Life After MBA — The Story of an Investment Banker
This is an article in the Life After MBA series published originally on Just Rokket website. Let me know your views in the comments.
My name is Arjun and I am an Investment Banker but this was not the case when I started my journey. Born in a family that belonged to the lower middle class strata. My name was the impersonation of Arjun, the hero in the greatest epic of Hindu mythology — the Mahabharata, my mother chose for me the same name on my birth. So, the underweight little baby that I was, already had heavy words like ‘independent’, ‘ambitious’, ‘determined’ and several other adjectives tied to my name and expected from me.
Quite comfortably carrying the burden on my fragile shoulders, I fell in love with mathematics in the first standard itself. That was enough to convince my typical Indian parents that I was ‘ambitious’ enough and could justify my name one day.
As time passed, I became permanent among the top three rank holders of class and that inevitably decided my fate to land up in engineering. Mechanical engineering was the branch I chose, thanks to my first love — numbers and second love — physics. Well, yes, you are right, after choosing Mechanical, there was, indeed, no scope for a third love!
To my dismay, mathematics and I went through a tough phase during my engineering days. It was no longer about numbers and I had to memorize formulae which were the length of an entire page. Okay, at least half a page!
During my third semester of engineering, I learnt about stock markets. I must admit that it was money which got me attracted to it initially. Intrigued by the reasons of stock movement and how the art of tradingcould be manipulated effectively in order to earn huge sums in the stock market, I began reading books on trading. I also took the pain of joining free online courses on Business and Finance which I thought could help me gain a better picture of the market. As I diligently completed every course, I found myself more and more inclined towards Finance. The concepts made so much sense with the support of numbers that I found myself engaged in those tutorials for hours in the weekends. I cannot deny that the mathematical base of Finance was also a driving force in this regard. It took a year of rigorous reading that made me finally decide that I wanted to pursue a career in Finance.
Having decided my career path, the next big thing was the entrance test. I was targeting IIMs and few premier B-schools of India and therefore, I chose CAT to decide my destiny. It was towards the end of my fifth semester that I had begun preparing for CAT, which meant I had less than a year at hand.
From taking coaching to solving books and joining test series, I did everything that my seniors advised me to. I left no stone unturned to get admitted into my dream IIM. However, CAT treacherously gave me a 96 percentile which was low enough to shatter my dreams and still high enough to keep hoping and pushing my luck.
I must tell you that I already had three sins to my name — Male, general and engineer.
For those who are unaware of it, let me tell you that this is the worst combination for a CAT aspirant as it reduces your chances of getting selected by a huge amount. However, some of my good deeds in childhood called ‘academics’ came to my rescue and I, miraculously, got a call from one of the older and most prestigious IIMs.
Though the PSUs visiting the institute for campus recruitments with fat packages lured me, I chose to take a giant leap of faith and stick to the only call I had. Once again, preparation began in full swing and I devoured all the newspapers and magazines I could grab hold of. Fortunately, being a debater since school, I used to keep a track of all the happenings around me and that helped me a lot in my WAT and PI rounds. Believe me, they can ask you anything and everything!
I consider myself extremely fortunate and blessed to have converted the only call I had. That was the first milestone I had achieved — a place in an IIM.
IIMs have a common course for all in their first year of curriculum and only in the second year, they provide subjects based on specializations, considering your performance in the related papers of the field during the first year. I was very clear on this front from the beginning and therefore, gave my entire self to subjects of Finance. I can say it bore fruit because I managed to get a summer internship in one of the leading investment banking firms — XYZ.
Allotted in the field of equity research, I hoped to learn about the different sectors and their valuation methodologies. I was also keen on knowing how target price for a stock is determined using future forecasts besides gathering information related to the macroeconomy, sector or company which can be converted to quantitative factors and factored in the financial model.
But, my internship offered me much more than that — attending earnings release conferences of companies, working on modelling as well as valuation and gaining an in-depth knowledge of the various sectors of the field. The hands-on experience of the work of a Research Analyst had immensely helped me to understand the correlation between public information and market movements. Apart from that, I also got to understand that valuation methodologies are a mix of qualitative as well as quantitative factors. Sometimes it is not completely based on numbers and rather, the positive sentiment associated with a company that drives the rating much more than numbers, even if the numbers don’t justify. Knowing that research is more about conviction and belief in the structural aspects of a company rather than just pure numbers had left me baffled.
Getting the most out of my two month long summer internship, I must admit that XYZ had helped me effortlessly rise in my academics in the second year. After a hands on experience, my concepts became much stronger and better.
Luck had never left my side and XYZ chose to absorb me as one of their full-time employees. I joined the firm soon after I had received my Post Graduation degree and immersed myself completely in the hectic schedule of an investment bank. A year has passed since then and a typical work day usually begins with tracking the news, company information or any latest development that was reported the previous day after market or earlier that day. Any movement on that front requires factoring in the numbers and then publishing a report based on the same, usually, accompanied by a buy-sell recommendation. These reports are then consumed by the buy side firms to make investment decisions.
A day in the life of a Research Analyst is typically very busy as a good number of companies are present in the coverage of a single analyst. Especially, during the earnings season, things get pretty intense. But then, the charm of equity research is unparalleled as every day is a new day in the life of an analyst and no matter how well you plan for the next day’s activities, things are meant to go haywire.
I frequently come across questions asking if I am happy with my job considering the long hours of work and effort I have to put into it.
My reply to them remains constant — “You have an influx of new challenges to deal with every day and therefore, no two days of my work life is the same. That’s the best part of my job which keeps me going.”
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