100 facts about investment

banking
Source: http://www.statista.com/topics/1061/investment-banking/

1. Global market share of the revenue of the leading investment bank

is 8.3%
2. Market capitalization of HSBC is 193,794m
3. Global investment banking fee-$76.3bn
4. Brand value of the largest investment bank-$10,821m

M&A Deals
5. Top leading investment bank in the world by the value of managed
M&A deals- Goldman Sachs
6 .Number of M&A deals made by the leading investment bank
worldwide H1 2014- 182
7. The leading U.S. investment bank by value of M&A dealsGoldman Sachs

Interview
Sources: http://www.investopedia.com/articles/financialcareers/10/investment-bankinginterview.asp

Many business students want to work in investment banking, but they freeze during the
interview when asked some of the more common technical questions. Getting the first
interview is often a difficult task all on its own, so you need to be ready to answer whatever
questions the interviewer throws at you. For example, could you answer the following
common questions?

8. What are the ways of valuing a company?

9. What are the advantages of raising funds through bonds rather than equity?
10. What happens to various figures in the financial statements, if $100 is added to
the current depreciation account?

If you don't have a ready answer for questions like these, you need to do more preparation
before your job interview. Read on to learn the answers to these common questions, and
what you need to know before you arrive.

11.Know the Job

Nothing is more offensive to an interviewer than a candidate who comes in not knowing
anything about the position. Showing that you understand not only the general practices of
investment banking, but also your specific duties should provide a competitive edge. Firstyear analysts do not pitch deals to CEOs or publish research reports about hot
stocks/sectors. An entry-level position mainly involves creating PowerPoint presentations,
compiling comp tables and making pitch books. Although financial modeling and financial
statement analysis are the bread and butter of the investment banking profession, don't go
into an interview with the presumption that you will perform such tasks on your first day on
the job. (Learn more in Getting An Investment Bank Job During A Recession.)
12.Financial Knowledge
The Basics
Basic knowledge of financial statements and a general understanding of how the balance
sheet, income statement and cash flow statement are interrelated is another common
technical skill-testing question of the investment banking interview. Familiarize yourself with
how changes made to one section alter the figures in the other sections. It is important to
understand, not just memorize, the connections between the statements.
Here is a typical example: Assuming a tax rate of 30%, if depreciation increases by $100
and pretax income decreases by $100, taxes will decrease by $30 ($100 * 30%), net
income (NI) will decrease by $70 ($100 * (1 30%)) and cash flow from operations will
increase by the amount of the tax deduction. This causes a $30 increase of cash on the
balance sheet, a $100 reduction in PP&E due to the depreciation and a $70 reduction in
retained earnings. Make sure you can easily follow this example and track the effects of any
such similar adjustments. (Check out our Financial Statements Tutorial for a step-by-step
look at financial statements.)

Corporate Valuation - DCF

Questions regarding company valuation are essential to the interview process, as this task
is the basis of a banker's everyday activities. There are three basic techniques to value a
company: discounted cash flows (DCF), the multiples approach and comparable
transactions. Only the first two are likely to be discussed.
Discounted cash flows, as the name suggests, involves creating a forecast of the free cash
flows (FCF) of a company and then discounting them by the weighted average cost of
capital (WACC). Free cash flows are calculated as:

Investment banking lifestyle & questions

Source: http://www.ibankingfaq.com/category/banking-lifestyle/

Are the hours really as bad as Ive heard they are?

For the most part, yes! At bulge bracket banks and top boutiques, Analysts can routinely expect
to work 90-100 hours per week or even more. A typical work day during the week might be
10:00 am until 2:00 am. Analysts will also typically work both days on the weekend. During a
particularly busy time (working on a big pitch or at the beginning stages of deal), it is not
uncommon for Analysts to work all night (pull an all-nighter) or even multiple all-nighters in a
row. Hopefully (for the Analysts sake and for others), they have the time to at least go home to
shower and change clothes.
Associates generally have a slightly better schedule (emphasis on slightly). Associates might
average 80-90 hours per week with a typical weekday schedule being 9:00 am until perhaps
11:00 pm and working either Saturday or Sunday. Associates on occasion will also find
themselves pulling all-nighters. At the Vice President level, the hours start to improve
significantly. VPs, if they have to work weekends or late nights, can often do so from home.
Managing Directors have a much more normal work schedule, when they are not traveling. MDs
tend to come in early (between 7:00 am and 9:00 am) and leave relatively early (6:00 pm - 7:00
pm). However, MDs are often on the road, traveling perhaps 3 out of every 5 days on average.
It should be noted also, that the hours at boutique banks can vary significantly. As mentioned
above, some boutiques tend to have similar work requirements to bulge bracket banks.
However, the lifestyle at many other boutiques can be substantially better.

If the hours are so long, why dont banks hire more people?
This is a question that every banker at one point or another (typically while they are staring at
Excel sometime around 3:00 am) has asked themselves. There is no better answer than to say
its just the culture of investment banking. Bankers are expected to work a lot of hours and
likewise, get paid a lot of money for working those hours.

Is the number of hours the worst thing about investment

banking?
Most junior bankers will tell you that the worst thing about the banking lifestyle is not the number
of hours required per se, but the unpredictability to those hours. Said differently, that you have
NO control over your life, as you are expected to be reachable at all time, day and night. This lack
of control makes it extremely difficult to schedule time to see friends and family. Analysts and
Associates find themselves routinely having to cancel dinner plans, weekend plans and even
vacations at the last minute. Many bankers, after a few months on the job cease scheduling
events altogether, for fear of having to cancel.

If the banking lifestyle is so tough, whats the upside?

First and foremost, the money. There are very few careers that pay as well as investment
banking, especially taking into account the level of risk (trading or hedge fund compensation,
while potentially equal to or vastly exceeding that of banking is significantly more volatile).
Second, the exit opportunities. Many people treat investment banking as a stepping stone to
other finance careers, including private equity and hedge funds. Third, for what you learn. Being
a junior investment banker teaches you two things. It teaches you about finance and it teaches
you how to work and survive in a difficult and detail obsessed environment. Both skills are likely
to prove valuable regardless of future career choice. Fourth, for ego. Many people get a kick out
of telling others that they are in banking and for seeing their deals on the front page of the Wall
Street Journal.

How does the lifestyle differ at bulge bracket banks vs.

boutiques?
Its always tough to generalize about boutique banks because there is such a broad range of
them. There are boutiques that have cultures similar to those of bulge bracket banks and there
are plenty of boutiques where the lifestyle is significantly better (and some that are worse).
Having said all that, there are some generalizations that can be made that will hold true much of
the time. Analysts and Associates at boutiques often have the opportunity to take more
responsibility than their bulge bracket equivalents, as deal teams are often smaller. Junior
bankers at boutiques also tend to have more interaction with senior bankers and clients and may
be invited to attend more pitches and meetings. There also tends to be less face time at
boutiques than at bulge bracket banks, meaning fewer hours spent in the office.

Will the lifestyle be better/worse in some groups than others?

Just like with bulge bracket banks vs. boutiques, its tough to generalize here too. Often the
lifestyle of a particular group depends most on the dealflow in that sector or product and on the
personality and culture portrayed by the group head(s) or senior bankers in that group.
Obviously if there are a lot of deals in say, Industrials but few in Healthcare, then the bankers
in Industrials will likely be busier. However, if the head of Healthcare is really aggressive about
marketing, then the healthcare bankers may be working 24/7 on pitches.
Alas, some groups do have reputations for having better or worse lifestyles. Bankers in product
groups (M&A, Leveraged Finance) on average probably work more hours than bankers in industry

groups, except during markets when there are few deals being executed. Groups such as Debt
Capital Markets (DCM) and Equity Capital Markets (ECM) are sometimes referred to as bankinglite and offer better lifestyles (and lower compensation) than other groups within investment
banking.

How does the lifestyle in New York differ from investment

banking jobs elsewhere?
Always a touchy subject, but generally, the life of an investment banker is tougher in New York
than anywhere else. The other big international banking centers, London and Hong Kong, come
in next. The West Coast of the U.S. is indeed more laid back, as per its stereotype. Bankers in
secondary cities (often satellite offices) also tend to have better lifestyles. Having said all that,
banking is still banking, and just because you may have a view of the beach from your cube,
dont expect to work 9 to 5.

As a banker, how much will I have to travel?

Senior bankers tend to travel a lot, perhaps being out of the office on average 60% of the time.
Most of the travel for senior bankers is spent marketing and pitching. Sometimes Analysts and
Associates will be invited to go to pitches and sometimes not. The majority of a junior bankers
time will be spent in the office. However, junior bankers may have a significant opportunity to
travel when they are working on live deals. For example, when working on a sell-side M&A
transaction, often the Analysts and Associates will spend a significant amount of time at the
client site, especially at the beginning of the engagement. As the process progresses, the junior
bankers might continue to travel to the clients headquarters to oversee (babysit) management
presentations or to travel to oversee (babysit) due diligence site visits by the prospective
buyers. Working on an Initial Public Offering (IPO) will likely require significant travel during the
roadshow process.

