A Stark Realization

I’m well aware that I need to post. Even my associates from across the pond have noted that I haven’t posted in awhile, and they’re usually too busy planning when to use their 9 months of a vacation a year to notice. So, dear reader, here marks the triumphant return of Convertible Notes.

Let’s recap what has happened in the past 2 months that merited mention:

1) New analyst class came in – always cause for hilarity (“what’s TTM stand for?” “good question, you should blast email the firm, I’m sure someone out there knows…and make sure to include VPs and above on the email too”);

2) New associates in the group – always interesting, especially from a 3rd year’s perspective;

3) Work has sucked – no summer downtime here;

4) This and this; and

5) I took a vacation – though this was decidedly “unbanking” of me to do, I mention it only because I became intimately familiar with my company’s VPN system.

Now there, off the top of my head are five (5) stellar subjects with which to fill many posts. Of course, I got busy (and lazy) and didn’t really know what angle to take when trying to write them. It’s easy enough to lambaste the 1st years, but that gets tricky because I know one of them reads this. Plus, it’s the dumb one, so if I make fun of him, he’ll know. Not good.

So what am I going to talk about today? Not really too sure. Well, since we’ve been apart for awhile, maybe I should update you all on my outlook on banking; it has changed since, well, most relevantly, bonuses were paid out.

Banking is tedious. The most underrated incentive to stay in banking is the promotion track. Most people talk about bonuses as if those are the end-all-be-all of banking incentives, and they are, but the idea that in two years you’ll be promoted to a position that doesn’t have to spread comps is crucial. The monotony of banking is lost on new Analysts; everything is new and crucial and it takes maybe a year and a half before you realize that the actual work you’re doing sucks. New types of projects or new challenges are just as crucial factors as obscene bonuses to get me to stay in banking. Of course, when the flow of these new assignments dwindles, I naturally become ornery. Which led me to this calculation:

Assuming bonuses stay static from this year to next and that I quit this job now, 4 months after the performance cycle ended, I would be losing (4/12 x $100,000 = ) $33,333. That’s right, to leave banking now would mean I most likely forfeit $33,333. Discount appropriately (25%) and that’s worth $26,666 right now. That’s the price of a car! Or the down payment on a really nice car!

And I realized, more than anything, I’m full of shit. It’s the bonuses that keep me here. New assignments are great to break the day to day rigor, but they aren’t enough. The new challenges make me like my job, but I don’t love it. And so, to answer the question of why someone would stay at a job they don’t love…well, it’s the money.

The Printers

I’m at the Financial Printers today. I find it hard to explain to people who haven’t had the pleasure of attending these sessions what actually happens here. In a nutshell, before a company files most major public documents, they spend 2-3 days at the Printer offices, tweaking, editing and rewriting their drafts so that they are (from Management’s perspective) consistent with the Company’s objectives, (from the banks’ perspective) filled with enough marketing points that the deal is sellable to investors (if there is a deal associated with the filing), and (from the lawyer’s perspective) free of liability.

Of course the question should be asked, why do you need to attend sessions at a professional word processor, especially when said word processor changes hundreds of thousands of dollars over the 3 days to host you? Can’t you just word process yourself? Well, I don’t have a great answer to this question, suffice to say that long ago someone decided that this was the best way to file documents, probably only because it forced everyone to be in locked in a room till the job got done.

Anyway, Printer sessions are largely a waste of time unless you’re the Company’s counsel, Company management or the lead banker on the lead bank. I am not any of these. So, largely for my edification, here is a summary of my activity at the Printers today:

7:40AM – Traffic wasn’t bad, so I get in 20 min early and grab a corner table spot (near the door). Grab coffee, OJ, smoked salmon and lox for breakfast.

7:50AM – Signed on VPN, answered some emails, checked Fantasy stats, set Fantasy roster, read CNN.com [Note to Lou Dobbs: stating the obvious hardly merits mention in a major news source; next time please offer us something with a real conclusion (I’m pretty sure this article would have earned me an C in any PoliSci or IR class I took in college, and that’s only because I went to one of those fancy schools that inflated grades)].

8:20AM – Per the usual, we get started 20 min late.

8:35AM – Make my first value add attempt (VAA) of the day: “please add comma to third line of paragraph one, after third word.” The change is accepted. Score one for me.

8:50AM – Second VAA of the day: “can we add a modifying clause to this sentence?” Suggestion is struck down; I tried to fly too high. Better stick to comma changes.

