Investment banking? (3 Viewers)

[Affinity]

Affinity- yea of course i get that completely- people think the word finance= million dollar salary.

I think wat i need (and im prob not alone- had a terrible careers advicer and it can be a confusing field) is a real run down on the Investment Banker's ACTUAL role. As in, i know that within a bank there is front and back office. Im talking about the market makers or trader (or are they different) and the quantitative skills they need. i said financial calculus as i thought they were using models lik the black-scholes model and pricing financial derivatives such as options and informing stockbrokers who find out on behalf of clients??? Or is there back office ppl doing that? Who makes the big salaries then and what maths is prerequisite for the front office traders????

have a look at
http://www.macquarie.com.au/au/about_macquarie/company_profile/mgmt_organisation.htm
http://www.morganstanley.com/about/company/governance/orgchart.html

To get you started, from what I know,
Most money are made from advising on deals, mergers share and debt issues and that kind of thing most work would involve deciphering accounitng reports (to get meaningful numbers) then using available data to calculate things like cost of capital, rates of return, discounted cash flows and sometimes to forecast growth etc, then the big shots in the bank make an advice on whether to do things and how to do things to hmm clients. It is these people that "bankers" usually refer to.

Sometimes the bankers also gets specific requests for an exotic derivative product which gets passed on to competent people in the bank to price.


Then there are the asset managers (fund ppl , real estate etc) not quite sure about how those ones work.

Trading is probably not as hot. True, bonuses can be huge, but I heard the bottom 10% gets fired every year from some places. Ofcourse you can try it if you think you are up for the challenge.

There are also businesses such as brokerage, etc.

 

[Cookie182]

thanks Affinity ur posts/links were very helpful- yea im only in first year, never done any finance subjects or anything so i admit i know very little. Lots to read!

 

[Ralph]

Which degree would be most helpful in pursuing a career on Wall Street (eg. investment banking)? Someone i know asked me and i didn't have the answer so i decided to ask you guys.

B.Finance/B.Law is perfect

 

[MasterPUA]

Most money are made from advising on deals, mergers share and debt issues

For a bank like Lehman Bros this may be true. For many other banks this is not true. Trading profits have smashed corporate finance revenues over the last 10 years for at least 6 of the top 10 banks.

Why is Goldman what it is today? Because they realised that the glory days of IBD were over and that trading is the place to be. Their decision to revolutionize their business model to gear more towards trading activities was the best decision they made in the 1980s.

and the bottom 10% of traders get fired? take a look at the cuts in IBD over the last year too. it's comparable.

 

[Omnidragon]

When people say investment banking, it's implicitly refering to the financial consultants of the bank. Basically those organising purchases and sales of firms, borrowing money and selling (usually new) shares. One will need to know some maths for these things but not much.. some basic stats, arithmetic and discounted cashflows are probably sufficient. ie, the compulsory courses are generally enough.

Trading is a different thing to banking.. These guys need even less maths. By it's nature, trading involves making quick decisions, so you don't have time to do anything complicated. Anyone could become a trader.. Mathy people get the jobs not because they know some sophisticated maths but because they are generally better at basic arithmetic (ofcourse you do need other skills). There are people who develop trading strategies who might need some maths, but thats another thing

Ofcourse there are people who require more maths.. but those are back office ppl generally called quants as mentioned already.

That said I do think it's good to learn some more maths, it's good for your soul.

And I suggest you to do some research on different roles in a big bank.

HAHAHAHAHAHAHAHA. Sorry.

 

[doink]

why do banks take engineers/skiled mathematicians then for trader roles.

Because their problem solving skills are unmatched.

 

[HSC guy]

Trading is probably not as hot. True, bonuses can be huge, but I heard the bottom 10% gets fired every year from some places. Ofcourse you can try it if you think you are up for the challenge.

There are also businesses such as brokerage, etc.

Yeah I've done a bit of research on New York financial companies (eg Goldman Sachs, Merrill Lynch etc) and it's relatively easy to get your foot in the door but starter salaries are very low, the standard of work is high, the workload is even higher and the bottom 5-10% get fired.

 

[ifsonotso_100]

Yeah I've done a bit of research on New York financial companies (eg Goldman Sachs, Merrill Lynch etc) and it's relatively easy to get your foot in the door but starter salaries are very low, the standard of work is high, the workload is even higher and the bottom 5-10% get fired.

u are so wrong because if you are talking about getting into their ibd- no it is not easy to get your foot in the door.......

 

[HSC guy]

u are so wrong because if you are talking about getting into their ibd- no it is not easy to get your foot in the door.......

Read my post again. 'Easy' is both a subjective and relative term. Easy compared to what??? It's pretty easy compared to finding the cure to cancer, beating Hillary Clinton and climbing Mt. Everest.

 

[blue_chameleon]

Read my post again. 'Easy' is both a subjective and relative term. Easy compared to what??? It's pretty easy compared to finding the cure to cancer, beating Hillary Clinton and climbing Mt. Everest.

Why make the comment then?

You're an intellectual, relatively speaking.

 

[MasterPUA]

Yeah I've done a bit of research on New York financial companies (eg Goldman Sachs, Merrill Lynch etc) and it's relatively easy to get your foot in the door but starter salaries are very low, the standard of work is high, the workload is even higher and the bottom 5-10% get fired.

This is the most hilarious post of the year.

It IS relatively easy to get your foot into the door of Goldman Sachs if you are:

a) Walking through the doors of 85 Broad to shine the bespoke John Lobb's of an MD.
b) A model and have been summoned for a night of 'models and bottles'.
c) A Harvard Undergrad/Harvard MBA WASP whose father was an MD at Goldman.

