<p>I looked up information from several sources and they all seem to agree on the general idea that i-banking is a high stress, high risk and high pay career. Personally, I don't find high stress and high pay (of course!) a troubling prospect. It doesn't really matter even if I have to work a lot of extra hours, as long as I get a good pay. But the risk factor worries me a LOT. I mean, assuming that I have a critical mind, good analytical and mathematical skills... all that is required of an investment banker, is working in the field of investment banking still as risky as people describe it to be? Are there any tractable mechanisms in the world of finance? What would you say about the importance of luck ( or anything you would like to call it) if you were to excel in i-banking?
If possible, please relate to the undergraduate economics program offered by U of C. Any input is appreciated!!!!!</p>
<p>You also need to have the personality, which is the toughest part. Plenty of people have the skills to be in i-banking, but not all of them fit the mold of an i-banker. Also, nobody should work in i-banking just for the money--the hours are too long and hard, and if you don't love the job, you WILL burn out.</p>
<p>This should probably be in the Internships/Career forum or the MBA forum.</p>
<p>and what exactly do you propose that this "mold" is?</p>
<p>Each firm has its own culture, so the mold can differ from one i-bank to the next. But generally they don't just look for good, smart workers--there's a big enough supply of those--but also for people who will fit in well. But generally, you'll have to be assertive and confident, yet polite and able to work with a team. Most firms don't like people with big egos. Also, you'll have to be pretty sociable, or at the very least be able to talk people into giving you their trust.</p>
<p>Thanks.
I'm sorry if I sound money-thirsty, but which career in finance do you think is the most profitable?</p>
<p>Proprietary trading. But don't plan on getting hired into that--you'd have to prove your worth as a normal trader first.</p>
<p>Aside from that, hedge funds offer great opportunities, and Citadel recruits at Chicago.</p>
<p>thanks, jpps!</p>
<p>no, there really isn't any one career in finance that is the most profitable. They really change every year. In the mid 90s it was the equity guys, then in the late 90s m&a advisory/corporate finance, PE/VC of course was very good during the boom, after the bust fixed-income was hot, and now the commodity guys (specifically energy traders) are doing well, with corporate finance back on track too for the most part. In general, you can assume that the top people in every field are compensated well, thus you should go with what you're best at- i.e. don't try to pitch deals if you're the underspoken type, don't try to trade derivatives if you get stumped in high school calculus!</p>
<p>More advice: If you want to do this kind of thing, you might be (even)better of at Wharton. Chicago Economics is more geared toward the "intellectual researcher."</p>
<p>I would still say that nine times out of ten, the most highly-compensated people are prop traders...at least, it's been that way for several years now. Your answer was more nuanced though ;).</p>
<p>As for your second bit--I'm going to Chicago next year, but to be honest, there are only two schools I would have chosen ahead of it. Harvard was one and Wharton was the other...for reasons I don't feel like typing right now, I applied to neither (I didn't think I had a shot at either)...but I don't think Chicago really limits one's opportunities in finance--many i-banks and consulting firms recruit there (and the GSB's reputation and career services help here as well), and with an econ or math degree and good internships, one should be able to find a great job.</p>
<p>foxdie: I'm the underspoken type but I think I'm quite good at calculus... do you think I should trade derivatives?
jpps1: I applied to UC Berkeley and Penn (College) as well, but got rejected..</p>
<p>There's less money in derivatives trading....and I think foxdie was understating the math required.</p>
<p>Many derivatives traders have Ph.Ds in math (at least moreso than any other traders)...when he's talking "calculus," he means "partial differential equations."</p>
<p>Yes Chicago is definitely fine, and apparently (from my experience) better than Harvard at many fine firms.
