Tuesday, September 23, 2008

Training in New York City

When that long-awaited internship finally arrived it was off to New York for a week of training. Looking back now, I should have taken complete advantage of all the free time I had to explore, hang-out and enjoy evenings after training which usually ended at around 5 pm (a "free evening" doesn't exist once you're assigned your cubicle). Make sure you enjoy these few relaxed days, especially if you're headed-off to Chicago, Houston or the West Coast; New York City has a lot to offer. Here is a brief overview of each day:

Day 1:
The first day of training was the typical "Get to know your firm" day and included filling out I-9s, getting your email account set-up, and the hour-long sexual harassment training (that really ought to take 10 minutes). There's a little bit of basic training on how to log onto your network and maybe some accounting but generally this day is laid back. Make plans to grab a drink with friends and enjoy "living the dream".

Day 2 and 3:
During these two days you will feel like you've been time-warped back into Accounting 101. I haven't taken any accounting courses but the workbook I mentioned last week was nearly sufficient to cover all the material we covered during these two days. Even though this section of training was rather boring, I'm glad I was up to speed on the material because it would've been difficult to keep up had I not been. We also learned about the different databases and resources available to analysts. Listen closely and take good notes because you'll be using these resources on a daily basis.

Day 4:
Day 4 of training was the most valuable day of the entire week. We spent much of the day learning how to "Spread Comps" (something that you'll be doing almost everyday the entire summer). Spreading comps is tedious at first but your skills will improve quickly as you get used to the process. There are trading comps and transaction comps, you'll need to learn both. For those of you who're interested, spreading a comp is the process of dissecting a company's financial statement data into a form that can be compared more accurately on a direct and multiple basis. Here is a link to a WallStreetOasis.com forum that discusses the topic.

Day 5:
On the last day we finished spreading comps and just scratched the surface with Excel, Word and PowerPoint (there might have been another hour somewhere earlier in the week with training in these applications but there wasn't much). Previous experience in Excel is important because there isn't much training (DealMaven modeling training will help). As summer analysts at a bulge bracket investment bank you'll be getting Blackberries. We didn't get ours until after training so don't expect one until training is over.

I have one regret about my training week in New York; I wish I would've gotten to know the other summer analysts from different groups and offices better. Considering that it was only 5 days and the majority of our time was spent sitting in training lectures, it would've been hard to make 112 new best friends. However, it would've been insightful to hear about other intern's experiences in different groups and locations throughout the summer. I recommend you reach out and get to know a summer analyst from each of the offices and periodically keep in touch.

Please leave comments, questions and feedback. Stay tuned for the next post as I write about my experiences as a Summer Analyst on the West Coast.

Tuesday, September 16, 2008

West Coast Summer: Adventures of a Summer Intern

This summer I interned in San Francisco with the technology group of a bulge bracket investment bank. I feel very fortunate to have been selected for the internship and I recognize that I couldn't have secured the position without the help of many. In return for the help I have received, I hope to pass along the favor to all those that frequent this blog.

Regardless of the fact that I come from a non-core recruiting school, in today's hiring market, I believe that it's difficult for anybody (target or non-target) to receive an IBD summer internship offer. This submission, along with those that follow, are aimed to give a glimpse into the life of a IBD summer intern. I'll include information that would've been helpful to know coming into interviews and the internship generally. If there is anything that you're particularly interested in hearing about, please leave a comment. In addition, let your friends and associates know about this blog if you think they might benefit from reading it.

#1 Preparation and Training

The preparation to-do list for investment banking interviews is endless; there's no such thing as being "too prepared". This blog (together with many other resources) offer suggestions on the most fundamental items you should be focusing on. I recommend you read up on those items as you start preparing. Once you have interviews lined-up, the trick to converting the interviews into a summer offer is in the little things that separate you from your competition. A truism that you will hear after you screw-up your first pitchbook or trading comp is: "The devil's in the details". Every bit of additional understanding, market knowledge, and Excel experience will improve your chances of landing that internship offer and the full-time offer that follows.

Modeling and Accounting

Unfortunately, most summer IBD interns don't get a ton of modeling experience. Your primary work as a summer intern will be PIB (Public Information Book) creation, spreading comps, presentation formatting and printing, and infrastructure projects. Anyone with common sense can create a PIB and format a presentation (it goes without saying that some people are faster and better at it). Spreading comps takes a bit of time as you familiarize yourself with the specific adjustments your associate wants (but this isn't "rocket science", either). In later posts I'll explain these tasks in detail so you can speak intelligently about your role as a summer intern in interview situations (definitely something that would have been helpful for me).

