Under the Kimono

The Sheep of Wall Street

Just last month I left my job in investment banking to join a tech company. As my admittedly somewhat obnoxious, entirely dorky photos would indicate, I am very excited about the change.

I sit here spending my Sunday morning in a pleasant coffee shop as opposed to a cubicle. The transition, however, is far more profound than a lifestyle change and merely working less hours. Investment banking might be for some people (and I take nothing away from those people) but I am not sure it was for me. In truth, the abrupt death of a Bank of America intern aroused a rather strong and visceral reaction in me.

I believe there is a great deal of disillusionment over what banking is and what it is not. As often stated in banking, I will attempt to show you “under the kimono.” As a caveat, I worked in SF not NY; my co-workers did not “pop bottles” on the weekend. This, however, has made me more aware of the banking predicament, allowing me to holistically evaluate the merits of the job beyond dollar signs and the guise of status.

In SF, an I-banking analyst is forced to be more self-aware and a bit self-conscious. Having had friends that worked at Facebook or Google, I missed out on the July 4th trips to Tahoe, the opportunity to visit my family at a whim (or, for that matter, even during the holidays), the ability to visit a long-distance girlfriend and the thrill of feeling like I was part of SF’s grandeur — its constant innovation.

At the time and in the moment, I was not that bitter. I was too tired to care. In fact, my parents marvel at how I “took it on the chin” for so long. I guess I’d never had a normal job before, a job in which quasi-indentured servitude was not the norm or expectation. It is possible that just a taste of this new tech utopia has allowed me to see things more clearly. The journey to Mars (as I like to call this strange tech utopia I am now part of) was not one without bumps in the road.

It began in the beginning of my junior year at Wharton. Swept up in the “running of the bulls” spirit, I applied to almost every financial institution that came to recruit at Wharton (83!). For over a week, I interviewed from about 9am to 5pm everyday. I chose to not go abroad so that I wouldn’t miss out on this hysteria (something I probably now regret).

In hindsight, the interviews were quite frankly ludicrous. Interviewers, wearing their slicked back hair (as you would imagine), custom-tailored suits and emblematic Ferragamo shoes and ties strut through the campus as though they were international ambassadors as opposed to more-than-likely hungover recent grads (excited to be out of their NYC office and even more excited to have gone to Smokey Joe’s the night before).

In order to succeed in these rather perfunctory, poorly designed interviews, the formula is simple: memorize the book. The book is the vault guide or, for those who can get their hands on it, Mergers & Inquisitions. What does the book teach you?

1. Fake it till you make it — i.e. If you don’t understand it, memorize it
2. Know your story. Why, from the moment you were born, you knew you wanted to be in Investment Banking? (It must’ve been that 1st grade lemonade stand)
3. Don’t ask about bonuses (if you have to ask, you won’t be getting one)
4. You haven’t earned your Ferragamo tie yet, so don’t wear it

Each year, hundreds of Wharton kids highlight, annotate and, of course, memorize the book. Mind you, this preparation comes weeks even months before anyone knows if they even have an interview. The process for determining who are the chosen interviewees is one that should surprise no one. With 500 people each applying for the same positions, the criteria is the following:

1. Who do you know?
2. How high is your GPA?
3. With so many resumes dropped, there really isn’t much of a #3…maybe you should’ve spent less time pretending to be involved in the Wharton Undergraduate Real Estate Club : /

After a number of interview processes, I landed in the tech group of a large bulge-bracket bank. Indicative of the impermanence of the industry as a whole, both my interviewers had moved on to greener pastures by the time I arrived that Summer.

I arrived in SF with a spring in my step, some s-w-a-g. I left without it.

Holding my finance abilities in high regard and naively believing in meritocracy beyond anything else, I disregarded the tales of all-nighters in favor of working half-reasonable hours, realizing that actually getting to know a city beyond the confines of a cubicle would serve me better in the long-run when I would have to later decide in a rather short period of time if I would accept a full-time offer to return to SF. My fellow interns adopted a different approach.

During the first month of the internship, my peers spent night after night slaving until ~3am to meet an arbitrary, often specious, deadline. During this time, I am sure my peers scorned me. The truth is I had no idea that they were working so late. When I left at nine, I couldn’t believe I had worked so hard. I was only 21, and I was working 12 hours per day. So what were they doing there so late?

While an ER doctor attends to a patient gushing blood from a bullet wound, a banking intern inputs a series of numbers into a spreadsheet or annotates a stock chart. It is often unclear whether these materials will ever see the light of day but what we do know is that the boss wants to see it first thing in the morning but irritatingly and humorously insists that no one should “burn the midnight oil” to get it done.