As for trading, its allways a good venue to pursue. There are alot more jobs for traders, whereas the typical investment banker is seen as the m&a/corpfin/capital markets banker, traders can get jobs at so many other places in addition to the tradition ibank. Back in 2001, when the bankers were getting laid off and unable to pay their mortgages, traders got back on much quicker. A UBS CM guy my father knew who started a new mortgage and (just) became a father was laid of in September. He tried to start a consulting group with some old colleagues but it didn't generate nearly enough. Whereas all the traders just joined/started hedge funds, or any other number of institutional funds.</p>
<p>One thing though trading, especially prop is also the most competitive division at an ibank, and are paid more in align to performance than in any other division. The bankers on the other hand have their bosses give ratings that are mostly biased and not completely meritorious. In the old days, (I have no idea how it is now) traders would all be on the trading floor crunched up into small spaces with their screens prominently displaying their daily revenue generation, for all the other traders around to see. You can imagine how this might lead to a very competitive environment to outperform your peer. Out of the thousands and thousands of people, the prop traders are the very best and you can imagine that it would be very difficult to get there, with many people topping off under the magical seven figure compensation numbers and leading a life of *****ing about their mba peers who do make the millions as a banker. </p>
<p>again, do what you want. The big generalization is that the bankers make more on average, but with less job security (not because they are allways dispensible-but also because they can only work at an ibank), whereas trader will probably allways find SOME kind of job, but only the best of the best will ever make the millions. It isn't a secret that star traders generate more for the firm than any banker. A few years ago Deutsche Bank was being publicly accused for acting like a risky hedge fund (albeit a really large fund) with shareholder money, when people saw that trading profits dwarfed baning fees by such a large margin.
Now a days most banks are very careful with their trading.
Remember Saloman Brothers? You could say they founded propreitary trading, and in the early nineties they had a choice- they could either gain hundreds of millions each year over or spend the money on building a corp finance team. No doubt they chose the latter realizing that it would give a consistent cash flow unlike the every risky business of trading. Otherwise, they could of ended up like RBS!</p>
<p>Anyway, the market gets more efficient every year and to make profits by the time you become senior, structured derivatives or emerging markets will be the only way to go.</p>
<p>wow i really get into discussing this, this is going to be my last post though</p>
<p>Thanks. That's a great heap of useful information!</p>
<p>jpps1> Derivatives is VERY profitable. There is a lot of money. The question is whether you are good at it or not. Derivatives such as MBS, CDS are booming and banks (particularly Barclays) are really getting into quantitative derivatives trading. Hedge funds are big players in the industry also. The key is to become profitable in something. Whether its vanilla, exotics or derivatives you just have to make money.</p>
<p>Want_1600</p>
<p>I see that your from HK and so hopefully you seek both mandarin and cantonese...so your pospects in business are extremely good. U.Chiacgo is one of the best business schools in the World. you are in a good situation. But from reading your previous posts you don't seem like the banker/business type. (but thats just from your post)</p>
<p>ElsyPelsyChinnyChinChin:
Everyone says that I'm not the business type... =(
and they say you can't be trained into the business type either...
<em>sigh</em>
but I do love Chicago...
yet I'd be in huge debt (HKD 1,000,000) when I graduate
alternatively I may choose to study medicine in HK
but I'm not sure my grades could get me in...
U of C is definitely more prestigious than HKU or CUHK,
but still the competition for places in medical school here is severe...</p>
<p>"jpps1> Derivatives is VERY profitable. There is a lot of money."</p>
<p>Thanks for clearing that up for me...I was under the impression that the average derivatives trader, while skilled, is not incredibly well-compensated.</p>
<p>Dude i totally understand!</p>
<p>But i advise for you is to go to U. Chicago and maybe go undecided. Choose what you want to do once you take some classes and experiment a little.
LIVE IT UP!!!You don't have to deceide now. You have freshman year to do that. If your heart is set on business that who am I to say that your not fit for buisness.</p>
<p>well...you have to go undecided so thats not really an issue :)</p>
<p>I mean you still have to pick courses that fit with what you see but you cant realy declare until end of sophomore year.</p>
<p>I'd love to go...
Oh.. to reduce the debt when I come out... is it possible for me to gradute in three years? I did not take the APs and so most likely no credit will be given...</p>