Is it true that as an investment banker, I get free dinner every

night?
Yes, at most banks if you work past 8:00 or 9:00 at night (though you dont necessarily have to
wait until that time to eat), you can have dinner delivered to you on the banks tab (generally up
to about $35). Since Analysts generally have no lives, and expect to be working far past 8:00,
they will often congregate together in a conference room to eat and relax for a little while.
Associates, more often eat at their desks as they may still have the hopes of getting home before
their loved ones or friends are asleep. VPs and above are usually gone by then but its always
funny when a late working and hungry Managing Director has to ask an Analyst to order them
food because they dont know how to use Seamless Web (the standard food ordering website
subscribed to by most banks in New York).
Of course, the consequence of having $35 each night to order dinner is that many Analysts gain a
lot of weight. After all, if the companys paying, lets max out and add that Tiramisu to my order.
More enterprising Analysts, stealthily use some of their daily $35 to pay for groceries for their
apartments.

Life after Investment Banking

Source: http://www.wallstreetoasis.com/forums/life-after-investment-banking
Like a majority of people who are on this website, I used to come on here and write bullshit about a
life partly my own, partly fantasy. I'm now going to uncloak the anonymous man and tell you my
story.
My name is Stephen Ridley. I graduated from a top tier British University with a First Class Honours
Degree in Philosophy, Politics and Economics in 2010 and went straight into IBD at a top tier
European Investment Bank, after interning there in 2009. I worked in the top team (on a revenue
basis) for 16 months, before quitting in October 2011. I want to tell you about that experience, and
about what has happened since then, about how I left the green to chase my dream. This will be blunt
and honest. I do not mean to offend, quite the opposite, I hope to inspire! Again, this isn't an attack
on those who choose to be bankers, it's just me sharing my experience together with the lessons I've
learnt, and hopefully it speaks to a few people. If you look at the picture above you'll see a picture of
what I do now. It's a little different from where I was 6 months ago!

BANKING IS FUCKING BRUTAL

I knew this after my internship, but I didn't care. I wanted money. I wanted respect. I wanted to be a
somebody in the eyes of myself and others. But most of all, I wanted money. Why? Because money is
freedom. Money means I can wear what I want, live where I want, go where I want, eat what I want,
be who I want. Money would make me happy. Right? Well... not exactly I'm afraid. In fact, money
didn't seem to make any of the bankers happy. Not one person in the roughly 200 I got to know in
banking were happy. Yet all earned multiples of the national average salary.
The reality of banking is this. Like everyone there, I worked my ass to the bone, working mind
numbingly boring work. My life was emails, excel, powerpoint, meetings, endless drafts and markups
about shit I couldn't give less of a fuck about, edits, drafts, edits, drafts, edits, send to printers, pick
up, courier, meetings, more work, multitasking, boredom, boredom, tired, boredom, avoiding the
staffer on a friday, more work, depression, tired, tired, tired, fucking miserable. 15 hour days were a
minimum, 16-17 were normal, 20+ were frequent and once or twice a month there would be the
dreaded all nighter. I worked around 2 out of every 4 weekends in some form. I was never free, I

always had my blackberry with me, and thus I could never truly dettach myself from the job. These
are the objective facts, contrary to what any 'baller' wants to tell you. The only models were excel
models, the only bottles were coca cola, which I drank a lot of to stay awake.
Though I managed to maintain relationships with certain friends (testament to how good these
friends were), I never was really 'there' and never really relaxed to enjoy their company, I was either
pre-occupied, exhausted, or too self-centred to really have a 2 way conversation. I was constantly
tired, constantly stressed, and I had this constant reoccurring thought. The thought went like this.
I'm not happy. These are my golden years, my 20s, the years I want to look back on and talk about
with fondness and pride. I should be making interesting stories, having the time of my life whilst I
have no dependents. I'm richer than I've ever been, yet I'm not as happy as I was backpacking around
South America on a shoestring. This is bullshit.

THE WORK ISN'T INTERESTING

That placed me in the 95% majority. Your not golfing with CEOs, talking about strategy, then driving
your lambo home at 3.30pm to have sex with your hot girlfriend. No, your sat at your computer,
haven't spent more than 5 minutes in the sun in weeks, your out of shape, bad skin, tired,
overworked, and your facing yet another office dinner before calling yourself a cab somewhere
between 1am and 5am to take your lonely ass to your empty bed. In those rare moments you do get
out your tie to go talk to a client, you're not having a nice interesting chat with an interesting person,
you talking finance to some other depressed office drone in some corporate office, who either
pretends to give a shit or, more often than not, doesn't pretend. Of course, every now and then, I did
meet that rare breed who got their kicks from debt-restructuring or endless levels of back-solved
pseudoscientific analysis, but this only depressed me as it reminded me how little I cared about this
nonsense, and thus made me further question why I was spending every waking moment - and half
the ones I should have been asleep - devoted to it.

YOU'RE NEVER GOING TO GET AS RICH AS

THE SUPERSTARS YOU ADMIRE ON THE TV
AND WATCH IN FILMS
Even though I got paid well, I wasn't going out buying a different coloured helicopters every
weekend, rolling in designer threads, splashing PS30k on a night out and holidaying every other
week in some exotic location whenever I can be bothered to charter my private jet. You'll be above

average, but still pretty average. Sure, you can buy an macbook air without really thinking about it,
and you can take taxis instead of the bus. But that's it. I was amazed how modestly people lived in
banking given all the hype that surrounds it. They were just sad middle class bland people, with
unexciting lives, and unexciting prospects. A bunch of nerds who got caught up in a cage made of
money and dreams and greed, and never got out. There had to be more to life than this.

EVENTUALLY, I THOUGHT FUCK THIS

I got to the point where I wasn't buying myself nice things anymore because doing so only reinforced
my dependency on a job which I hated, a job which was taking over every aspect of my shortening
life. I had worked hard at university to have a good life, a happy life, a 'successful' life. And I wasn't
finding it in IBD. And nobody above me was either. Even the 'baller' MDs were really just miserable,
uninteresting, and often pathetic old farts. I didn't want to be them. I wanted to be a colourful,
shinny person with love in my heart. Someone with passion, happiness, laughter lines, someone who
has taken life by the horns and lived on the edge, taken risks, had love and loss and seen the world.

I MADE MY PLAN TO LEAVE IN BABY STEPS

First I started interviewing at other city jobs - everything from hedge fund analyst to private
equity analyst to inter dealer broker to insurance to wealth management to sales to trading and
even equity research. These all looked boring, these all involved wasting away the majority of my life
at a desk. These all involved long working hours, even if a little better. None of these lit the fire I once
had before being crushed by banking. So I looked at jobs in corporates, in their M&A team, their
finance team. Again, I went to a few interviews, got offers, but it was just the same shit. I didn't want
to be a drone in a suitand tie. Fuck that Stephen, fuck that!

EVENTUALLY I SNAPPED
Despite being staffed up to my eye balls, I left the office at 7pm to prepare for an interview I had the
next morning at 8.30am. The AD I was working with (5 years my senior) consequently had to work
until 5am. The next morning, I wasn't at my desk at 8am as I should have been. I was at my
interview. Just another mind numbing 'opportunity' to work in debt refinancing team at Tesco's head
office. Fuck that. I'd had enough. There was nothing for me in any spectrum of finance. I'd had
enough. I walked into work at 11am, and by 11.01, the AD had dragged me into a side room to rip me
a new asshole (she'd got a little cranky after 90 minutes sleep and a lot of stress). She said that she
was going to go and talk to our team head about this and stood up. I told her to sit her ass down, I'd

do it for her. I walked over to his desk, and I respectfully told him I'd had enough. I thanked him for
his time, he did the same, we shook hands, and I packed my shit together and sent my bye bye email
around the team.
Within 20 minutes of quitting, I was out of the front door. Bye bye blackberry, bye bye security pass,
bye bye banking. The sun has never shone so bright, the air has never tasted so sweet, I have never
felt lighter, than that moment. I was free. I was free. I was so fucking free I could taste it!
Now, oddly, I chose this moment to go to a shopping centre (long story) with a friend. Upon walking
around in a slight state of shock I saw a piano in a suit shop, and this was exactly what I needed. To
play a little tune and unwind. I didn't even ask if I could play, I just went in and started playing. A
man quickly came up to me, paid me a compliment and then asked me what I did. I responded 'I'm a
musician' (why not?!). He asked how much? I said PS100 for 2 hours. He hired me 5 days a week.
Just like that I'd become a musician, working around a ninth of the hours for about the same money.
Now I'm going to speed up the story a little. I quit this in a couple of weeks because I realised I didn't
want to be a background musician in a shop, I wanted to be in the limelight. I wanted to entertain the
world. I wanted to try and make it in music. I rolled a piano onto one of the busiest streets in
London, and I started playing. Within 1 month I had 9 management contract offers and had started
recording my first album. It's now been 6 months. I've travelled around the world, I've got an album
on iTunes, named 'Butterfly In A Hurricane'. I've played to literally tens of thousands of people. I've
felt all the love and beauty of the world. I've laughed until I've cried. I've enjoyed more female
attention than I thought a guy with my face could get! This is the most alive I've ever felt.
I used to do something I hated all day everyday, I used to hate myself for doing that. I was bad
company around people and nobody really liked me. Now I do something that I love, that makes me
bubble with excitement daily. In return for doing the thing I love the most, people are made happy,
people are overhwelmingly kind to me, people open their hearts to me, and I do the same to them. I
roll my piano around the world sharing this love which grows inside in the soil of my happiness and
fulfilment. I never ever thought I'd be this happy.
Okay, I can't afford the Prada suit right now, but I can't wait to wake up tomorrow, I've got a singing
lesson in the morning and I'm meeting Coca Cola in the afternoon to talk about being in an advert for
them. My future is unpredictable (which I love), but I know that it will be fine because I'm the one in
control. I spent 23 years developing my brain, and now I'm using it.

