. You're not going to pinpoint the bottom. But one person's going to be the lucky guy that buys the bottom. It's going to be, that's what everyone wants a time I'm not going to.
Nabil: [00:04:46] I’m not gonna buy the bottom. I'm just going to wait until highly traded.
Patrick (CEO of WSO): [00:04:50] Tesla beautifully think he bought in at 120.
Nabil: [00:04:54] Landed sold it like 200 plus but like I'm going to wait again like it's going to come to 120 like fair value. Fair value, again the thing is, it's interesting that you mentioned that despite having all these negative things, the market didn't go down. If I look at market as a way industry that market should like.
Patrick (CEO of WSO): [00:05:12] What you're saying.
Nabil: [00:05:12] Show reality
Patrick (CEO of WSO): [00:05:13] You're saying it should go down more. It hasn't come down that far, even with all this bad news.
Matthew: [00:05:17] No, no. But there's been some recovery though is what I'm suggesting. There's been some recovery and we're now just chopping in a place now this like this plateau here where there has still been a sizable amount of negative energy, like negative information. The initial decline came around this time last year because the Fed announced an aggressive hiking schedule. Right, but then since then there's still been wars, you know, financial crisis, crypto imploding. There's still been a lot of negativity that's come off as like as a result of where we're at now. And it doesn't seem like the market wants to go any lower. My $0.02 is I still think there's a lot of sidelined capital that's really keeping things afloat. People maybe have these psychological levels in the market where they're willing to deploy. And I just think like, you know, Powell is saying this is near the end. Like we got maybe one more hike and you're just thinking of the progression of things like we're here. Yes, He's going to give verbiage around, you know, it might do more, it might do less. But that's he needs to obviously be able to control the market. Can't have people seeing just green all the time. They need to be kept on their toes. But once that, I think the next important piece is going to be how long that hold takes place, how long are they going to hold the rates at this level? The Dot plot is suggesting next year is going to be cuts. I think as soon as you see rate cuts or even before that, because again, the market's forward looking, any anticipation of a cut coming, I think the market's just going to start screaming up. There's too much money on the side. Money's still been printed. Valuations are going to go back to where they were.
Patrick (CEO of WSO): [00:06:43] Then Inflation will take off again.
Matthew: [00:06:45] And takes off again.
Nabil: [00:06:46] But then…
Matthew: [00:06:48] The Ponzi keeps going, that's what it's all about. The Ponzi keeps going.
Nabil: [00:06:50] Yeah. The most interesting part now that you mentioned rate cuts is most of the depressions that have happened actually happen after a rate cut, after a hike, a hole and then a rate cut, all the things start going to shit because at that point they kind of lose confidence because if they have to do a rate cut, it means they've broken something. So last time in 2008 they did a rate cut and then the banks failed, but they did the rate cut to try to save it.
Matthew: [00:07:13] I don’t know if they only do rate cuts though when something breaks. Right, the way I think our financial system is set up from like, a like just the flow of money and everything. You need to have your rates at that Goldilocks environment where there's always growth, right, guys? I think as individuals like we always like our markets need to grow like assets are going to grow in value. I think that's just the way things are going to as a on a whole, not as like on an individual per company basis, but the market as a whole is going to be growing the way I think our financial system is set up is it needs to have that Goldilocks environment with interest rates where it does stimulate growth. You do want to have growth for your people, for your economy, for markets, or else if there's no growth.
Nabil: [00:07:54] But Jay Powell, just yesterday at his, thing just said there's not going to be any growth in 2023.
Matthew: [00:07:59] Yes. In 2023. But markets are.
Nabil: [00:08:01] Just means.
Matthew: [00:08:03] Markets are future looking. Right, so it's not to say you can't be buying thinking that it's you know, I mean, the markets are projecting what they expect the future market to look like is how I see it. And again, my suggestion is I'm not saying this year we see growth, but I think you have a 3 to 5 year time horizon. I think now is the time to at least start building a position. My $0.02.