In general, interns are asked to 1) profiles companies 2) do “comps” 3) do s*** that no one else would do by choice.

1. For context, a profile of a company is usually a single slide that gives an overview of the company’s business, financials and management. As an intern, I was asked to profile dozens of companies. This is a task now outsourced to India by the investment banks though still asked of interns.
2. Comps is a way to compare companies in a financial sense. It is nothing more than a game of financial “Where’s Waldo?” One simply opens up a bunch of financial statements, then control F’s a number of words and inputs the corresponding number into the respective cells. These cells are then automatically inputted into formulas to produce the desired output. This task is also now outsourced to India though still asked of interns.
3. What is s*** that on one else wants to do? Well…not important because this is now outsourced to India thought still asked of interns.

I worked at a bulge bracket bank, meaning basically a large established one. Why am I telling you this? To let you know that my experience is not unique; in fact, my intern experience is considered to be the gold standard in finance internships.

Almost halfway into my internship, I got the news that my s-w-a-g needed tempering. I was quite candidly asked, “Do you think you are too cool to be here after nine? Do you realize you left before a full-time analyst on more than one occasion?” The initial question was certainly a tough one. After all, I was proud of the fact that I wouldn’t as graciously give up my soul, my youth or my weekends. When the deal closed or the powerpoint completed, I neither made a commission or attended the meeting for that matter. Imagine a situation in which the person who spends the most time working on a project is the least likely to witness the final deliverable — the meeting with the client. This is the norm in investment banking.

I cannot be certain what caused the BoA intern’s death or what he was working on. Regardless, I hope we can all agree it is an outrage. A job is just a job. Regardless of any health condition he may have had, I am not sure if there is any other profession that would have allowed someone to work so hard. Anywhere else, he would have been forced to go home, perhaps even rebuked for working too many overtime hours. How does a culture that allows something like this to happen continue to persist (and by persist I really mean attract some of the smartest individuals from the best schools in the world)?

The finance oligopoly has a powerful weapon to fear: Change. In general, change is good; change is bad for the banks. The Nasdaq, an electronic platform for executing trades, typifies change for the banks. With it, the markets became more efficient and no longer relied on human intervention to help execute transactions. This is good. On the other hand, the banks lost money as they were forced to charge lower fees and downsize (something banks have forced to become adept at).

To refocus a bit, in the latter half of my internship, I made it a goal of mine to be the last person to leave every night. The quality of my work did not improve; in fact, I would argue it went down. My relationships deteriorated. I went from building a strong network of people in a new city to instead billing overtime hours to invisible faces (as the interns and analysts were the only ones who stayed after dinner as everyone else usually went home). It was, however, hinted at that our badges to enter and exit the building were monitored.

Adding to this Orwellian 1984-esque environment was an often-times, deleterious competitive dynamic amongst the interns. In general, banks have more interns than full-time spots available. Thus, if one of us was in the office, we all had to be there or fear being perceived as ”lazy” and, thus, fear being the odd-man-out on offer day.

This is the banking predicament: the so-called game of “Misery Poker.” In order to get a full-time offer given my initially perceived poor attitude, I sought to have the winning hand (i.e., tolerate the greatest deal of misery). This was important because we felt that failure to get an offer would put us in an almost impossible position to get a job after we graduated. I drank the Kool-aid and assumed this to be true.

I got the offer. Sometimes, I wish I hadn’t. Failure to get the offer would have forced me to reconnect and recalibrate with my “id” and to instead go and do the things that I was just more passionate about. I take the blame for that. Instead, I was given just enough time to make it almost impossible for me to reject an offer and have another job lined up. Of course, the banks are aware of this fact.

And so I accepted the offer to return as a full-time analyst after graduation. I signed up for two years.

Two years became one. Misery poker wasn’t for me. The game is twisted and non-sensical. We envy those who have it worth than us, wondering why one analyst hasn’t gotten to go home before 4am in three consecutive weeks. Is he better at his job than me?

I folded my hand before the turn, before the second year. Hopefully, I can elucidate the game for those who are now in the same shoes I once filled (which might be Ferragamo’s for those precocious financiers).

