Why Investment Banking?

<p>I'm applying for transfer, but were I to stay at my current school, I would probably end up taking:</p>

<p>12 Econ classes
-some would be cross listed with finance
-Honors? probably...
11 Finance Classes (Five Graduate Courses)
-corporate finance sequence
-investments/derivatives and risk management/mergers and acquisitions/investment banking
-financial econometrics (in addition to the regular econometrics)
8 Math class
-Calc through Diff EQ
-Probability
-Linear Algebra
-Real Analysis
-Statistics</p>

<p>I've been taking my class pretty seriously after Freshmen year and I expect to keep my GPA up as close to 4.0 as possible (Probably end up 3.7-3.8). I'm currently at a school in the 30s-40s overall and 40s in terms of business. Would I be competitive for an IBanking job with a strong quantitative background?</p>

<p>I'm not just interested in IBanking because of the money. I think it's a job that I could do well at and even make a career out of.</p>

<p>How good are your chances of getting into an ibank if you get a bachelors from HYPS? Someone mentioned earlier that 500/16,000 applicants received an offer from Citigroup. How much higher would my chances be if i graduated from a top school?</p>

<p>this is not a chances thread....</p>

<p>and one more thing. although u need all these math/economic classes to get the job in Ibanking, few positions within the bank ever use any math above algebra 2- its all about how the economic system works</p>

<p>You don't need to go to school to learn how to invest. thats a grave mistake. The majority of the worlds most successful investment bankers did not learn how to invest via a formal education. what makes them good or even great is that they are different than the rest. </p>

<p>There are far mores sucky Ib graduates than there are non graduates.</p>

<p>I don't know much about I-banking but I tend to agree with Dr.Horse and Wneckid99. I feel it's more about being a rational thinker and using some common sense in the end. Along with extensive research on different options. Psychology plays a huge role in how people invest. You just can't be a fearful or wary person. If you've done the research you need to stick it out and hang on for the ride with your investments.</p>

<p>As far as investing goes in general it's like that age old story, people watch their stock plummet and wait for it to go back up. But it never does go back up to where they want it and when they want it to. So they dump on it and immediately afterwards the stock starts to jump back up and people buy back when it's back where it originally was. People lose a ton doing this. You don't think this happens but it does, even the smartest people in I-banking and the finance industry make irrational decisions from time to time just like the average joes.</p>

<p>The biggest reason is because people are in it for the money. They love money so much that when they see their investments doing bad they equate this with losing money(which they are), which to them is the worst thing in the world(in the finance industry). But I like to think of it as more of a game. It's like fantasy baseball, if you will. You draft your team. Dump some of your guys before they start doing awful and make a better investment in another option(player) who has proven themselves or are starting to go up. Rookies are the highest risk investment- year end could have a huge return or medium return or likely none at all. Veterans are like bonds- you know what to expect from them and they will put up decent numbers. Then there are the all-stars- medium amount of risk, usually good return but the chance of doing bad is always there. </p>

<p>It's obviously a thrilling profession but I think the guys that love to gamble(i.e. win, doesn't have to be money) and view it as just a game do far better than those who just want money and play for $$$. The ones that play the game just have the $$ as an added bonus for the love of the game. I could be completely wrong here but this is how I see I-banking. Go watch Wall Street(the movie) if you think money is everything and where it gets you thinking that way =D haha</p>

<p>I recently found CC has a career forum and this thread was entertaining to say the least. I see a lot of people talking about banking, but I'm curious just how many of you are/have been bankers yourselves? I'm not seeing a whole lot of answers that lead me to believe than more than 5 of you know from first hand experience...</p>

<p>you're right this isn't a chances thread. My bad. I was asking more because a lot of the people in my school go and work for like the banks in Cleveland like Key and National City. I don't want to do that. I want to be on Wall Street. No I don't go to HYPS, or any ivy league or super prestigious school. I go to a very good school and that's all. </p>

<p>and YES, my username is sachmoney. I've used it for all my usernames for a while. It's something that I made a long time ago, and has stuck with me since like the fourth grade. I like money, but I wouldn't say I'm obsessed with it. Certain family members would disagree...</p>

<p>YouTube</a> - unofficial guide to investment banking</p>

<p>Thought this was funny. Not sure if THEY are located in New York but this is pretty informative for those that want to become analysts.</p>

<p>If you aren't interested in IBanking because of the money you are lying or dumb.</p>

<p>where does financial engineering fit in in all of this?</p>

<p>
[quote]
If you aren't interested in IBanking because of the money you are lying or dumb.

[/quote]

Or you have connections, or an understanding of a different path you'd like to take with better compensation, or you have the capability of getting a better position in the financial industry out of college than bottom of the rung at an investment bank.

[quote]
It's like fantasy baseball, if you will. You draft your team. Dump some of your guys before they start doing awful and make a better investment in another option(player) who has proven themselves or are starting to go up. Rookies are the highest risk investment- year end could have a huge return or medium return or likely none at all. Veterans are like bonds- you know what to expect from them and they will put up decent numbers. Then there are the all-stars- medium amount of risk, usually good return but the chance of doing bad is always there.