Nabil: [00:08:25] If you. Yeah, but if you look at valuations, none of them make sense. Like they're not at a place where it's so future looking like it's still overvalued. Like looking at current scenarios, like wait for the next earnings. You'll probably see a lot of these things, cracks start to come again. Someone's going to say I push valuations up but like. People still have to come to reality, right? Like companies with cash burn with no cash are going to find it harder to borrow. And that thing hasn't flown into the system yet, especially on the tech side of things. Low cash, high cash burn companies. You could easily short them into September, October buy puts in them and you'd make money. And then maybe.
Patrick (CEO of WSO): [00:09:04] This is not investment advice.
Nabil: [00:09:05] It's not investment advice. I'm just saying like you could short them because you think realistically, if you think realistically interest rates is going to first impact banks, then it's going to impact real estate. And then finally it's going to come to corporate finance where you don't because most of the growth relies on borrowings and now suddenly you have credit tightening and that's going to impact all your industrials and what not. Maybe not the stable ones like Coca-Cola or whatever, but the rest of them.
Matthew: [00:09:29] One thing I wanted to ask, and then we'll quickly pivot here because we're spending some time here. But I do think it's a good combo. Nabil what are your thoughts around the velocity of hikes? Right, because I know what you're saying. Every crash or every leg down has come on the back of a hike. But I think, you know, when we were hiking 50 beeps, when rates were near the bottom, like the velocity of that is a lot higher than now doing a 25 beat raise on whatever we were at, now 4.5 or 4 and three quarters. Right, so I do think the impact of it is lower every single time. What I could be wrong with this, but I'm even just thinking I think the psychological effect of these rate hikes is more detrimental now. Right? Like what I'm finding is now it seems like everyone is a macro expert, right? Everyone's an expert on interest rates. That's one of the funny things that's come on the back of this, where before FOMC meetings were a non event. Right, I see a lot of people talk about that and now everyone's a whiz on FOMC and what's going on there. So I think just a lot of these headlines now is what's I think even probably just shaking consumers now like people are a bit more knowledgeable if they've chosen to brush up on this type of information. I just think it's a lot of it is just…
Nabil: [00:10:37] But this happens before every bubble, right? There's a there's a saying from JP Morgan, like the original guy who said, when my shoeshine starts giving me stock advice, I know to get out. But like, the idea is when everyone's starting to talk about it's a very good time to get out of the market, right?
Matthew: [00:10:53] I don’t know about, you know no one. I have no one here that I know is talking about stocks to me anymore and crypto.
Nabil: [00:10:58] Okay. A lot of people are here are talking.
Matthew: [00:11:01] For me, cryptos quiet, crypto like I was joking with Pat because we have help out with a friend of ours of WSO a newsletter crypto focused they get very like not very little subs but amongst all the other ones that we help promote, they're the lowest ones. I was joking with Pat being that, that's like almost like a Yeah, you know what I mean? It's still showing that crypto is not in the light, but I would say even just amongst my close group of friends and not even all finance related people like people that are tradesmen or just, you know, and as science roles, whatever it may be, there's definitely less talk on investing. I would say, in my inner circle than there was before everyone was making money. Now it's like no one's making.
Nabil: [00:11:40] A bull market. But..
Matthew: [00:11:43] Personal spending.
Nabil: [00:11:44] Issue is it's still a lot. It's still a lot because FOMC, like you said, shouldn't have been like a major event on any stock market related issues. But now it's just moving the market like crazy. Right? You had a drop, I think yesterday and be like at that point, two five is going to it should never have an impact on the market, technically speaking, except for the very fact that tighten credit which in but it's not going that way tech still booming for whatever reason you know like it makes no sense like it has to.
Patrick (CEO of WSO): [00:12:15] Tech isn't booming and look at the valuations on Google on some of these big tech, the big tech names.
Nabil: [00:12:21] Google is fine like it's at that rate where.
Patrick (CEO of WSO): [00:12:23] It's come back, yeah it's come back a little bit but it was trading at, you know, pretty low valuation.