I just wanted to reach out to all those people who are in banking and miserable but too scared to
leave, I want to reach out to all the nerdy kids with the great CVs who want to go into banking, I want
to reach out to everyone who has got this far reading and I'm telling you to take a leap and do
something you love. You might not know what that is, but you sure as hell aren't going to find it sat
unhappily at your desk trying to multitask all day long. You only progress by taking a leap of faith,
not in God necessarily, but in yourself. Know that you have all the tools within you already. You can
do and be whoever you want to be, and you deserve to be so much more than a tired suit in an office.
Of course if that's where you get real happiness, then that's fantastic. I'm just saying that wasn't my
experience, nor was it for the majority of those I met.
Life is short - you're young, you're old, you're dead. React to that knowledge. You have nothing to
lose!

Investment Banking Interview

Questions
Source: https://www.wikijob.co.uk/wiki/investment-banking-interview-questions

Career Questions

What other firms are you interviewing with and why?

Are you interviewing with Management consulting firms too?

What career opportunities are you exploring other than investment banking?

What are the most important qualities for a career in investment banking?

What do you understand the responsibilities of an analyst to be?

Describe a current event in the market?

What is your most challenging professional experience?

What would you do if you were giving a presentation to a client and suddenly noticed a
mistake in some of the calculations, which you had prepared?

Education Questions

What were your grades each year at university?

Why did you choose your university?

General Questions

What are your greatest strengths?

What are your weaknesses?

Where do you see yourself in five years/ten years?

What are your proudest accomplishments?

Who or what is your greatest influence?

Competency Questions

Are you a leader or a follower? Give examples.

Describe an ethical decision you had to make?

Describe a time you failed. Why did you fail, what did you learn?

Finance Questions

Why would two companies merge?

What major factors drive Mergers and Acquisitions?

What are some common anti-takeover tactics?

Why might a company choose to issue debt vs. equity?

What could a company do with excess cash on the balance sheet?

How would you calculate a firm's WACC? What would you use it for?

How do you calculate the firm value for the following firm?

What would greater impact a firm's valuation: a 10% reduction in revenues or 1% reduction in
discount rate?

What major factors affect the yield on a corporate bond?

Walk me through the major line items of a Cash Flow Statement.

Say you knew a company's net income. How would you figure out its cash flows?

What is the difference between the balance sheet and the income statement?

What is Goodwill? How does it affect net income?

What is the difference between Purchase and Pooling accounting? Under what
circumstances would you use one or the other?

What are deferred taxes? How do they arise?

What is working capital? How would you calculate it?

Industry Questions

What was our firm's share price yesterday?

What is the FTSE at today?

Which way is the market going? Bond, equity and foreign exchange?

Where do you think interest rates will be in the next 12 months?

What has happened in the markets in the past three months?

What were the headlines in the Financial Times today?

What would you personally invest in?

What industry do you follow and what numbers do you look at to determine if a firm is doing
well in the industry?

Investment Banking Questions

Why have you chosen to work in investment banking rather than Management consulting?

How does your past career qualify you for a position in investment banking?

What department do you want to work for inside investment banking and why?

Who is in the Bulge bracket?

If you were the CEO of our firm, what major changes would you implement?

Describe a typical day of an investment banking Analyst?

What is your greatest concern about investment banking right now?

Advice
Source: http://www.careers-in-finance.com/ibfacts.htm

A good time to send your resume to an investment bank is in

November and December.
Hires are usually made around January and February. But don't
stop in February just because you haven't hit your target.
According to one analyst we spoke to it's really crucial to be
persistent. It's basically a numbers game. Contact lots of
people. But at the same time, customize your approach to each
person and bank. That means it's going to be pretty much a
full-time job.
Don't forget to check back.

Traditional recruiting is done by April. Lots of people also

change jobs in the March to July period. This is going on heavily
in the post-financial crisis period because banks are doing well
and are scrambling for people. This means that many banks
are looking for personnel in July, long after the resumes have
been thrown away. Somewhat surprisingly, the best time to
find a full-time job is by screening your contacts in late Spring
and Summer.
Investment banking is bounding back after the financial
crisis.
Investment bankers lost jobs in record numbers due to the
financial crisis from June 2008 to Sep 2009. While many firms
have not yet fully bounced back, things have turned around
substantially. Hiring is picking up substantially and while things
won't be bubbly again for awhile, there is no doubt that
banking is back. It's a great time to enter this profession.
Franchises Being Sorted Out
Certain franchises are suffering significantly. Morgan Stanley
has seen its league table standings in M&A fall. This is a strong
firm that went through substantial turmoil in 2006 with the
result that quite a few of its top flight bankers left.

Similarly, Bank of America absorbed Merrill Lynch. Yet B of A is

culturally very different and, as a result, many of Merrills best and
brightest have moved on. Citigroup has laid off large numbers of
people but is holding its own in 2010.
Bulge Bracket Changing
There is always movement in the bulge group and the
emergence of new powers in thetop 10 list of banks that are

not at the top. The new bulge powerhouse is JP Morgan which

is now a real rival to Goldman Sachs for the title of the worlds
premiere investment bank. Firms like Credit Suisse, JP Morgan
and RBS benefitted from the financial crisis but haven't been
keeping their gains in 2010. In contrast, recovering franchises
like Barclays and Morgan Stanley are picking up in league
tables in 2010. Goldman Sachs has not benefitted from recent
U.S. congressional scrutiny but still maintains strong client
loyalty. In addition, Deutsche Bank has been steadily climbing
the league tables as of late and has solidified a position as a
major world player in investment banking.
Not Going Away
Despite apocalyptic media coverage in 2009, investment banks
are here to stay. Their function is far too central in the
economy. On the one hand, investment banks solve a matching
problem between multiple buyers and sellers of assets in the
M&A market. By facilitating asset transactions, investment
banks play a valuable role not dissimilar in function that played
by real estate agents, export brokers etc. Similarly, in financial
markets, banks match users and providers of capital. This is an
enormously important function that will only grow over time.
Investment banking is one of the most global businesses on
earth.
Investment bankers spend plenty of time tracking down
corporations in Peoria and Seattle. But they are just as likely to
be working with investors and issuers on the other side of the
world--perhaps Hong Kong, Bulgaria or even Africa.
Investment banking is seeing massive consolidation.
Today,firms are combining at an unprecedented rate. Recently,
Merrill Lynch has merged into Bank of America. Lehman has
merged into Barclays and Nomura and there is talk that other
major firms may combine as well.
The investment banking business is notoriously competitive.

There are probably too many investment banks in the industry

and business is hard fought.
Investment banks are facing declining margins on bread and
butter business.
Margins are falling in underwriting of investment grade debt,
vanilla foreign exchange and many areas of OTC derivatives.
Treasury bond trading is fast becoming one of Wall Street's
least profitable areas. This is putting downward pressure on
salaries in places. Expect more pressure on salaries in time for
traders as electronic trading becomes more prevalent.
Sometimes you will find yourself working for an egotistical
jerk.
What do you do? First, don't take the job in the first place. If
someone mistreats you in an interview, get up and walk out
(funny... you may actually get offered the job). Second, be sure
to communicate your needs very clearly when it matters when
dealing with an ego-creep. It might just be that someone is so
busy and overwhelmed that they get abusive. Laying it out in a
nice way may help. Finally, if you find yourself in a truly
pathological environment working with dysfunctional people,
bail out. Life is too short and the money isn't worth it.
Labor Arbitrage Increasing
Shift towards outsourcing at the analyst and associate roles.
Increasingly, investment banks are substituting highly skilled
but less expensive labor from locales such as India, China and
even Vietnam for analytical work and pitch book prep work
normally carried in London or New York. Suppose, an associate
makes $300,000 a year and works 3,000 hours a year. That
works out to $100 per hour. A number of outsourcing services
will prepare materials for $20 to $25 an hour that are well
done. Classic labor cost arbitrage that will grow in importance
over time.
Less "Monkey Business"
Investment banks are notorious as hierarchical playgrounds,
rife with acting up, bad behavior and too frequent sexual
harassment and other forms of misogyny. Firms are cleaning up
and leaders such as John Mack of Morgan Stanley and Bruce
Wasserstein of Lazard deserve credit for setting zero
tolerance cultures for bad behavior. This bodes well for the
future of women, minorities or persons who are generally not
out of Brooks Brothers Central Casting in the industry.

Pick the first firm you work for carefully.