[/quote]

These analogies and references to movies are getting very annoying. I don't mean to insult you, but this isn't a game. Anyone who treats it as a game will probably have a relatively short career in the financial industry, and if they make a transition to an asset management position they'll most likely destroy themselves.</p>

<p>A strong investor, whether they're institutional or private, must understand money management. It's about the management of risk. What you are describing is what novices do--they think about potential gains and exit strategies, which is in actuality the backwards train of thought. People who are more experienced, whether they be professionals or private investors, understand that unless they are moving enough capital to directly influence the actions of a company their primary focus must be managing the risk they take on. You're thinking about potential losses more than you are about potential gains, and if you make a trade without a clear understanding and assessment of what kind of loss you're willing to take you're trading recklessly.</p>

<p>Most investment bankers are boring and annoying. Most doctors are unattractive and perform disgusting tasks. Most lawyers never make a great speech inside a court room. These are fantasies. You know what sound a frog makes? Ribbit, right? Wrong. There are a multitude of species of frog, and each one has a different call. The main frog that goes ribbit is the American Bullfrog, and when Hollywood needed the noise of a frog they used that one. In "The Other Boleyn Girl" they call Henry "your grace." Over and over again. Multimillion dollar movie. Period piece. In all the advertisements.</p>

<p>My grace is what you call a duke. Your majesty is what you call the king. Your majesty used to be God, but the first person who styled themselves as majesty was... Henry VIII. The king portrayed in the movie. He would have executed anyone who called him "your grace." You'd think with all that money spent on a period piece they'd, you know, catch that, right? Wrong.</p>

<p>The reason for my little diatribe is that everything you seen in Hollywood is fake. What Hollywood has produced is the conception of what life is in a multitude of professions, notably "high" finance, medicine and law. Never apply anything you think, without knowing where that thought comes from, to the reality of a situation. Yes, plenty of people in finance do cocaine and they drive sports cars and they have sex with hookers. Yes, they try and life fast. No, they don't do that in their workplace, because a multitude of elderly white men could destroy their careers forever with one mistake. It's not a game.</p>

<p>I need someone with experience to answer this. If you have the opportunity to go directly from undergrad into hedgefunds or private equity, is it worth it to skip investment banking? I've heard that i-banking can provide invaluable experience, yet, if you have this opportunity to make more money in a less insane environment directly out of college, should you go for it?</p>

<p>johnny, banking provides you a great background for anything in finance and can help you make some valuable connections with people but if you have the opportunity to work PE at a 220, then go for it, as you'll get all the training you need there. That's an area where you can actually work les than IB but potentially make more.</p>

<p>tetrishead, you may know a lot but you are mistaken. Your majesty is a more exalted title most commonly used on the Continent, by French and Spanish sovereigns. English kings are called your highness or your grace. Your grace was very properly used to address Henry.</p>

<p>Thanks for answering Spiders05
Another question. How is consulting in terms of being a spring board into HF, PE, or VC? I might like to do that because of the travelling involved, I think it would be a great way to spend a couple years out of college.</p>

<p>
[quote]
tetrishead, you may know a lot but you are mistaken. Your majesty is a more exalted title most commonly used on the Continent, by French and Spanish sovereigns. English kings are called your highness or your grace. Your grace was very properly used to address Henry.

[/quote]

AFAIK (I should admit I haven't studied European history in a few years), grace was for archbishops and dukes, and the monarch of Scotland until England and Scotland merged. Roman Catholics and Orthodox (Eastern) Christians use it too. Henry VIII was the first to specifically style himself majesty, and I was told by someone I generally considered relatively informed on the subject that he did not take kindly to be called your grace. He was kind of a schmuck, after all.</p>

<p>I know today that non-royals who hold high positions are called grace, but the queen is specifically referred to as majesty. You may very well be right though, God knows every book and teacher in the world isn't perfect, and my memory could be poorer than I give it credit for.</p>

<p>I enjoy the fact that we're discussing the styling of titles for 16th century rulers in the middle of a thread for college students who want to become rich financiers on a forum dedicated to college admissions.

[quote]
Thanks for answering Spiders05
Another question. How is consulting in terms of being a spring board into HF, PE, or VC? I might like to do that because of the travelling involved, I think it would be a great way to spend a couple years out of college.

[/quote]

If you're working in financial management consulting, or conceivably accountancy consulting, it could work. I don't see how general management consulting or IT consulting would ever apply itself to work in HF or PE unless you're going for a tertiary position (not finance, not "directional" management [the top executives]). VC is so broad that you'd probably be fine, and consulting and finance are both equally useful for VC. I personally think IT consulting with a strong understanding of valuations and management practices makes the best VC, but then again I'm applying that standard to the Valley. Other sectors of VC are different, and I'm less familiar with them.</p>

<p>tetrishead, your grace was used for the English sovereign, it has fallen into disuse today.</p>

<p>"These analogies and references to movies are getting very annoying. I don't mean to insult you, but this isn't a game. Anyone who treats it as a game will probably have a relatively short career in the financial industry, and if they make a transition to an asset management position they'll most likely destroy themselves."</p>

<p>No offense taken. I'm not an I-banker and it's not my career path. You obviously know more about this stuff than I ever will or want to know. I just feel a lot more people choose this career striclty for the money and not neccassarily because the finance industry as a whole excites them; stock market, economy, etc. I'm sure it does but money is the main motivator. If I were to choose I-banking it would be because I thorougly enjoyed the work and the people. I've read a few blogs from I-bankers and most of them say flat out they simply do it for the money. Some quit and go back just because of the money even though they hate it. Money is an important factor in choosing my career. But so is job security/experience, work/life balance, benefits, work environment and so on. You can correct me again if I'm wrong, no offense will be taken. As I said before I don't know much about it. But just what I've read and seen so far.</p>

<p>Those who take this job for the $$ benefit in years like the past couple but are in trouble in years like the next 2 where jobs and pay are cut at a huge level. You take the good with the bad....high risk and high reward...some years you'll make 160k others years you'll have to fight for your job and 110k.</p>

<p>It is a little known fact that investment bankers make a good deal of money, but that their job is also constantly at risk. They are also always stressed. That being said, what is the average retirement age of ibankers? I would assume it is less than the national average since the money is so good.</p>