Nabil: [00:12:28] Like 90s, It's like pretty fair value there. But like when you look at Nvidia and like.
Patrick (CEO of WSO): [00:12:32] Actually 106 right now.
Nabil: [00:12:36] Oh. Yeah, it was like 90 ish or something.
Matthew: [00:12:38] Google is doing. I've been keeping an eye on it and see that it's at 106 and I'm kind of bothered by missing that boat. But, it's I think the point is that I think between you and I and where our differences lies, I think also just maybe the amount. So what I'm picking up is I think you like to trade a little bit more often than at least I would. So how I see it is like, yes, there could definitely be another 15% leg down, but in three years time, is that 15% leg down on my purchase price going to be that impactful on like the amount of capital that I'd also be investing? Like I don't have a million liquid that I'm going to put in where it's that's going to make an impact on future returns. But for me missing if it does, I don't think it goes 15 down, but let's just say it does. I'm still sleeping happy though, because I still think in three years in a good name for like a Google, for instance, or someone else in three years, did that 15% really make that much of the impact? Because I just don't want to focus too much thought on this.
Patrick (CEO of WSO): [00:13:33] Okay, real quick. Google over or under 150 a share in three years?
Matthew: [00:13:38] Over.
Nabil: [00:13:39] In three years?
Patrick (CEO of WSO): [00:13:40] Yeah.
Matthew: [00:13:41] Over.
Nabil: [00:13:42] Well, that's really hard to say. But like.
Patrick (CEO of WSO): [00:13:43] 50% gain. It's 50% up from here.
Nabil: [00:13:46] No idea. Depends on a lot of automatic.
Patrick (CEO of WSO): [00:13:48] That's not automatic. Okay, Tesla, we're at 192 to 250 over or under in three years?
Matthew: [00:13:57] Over.
Nabil: [00:13:58] It depends. Like you mean.
Matthew: [00:14:02] I'm a perma bull, guys. You got to be a permeable. Why not..
Patrick (CEO of WSO): [00:14:06] 20 million cars by 2030. Mark it down. They already have the capacity they're building. They already have the land for 10 million cars a year. This guy watched this video yesterday. This guy was drinking kool-aid like even more than me. But anyways, so anyways, on We can move.
Matthew: [00:14:24] Yeah, let's, let's move on. But of course, very interesting to have these conversations. But the next one would be this one's right up your alley here. So there's some discussions around working in the Middle East, specifically just around any nuances maybe that you've seen or you've you maybe recognize from also working with Wall Street Oasis and American firms, but also just the work life balance, working in a financial services organization in the Middle East. So I'll pass it off to you to any color you can provide. What's been your experience thus far and or maybe any differences that you've seen when compared to American based firms?
Nabil: [00:14:59] It depends on which firm, to be honest. At the end of the day, it's very like if you're working at international firm, you're you probably have like really good standards around work. But at the same time, if you're working in finance, your work life balance is pretty much non-existent regardless of where you work. I don't know what you are, but like you, it tends to follow a fall in the whole U.S thing where it's like not much of, especially in financial services not much..
Patrick (CEO of WSO): [00:15:21] If That is Hong Kong.
Nabil: [00:15:23] Yeah, hopefully. Yeah, I don't think it's as bad as. Yeah, those countries Asia, the Singapore's and the Hong Kong's. Yeah, probably not. Yeah, but it's pretty competitive. Pay is pretty good. But again, it's more about international style. If you end up with like something that's super tiny like localized. You might not get into the right deals. A lot of things happen based on reputation at the end of the day. So if you're working in like.
Matthew: [00:15:47] I'm curious to hear, is it similar to the US where straight out of undergrad you could become like an investment and investment banking analyst? Or is it typically you got to get some additional experience before becoming an analyst?
Nabil: [00:16:00] Yeah, you probably need to get like a master's. That's kind of how it works, like the UK or the European way of doing things.