There are a couple of key questions to ask yourselves:

1. What drives you? Are you motivated by money? If yes, there is no other profession that guarantees you such a direct path to significant wealth. Be warned though, the days of excessive bonuses are over. On an hourly basis, you will earn very close to your peers. Yet, annual compensation will increase each year as you progress upwards.
2. This brings me to point #2. Do you like very explicit direction over a less structured environment? At the intro levels, you will be asked to “process” work. “Re-creating the wheel” (as often uttered in banking) is not encouraged. Most would rather adhere to the notion of “if it isn’t broken, don’t fix it” and, quite frankly, you don’t have the time to do otherwise. With that being said, some people operate better under more direction. In contrast, I might be asked in my current role to come up with a business insight / project without any guidance. Not everyone enjoys less structure.
3. Would-you-read-about-it-in-your-free-time” test. When interest rates go up 1%, do you give a f***? Would you actually read the WSJ in your free time (do you know what WSJ stands for?) or was the online subscription just a Bar Mitzvah present? Candidly, I read tech blogs not the WSJ. I think this question helps one to understand if they are really in the right industry after all.
4. Do you “believe” you want to do Private Equity? If the answer is yes, I encourage you to really understand what it means beyond an all-in compensation >$200K. If the answer beyond the monetary rewards is still yes, then banking might also be for you. It is undeniably the most direct and clear stepping stool to get into PE though the consulting route is one increasingly traveled.
5. There are other reasons to go into investment banking. You will learn things that are likely not discussed in an informational session. You will learn how to work with all types of people and to navigate large organizations. This is a very good skill to have. You will develop methods to surmount an impossible number of tasks. You will have to become organized. These are transferable skills. I myself learned more about the ad tech industry than I could have imagined, and I am grateful for this.

Banking can be good. You are exposed to a ton of different companies and industries. You can actually interact with C-level people but most often people don’t. If you don’t and want to, you have no one to blame but yourself and your failure to speak up.

It is the banking culture — this game of misery poker- that is bad and that must change. So, here are some tips from someone who has gone through it.

Once you’ve bought your chips and entered into the game of misery poker, I encourage you take your chips off the table and play a different game.Re-write the rules of the game. You are more important than you know.

Once you have a full-time analyst offer, the pendulum of leverage swings into your hands. Outside of a Managing Director (the boss), who in theory holds the relationships that bring in the revenue, I believe the analyst is the single most important cog in the machine. You are one of the few who can really produce or process the deliverables (i.e., powerpoint and excel models) and those are often the only things the client sees.

I have heard stories of analysts working with people above them who do not know how to even change the color of a powerpoint text box from white to blue. This is a good thing for you. This is what makes you important. This is leverage. At first, you will have to earn this leverage by proving yourself. This might come in the form of creating models and outputs so complicated that they would require a hundred page user manual — make yourself valuable early on!

Reach further in securing this leverage by appreciating another poker analogy. As in poker, there are times to underplay and to overplay your hand. I suggest you lean in the direction of underplaying your hand. Working to be the fastest (not the same as best) analyst will simply earn you more work. You will have plenty of deals to work on. Eventually, you will not need or want more.

This is just one example of how to re-write the game of Misery Poker. It all comes back to leverage. Sure, you will have a rough night or two (or three…) but the misery can be contained. Analysts as a class can also learn a great deal from the financial institutions themselves, namely from the LIBOR scandal. Imagine if all analysts got together to fix the number of hours they would work (like a union?!?)…

What’s the point of this post anyways? In my candidly incoherent, stream-of-conscious state, I think it is a desire for change. It wasn’t easy for me to make a change. I had to first win back my time. In those couple hours I won back, I went through every Codeacademy lesson, began writing again and was fortunate to meet a number of people in tech that helped me find my way.

I am a big fan of the notion of “paying it forward.” Hopefully now, I can help others make a change if they so desire, because when I read the following I felt change is more than ever needed especially on Wall Street:

‘When I asked senior executives across Wall Street why it had to be this way — why you couldn’t hire twice as many young workers, pay them each half as much, and create a more reasonable work environment for everyone — their answers often boiled down to “because it’s always been this way.” Like older frat members running a pledge process, senior bankers remembered being mistreated and overworked as young analysts and viewed it as a galvanizing experience that confers special status, and that should be passed on to the next generation.’

- NY Magazine

…which reminds me a little bit too much of this…

***This article represents only my personal views about the entire industry and is not intended to rebuke my previous employer or those that work(ed) there. There are many individuals at this employer whom I hold in high regard, have great respect for and continue to have close friendships with. Unfortunately, it is an industry in which a couple people can contaminate the well. Also, this is just my experience. I would be interested in hearing yours.***