People who jump from firm to firm too much are less likely to
get hired into a great job because your loyalty will be in doubt.
One leading global investment bank has a practice of
minimizing hiring from outside to avoid "career jumpers."
Investment banking is generally transaction driven.
In this environment a single individual with good client contact
can make an enormous difference for a firm. This is part of the
reason that star investment bankers ("rainmakers") take home
high bonuses.

Some Mind Blowing Facts About

Wall Street
Source: http://www.forbes.com/sites/quora/2013/02/21/what-are-some-mindblowing-facts-about-wall-street/

Some observations having spent my better years walking

on the street:

Work hours as a junior banker. As a junior investment

banker you consistently work 80 to 100+hrs a week.
Sometimes over 120+hrs a week, which is nearly 18hrs a day
for 7 days a week. I remember pulling two all-nighters in a row,
went home for a short sleep, came back to the office and pulled
another two all-nighters. Looking back, it was just plain stupid.
Nature of investment banking. People dont realize investment
banking is primarily a sales job. Like your neighborhood car
salesman, a banker will say almost anything to get a deal done. Expert
advice is frequently just educated guesses, and at times, complete
fabrications.
Banking salary. The average salary is about $300,000400,000/yr. What he did not say is the figure is distorted by an army
of lowly back office and support staff. Seven figure payday is really
nothing special. Personally, I have no problem with the few rainmakers
bringing home the bacon. Many are very talented individuals and
deserve every dime they make. However, in aggregate, the pay is not
well deserved. I wont dwell on this point, most people probably
recognize this already.

Other Peoples Money (OPM). OPM is one of the most

perverse problems that permeates every corner of Wall
Street. Heads I win and tails you lose. Traders get paid lavishly when
they make the right bet but it is always OPM when the bet goes wrong.
Actually, by the time the bet goes wrong, the trader has probably
moved on to a different company/department and not held
accountable. Excessive risk taking is therefore encouraged.
Investment management is a zero sum game. The fund
management industry in aggregate does not really add value. When a
trader wins, another trader must lose (or miss out). As a collective, the
fund management industry is just the market (more or less). Ive
always found it amazing the number of young talent and amount of
management fees that flow into a sector that in aggregate simply
cannot add value. How unfortunate.
High frequency trading. I wont go into the details, but basically
it has become an arms race of being a millionth of a second faster than
the other guy. The exchanges (Nasdaq and NYSE) started offering colocation within their facilities and traders started fighting for the best
physical real estate within the co-location center (ie. literally trying to
be a few feet closer to the exchanges computers). Some of the high
frequency traders complained about how unfair it was to be a few feet
farther away. The exchanges conceded and added latency, basically a
few feet of cable, so everyone within the co-location center is
equidistant. It baffles me financial progress is moving in this direction.
Prediction by experts/pundits. Why do people still
believe in pundits and experts on TV? If experts could
predict the future with any accuracy, they would be doing
something else. They are not always wrong, they are simply
not right consistently enough to provide meaningful value.
Im always surprised how confident and certain people sound on CNBC
(I rarely feel sure of anything). Keynes got it right when he said, If you
must forecast, forecast often.
Madness of crowds; Forget and repeat. Scientific
knowledge is cumulative, but financial knowledge is
definitely cyclical. Financial history is forgotten and repeated, again
and again. Every stock market cycle and every asset class bubble,
people get sucked by a good story at the top and sell at the bottom in a
panic. It cant be helped. A great read of various bubbles and manias is
Charles MacKays Extraordinary Popular Delusions and The Madness
of Crowds, although someone should revise it and add new chapters on
the Nifty Fifty bubble of the 1970s, Japan bubble of the 1980s, Asia
financial crisis of 1997, dotcom bubble of 2001 and US housing bubble

of 2007. The crisis / bubbles seem to be increasing in frequency over

time.
A million deaths is a statistic. There is an odd detachment on
Wall Street when it comes to large sums of money. A billion here, a
billion there, pretty soon you are talking real money. Rogue trading
bets gone bad, bank bailouts, massive quantitative easing, etc. feel like
a statistic and just not real. People can grasp the day-to-day reality of
thousand and million, but when it comes to billion and trillion,
what does that really mean? Just a statistic. Personal detachment
contributes to recklessness. (there might be a behavioral psychology
research topic here )
Magic of compounding (or not). Albert Einstein called
compounding the eighth wonder of the world. Warren
Buffett is frequently quoted as an example. $10,000 invested
with Buffett in 1956 is worth north of $300 million today
compounded at a little over 20% per year. But Buffett is truly an
exception. Most people can only compound at very low rates, assuming
they dont end up losing their money to Wall Street.

99 Surprising Financial Facts

Source: http://www.investinganswers.com/education/how-invest/99-surprising-financial-factsmost-investors-dont-know-1163
1. The highest-price stock currently sold on the NYSE is Warren Buffett'sBerkshire Hathaway,
Class A (NYSE: BRK-A), which sells for around $126,500 (as of August 31, 2012). That means you
can buy about 190shares of Apple (Nasdaq: AAPL) ($666 as of August 31, 2012) for the cost of
one share of Berkshire Hathaway.
2. The global bond market was valued at more than $99 trillion in 2011, according to a report from
Morgan Stanley. That's nearly twice as large as the global stock market in 2011, which was valued
around $54 trillion, according to a report from McKinsey Global Institute. Political consultant James
Carville once said, "I used to think if there was reincarnation, I wanted to come back as the president
or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can
intimidate everybody."
3. Bill Gates told his Harvard University professors that he would be a millionaire by age 30. He
became a billionaire at age 31.
4. The Amsterdam stock exchange (now part of the Euronext exchange) first listed shares in 1602.
The first stock to be traded was that of the Dutch East India Company, a multinational megacorporation granted a monopoly by the Dutch government to conduct trade with Asia. The company
operated for almost two centuries, paying out an 18% annual dividend for almost the entire time.

5. Agricultural giant, Cargill, Inc., is the largest privately held company in the U.S, according to
Forbes. If it went public, it would rank among the top 20 companies in the Fortune
500 in terms ofrevenue. It employs nearly 130,000 people and had revenues of nearly $110 billion.
6. Legendary investor Warren Buffett bought a 40-acre farm at age 14 with $1,200 in savings from
delivering newspapers.
7. On January 1, 1791, the U.S. national debt was $75 million. As of August 28, 2011, the official
debt of the United States government was approximately $15.9 trillion. To pay this debt would
require approximately $51,000 from every single person living in the United States.
8. The first debt ceiling was established in 1917 and set at $11.5 billion, according to the Committee
for a Responsible Federal Budget.
9. The U.S. government's debt ceiling has been raised 11 times since the beginning of 2001 -- and a
remarkable 76 times since March 1962, according to the Congressional Research Service. It now
stands at $16.394 trillion.
10. The Peter G. Peterson Foundation estimates the total amount of all U.S. government liabilities,
explicit and implicit (Social Security, Medicare, etc), at $57.7 trillion. That's around $180,000 owed
by every man, woman and child in the U.S.
11. The first text message ("Merry Christmas") was sent in 1992. In 2011, 4.5 billion spam text
messages were sent in the United States alone, according to industry analyst Richi Jennings.
12. The design of the folding cell phone/flip-phone was inspired by the fictional communicator from
Star Trek.
13. Warren Buffett claims the worst investment he ever made was in 1993 when he bought Dexter
Shoes. The loss to Berkshire shareholders was $3.5 billion. In his letter to shareholders he quoted a
line from country singer Bobby Bare to explain his feelings on the failed acquisition: "I've never gone
to bed with an ugly woman, but I've sure woke up with a few."
14. 2008 was Berkshire's worst year in the 44 years that Buffett's been its Chairman. Net worth fell
by $11.5 billion that year, a decline that reduced per-share book value by -9.6%. The only other year
that saw a decline was 2001, when Berkshire's net worth fell by -6.2%.
15. In 1930, Al Capone attempted to revamp his public image by opening a soup kitchen in Chicago
during the Great Depression. Chicago was one of the hardest-hit cities during the Depression due to
its reliance on manufacturing and a local fiscal crisis that wounded the city's finances even before
the stock market crash. In 1933, the city's unemployment rate hovered near 50%.
16. Herbert Hoover infamously declared in March 1930 that the U.S. had "passed the worst." The
worst, however, had just begun. From 1929 to 1932, more than 100,000 businesses failed, banks
collapsed at a staggering rate of 200+ per month and GDP fell from $81 billion to $49 billion.