Patrick (CEO of WSO): [00:16:06] Yeah, they all get the master's right after uni. Yeah.
Nabil: [00:16:09] Yeah.
Matthew: [00:16:10] And what's the reason for that Though?
Matthew: [00:16:11] Is it just because it's so competitive or just because some of the concepts maybe aren't covered in like a standard undergrad program, in schools there? Like or is that just how it's always been? Because I know like here in the U.S and Canada, you can get your MBA. That's definitely what people do. But it's not like a prerequisite. And especially the past two years I've shops have just been frothing at the mouth for any talent, junior talent specifically. So they're hiring direct from undergrad. And even sometimes like a liberal arts background, it's not even like a business, business acumen background.
Nabil: [00:16:44] Yeah, I just think it's culture to be honest. It's just been that. Yeah, it was like it follows a lot I mean, they follow a lot of British based traditions, I think UK. And if you go to those countries, you tend to see a lot more bachelors straight to masters and then a move out and I think bachelors also are like three years instead of the typical four, isn't it? So it's sort of like, yeah, you just get one more year of because the master's is one elsewhere. Yeah, two in U.S, but one elsewhere isn't it. So yeah kind of similar to the same.
Matthew: [00:17:16] I see. Well one one positive I know you guys have there is, is no income tax so for anyone listening that's probably going to flash some lights there. But they always say taxes are your biggest expense in life. And obviously with you guys there, you're minimizing your largest expenses, which is obviously very nice thing. And any comments on that Nabil or if you are just gonna?
Nabil: [00:17:36] As long as I mean, as long as they keep tax zero, it's a good thing. But I think they have plans to introduce something called corporate tax for businesses like 9% or whatever, no personal income tax. So it doesn't like matter too much to the individuals.
Matthew: [00:17:55] Yeah, so I'll say to myself actually now that you bring that up. I did remember seeing that as I was mentioning to you guys before we got live on the pod. I was actually looking into possibilities of moving out there just because of the no income tax. Obviously the weather there is great, Coming from Canada where I'm at here. So definitely to me is very attractive. But then it got me thinking, you know, how obviously does Dubai and other countries around there provide like a knowing no tax environment? From my understanding, a lot of it's just coming because the country is very oil rich. A lot of the revenues are coming from like the Saudi Aramco's of the world, not because they're all crown corporations owned by the government. So it just got me thinking because obviously Dubai is on this trajectory right now. It's just growing like wildfires a lot of events went on a lot of people moving there. Is it common practice? And I don't know if you know this, but you know, for other countries that are trying to be up and coming really grow in terms of having people emigrate there and start a life there is having like a no tax environment pretty common. It's like an initial starting point to have that initial attraction then…
Patrick (CEO of WSO): [00:18:56] Yeah, especially like when they're like you see all these like government agents trying to like, like just lure like these large factories. And so like, you get it with Tesla, like this guy in, is it Vietnam or the Philippines? No, maybe the Philippines. They're like trying to get Tesla to build a factory there and like so they're always like, hey, come. And they give huge tax breaks and all that good stuff. So yeah.
Matthew: [00:19:16] But obviously the idea is as time goes on, say like 30 years from now then that first tax law comes into effect because then they're already there. Okay, So that's what I assumed. I'm like, you know, I can see this being like forever because at the end of the day, like you know, maybe in 100 years oil is not as important as it is now. Who knows?
Patrick (CEO of WSO): [00:19:32] Large corporations have like whole tax teams to figure out like loopholes and like so I think Apple keeps like a ton, like billions upon hundreds of billions of dollars so they don't have to..
Matthew: [00:19:42] That was somewhere in Europe, though. Wasn't that like Norway or somewhere? I remember that.
Patrick (CEO of WSO): [00:19:45] On Ireland or Norway.
Matthew: [00:19:47] Yeah, something like that. Yeah. It was one of those countries there where the wealthiest company in the world is not paying or paying very little tax.