9:20AM – Feel remorse for picking on Lou Dobbs earlier. I’m a firm believer that, when giving others a hard time, you should not go for low-hanging fruit, and that’s just what I did. Sorry, Lou. Yes, I’m aware that there was an implicit insult there.

9:45AM – HA! Another successfully converted VAA with a comma change. I even got a “good change” from the lawyer. I think he meant it the same way you say “good catch” to a dog after it catches the frisbee for the 15th time of the day.

10:00AM – It’s been 1.5 hours and we just got done reviewing page 4. Awesome

11:00AM – It’s been 2.5 hours and we just finished page 9. By the way, this is a 150 page document. If we assume we keep this recent rate of 5 pages per hour, we will finish reviewing this document 28 hours. Working around the clock, we’d finish tomorrow at 3PM. This is also under ideal conditions.

11:25AM – Getting a little bored. Here are some stats for the participants of this Printers session (n=16)
 Blue shirts: 44%
 Males: 69%
 Rolex’s: 25%
 Comb-overs: 13%
 Blondes: 0%
 Polo shirts: 19% (Company Management, duh)

12:00PM – Just got this link from a friend. Awesome, that killed 2 minutes. You know, I’ve yet to meet a girl who fawns over the fact that I work in banking. This is a good thing; I'm not about the gold diggers.

12:30PM – Boss got here…can’t really post too much.

Fuck, ok, it’s now 9AM on Day 2 of the Printer sessions. I stopped writing because, well, I read this and got a little freaked. Then, around 3AM last night when I had a little down time, I thought about it some more and realized that this person is a complete dumbass. Jeeze, she even posted a picture of herself on the blog. It should come as no surprise that she worked for an accounting firm.

***

Anyway, truth be told, reader, this is where the post breaks down. As I sit in my cubical, now a couple days later, I’m not really sure what happened those last few days at the Printer. Like much of banking, as the hours dragged on and as bankers and lawyers alike fell into a caffeine / word-processing induced haze, memory became indistinguishable from delirium and for the life of me, I can’t tell you what happened in the intervening hours.

All I know is that, like some alien abductee recounting trauma years later, I am only now remembering that I had 72 hours of my life stripped away from me.

Briefing Advice

I can’t stress this enough: always be briefed on the meetings you attend. Always. It’s honestly the difference between looking like a moderately “with-it” person and a complete and utter dumbass. To clarify, looking like a complete and utter dumbass is not a good thing when representing your firm. It’s also not a good thing in general.

Even the smallest tidbit of information is important. It’s the difference, say, between knowing that you’re talking to the CEO and making insipid small-talk with someone, only to realize 5 minutes later when he hands you his business card that he is, in fact, the CEO. Note to me: just because he wears cowboy boots does not mean he works in sales.

Additional note to me: talking about the weather when trying to hold a conversation with a girl is bad, doing the same with a company executive is even worse. These people take time out their busy days to hold meetings with investment banks in order to hear glorious strategic and financial insights and recommendations – they do no hold meetings with investment banks for any of the following reasons:

1) to talk about their kid’s little league team;
2) to talk about the commute;
3) to talk about their childhood; and

to talk about any of these is a ginormous waste of their time.

In other a related story, I am a complete and utter dumbass.

I May Get Fired

...not for incompetancy or anything like that. Just because I keep asking my performance manager when the hell I'm going to learn my numbers, and I can only imagine how annoying it is for him, given the fact that I'm getting pretty annoyed asking. There are stories from back in the day of such slip-shod HR work that Analysts and Associates alike only found out how big their bonuses were when they checked their bank account statement at the end of the month. This has the potential to happen to me. In the scheme of things, it doesn't much make a difference whether I find out now or find out after; it won't change how big or small my bonus is this year.

The issue I have is this: why do we have to be nearly the last bank of the Street to report numbers to its minions? Seriously. A little team work would be nice. A little quid pro quo. For example, I finish this Committee Memo, and you tell me my numbers. Does that work?

Training Wheels

I was at a BBQ yesterday when someone remarked to me that, yeah, so-and-so reads your blog. So-and-so happens to be an Incoming First Year Analyst. I had a moment of panic when I realized he might not be enthused about some of the banking insight he’s read here, but then I learned he’d already started spending his signing bonus, which means we have him locked in until December. Ha.

So, Incoming First Year, this post is for you. Plus, it gives me an excuse to bring up Training – which, as a Second Year, isn’t really a subject I could organically bring up in a blog since I am two years removed from it. To the uninitiated, Training is a 3-4 week period held by banks in their New York offices to impart their vast library of protocols, procedures and company culture upon recently graduated college kids. They will teach you to do comps, how to use various research tools, various company-specific macros and programs and most of all, they will tell why you are working for the best bank on the street.