17. At an estimated $15.1 trillion in 2011, the U.S. economy, as measured by GDP, was larger than
the next two largest countries' economies combined (China and Japan). That's according to data
from theIMF. However, if you consider the European Union as one economy, it jumps to No. 1 with
$17.6 trillion.
18. The United States generates more than 20% of the world's GDP with about 4% of the world's
population.
19. The main article in The Economist in March 1999 was famously titled, "Cheap Oil: The next
shock?" The article surmised that oil prices could be headed to $5 a barrel and prices might hover in
a "normal" range of $5 to $10.
20. In 1979, the Dow Jones Industrial Average (DJIA) sat at 800. A famous Business Week cover
that year touted "The Death of Equities." As of August 2012, the DJIA hovers around 13,000.
21. The five countries with the fastest GDP growth in 2011, according to CIA estimates: Qatar
(18.8%), Mongolia (17.3%), Turkmenistan (14.7%), Ghana (13.6%) and Timor-Leste (10.6%).
22. The biggest decline? Yemen (-10.5%).
23. October 13, 2008, saw the single-largest point gain in the Dow Jones Industrial Average.
The indexrose 936.4 points (11.1%). Just two days later, on October 15, the index posted its second
largest point loss in history, falling 733.1 points (-7.9%).
24. The Dow Jones Industrial Average posted its largest single-day percentage increase on March
15, 1933, gaining 8.3 points for a 15.3% gain. Meanwhile, October 19, 1987, marked its largest
single-day percentage decline, losing 508 points and -22.6%.
25. In 2004, Alan Greenspan said, "American consumers might benefit if lenders provided
greatermortgage product alternatives to the traditional fixed-rate mortgage." Since 2007, total losses
attributable to subprime, Alt-A and other alternative mortgage products have been in the trillions.
26. Americans have about $2.6 trillion in debt, as of June 2012, according to the Federal Reserve.
About $864 billion of that is credit card debt, while the other $1.7 trillion is in installment loans, such
as car or boat loans.
27. Only six U.S. corporations have reached a $500 billion market cap, according to multiple reports.
Apple is the most recent. Exxon, Microsoft, Cisco, Intel and GE are the other five, though none of
them currently have market caps that are that high.
28. Approximately 1 in 12 Americans -- are "unbanked," according to the FDIC. That means they do
not use mainstream, insured financial institutions. The most common reason given for not having a
bank account is that the respondent thinks he or she does not have enough money to need one.
29. The population of Americans 65 and over is projected to increase to 55 million in 2020 -- a 36%
increase for that decade -- according to the U.S. Department of Health and Human Services.

30. The average credit card holder has 3.5 credit cards, according to the Federal Reserve.
31. According to data from the U.S. Census Bureau, there were 159 million credit card holders in the
United States in 2000, 173 million in 2006, and that number is projected to grow to 181 million
Americans by 2010.
32. 70% of American students have credit cards, according to a report in the International Journal of
Business and Social Science.
33. In 2012, Forbes listed three women in their billionaire rankings. Christy Walton (listed as Christy
Walton & family) was 11th, with $25.3 billion. (Her wealth came from Walmart, as did the No. 17
woman Alice Walton.) Liliane Bettencourt from L'Oreal was 15th, with a net worth of $24 billion.
34. In 2005, Oprah Winfrey was listed at No. 562 with a net worth of $1.4 billion. By 2012, she had
risen to No. 442 -- a jump of more than 100 spots -- as her net worth jumped to $2.7 billion.
35. The first self-made female millionaire was Madam C.J. Walker. In the early 1900s, Walker
developed and operated a cosmetics empire focused on African-American women. She was quoted
as saying: "I am a woman who came from the cotton fields of the South. From there I was promoted
to the washtub. From the washtub I was promoted to the cook kitchen and from there I promoted
myself into the business of manufacturing hair goods and preparations. I have built my own factory
on my own ground."
36. In 2006, after tough new bankruptcy laws were passed, bankruptcy filings hit an 18-year low
with only 617,660 bankruptcies filed that year. Total bankruptcy filings reached 1.4 million in 2011,
but that number was still well below the 2.1 million bankruptcies that were filed in 2005 in anticipation
of the aforementioned change in the laws.
37. In early 2012, Tennessee surpassed Nevada as having the highest per capita bankruptcy rate,
with more than 7 bankruptcies filed for every 1,000 residents. Nevada and Georgia were second and
third, respectively.
38. Americans 34 and younger decreased their rate of filing bankruptcy by more than 30% since
2006, according to the Institute for Financial Literacy.
39. Jim Cramer is a former hedge fund manager and founder/owner of Cramer Berkowitz, where he
reported a compounded "rate of return of 24% after all fees for 15 years." However, the returns have
not been independently audited or verified.
40. On February 29, 2000, about one week before the historic all-time high of the NASDAQ
Composite index, Jim Cramer delivered his "The Winners of the New World" speech, in which he
recommended 10stocks and said, "I wouldn't own any other stocks in the year 2000." By 2009, all 10
companies were either out of business, were taken over by competitors or traded at fractions of their
2000 stock price.
41. Three of the world's 50 largest economies dont have a dedicated exchange-traded fund
(ETF)listed on a U.S. exchange: Iran, Saudi Arabia and Pakistan.

42. One of the smallest economies to have its own U.S.-listed ETF is Israel. The ETF trades under
theticker symbol EIS.
43. Total business bankruptcy filings in 2009 were the highest in 16 years. However, things have
improved. For the 12-month period ending on March 31, 2012, business bankruptcies had fallen 14
percent compared to the 12-month period ending on March 31, 2011.
44. The average American family's net worth plunged by nearly 40% between 2007 and 2010,
according to the Federal Reserve. Net worth fell from $126,000 to $77,000.
45. The population of Americans 65 and over jumped from 35 million in 2000 to 40 million in 2010 -a 15% increase.
46. The median income of persons 65 and older in 2010 was $25,704 for males and $15,072 for
females.
47. Life expectancy in the United States has reached a record high of 78.49 years, according to
researchers from Rice University and the University of Colorado. The three countries with the
highest life expectancies are: Monaco (89.68), Macau (84.43) and Japan (83.91).
48. In 1991, 11 percent of workers expected to retire after age 65, according to the Employee Benefit
Research Institute. In 2012, that number is 37 percent.
49. 30% of people responding to a 2012 survey conducted by the Employee Benefit Research
Institute say that they have less than $1,000 saved for retirement.
50. In 2011, according to the World Bank, 33% of people in India live in poverty. About 70% of
people in India live on less than $2 U.S. per day.
51. France is the world's top tourist destination, with 77 million visitors in 2010. (The United States is
second with 60 million.)
52. The United States tops the world in plastic surgery procedures, according to the International
Society of Aesthetic Plastic Surgery (ISAPS).
53. Russia is geographically the largest country in the world. It covers 1/7 of the total land on Earth.
Moscow is the second largest city in Europe with a population of 11.7 million. (Istanbul, Turkey, is
first with 13.5 million.)
54. GM sold slightly more cars in China than in the U.S. in 2011 -- 2.55 million to 2.50 million.
55. 85% of Americans 18 or older own cell phones, according to Pew. About one-third of those that
don't own a phone live with someone who does, so about 90% of American adults live in a
household with a working cell phone.
56. More than one million shares changed hands on the NYSE for the first time on December 15,
1886. The NYSE had its first billion share day on October 28, 1997.

57. The largest daily trading volume on record for the NYSE Composite was on October 10, 2008,
when more than 11 billion shares were traded. As of August 29, 2012, the NYSE Composite's trading
volume has reached 10 billion only three times -- all since late 2008.
58. Oakley, Inc. chose the ticker symbol OO because it looks like a pair of sunglasses.
59. Colgate's first toothpaste, introduced in 1873, was packaged in a jar. Toothpaste was first
packaged in a tube in 1896.
60. Apple was started in a bedroom in Cupertino, California in 1976.
61. Dell (Nasdaq: DELL) was started in a dorm room at The University of Texas in 1984.
62. Hewlett-Packard (NYSE: HPQ) was started in a garage in Palo Alto, CA in 1939. Bill Hewlett
and Dave Packard flipped a coin to determine whether the firm would be called Hewlett-Packard or
Packard-Hewlett. Packard won the coin toss but chose to go with Hewlett-Packard.
63. The history of Wall Street dates back to the 1600s, when New York was called the New
Amsterdam settlement. Back then, before the bells and exchanges, it was merely a pathway that ran
alongside a wall protecting the settlement from Native American attacks. In a moment of creativity,
the citizens named the corridor "Wall Street."
64. The New York Stock Exchange was born on May 17, 1792 with the signing of the Buttonwood
Agreement. The agreement, which laid out trading rules and regulations, was signed by 24
stockbrokers underneath a buttonwood tree. The entire contract was only two sentences in length.
65. In 1790, to pay for war debt, the federal government refinanced all federal and state
Revolutionary War debt by issuing $80 million in bonds. These become the first major issues of
publicly-traded securities and marked the birth of the U.S. investment markets.
66. The first listed company on the NYSE was the Bank of New York, traded under the buttonwood
tree on Wall Street. The bank now continues under the name of The Bank of New York Mellon
(NYSE:BK).
67. By the end of the Civil War, between one-third and one-half of all U.S. paper currency in
circulation was counterfeit.
68. The Secret Service Division was created on July 5, 1865 in Washington, D.C., to suppress
counterfeit currency.
69. The Bank of North America, located in Philadelphia, was the nation's first private commercial
bank. It was chartered in 1781 by the Continental Congress, which was looking for a solution to its
problem of funding the American Revolution. It was largely modeled after the Bank of England.
70. Flatbush National Bank of Brooklyn was the first bank to issue a credit card in 1946.