Patrick (CEO of WSO): [00:19:55] Keep their money parked there because like why repatriate it and pay whatever it is 25-35% tax. So yeah.
Matthew: [00:20:01] Anyways, yeah. One question I did have on this before we wrap up this topic because this one again gained a little bit longer. In terms of industries, do you find that, you know, in Dubai there's specific industries, I'm assuming like the oil and gas is probably a hot industry to be in within the investment banking realm. Is there any other industries that you see are growing there?
Nabil: [00:20:19] Health care.
Matthew: [00:20:20] Health care, too? Is health care covered by, is health care privatized in Dubai or is it covered by?
Nabil: [00:20:24] It's privatized. If it is soft privatized, but then you have insurance. So it's a mix. Like you never pay for healthcare, but your employer pays for it's all insurance. But yeah, other than that like the like there's a heavy push towards health care. So if you're in one of the health care groups, you probably are doing very well. But it's really hard to get into. You need to know a lot of people to get in.
Matthew: [00:20:45] I see. I see. And compensation, albeit all things equal with exchange rates pretty similar to what like U.S based talent.
Nabil: [00:20:56] It should be, it should be at an international firm. But again, if you end up at like some no name shop, you might end up not getting much.
Patrick (CEO of WSO): [00:21:06] It cost living pretty similar to. Cost of living similar to New York, right or no?
Nabil: [00:21:07] It is. Yeah, it is.
Matthew: [00:21:08] If you're in Dubai. Right. But is it similar where it's like if you kind of go a little bit further out, a little bit cheaper to live in?
Nabil: [00:21:14] Yeah, it is. If you stay out of the city, it's cheap, but then that ends up becoming a headache because you're traveling like one two hours to work and.
Matthew: [00:21:20] I also had the traffic there I remember I think I was talking to him about he was saying traffic get a little bit hectic. Yeah.
Nabil: [00:21:26] And yeah, yeah especially in Dubai. I'm based in Abu Dhabi. It's a little more expensive, but it's better in terms of traffic and just. I mean, it's a little more quiet, but if you go to Dubai, the roads are like, Yeah, you're going to be stuck in traffic during those peak office hours for a long time. Yeah.
Matthew: [00:21:43] It's interesting. All right. Well, I guess it's a good thing. It's makes us feel a bit better. Toronto traffic, New York traffic, California traffic. Seems like it's the same.
Patrick (CEO of WSO): [00:21:50] I Don't move, man. I'm at home all day. Every day.
Matthew: [00:21:53] Yeah, you got it bad. Obviously being remote, I'm at home. Not stuck in the traffic. California traffic too, is brutal from what I've heard. But anyways, let's get on to the third topic here. Last one, I think this one's a fun one guys. So there's an interesting thread on the forums specifically in our investment banking forum around IB rankings. So this typically comes up a handful of times a year. It gets a lot of engagement because naturally everyone's going to have their own personal opinions. But before we even hop into what the individuals rankings were, I want to turn it to both of you to kind of get their thoughts on what they would rank some of these bulge bracket shops in a, we'll do keep it a little bit simpler on a 1 to 5 tier, here. But let's let some of these firms for you guys you don't got to go through all of them. But just so you have in top of mind And then we'll start with Pat. You kind of give your like A tier B tier and C tier. and if you want to go D tier as well, if you remember all the names, we'll go from there. But some of the names to include in these rankings, guys, we got Evercore, Goldman Sachs, Morgan Stanley, Catalyst, JP Morgan, Lazard, Bank of America, Citi, Barclays, Mollus, Greenhill, Guggenheim, Credit Suisse, Jefferies, Houlihan, Deutsche Bank. And what else we got? We got PGT as well. So pretty big list here guys. Again, don't gotta get on each one, but just roughly start thinking about some buckets in your head there on how you guys would get.