Starter salaries are low? Yes, if it is opposite day and low means high.

Maybe you can get your foot in the door if you want to work in ops. Moves from the back office to the front office happen, but they are rarer than you think.

Please refrain from 'researching' New York 'financial companies.' Stick to the Big 4 my friend.

 

[ifsonotso_100]

Read my post again. 'Easy' is both a subjective and relative term. Easy compared to what??? It's pretty easy compared to finding the cure to cancer, beating Hillary Clinton and climbing Mt. Everest.

you are an idiot and make such a crap attempt of rectifying your idiocy. its obvious you are in your hsc to think top wall street firms are easy to get into. pfft they are hard as hell to get into in australia, think how challenging they would be to enter in the US. just focus on the hsc and don't post here anymore

 

[blue_chameleon]

you are an idiot and make such a crap attempt of rectifying your idiocy. its obvious you are in your hsc to think top wall street firms are easy to get into. pfft they are hard as hell to get into in australia, think how challenging they would be to enter in the US. just focus on the hsc and don't post here anymore

Easy tiger.

 

[Omnidragon]

Why make the comment then?

You're an intellectual, relatively speaking.

Or a retard compared to me.

 

[HSC guy]

It is obvious to someone that is knowledgeable like me that everyone who is argueing with me is a moron.

blue_chameleon, i make the comment because i can and it is my opinion. Getting a shot with those companies is what i call 'easy'. You may have a different opinion and that's fine.

MasterPUA, you are idiotic arrogant jerk. I'll stick to the big 4 if you stick to the big 4 fast food companies because that is the only employment your fit for.

ifsonotso_100, No, just NO. Maybe in your fantasy world of absolutes and black and white and all or nothing words like 'subjective' and 'relative' are 'crap' but out here in the real world these words mean something.

Omnidragon, or homosexual compared to me.

 

[blue_chameleon]

It is obvious to someone that is knowledgeable like me that everyone who is argueing with me is a moron.

blue_chameleon, i make the comment because i can and it is my opinion. Getting a shot with those companies is what i call 'easy'. You may have a different opinion and that's fine.

MasterPUA, you are idiotic arrogant jerk. I'll stick to the big 4 if you stick to the big 4 fast food companies because that is the only employment your fit for.

ifsonotso_100, No, just NO. Maybe in your fantasy world of absolutes and black and white and all or nothing words like 'subjective' and 'relative' are 'crap' but out here in the real world these words mean something.

Omnidragon, or homosexual compared to me.

Well, if that's your opinion (disregarding the fact you haven't provided any clues about what 'research' you've done) that's fine. However, you've failed to tell anybody, that it's 'just your opinion'.

Out of interest, just what research have you done? Titles of books, links to websites etc?

You're trolling is fantastic.
Have fun with that.

EDIT: I see nobody is yet to grasp the sarcasm regarding the "intellectual" comment I made.

 

[HSC guy]

Well, if that's your opinion (disregarding the fact you haven't provided any clues about what 'research' you've done) that's fine. However, you've failed to tell anybody, that it's 'just your opinion'.

Out of interest, just what research have you done? Titles of books, links to websites etc?

You're trolling is fantastic.
Have fun with that.

LOLZ, trying to demean my views by labelling it as trolling? Says more about you than it does about me.

As for research:

The two biggest and most influential players in NY are Goldman Sachs and Merrill Lynch and most of my research into the industry has been focused on those two companies.

www.gs.com (goldman sachs website)

Goldman Sachs: The Culture Of Success by Lisa Endlich
Long-term Greedy: The Triumph of Goldman Sachs by Nils Lindskoog

The two books offer two contrasting (one is complimentary, one is less so) views abould Goldman Sachs while explaining the nature of the company.

www.ml.com (Merrill Lynch's site)

Riding the Bull: My Year in the Madness at Merrill Lynch by Paul Stiles

That's an interesting book because of it's firsthand account of ML.

Have fun reading.

 

[Rorix]

The two biggest and most influential players in NY are Goldman Sachs and Merrill Lynch and most of my research into the industry has been focused on those two companies.

According to who?

 

[ifsonotso_100]

It is obvious to someone that is knowledgeable like me that everyone who is argueing with me is a moron.

blue_chameleon, i make the comment because i can and it is my opinion. Getting a shot with those companies is what i call 'easy'. You may have a different opinion and that's fine.

MasterPUA, you are idiotic arrogant jerk. I'll stick to the big 4 if you stick to the big 4 fast food companies because that is the only employment your fit for.

ifsonotso_100, No, just NO. Maybe in your fantasy world of absolutes and black and white and all or nothing words like 'subjective' and 'relative' are 'crap' but out here in the real world these words mean something.

Omnidragon, or homosexual compared to me.

you just keep digging yourself into a whole which keeps getting bigger and bigger. The relative argument is retarded and makes no sense- and you are a retard to suggest when you used the word relative that you meant relatively easy compared to curing cancer.

Twas a crap attempt to hide your ignorance, so live with your mistake for the rest of your life.

Agree with Rorix's comment 100%- says who. Also highly doubt a HSC guy has read those books and if you have would you kindly share with us your opinion on those books/research you have conducted and share your wisdom.

 

[HSC guy]

According to who?

According to anyone with any knowledge of the industry. Make the most money, worth the most, own the most. There's a number of different ways to rank companies, in most GS and ML are at the top.