71. The largest cash robbery of a bank was the Loomis Fargo bank robbery in 1997. $17.3 million, in
cash, was stolen from a regional office vault in Charlotte, NC. An FBI criminal investigation turned up
evidence that the heist was an "inside job," and less than six months later, the thieves were caught.
In the end, 95% of the cash was recovered.
72. It's not gold that John Maynard Keynes famously called a "barbarous relic" in 1923; he was
actually referring to the gold standard.
73. The most expensive coin in the world -- the 1794 Flowing Hair Dollar -- sold for $7.85 million in
2006. It was the first dollar coin minted by the United States government. (Runner-up: The 1933
Double Eagle, was sold by Sotheby's in 2002, for a record sum of $7.59 million. The coin is one of
only a few Double Eagles that escaped being melted down after the Gold Reserve Act of 1933 made
it illegal to circulate and possess most gold coins.)
74. The Stutz Blackhawk, made from 1971 to 1987, was a luxury car in which everything normally in
chrome -- the steering wheel, pedal surrounds, ashtray and cigarette lighter -- was instead plated in
gold. Elvis owned five, though he gave three away as gifts.
75. Dennis Kozlowski, former CEO convicted of looting the mega-corporation Tyco International
(NYSE:TYC), redecorated his bathroom with a gold-threaded shower curtain costing $6,000.
76. The Exxon Valdez, whose infamous wreck spilled almost 11 million gallons of oil into Alaskas
Prince William Sound, was repaired and renamed the Sea River Mediterranean. The ship is
prohibited by law from returning to Prince William Sound.
77. The five largest U.S. companies by market capitalization are: Apple ($632 billion), Exxon Mobil
(NYSE: XOM at $406 billion), Microsoft (Nasdaq: MSFT at $257 billion), Walmart
(NYSE:WMT at $246 billion) and Google (Nasdaq: GOOG at $225 billion), as of August 29, 2012.
78. Through July 20, 2012, 38 U.S. banks had failed in 2012, according to Associated Press reports.
That's a much slower pace than 2011, during which 58 banks had failed by the same date.
79. The oldest known monetary law code, the Code of Hammurabi, was created ca. 1760 BC in
ancient Babylon. It formalized the role of money in civil society by setting amounts of interest on
debt, fines for wrongdoing, and compensation in money for various infractions of formalized law.
80. The birth of modern banking is credited to the medieval Knights Templar. They took oaths of
poverty; therefore donating all of their cash and property to the Order. Nobles often used the Order
to safeguard their money while they were off fighting in the Crusades.
81. 51% of American pet owners planned to buy their pet a gift during the 2011 holiday season,
according to the Associated Press. The average budget: $46. However, 72% of those polled said
they planned to spend $30 or less.
82. In 2010, U.S. lottery sales reached $58 billion, according to the North American Assoc. of State
of Provincial Lotteries. The report says that more than half of Americans played in the lottery in the
last year.

83. The largest lottery jackpot in U.S. history was $656 million for a Mega Millions tickets in March
2012. There were three winners, and the total cash payout was $474 million.
84. Approximately 147.3 million ounces of gold are being held at The United States Bullion
Depository in Fort Knox.
85. The weight of a standard gold bar is approximately 400 ounces, or 27.5 pounds.
86. In the past, Fort Knox has housed the Declaration of Independence, the U.S. Constitution, the
Articles of Confederation, Lincoln's Gettysburg address, three volumes of the Gutenberg Bible, and
Lincoln's second inaugural address.
87. In addition to gold bullion, the United States Mint has stored valuable items for other government
agencies. The Magna Carta was once stored there. The crown, sword, scepter, orb, and cape of St.
Stephen, King of Hungary, were also stored there before being returned to the government of
Hungary in 1978.
88. The 1792 law that established the United States Mint also made coin defacement, counterfeiting,
and embezzlement by Mint employees punishable by death.
89. The portrait of Abraham Lincoln on the penny faces to the right and all other portraits of
presidents on U.S. circulating coins face to the left.
90. The motto "In God We Trust," was omitted from new gold coins issued in 1907, causing a storm
of public criticism. As a result, legislation passed in May 1908 made "In God We Trust" mandatory
on all coins on which it had previously appeared.
91. The largest note ever printed by the Bureau of Engraving and Printing was the $100,000 gold
certificate, series 1934, featuring Woodrow Wilson. This series was issued only to Federal Reserve
Bank Banks against an equal amount of gold bullion held by the Department of the Treasury for
certaincredits established between the Treasurer of the United States and the Federal Reserve
Banks.
92. The oldest component company of the Dow Jones Industrial Average is General Electric, which
was added on November 7, 1907.
93. The first stock exchange can be traced back to Antwerp, Belgium in 1460.
94. The first female member of the NYSE was Muriel Siebert, who became a member in 1967.
95. Lion County Safari, the first drive-through safari park in the United States, traded under the ticker
symbol GRRR.
96. The physically smallest U.S. bond was the State of Louisiana 'Baby Bond' Certificate, called a
Baby Bond for three reasons: Its small denomination of $5 (the lowest denomination U.S. municipal
bond), its small size (three inches by five inches), and its vignette of a baby wearing a hat.

97. Credit cards were not always made of plastic. There have been credit tokens made from metal
coins, metal plates, and celluloid, metal, fiber, and paper cards.
98. Michael Milken, the "Junk Bond King," originally gained notoriety after being indicted on 98
counts of racketeering and securities fraud in 1989. Although he was never convicted of racketeering
or insider trading, he did plead guilty to reporting violations and was sentenced to 10 years in prison
and a permanent exile from the securities industry. Today, the man once known as the epitome of
Wall Street greed is the founder of many charitable projects, including the Milken Family Foundation,
which has awarded over $60 million to more than 2,400 "master" teachers, and the Prostate Cancer
Foundation, the world's largest philanthropic source of support for prostate cancer research.
99. At the end of 2011, three companies had total debt loads of more than $500 billion: JPMorgan
Chase ($684 billion), Bank of America Corp. ($622 billion) and Citigroup ($560 billion).

fun facts about investment banks

source: http://aceinterviewcoaching.blogspot.com/2013/07/12-fun-facts-aboutinvestment-banks.html

Bank of America Merrill Lynch: Before being swallowed by Bank of America during the GFC,
Merrill Lynch was known as the Thundering Herd, due to its unrivalled brokerage network, the
conspicuous use of a bull as its logo and its view of being bullish on America.

Barclays: A household name for English football fans due its continual sponsorship of the
Premier League since 2001, its global aspiration of being a top investment bank was realized when it
acquired the North American investment banking and trading operations of Lehman Brothers in 2008.

Citi: Once the worlds largest bank by market cap and advocate of the concept of being a
financial supermarket, it was forced to shed assets during the GFC when it was bailed out by the US
Government.

Deutsche Bank: Its logo of a slash inside a square was created in 1972. The slash represents
consistent growth and dynamic development whilst the square frame symbolizes security and a
controlled environment.

Goldman Sachs: Undoubtedly the most venerable bank on Wall Street, its employees are the
highest paid on average. In 2006, each employee took home on average US$622,000 (This was of course
skewed by the gigantic pay packet of its CEO). Of course, things have come a long way since then, with
pay now crashing down to still a jaw dropping amount of US$399,506 per employee for 2012.

J.P. Morgan & Morgan Stanley: Both investment banking titans share the same roots. Morgan
Stanley was formed by Harold Stanley and Henry S Morgan (grandson of John Pierpoint Morgan) in
response to the Glass-Steagall Act, which required the splitting of commercial and investment banking
operations in 1935. This Act was repealed in 1999.

Lazard: A US based boutique investment bank renowned for its independent advisory services,
it came knocking on Australias investment banking world with immediate effect by acquiring Carnegie,
Wylie & Company, a local independent advisory services firm.

Macquarie Bank: The name Macquarie and its logo of Holey Dollar drew its inspiration from
Governor Lachlan Macquarie. Faced with a shortage of coins in circulation in 1813, Governor Macquarie

purchased Spanish silver dollars and punched holes in them, thereby creating two sets of coins and thus
immediately doubling the amount of coins in circulation.

Morgan Stanley: Often referred to as the blue blood bank. The term comes to describe
royalty and nobility, originating from the medieval belief that aristocratic blood was blue.

Nomura: Not to be outdone by Barclays (or rather taking a leaf out of its playbook), Nomura
picked up the Asia Pacific operations of Lehman Brothers, as well as its investment banking operations
in Europe and Middle East, almost two weeks after Barclays purchase.

UBS: Formed through the merger of Union Bank of Switzerland and Swiss Bank Corporation, its
logo of 3 keys, retained from SBC, represents confidence, security and discretion.

Credit Suisse: Couldnt find any fun facts about a bank that likes to fly under the radar, in
keeping with its image as a private bank. There was something about an accusation of denying
Holocaust victims from accessing assets of relatives. But then again, nothing about the Holocaust is
fun.