Here’s the secret: only 5% of the things you learn will actually be useful. And all of that 5% will be reiterated to you over and over again once you actually start working. So please, Incoming First Year, DO NOT take Training as seriously as they tell you to take it. Take all of that alpha-male personality that got you hired in the first place, that need to impress college professors that earned you the inflated private university GPA, and tuck it away until it will actually be useful again. Which is to say, tuck it away until you start work and I start giving you things to do – then take it back out and impress the hell out of me, because I will be reviewing you come next June.

Back to Training – I’m sure you’re asking at this very second, well, if I’m not supposed to take Training seriously, what do I do for 3 weeks? Good question, so here are some tips:

1) Attendance Policy – I was dismayed when I learned our firm had started instituting an attendance policy last year. Complete crap. Listen, they will pretend to have leverage and tell you that your attendance will be reported back to your performance managers, who will then decide how to punish you once you start work. Here’s the catch – you’re performance mangers don’t give a damn. As long as you come to work and show some level of competency, they could care less how much training you attended or how tardy you were. The only reviews that matter for you are the ones next June, and don’t think anybody is going to remember, much less care, how diligent you were during Training.

2) Do Not Get Intimidated – Specifically, do not be intimidated by other Incoming First Years, especially those who majored in accounting. They will nod smugly during Training as the instructor goes over the more arcane and esoteric points of accounting, meanwhile, you will be sitting in your chair wondering how you will ever learn this crap. Listen, you don’t really need to know it. Again, of all the Accounting Principles out there, only 5% will be directly applicable to your work, and another 2% may crop up on occasion, but you can always look those up in text books when you need to.

3) Take Advantage of the Free Stuff – Well, you wanted to live the life of a banker, now’s your one chance to do it without putting up with the work load. There are more free meals during the 3 weeks than actual meal times. There are dinners held at restaurants that you would only take your girlfriend to on yearly anniversaries. And every function has an open bar. Do not pass this up. Do NOT drink yourself into oblivion, mind you (or even to the point where you think hitting on a co-worker is advisable), but at the same time, don’t shy away from the freebies. Embrace the freebies.

I think those are the salient points here. Bare in mind, I’m giving this advice within the context of knowing Incoming First Years are not complete morons, and can show some level of self-restraint and common sense. Within that context, have fun during Training.

Attn: Recruits Re: MySpace

Some unexpected departures and increased workloads have led my firm to attempt a mini-recruiting drive to fill some needed analyst spots (though, before I continue, I should mention that this point will not be a solicitation to apply for a job; if anyone is addled enough to apply for the Analyst position through this blog, well, I don’t want to work with you). Anyway, this whole recruiting effort is great; it teaches accountability. For example, IF you apply for a job at a firm, you should be held accountable for anything and everything you post on your facebook.com, myspace.com, friendster.com or match.com profiles. Trust me, we check these things.

I don’t believe that this is online stalking per se – it’s more along the lines of performing proper due diligence on a candidate before accepting them into our ranks. As great as the interview process is (and trust me, asking questions like “how many ping pong balls fit into a 747?” and “you have two candles, one will burn in 45 min, the other in 15 min, etc…” are excellent at weeding out the brilliant from the simply autistic), it is still lacking in some regards. There is no way to quantitatively tell during a 6-hour Super Day exactly what the breaking point of a candidate will be. Will he break down after 37 consecutive hours at work? 39 hours? 42 hours? Moreover, how can you “manage” the candidate to push back that break down number? See, these are things we really need to know, and looking at profiles on the internet does more than just satisfy some latent voyeuristic need, it provides us with useful information.

Here are some common things we notice on profiles…

1) The guy flexing. While this probably indicates some deeply buried insecurity, it also goes hand-in-hand with the need to prove oneself. Anyone who will be driven by the need to look over at the Analyst next to them and talk shit about how their LBO model could run circles around the other’s will be a hard worker. Then again, I hate people like this, so they won’t be hired.

2) Party pictures. I actually think these are OK. There is nothing wrong with partying or blowing off steam. Hell, it’s even necessary at times in banking. Plus, I want to work with people who can have a good time.