Even though you won't be "modeling" per se, you will however be using Microsoft Office Excel, Word and PowerPoint night and day. On day one when you start spreading your very first comp it will be that much easier for you to distinguish yourself if you're already "fluent" with these programs (it should also be said that not knowing how to use these programs will set you apart as being slow or incompetent). Something prior to the internship that helped prepare me was the DealMaven financial model training online course. In addition to teaching me how to navigate Excel effecitively, the DealMaven training forced me to understand the actual item flows between the three financial statements. In retrospect, having completed the DealMaven course prior to interviews would have prepared me that much better.

In addition to DealMaven, I suggest you purchase and complete Adkins Matchett & Toy's accounting workbook: Adkins Matchett & Toy's Accounting Workbook
Although it may be a review for you, this workbook breaks accounting down into the most simple principles. Our recruiters suggested this as extra study material prior to the internship and I'm really glad I completed it. If you're a non-business major this workbook is a must (I'm a Economics BA and really benefited from it).

Setting yourself apart from your competition in today's market is more important than ever. By working through a DealMaven modeling course and completeing the accounting workbook your chance at landing your dream job is that much closer.

Stay tuned for the next post as I talk about my experiences as a summer intern on the West Coast.

Monday, September 15, 2008

Prepare Today For Where You Want To Be Tomorrow

With today's fall of Lehman Brothers, the acquisition of Merrill Lynch by Bank of America, and the recent bailout of Fannie Mae, Freddie Mac and Bear Stearns by the Fed, and with AIG looming on the edge of demise...now is not a great time to be getting a job in banking! The markets are taking a bloody beating and the job forecast for upcoming college graduates is dark and dreary.

I have been affected in my own way by this market turmoil. I previously had a job offer to work at Bear Stearns in New York in their investment banking division before their fall. Regardless of this I was able to find a great job in finance (outside of investment banking), with a company where I help deploy capital, and working on deals, all while partnering with investment banks, private equity funds, and institutional investors.

As you know look to your future and prepare to exit college, I would like to give some advice.

1) Just because the markets are bloody, doesn't mean there aren't great jobs in finance. Consider working on the corporate side of a business in accounting or finance. This is a great way to build your accounting and finance skills in a specific industry.

2) Look for companies who could benefit from the demise of the investment banks. Remember, where there is a loser there is a winner and vice versa. In this case our loser is Lehman Brothers, their shareholders, et al. The immediate winner(s) might include short sellers, hedge funds, and others. There will also be long term beneficiaries because assets of Lehman's will be sold for a discount. For example, Lehman Brothers has a massive commercial real estate portfolio that will most likely be put on the block for sale. Thus, working for a solid real estate investment group with a proven track record would be a great strategy.

3) Be open to working in different industries and cities than you had previously considered. Right now Texas is one of the strongest economies in the nation (although hurricane Ike just ravashed its coast line), it is still a great place to look for a new job.

4) Plan on working in an industry and in a job that will help you get into business school. Markets go up and they go down. Right now the market is down....really down, but it will eventually be back up. In the crash of 1987 the markets were also in a dire situation and the job outlook in the financial sector also was ravished by the effects of the crash. But the market eventually turned around. Prepare yourself now for a market turn around.

5) Look for a job that will help you get into business school. Use the most recent events in your future story when you interview for business school. Talk about how when you were graduating Bear Stearns crashed, then Fannie and Freddie were bailed out, the credit markets were terribel, banks were falling, then Lehman Brothers went down, Merrill Lynch was bought by BofA, and AIG was in dire straits, thus with all of these conflicts in the market you started your own company doing ABC. Who knows, but show how in this market you were able to turn lemons and into lemonade and capitalize on the situation.

This might be the perfect opportunity to work for a startup and gain a ton of entrepreneurial experience. Or if you want to go a more corporate route, look for companies that have alumni from the MBA program(s) you want to enroll in.

Take this situation, capitalize on it, turn it into a story, and prepare yourself for the next phase of life: either graduate school, a future job, further career advancement, etc... It doesn't mean you have to take your eye off the prize of being an investment banker, instead prepare today for where you want to be tomorrow.