Some Interesting question and

answer for Investment Banking
Source: http://www.internships.com/eyeoftheintern/news/the-economy-news/whats-the-dealwith-investment-banking/
How did you get into investment banking?
Like most students, I hit information sessions pretty hard during the fall of my junior year. In the spring, several investment banks came to
campus to interview, and I landed an internship with KeyBanc Capital Markets in their industrial technology group in Charlotte, NC. I
worked hard at the internship and was given an offer to return after graduation to Keys Cleveland, OH headquarters. Ohio wasnt where I
wanted to be, so I spent fall of my senior year interviewing at several investment banks before finally taking a job at Edgeview Partners, an
exclusively M&A-focused firm also in Charlotte.
What will I really be doing as an intern at an investment bank?
A lot of people dont have a good grasp of what investment bankers actually do. There are a ton of definitions out there,but a simple summary
is that investment banks help companies to raise capital (through debt or equity offerings) or sell themselves (M&A). In both cases,bankers
prepare all the marketing materials and help to broker the deal (similar to a real estate agent selling a house). As an intern, your job is to help
out with things like industry research and PowerPoint slide creation, with occasional runs to pick up takeout or coffee for the team.
Are the hours really as long as Ive heard?
That depends what youve heard and it also depends where you work. Your hours will vary a lot based on the deals you are staffed on, and
some groups at some banks are notorious sweatshops. However, most full time (post-college) investment banking analysts will spend
between 70 and 90 hours each week in the office. Thats roughly equivalent to 9am-midnight on the weekdays (65 hours), and then variable
hours during the weekend depending on your workload. When a deadline is looming, hours can get crazy I once caught an hour of sleep
sitting up in a bathroom stall at 4am before returning to my desk to finish cranking out a pitch book. As an intern your hours might be a little
shorter, but never leave the office until youre sure the analysts youre working with dont need any more help, and never complain youre
there to work for the summer and get that return offer, not sight see (sorry).
-

What questions are they going to ask me in the

interview?
Source: http://www.internships.com/eyeoftheintern/news/the-economy-news/whats-the-dealwith-investment-banking/
A lot of students freak out before interviews for an investment banking internship, expecting to be peppered with technical questions about
bond math and fixed charge ratios. The reality is that your interviewer knows youre still in college and havent been exposed to a lot of this

stuff theyll tailor their questions accordingly. The key things you want to demonstrate are an understanding of the job, a strong work ethic,
and that youre a generally normal and social person.
However, since I know you want more specific details, here are three questions you can be almost certain will come up:
Q: Why are you interested in investment banking?
A: If the best thing you can come up with is I want to make a lot of money, you might as well cancel your interview now. The correct answer
here is dependent on the group youre interviewing for (M&A, industry coverage, etc) but the thesis is the same. The key is to convey an
understanding of what the job entails contrary to what you may see in the movies, its not all power ties and screaming pit traders. One of
the most interesting things about investment banking is the opportunity to learn a ton about your clients in an M&A group, you might
spend 3 months selling a defense contractor, then the next 3 months diving into the quick oil change industry. If youre interviewing for an
industry coverage group, make sure you emphasize your interest in that specific sector.
Q: Why do you want to join our firm specifically?
A: Heres another one where you need to have done your homework. Nows a good time to parrot back some of the things you learned about
the firm in the information session (you did attend their information session didnt you?) You can also prep for this question by using your
career services office to contact alumni that work at the bank ask them what makes their firm unique.
Q: What are 3 ways to value a company?
A: Ah, finally a technical question. Despite what you may have heard, this is about as hard as its going to get for internship interviews. You
covered the first valuation method in your introductory finance class discounted cash flows. Use the time value of money to obtain a
present value for the firms future cash flows. If youre a little rusty on this, click here for a refresher.
The other two methods are comparative well compare the company youre trying to value with others that are similar to it. There are two
different types of yardsticks public comparables and precedent transactions. Comps, as theyre called in the industry, are publicly traded
companies that are similar to the one youre trying to value. Deals are completed acquisitions of public or private companies. These
externally validated valuations give you an idea of what your similar company is worth. The key concept to understand here is called the
multiple you dont compare the values of the comps and deals directly, you compare their EBITDA multiples. Divide a companys market
capitalization (comps) or sale price (deals) by its EBITDA, then apply that multiple to your companys EBITDA to get the expected valuation.
What part of the interview do students mess up most often?
Far and away, the most common reason prospective interns get dinged is for personality. Even if you nail all of the above questions, youre
not getting the spot unless you click with the interviewer. It sounds unfair, but its true. If Im going to hire someone and then spend 90 hours
a week with them, we need to click personality-wise. More students just need to relax and be themselves connect with your interviewer and
show them youre a normal person whod be fun to have a beer with. Thats the secret that career offices never tell you.

Philosophy of Investment Banking

Source: http://chiefexecutive.net/a-philosophy-of-investment-banking/
WHAT IS A PHILOSOPHY?
In general, philosophy is the search for sense, meaning, cause, and principle using logical thinking and
rigorous thought. Philosophy excavates foundations and stresses being and mechanisms, discerning
what things are and how they work. It is an attempt to perceive what things really are, not how they
appear to be, and to discern how things really work, not how they appear to work. Philosophy seeks
ultimate, irreducible truth.
A philosophy of investment banking may seem pretentious (or worse, silly) surrounded by such towering
achievements of human knowledge as the philosophies of science, education, history, law and religion.
Philosophy claims to be able to make sense out of any human awareness or endeavor, however massive
or minuscule. Perhaps we will find interesting things about the nature of investment banking.
DEFINITIONS OF INVESTMENT BANKING

If we are to lay claim to constructing a philosophy of investment banking, we must begin by introducing
some rigor into the process. A philosophy flounders when language wobbles. An incipient philosophy
needs verbal precision.
Even within the finance community, the term investment banking is used rather loosely. Such usages
range from widely inclusive of virtually everything that large Wall Street firms do to narrowly restrictive to
only certain conventional investment banking functions, primarily underwriting. Part of the problem is the
evolution of the field.
Traditional investment banking was the underwriting of common stock equity and investment-grade
corporate bonds. But the financial world has changed dramatically, and investment banking, the key
catalyst of the metamorphosis, has widened its scope proportionately. Following are four definitions of
investment banking; the order proceeds from the most broad to the most restrictive.
1) Investment Banking as Everything Major Firms Do. All Wall Street activities are encompassed here,
including personal financial products and retail investments.
2) Investment Banking as All Capital Market Activities. All capital raising and corporate finance
functions are included, such as mergers and acquisitions (M&A), merchant banking, fairness opinions,
fund management, venture capital management, investment research, risk management and the like-in
addition to traditional underwriting of debt and equity securities. Excluded are consumer markets, retail
investments, branch management and the like (but would include market making and institutional
securities trading). This definition is my personal preference.
3) Investment Banking as Some Capital Market Activities. Some usages of investment banking
restrict its connotation to only some capital market activities, stressing underwriting, mergers and
acquisitions, fairness opinions and the like. Excluded are money management, trading for their own
accounts, research, commodities and some risk management (i.e., trading).
4) Investment Banking as Only Underwriting and Raising Capital. This traditional definition, limited to
raising capital for corporations in the public markets and trading securities, is the most restrictive. It is
hardly a defensible position today not to include M&A as central to mainstream investment banking.
What is the fundamental basis for investment banking? Why does a free market allow, indeed encourage,
the existence of highly compensated financial intermediaries who make markets but not products?
Following are areas of high value-added contribution-worth-that investment bankers provide for financial
markets.
Worth of Underwriting Investment bankers float and trade securities; they set standards and establish
prices in the underwriting process, and they broker trades and make markets in the subsequent trading of
those securities. As such, investment bankers are the essential intermediary that establishes the market
between buyers and sellers. They assure the efficiency of the market by their issuer selection process,
due diligence procedures, pricing mechanisms, distribution allocations, supply and demand equilibria, and
the like. In syndication, investment bankers distribute the risk of underwriting new securities among
various firms; the process is important in that it requires one investment bank to convince its peers of the
efficacy of its proposed offering, thus building checks and balances in the system.
Worth of Broker / Dealer / Market Making The trading of securities provides liquidity by enabling the
continuous buying and selling of those securities. Such liquidity is vital for giving investors confidence that
their investment can be converted into cash easily and quickly, which works to lower the cost of capital for
issuers. Investment bankers assure a ready and efficient market for both buy and sell sides; they act
asbrokers, who are commissioned agents for buyers and sellers (brokers hold no inventory and therefore
assume no price risk); dealers, who set bid-and-ask prices for each security they offer for trade (dealers
assume a price risk for all securities they hold in inventory); and market makers, who establish (and
support) the entire market for a security, normally following its initial public offering.
Worth of Mergers and Acquisitions Investment bankers perform a service greatly desired by both
buyers and sellers, helping each to achieve economic goals not attainable as efficiently through any other
means. When corporate buyers and sellers have a ready, fluid (liquid) M&A market, there is more
incentive to build companies (e.g., cashing out is easier and more lucrative) and more opportunity for
effective strategic planning (e.g., growth through acquisitions is more practical). The intrinsic worth of
hostile takeovers-i.e., assessing and comparing the often competing interests of stockholders and
management-is a complex issue. On the one hand, it is disruptive for executives to spend their time
devising legal and financial techniques to defend their companies against unwanted suitors. On the other
hand, an efficient market demands that inefficient corporate structures should be subject to restructure,

and sleepy underperforming corporate managers (e.g., highly paid and perked executives who own little
stock in their companies) should be subject to change.
Worth of Merchant Banking / Private Equity When investment banks risk their own capital to facilitate
M&A deals, whether as short-term bridge financiers or as long-term equity players, the process enables
more companies to be on the market and more deals to get done, thus enlarging the M&A market and
making it more liquid and more efficient.
Worth of International Investment Banking By extending financial markets worldwide, investment
bankers achieve greater efficiencies in optimizing risk and return for both issuers and investors. (Portfolio
Theory explains the benefits of such diversification.) In addition, the internationalization of financial
markets supports the globalization of business, the development of third-world countries, and the
emergence of new markets.
Worth of Fees and What They Mean The enormous fees that investment bankers make in mergers and
acquisitions are often used to question M&As value to the economy (e.g., critics contend that when
investment bankers churn companies they increase personal fees not industrial productivity). Yet, viewed
from another perspective, these admittedly huge fees can demonstrate the desirability of the service. After
all, chief executives are not easy marks; they are not in business to overpay; they are not suckers or
easily bullied; and most of all they are used to getting what they want. If these seasoned corporate
leaders are paying such spectacular sums, whos to say that they are not getting their moneys worth?