Patrick (CEO of WSO): [00:23:21] We see this so many times and WSO the rankings, the IB rankings, and people like to argue over it. What I always say is like the group you're at and the deal flow you're going to get is more important than the exact rankings. Like some of these like to be able they split it into like five different buckets where they're like saying Evercore is ahead of like JPM or Centerview, which is just like silly because if you're in the right groups at some of the at like JPM or like it could be a much better experience than like if you're at a weak group at Morgan or Goldman or you know, vice versa like Lazard could be a better experience if you're like in the right group there. So I think.
Patrick (CEO of WSO): [00:23:59] You know it…
Patrick (CEO of WSO): [00:24:00] Yeah. If you're looking at like what they call the S tier or the top tier down all the way to like the B tier or B+ tier, then yeah, you're likely going to have better ops at like those higher names, like the Goldmans, the Morgans, the Evercore.
Matthew: [00:24:13] I would even aside from industry, I think even just geographic location probably plays a factor too. So for instance, obviously amongst this list, this was pre the big Credit Suisse and UBS debacle there. But nonetheless, like, you know, Credit Suisse, they have actually Jefferies, for instance, below Credit Suisse and I would argue in the U.S, Jefferies is probably bigger again prior to everything, right? But like Jefferies is probably a bigger, bigger name. And I would put that on a higher ranking list, U.S based and, you know, like what a Credit Suisse was, you know what I mean? So I think that's also something to take into account.
Patrick (CEO of WSO): [00:24:49] Put a tier below Credit Suisse and UBS ended up buying Credit Suisse. So it's kind of funny. It just shows you these rankings are kind of silly. And yeah, their general kind of if you want to go buy firm, there's general broad brushes in terms of like overall strength and exit ops and name brand and prestige and all that good stuff. But like really what it comes down to when you're like recruiting elsewhere, if you're staying in the industry, people are going to care a lot more about your deal experience and like what group you are part of and that and how you speak to that. That's going to matter. Like, you know, ten times more than the exact name. Of course you want to be at a stronger name if other things being equal. But like it's it's funny because these rankings never rarely talk about that. You sometimes have some knowledgeable members coming in and be like, I'd rather be at XYZ group at a much lower bank than they say this group.
Matthew: [00:25:39] Yeah. It's funny, I would say. I think if I had to guess, this person here that made these rankings is probably an analyst or associate Evercore because he's put them over at JP Morgan. Nothing, nothing against Evercore, Any Evercore.
Patrick (CEO of WSO): [00:25:51] Hey, Evercore ranks really well in our data.
Matthew: [00:25:54] Yeah. It's a very good bank, a very good place to have a career. I just don't think it's over like JP Morgan. I think that's just a little bit silly there.
Patrick (CEO of WSO): [00:26:05] Are very different lists. They're very different, like if you look at like Centerview. Centerview has a very different model than a lot of the other banks. So for example, they'll pay more, but they expect three years like it's a three year analyst program. And I think the pay is like the highest though on the street compared to like an even, even a Goldman or a Morgan or an Evercore. I think they pay.
Matthew: [00:26:25] That model working for them. Have you heard anything?
Patrick (CEO of WSO): [00:26:27] Think yeah. I think it's well known. I mean for people who are really into banking, want to do banking, it's a good place to be and the exits are still good out of it because people respect it. So yeah. And the deal flow is great there. So yeah, I mean, I don't disagree necessarily having it pretty high up there for banking.
Matthew: [00:26:44] I see. Nabil If you given a look at the, the rankings there, any, anything you would change around on this or anything that catches your eyes from.
Nabil: [00:26:53] I mean I'd probably follow what Patrick said.
Patrick (CEO of WSO): [00:26:54] It's just where's Rothschild guys? Where's Rothschild on this list.
Matthew: [00:27:00] Yeah. That one's hitting you close to home.
Patrick (CEO of WSO): [00:27:03] Yeah. I mean, they got Green Hill on their green hills. Had a little bit of a struggle the last few years, but Mobius is in there kind of in the middle, I think. I think it's not that like.
