S&t Vs IB

<p>Just curious (for those Investment Bankers on the forum) what personality types do better in S&T and IB, and what are the compelling reasons to choose one over the other...</p>

<p>Also, any words of compensation differences would be great.</p>

<p>(feel free to refer me to the right websites...)</p>

<p>Lastly, how should I approach a exploding offer (esp. if I haven't heard from my bank of choice...)?</p>

<p>I was also recently told by an MD at a bulge bracket bank that they are no longer requiring MBAs for promotion purposes if the analyst does high quality work (not superstar analyst, just competent/productive)...any thoughts on this? </p>

<p>Thanks, guys.</p>

<p>WF</p>

<p>S&T: hours, maybe? Traders make just as much as bankers and work about 60 hours per week at most.</p>

<p>Umm, isn't S&T considered to be IB? Just separate from the M&A portion or financing area?</p>

<p>"Umm, isn't S&T considered to be IB? Just separate from the M&A portion or financing area?"</p>

<p>Ask an I-banker and you'll get a no; ask anyone else and you'll get a yes.</p>

<p>Read the book Liars Poker and Monkey Business and you'll understand the differences between the two.</p>

<p>
[quote]
Read the book Liars Poker and Monkey Business and you'll understand the differences between the two.

[/quote]
I've read both, and I consider both to be IB.</p>

<p>Well you're both raising capital in both areas. However, with IBanking you deal more specifically with strategies of determining a company's worth through M&A or IPO projects and do more of an outside view of the stock market. S/T is more dealing with raising capital inside the market through flow/prop trading. I don't know if that really made sense as it's hard to explain in words, but technically both IB/ST have the same common goals but deal with more detailed aspects of doing so.</p>

<p>
[quote]
S/T is more dealing with raising capital inside the market through flow/prop trading.

[/quote]
</p>

<p>Makes no sense. </p>

<p>S&T is different from banking:
Trading can be broken down into two parts both of which can and do overlap:</p>

<p>Flow trading: This is where banks execute trades on behalf of their clients. While most of the straight through equity and options traidng is conducted automatically, the client might require some custom derivatives and the bank would structure it. Many times the bank also ends up with a prop position as it might take the other side of the clients position.</p>

<p>Prop trading: Think of it as internal hedge funds. They trade markets to generate profits for the bank using the bank's capital. They don't deal with clients (although they may benefit from client flow as it may provide an execution or information advantage) and are focused on making money for the bank. </p>

<p>Ibanking doesn't generate as much revenue for banks as sales and trading. In many cases the asset management division (which includes marketable hedge funds, mutual funds, private wealth management) generate more revenue than banking, although not as much as trading.</p>

<p>As for compensation, the best traders (head of top trading desks) make more than the CEOs themselves. Then again remember that the success rate of traders is lower than that of bankers.</p>

<p>The highest paid people in most investment banks are almost always traders not m&a bankers. Top hedge fund-ers make far more.</p>

<p>question is - what makes a successful trader? obviously you need to understand market patterns, etc.</p>

<p>Say for example, are the most successful traders usually quants?</p>

<p>Successful traders/investment professionals (aka people who actually have their neck in line) need an edge. Some go into highly quantitative methods while others might be much more qualitative. There isn't any one way in doing this.</p>

<p>Isn't what I mentioned exactly what you said Mahras? I though everyone knew the difference between flow and prop. All I said is that S/T focus more on obtaining capital from inside the market through trading shares, while the IBD focuses on M/A and IPO which is a different way of obtaining revenue or capital.</p>

<p>Securities salespeople have clients. they have to kiss behinds of the fund managers, etc. they sell to. Some of these fund managers are the rudest jackasses I've ever come in contact with. They also have to kiss behinds of the traders in their own firms so those people will allocate their clients securities in preference to the clients of other salespeople. and so they can come up with the best ideas for their clients. So in other words, these people need to be aggressive, like real eastate agents sort of, but have outstanding interpersonal skills. They have to be able to entertain clients outside of the office, take them on golf junkets, etc.</p>

<p>Traders do not have clients. They could care less about taking some moron out to dinner. They think they are the market. They commit capital, They are a big deal. Meanwhile they all seem to have played basketball at Dartmouth, etc., and they haven't read a book in 3 years. They need huge egos, be good poker players. Be able to calmly sell a position that loses millions. Con your fellow traders across the street. Make money for the firm. Or goodbye. You need to be quick-witted, analytically quick. tremendous poker skills and tremendous nerve. On the other hand you need no interpersonal skills whatsoever.</p>

<p>Investment bankers have clients. They have to do even more wining and dining than the salepeople, because there are more potential clients out there.
Their clients, CEOs and corporate finance types, tend to be better mannered than the fund people in my experience. Though no less ruthless, ultimately. </p>

<p>They also have to manage transactions, including working groups of lawyers, etc. They too need to be quick-witted, verbally as well as analytically. They need excellent interpersonal skills. They also need exceptional writing skills, moreso than in securities sales. They travel more and have much longer hours. They have to be highly creative in order to come up with winning strategies and financing plans for their clients and win business. They also need excellent presentation skills. They need to make their revenue goals of business to the firm or they are out. Ultimately, they are salesmen.</p>

<p>There is more of a management aspect to IB, IMO; marshalling the resources of the firm, and outside professionals such as lawyers, to best meet the needs of your clents.</p>

<p>Investment bankers work on transactions, and submit proposals, all of which have deadlines. There is constant deadline pressure in IB. Consequently, long, tension-filled hours.</p>

<p>Monydad sums up it nicely. Most top traders are very good at either chess or poker or both. Bankers need more personal skills, and in general are a lot more PC than the traders.</p>

<p>A good bit on why top traders make more money than top bankers: </p>

<p><a href="http://www.bloggingstocks.com/2006/12/18/why-top-traders-outearn-investment-bank-ceos-2-1/%5B/url%5D"&gt;http://www.bloggingstocks.com/2006/12/18/why-top-traders-outearn-investment-bank-ceos-2-1/&lt;/a&gt;&lt;/p>

<p>thankyou MoneyDad. that was one of the greatest posts I've ever read on CollegeConfidential.</p>