23How to Guide to Wall Street

SanfordC.BernsteinA“Howto”GuidetoWallStreetCareers.WallStreetisoneofthemostmisunderstoodareasoftheU.S.economy.Underwriting,M&A,RiskArbitrage,ProprietaryTrading,EquityBlockDesks,IPOsandFollow-Ons,EquityProgramDesks,PrimeBrokerage,High-YieldBonds,ResearchSalesarealltermsthateventhemostdevotedMBAstudentfindssomewhatbaffling.Frequently,whenwemeetwithMBAstudentsandaskthemabouttheiraspirationsonTheStreet,theymumblesomethingaboutinvestmentbankingandthenunknowinglysaysomethingabouttheindustrythatiseitherveryoutdatedorsimplyuntrue.Well,WallStreetisn’tjustinvestmentbankingandgettingajobonWallStreetisnotlikeanyotherexperiencethatyouwillhave.It’snotlikeinterviewingforajobataconsultingfirm,ortryingtogetapositioninatrainingprograminanindustrialcompanyortalkingwithabankaboutalendingjob.Yourprofessorsandplacementoffices,asgoodintentionedastheymaybe,arelikelytobe“inthedark”abouthowtogetajobontheStreet.SoastheSecuritiesIndustryAnalystsatSanfordBernstein,ToddBuechs(USNA,TuckandGoldmanSachs)andBradHintz(Purdue,SouthernCalifornia,Wharton,MorganStanleyandLehman)haveattemptedtodraftatotallyunvarnished“HowtoGuidetoWallStreetCareers.”WehopethatthisguidewillhelpanundergraduateorMBAtofirstdetermineifWallStreetisforhimorherand,iftheydecidetopursuealifeonWallStreet,willhelpthemtosuccessfullynavigatethefirstcoupleofinterviews.PartOne–LifeonWallStreetDon’tExpectaGoldWatch.ModernWallStreetisnolongeranaristocracyofwell-connected,arrogantpreppies,asitisportrayedinthemovies.Rathertodayitisatruemeritocracyofhighlymotivated,highlyintelligentandremarkablycommerciallydrivenprofessionals.Ifyouhavethesecharacteristicsandhavethechutzpatopursueapositionwithnoconcernaboutbeingrejectedinnumerabletimes–thenWallStreethasacareerforyou.Butgettingthatfirstjobwillbedifficult–youhavetorelyonyourowninitiativeandtoworkdiligentlyatfindingthatfirstopening.ThemostimportantthingtorecognizeabouttheStreettodayisthatthismeritocracybothvaluesandrewardsitstalent.SmartdrivensomewhatcompulsivepeoplecanbecomeindependentlywealthyonWallStreet--buttheStreetisnotaplaceforpeoplewhoarelookingforjobsecurityandapensionatage65,or9amto5pmlifestyles.Noone–letmerepeat,NOONEretiresonWallStreet.WhenBradjoinedMorganStanleyGroupin1985,hewasthe32,330themployeesincethefoundingofthefirminthe1930s–tenyearslatertherewereonly300totalretireesatMorganStanleyorlessthanonepercent.However,youdon’thavetoworryaboutoldWallStreetpartnersstandingonstreetcornersaskingforsparechangeintheirthreadbarepinstripedsuits.AnaverageWallStreetpartnerwillmakeapproximately$2millionperyear–muchmoreataGoldmanSachs,somewhatlessatalargeuniversalbanksuchasJPMorganorBankofAmerica.Thisisprettygoodpay–onaparwiththatofCEOsofmidsizepubliccompanies.Don’tExpecttheCareertoBeEasy.WallStreetisn’tgoingtoprovideaneasylifeforyou.Lastmonth,BradspentthenightinNewYorkCityatahotelnearTimesSquare.HecouldlookintothewindowsoftheMorganStanleyHeadquarters.At3:00aminthemorning,heawoketoseealltheinvestmentbankingfloorsofMorganStanleystilllightedwithlargenumbersofeagerMBAsandearnestundergraduatesbusilyproducinganalyses,draftingprospectusesandproducing“pitchbooks”forclients.Frankly,thelifeofanewsecuritiesindustryemployee–eitherMBAorundergraduate–ismiserable.Youwillworknightsandweekends.Ifyouareininvestmentbanking,youwillflyalloverthecountryandwilldealwithselfimportantclientswhowanttheirdealsdone“yesterday.”And,asonenewMBAconfessedtome,“youwillcomehometoamicroscopicapartmentinManhattantofindthemilkinyourrefrigeratortohaveturnedgreenfromageandspendyourfreetimetryingtogetyourlaundrydoneinpreparationforthenextbusinesstrip.”Youcertainlyareunlikelytohavemuchofasociallife.Ifyouaremarried,yourwifeorhusbandmayfeelthatyouhaveabandonedthem.Ifyouaredating,bepreparedtobedumpedbyyoursignificantotherafteryou’vecancelledyourdinnerplansforthefourthtimeinaweek.iYouwillbeluckyifyoucankeepahouseplantalive,muchlessarelationship.Atwork,youwillattempttoprovethatyoucanspendungodlyhoursatyourdeskonvirtuallynosleepandstillhaveasunnydispositioninthemorning.Ifyouareininvestmentbankingorequityresearch,mostofyourdinnerswillbecoldpizzaorChinesetakeoutandeatenatyourdesks.YourcolleagueswillbesupersmartandconstantlytypingmadlyontheirBlackberriestoclientsandcounterpartiesandattemptingtobecome“one”withtheirExcelspreadsheetwhilespeakingoftheirundyingloveforinvestmentbanking,tradingorequityresearch.Please,don’tbelievethatyoucantranscendthesenormsandcarveoutsomehappinesswhilewaitingforthebigbuckstoarrive-youwon’tbeableto.IsThereAnythingGoodAboutWallStreet?Yes,MuchoftheTimeitisReallyFun.InInvestmentBanking,thebestpartofanewhire’searlyyearswillbebecomingpartofa“highpowered”dealteam.YoumaymeetwiththeCEOofamajoraerospacefirmadvisingonacorporaterestructuring.YoumayflyinapalatialcorporatejettoBritishColumbiatopitchtolumbercompaniesandbewhiskedaroundinlimousine.Youmaybecomeaherobecausetheobscurefinancialdatathatyoufoundinanarcanefinancialfilingorthesophisticatedanalysisyoucompletedbecameakeyfactorinasavinganacquisitiondealofamajorclient.Andovertime,youwillfindyourselfrunningmoreandmoreofthede