3) Type Formatting. I can’t stand aLtErNaTiNg tYpE cAsE or instant messaging syntax (e.g., LOL, ur, wit, etc…). The former suggests a lack of understanding of appropriate formatting and will result in shoddy work (the last thing I want to do is review a first-year’s model, only to find that I have to sift through pages of inconsistent formulas, mislabeled categories, misused caps lock and improperly sized cell widths), while the latter suggests laziness (if you can’t type out the whole word, you’re not going to handle working more than an 8 hour a day).

4) Relationship status. While we don’t discriminate on this per se, having a significant other naturally detracts from the amount of time one wants to spend in the office. On the other hand, having a significant other is a drain on cash flow, so these people will be incentivized to get that big bonus at year end. It’s a wash here.

You also have to be careful what you write in your profiles. There was a candidate a couple years back that listed the following things under his “Favorites”: (i) dream care: E55 AMG and (ii) favorite drink: Patron silver, chilled. Well, (i) tells me that he has low standards (it’s like saying your dream girl is Tiffany Amber Thiessen…I mean, it’s not a bad choice, but out of all the girls in the world, that’s the pick? Really?) and (ii) tells me that he can’t handle his liquor (you need silver tequila chilled? Maybe you should slow down and stick to drinks with umbrellas in them, big guy).

Anyway, these aren’t huge issues in the scheme of things; if a candidate rocks, then we won’t be dissuaded by his listing of Kelly Clarkson under the music that he listens to (or, to be fair, if it’s a girl, we won’t be dissuaded by Linkin’ Park appearing in her profile). Ultimately, these things just provide Analysts with something fun to laugh at during recruiting season.

I've Got (Some) Soul

A couple things have been brought to my attention over the last couple days:

1) I don’t really post on music anymore. The reason for this is pretty much that I have no real insights that I find interesting enough to fill an entire blog entry. So let me just sum up some musical thoughts very quickly: (i) Silversun Pickups have their debut album coming out on July 25th – I have not been more excited about an album since the Pumpkins followed up MCIS with Adore; (ii) venues that I enjoy hearing music at (in order): Café Du Nord, Bimbo’s and the Fillmore, venues that I do not enjoy hearing music at (in order): Shoreline, Bill Graham Civic and Bottom of the Hill; and (iii) I think it’s OK that Steve Perry used vocal tracks during live shows - I’d much rather have my Rock n’ Roll gods stay Rock n’ Roll gods and not be reminded of their mortality.

2) My readership has grown by 1 or 2. Including people with whom I may work. I may have to be more discrete. May.

3) Smallchou’s scathing response to my It’s That Time of Year Again post, in which he refers to the “utter soul-lessness of investment banking.” I don’t really know how to respond to this extremely ill-informed and utterly short-sighted opinion. Look, if wads of cash, heaps of material goods and a penchant for unnecessary accoutrements can’t procure you a soul, then I don’t know anything anymore. Ultimately, I trust myself and my 13 years of parochial school to know that I do, in fact, have a soul and that material possessions and a latent-resentment of my profession do not relieve me of that essential essence. True, there was a moment there where I felt lost and dissatisfied, but I am happy to report that I now have my feet firmly planted on the ground (albeit with a soft-layer of Italian-formed calf-skin between my feet and said ground).

In seriousness though, aside from the long-hours and tendency towards the money-makes-it-worthwhile-ness of banking, and ignoring the fact that the powers that be are drumming up business because that’s what fills their pocket books (look, gas is getting expensive and M5’s get mileage in the low 8’s, so I don’t begrudge them this), the fact is that banks provide a needed service to companies looking to survive and grow. We facilitate or sometimes provide financings to small companies so they can commercialize product, we organize mergers or acquisitions between companies so that they can realize operating and development synergies and pass the benefits onto the consumer and we underwrite financings for larger companies so they can grow.

I don’t intend to present the “ends justifies the means” argument to support the premise of banking (admittedly, we are too far removed from the ends to justify our means), but I still feel it is salient to point out that what we do is not solely about making the rich richer. Moreover, I don’t really accept the premise that you can adequately argue whether a corporation has a “soul,” it kinda sounds like hippie-talk to me, and that’s something I can do without.

Furthermore, seeing as Smallchou’s comments stem from a trip to Napa Valley and the passionate viticulturalists there who love their job, I feel it incumbent upon me to mention that this was Napa Valley and there is virtually no old-school, stomp-the-grapes-in-the-barrel wine done there anymore. The people you talk to while wine-tasting are salesmen who are more driven to close a sale than they are to have a good bottle of wine come out of their cellars. Not that this is relevant or anything, I’m just regurgitating something a girl said to me once.