10 Interesting Facts
Source: http://www.tiptoptens.com/2011/05/31/facts-about-investment-banking/

Investment bank can help companies who are currently involved in some kind of merger or
acquisition and can provide services as market making, trading of derivatives, fixed income
instruments, foreign exchange, commodities, and equity securities.
The thing which distinguishes an investment bank from retail and commercial banks is that
investment bank does not accept deposits.
We can draw a boundary line between the private and public function of an investment bank,
as a result of which an investment bank can be said to be divided into two separate functions.
There is no crossing of information between the private and public function.
In United States, the person who provides services regarding investment banking must be a
licensed broker-dealer and subject to Securities & Exchange Commission (SEC) and Financial
Industry Regulatory Authority (FINRA) regulation.
There are two major lines of business in investment banking; trading securities for cash or
for other securities, for example facilitating transactions, market-making, or the promotion of
securities for example underwriting, research, etc.
Investment banks deal with both the corporation issuing securities and on the other hand
investors buying securities.
In 2007, the revenue earned by global investment banking activities reached USD 84.3
billion which was an increase of 22% as compared to the previous year.

In 2007, the main source of investment banking income was United States constituting 53%
of the total revenue.
The event which lead to the separation of the investment banking from the commercial
banking was the GlassSteagall Act, initially created in the wake of the Stock Market Crash of
1929 which prohibited banks from both accepting deposits and underwriting securities. This
ultimately lead to the separation of these two type of banks.
The investment banking is experiencing a mushroom growth in private investments into
public companies (PIPEs, also known as Regulation D or Regulation S)

Career and Salary Facts

Source:
http://learn.org/articles/Investment_Banker_Salary_and_Career_FAQs.html
What Would I Do as an Investment Banker?
The investment banking industry comprises a wide range of institutions that
employ individuals in many capacities. Investments vary by organization,
which usually employ an overall strategy to handle individual assets.
Investment bankers represent an elite section of this field and are generally
responsible for coordinating strategies.
What Kind of Education Do I Need?
The financial industry is an environment of very high competition, and most
investment bankers have at least a bachelor's degree, often in business or
economics. Coursework in these areas frequently includes business
fundamentals, accounting, economics and management strategy.
Post-graduate education is not uncommon in this field. Many investment
bankers go on to earn a Master of Business Administration (MBA) or an
advanced degree in economics. As an aspiring investment banker, you also
need well-developed mathematical, organizational and analytical skills.
Do I Need To Be Licensed?
Most investment bankers need to be registered with the Financial Industry
Regulatory Authority (FINRA), which oversees the industry and grants
licenses. FINRA offers various licenses that cover many jobs and
responsibilities in the banking industry. You need to pass exams and
demonstrate your industry knowledge and compliance with regulations.
Continuing education is usually necessary to maintain your registration.
Where Might I Work?

You can expect to begin in entry-level positions within investment firms. This
usually entails working as an analyst and undergoing a training period.
Successful analysts are generally promoted to associate-level positions and
begin to handle clients' accounts more directly. Investment bankers are
directors of financial firms and represent the apex of this career path. The
level of employment at which you enter the financial sector and the speed of
your advancement may be influenced by any advanced education
credentials you possess, as well as your personal skills.
What Kind of Working Conditions Can I Expect?
The financial industry is known for its high stress environment and
demanding hours. You could face regular deadlines and competition from
your peers. Because you may be working in groups with other analysts or
associates, networking and social skills are an asset.
As a director in investment banking, you would meet with high-profile clients
and coordinate investment strategies. You could travel frequently, and your
position would demand the leadership and communication skills necessary to
guide associates, as well as work with investors.
What Kind of Salary Could I Have?
According to Payscale.com, investment bankers earned a median annual
salary of $81,558, as of December 2014 (www.payscale.com). The 10th to
90th percentile of earnings for investment bankers, including bonuses, profit
sharing and commission, ranged from $44,261 to $296,615 in the same year.
In May 2014, the U.S. Bureau of Labor Statistics (BLS) reported that the
median yearly salary of securities, commodities, and financial services sales
agents was $72,070 (www.bls.org). This figure could vary due to salary
frequently being dependent on factors like the output of the individual and
the strength of the market, as well as any bonuses you might receive.
To continue researching, browse degree options below for course curriculum,
prerequisites and financial aid information. Or, learn more about the subject
by reading the related articles below:

A Week in the Life of an Investment Banking

Analyst

Source: http://www.mergersandinquisitions.com/week-in-life-investment-bankinganalyst-sunday-monday/
Sunday
12 PM Wake up late. Was up late the night before at a friends birthday (fun, but
nomodels and bottles). Find food and get ready for the day.
1 PM Head to gym. While there, run into another friend at a different bank and talk
about plans for next year (one of the most popular discussion topics among analysts)
and why neither of us is in the office currently.
3 PM Relaxing near the pool post-workout when The Dreaded Email arrives. Client A,
a sell-side M&A client, has reviewed a presentation we sent yesterday and has
changes. I have to run to the office at 4 to discuss the changes and then revise the
presentation.
4 PM While on a call going over the changes, I get bored and begin internet surfing in
the background. Most of the edits involve wording and font sizes on graphs through 100
or so slides. This is going to take some time to finish because of the sheer volume of
changes.
10 PM I finish up with the revisions and the associate sends it out to the client.
Meanwhile, Client B, a public company being sold to a bigger public company, has sent
over revised projections and we need to update our merger model.
A merger model (also called accretion / dilution model or combo model) is used to
analyze the impact of an acquisition. The output, called the accretion / dilution, is the
change in EPS (Earnings Per Share) and the most important inputs are purchase price,
form of consideration (cash, stock, or debt), and the buyer and sellers financial profiles.
Click here and enter your email address to get a free merger model tutorial.
11 PM Finish the updates and head home.
This was a normal Sunday some time for fun, some work, and being in the office for at
least part of the day.

Monday
9 AM Arrive at work and chaos is unfolding a standard Monday morning.
Were working on further revisions to the presentation for Client A, and the Director in
charge of the deal is quite persistent with the Are you done yet? questions.
At the same time, were also multi-tasking between that and getting NDAs (NonDisclosure Agreements) executed for Client C, a large public company we are selling
to several private equity firms.
Getting NDAs (also called Confidentiality Agreements (CAs), among other terms)
executed involves sending the document back and forth between legal representatives
of the buyer and seller until they reach agreement. Its a joke because theres no way to
enforce an NDA, but both parties want protection for their trade secrets and employees
if nothing comes of the discussions.
In this case the associate is handling most of the work.
2 PM CFO of Client C (the private equity deal) sends updated financial statements
and other information that we need to incorporate into our own models and into the
materials were sending to the buyer(s). VP informs me this is needed ASAP.
5 PM Finish up the updated model and send it to the VP, who sends it to Client Cs
CFO so he can sign off on it. Just as Im finishing, I learn that Im being staffed on an
upcoming Fairness Opinion for an M&A deal that is set to be announced soon.
A Fairness Opinion is an extremely rigorous valuation that is prepared by a bank for
legal reasons (to prove that a deal price is fair). Its a bit silly because no bank is ever
going to say that a price is not fair, and theyve become formalities that are required to
counter shareholder lawsuits following a deal.
8 PM Head to the conference room to eat dinner quickly with other analysts and then
go back and try to wrap up an Offering Memorandum and presentation for Client A. The
associate is side-tracked on other projects all night so I have to handle this work.
An Offering Memorandum (or Information Memorandum (IM) or Confidential Information
Memorandum (CIM) ) is a long document with an overview of a company, including its
products/services, customers, management, history, and financial profile that sells it to
potential buyers. As an analyst or associate you spend a lot of time working on these.

12 AM Head home.
This was a typical Monday 15 or so hours of work, some chaos in the morning and a decent
amount of actual work at night.

Some more interesting source that you may

interested to see
http://www.wallstreetoasis.com/forums/banking-lifestyle-what-are-the-hours-like-really

http://www.askivy.net/articles/investment-banking/investment-banking-lifestyle/doinvestment-bankers-have-social-lives

http://www.streetofwalls.com/articles/investment-banking/learn-the-basics/life-of-aninvestment-banker/