- Jordan Szekely - Financial Analyst, Lehman Brothers
- Ben Kinney - Equity Sales, Salomon Smith Barney
- Michael Grossman - Equities Research, Putnam Investments
Jordan Szekely: Mergers & Acquisitions - Media & Entertainment
Basic job is valuing companies - qualitatively & quantitatively
Looking at companies to assess their value
Valuation = determining fair value of a company
Long two years if you're not really interested.
- You need stamina
- Use your contacts at firms.
No other industry offers the same opportunities.
Fortune 500 companies want people who know how capital markets work.
Why Sales & Trading?
- 12-hour days - very fun.
- Sales and Trading is like a sprint - in office between 6 am and 6:30 pm.
- Usually leaves work right after 5:00.
- Day is extremely varied.
- Sit shoulder to shoulder with other sales and traders (literally).
- Sells securities - sells US & government treasury debt, derivatives.
- Talks to large institutions about trade ideas.
- Fixed income debt (bonds) has no central exchange, so all banks have their own trading floor.
- You must be a people person - lots of customer contact.
- Alcohol tolerance goes up a lot! - you go out with clients at least 2 times/week.
- Get on a trading floor if you're interested.
Choose your firm & your job based on the people.
- These are the folks who are going to pay you.
- You need to know that people will support & trust you.
Useful skill sets:
- Common sense
- Able to learn quickly
- If you hate math or if numbers scare you, don't do it.
- Have a "blue collar" approach to the job - work really hard.
- Be honest in what you claim you can do.
- Quantitative questions - process of getting to your answer
- Your resume doesn't mean too much once you've gotten your interview.
- "Fun factor" - have things to talk about.
The difference between Private Client Services and Sales & Trading:
- S &T = talks to large institutions ($100MM+) - Freddie mac, Fannie Mae, Fed.
- PCS = high net worth individuals, or agents for individuals
- PCS = Investing in everything: equities, equities derivatives, etc.
- PCS = No one will ask you really complex questions.
- Chief competitors are Fidelity and Wellington
- Has $400 billion under management; 4th largest asset management firm
- Responsible for 2-3% of what's traded daily.
Putnam Investments is a "buy side" (as opposed to "sell side" firm)
- Buys securities from the investment banks, etc.
- Keep research totally inside.
- Use sell-side research, but "with a grain of salt"
- Very unbiased: no clients, no banking business. - clients depend on this
- Few analyst positions in buy side.
- Sell research plus "makes markets" (ie, sells securities).
- Between investment banking arm of the bank & equity research side.
- Get information ahead of the public.
- Neither a marathon nor a sprint - describes his job as a "workout"
- Gives you choice of how hard you push.
- Research analyst in European ISPs, retail & e-commerce.
- Can also do equity research for private partners in the firm.
- Gets in, reads Wall Street Journal, checks news.
- Always learn a specific industry, but you also need general info.
- Reads research reports - sell side & independent analyst.
- Gets exposure to CEOs, since they want Putnam buying their product.
- Also does quantitative stuff - cash flow analysis, valuation modeling.
- Learn a lot of accounting on the job.
- Due diligence - qualitative research.
- Not research in the sense of going to the library and reading a book.
- Travel 2-3 times a month.
- Get lots of responsibility.
- Learn lots of qualitative, quantitative, and communication skills.
- Can go to business-finance side or business side.
- Good links to business schools - if you're great, the company can get you in.
- Be yourself, academically and socially - faking it really comes out.
- The interview process takes stamina.
- Don't think all the good jobs come only in September and October.
1. What is the difference between sales and trading?
- Sales: client calls wanting to buy ____.
- Trading & Risking the firm's capital. Facilitating customer trades.
2. How quantitative are interview questions for equities research?
- 9 out of 10 questions are non-quantitative.
- Interviewers want smart, hard-working candidates, interested in the market.
- As an interviewee, it's the luck of the draw who your interviewer will be.
- Keep your interviewing in perspective. People switch jobs a lot! By 26, you may have been through a lot of jobs.
- Get over the Wharton inferiority complex - you already know a lot.
3. What are the advantages of New York over other locations?
- Investment banking - New York
- Buy side - Boston
- Ideal to be as close to the center of everything as possible. Salomon Smith Barney's trading floor is only in New York. You get to pick up a lot.
- Boutique firms - Lots of acquisition going on. Hard to make the jump from smaller firms up.
- Leverage in the markets, & amount of assets, give you power.
- For banking, you need to consider what you want, what your life is like. If quality of life and having your work recognized matters to you, then smaller markets/firms may work for you.
4. What about the size of the analyst class? Does it help if it's smaller?
- On a new job, you have to create your presence and value - "get me on the deal"
- In terms of getting recognition, it may depend on who you work with and/or the project you are assigned to.
- Salomon only had 11 Sales & Trading people - all made associate in 2 years.
- Sales & Trading gives you access to senior folks very easily - you get much more exposure to senior management.
5. What about someone whose background includes no great experience?
- It may be hard without some decent experience.
- But if you can sell yourself, that's all that matters.
6. What kind of training will you get?
- Firms will train you and pay for any courses. Series 7, Series 63, CFA, MBA - many firms will support it, particularly for Asset Management & Equity Research; less in Sales & Trading; middle for I-banking.
- The dot.com phenomenon has scared banks, so MBAs are no longer needed - lots of fast promotions.
7. How do you know you will like investment banking?
- Like high-pressure situations.
- Like lots of action.
- Able to learn a lot.
8. In sales, do you interview generally, or for a specific desk?
- Varies by firm.
- Salomon Smith Barney - generalist program for 2 months, then you get to choose.
9. Advice for International students.
- Domestic/overseas experience
- Lehman - can move internationally, if you can make things happen and if people want to leverage you.
- Mention where you want to work.
10. Promoting yourself - what works and what doesn't?
- Very fine line - show interest and persistence without being overbearing or annoying.
- Really random why people get jobs.
- Never turn down an interview.
- Learn your pitch.
- Being from Penn gives you a real leg up.
- Firms look for intelligent people who are proactive, energetic and involved.
- Jobs are learned on the job.