Matthew: [00:27:13] Bank of America was. I thought Bank of America was higher, to be honest with you. Like, just from like an overall brand recognition, like when I hear IB and I hear you know Goldman, Morgan, JP, Bank of America, those are always like a bucket of mine. I would always kind of hear and then like the Barclays.
Nabil: [00:27:29] On catalysts being like steer.
Matthew: [00:27:32] No, to be honest, I don't know much about catalysts.
Patrick (CEO of WSO): [00:27:35] Catalysts is tiny in size. No, in the industry they do like the dollar per banker they make.
Nabil: [00:27:41] Oh, okay.
Patrick (CEO of WSO): [00:27:42] That's because they're doing like some monster deals. They're not doing as many deals, but they're doing some monster deals and like, they're a tiny team. So it's like for people who know, it's like.
Matthew: [00:27:52] Well, one question that I have for you and then I guess we'll wrap it up just because you mentioned around like exit shops obviously all these firms provide great exit shops but specifically around like the industry, if you're on a specific like industry focused team. Does that directly impact your exit option? Like where you like? I'm trying to get at is like so for instance, like if you're on a quote unquote bad team within Morgan Stanley or just like a team, that's not.
Patrick (CEO of WSO): [00:28:19] Like if you're on.
Patrick (CEO of WSO): [00:28:19] If you're in Fig, if you're in financial institutions group at a top bank, it's still going to limit you in your exits? Probably.
Matthew: [00:28:25] So does it still limit you like. You become firm. Take that into account. Even though you're coming from Morgan, right?
Patrick (CEO of WSO): [00:28:32] Yeah, they do.
Patrick (CEO of WSO): [00:28:33] They do. They're looking for kids at certain groups, like, you know, they're like, okay, give me the Goldman Sachs, the TMT kids. Yeah, give me the, the credit shops, the hedge funds that are looking for like distressed people. They'll like, give me the restructuring analysts from Lazard from a mollus, whatever. Right.
Matthew: [00:28:52] What is it, though, with TMT? I would say someone that's never actually spent time in banking like I've never actually been.
Patrick (CEO of WSO): [00:28:57] It's just they had they've been doing they've done a ton of huge deals like they're usually on there. So like it's just.
Matthew: [00:29:03] Always like TMT is always like the one like everyone is.
Patrick (CEO of WSO): [00:29:06] Morgan Stanley to, the Menlo Park team here, right near me. There's a lot of big deals in tech. But yeah, I mean.
Nabil: [00:29:15] Speaking of which, with the recession coming up and restructuring again, What groups would be like, oh.
Patrick (CEO of WSO): [00:29:22] Go Russia, go Lazard all strong names in restructuring you. Greenhill has a pretty strong restructuring practice my former MDs at Greenhill Neal shout out to Neal if you're watching this, yeah he and Molus. Molus are really strong too in restructuring.
Matthew: [00:29:39] So yeah, think maybe Pat and I when we, when we launch our restructuring course in the future, that was next week. We had like, Yeah, exactly. So next week there's going to be certain banks that we'll be able to target with industry groups there that are more applicable. One interesting call we had was actually a law firm that focuses on like restructuring is looking at hires, right? So they came to us, tapped on us for talent Oasis. But just because they're kind of anticipating an influx of, of ideally volume on their end.
Patrick (CEO of WSO): [00:30:08] Oh yeah so the bankruptcies are coming.
Nabil: [00:30:10] Oh, yeah. Signature was next.
Matthew: [00:30:15] So definitely be something, but hopefully not until next Thursday because I think we need a week of like positivity guys. The past two weeks have been pretty negative, but with all things, all things being said after these past two weeks, the markets are kind of at the same place they were two weeks ago. So the chop continues. I'm sure we'll have more to talk about that next Thursday, But it's been a great conversation, guys and we'll be back next week.
Patrick (CEO of WSO): [00:30:38] Yeah, Thanks, guys.
Nabil: [00:30:39] All right. Sounds good. Cheers.
Patrick (CEO of WSO): [00:30:41] And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick@wallstreetoasis.com and till next time.
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