V a u lt C a r e e r G u id e t o In v e s t m e n t B a n k in g

is m a d e p o s s ib le t h r o u g h t h e
generous support
o f t h e f o llo w in g s p o n s o r s :
 Money magazine

Fortune

Library Journal

U.S. New s & World Report

New York Times

Forbes

SmartMoney Magazine

The Washington Post

New York Law Journal

USA Today
gchgh
 Competition on the Street and beyond is heating up. With
the finance job market tightening, you need to be your best.

W.B., Associate, Investment

Banking, NY
The Wall Street Journal The Wall Street Journal

R.T., Managing Director, SF

S.B., Financial Planner, NY

For more information go to

www.vault.com/finance
T h e P la y e r s
 W h a t i s In v e s t m e n t B a n k i n g ?

For more information on top investment banks and other

finance employers, go to the Vault Finance Career Channel
The annually updated Vault Guide to the Top 50 Banking Employers
Extended insider profiles and employee surveys for hundreds of banks and
other finance employers
Detailed 40-page employer profiles on top employers like Goldman Sachs,
Merrill Lynch, CSFB, UBS, JPMorgan Chase, Morgan Stanley and more

4
 W h a t i s In v e s t m e n t B a n k i n g ?

Th e G am e
 W h a t i s In v e s t m e n t B a n k i n g ?

(1) Providing liquidity

(2) Propr ietar y tr ading

W h a t i s In v e s t m e n t B a n k i n g ?
 Wondering what it's like to
work at a specific employer?
3 M | A .T . K e a r n e y | A B N A m r o | A O L T im e W a r n e r | A T & T | A X A | A b b o t t L a b o r a t o r ie
A c c e n t u r e | A d o b e S y s t e m s | A d v a n c e d M ic r o D e v ic e s | A g ile n t T e c h n o lo g ie s | A lc o
n c . | A lle n & O v e r y | A lls t a t e | A lt r ia G r o u p | A m e r ic a n A ir lin e s | A m e r ic a n Ele c t r i
P o w e r | A m e r ic a n Ex p r e s s | A m e r ic a n In t e r n a t io n a l G r o u p | A m e r ic a n M a n a g e m e n
S y s t e m s | A p p le C o m p u t e r | A p p lie d M a t e r ia ls | A p r ia H e a lt h c a r e G r o u p | A s t r a Z e n e c a
A u t o m a t ic D a t a P r o c e s s in g | B D O S e id m a n | B P | B a in & C o m p a n y | B a n k O n e | B a n k o
A m e r ic a | B a n k o f N e w Y o r k | B a x t e r | B a y e r | B M W | B e a r S t e a r n s | B e a r in g P o in t
B e llS o u t h | B e r k s h ir e H a t h a w a y | B e r t e ls m a n n | B e s t B u y | B lo o m b e r g | B o e in g | B o o
A lle n | B o r d e r s | B o s t o n C o n s u lt in g G r o u p | B r is t o l- M y e r s S q u ib b | B r o a d v ie w
n t e r n a t io n a l| B r o w n B r o t h e r s H a r r im a n | B u c k C o n s u lt a n t s | C D I C o r p .| C IB C W o r l
M a r k e t s | C IG N A | C S X C o r p | C V S C o r p o r a t io n | C a m p b e ll S o u p C o m p a n y | C a p G e m in
Er n s t & Y o u n g | C a p it a l O n e | C a r g ill| | C h a r le s S c h w a b | C h e v r o n T e x a c o C o r p . | C h iq u it
B r a n d s In t e r n a t io n a l | C h u b b G r o u p | C is c o S y s t e m s | C it ig r o u p | C le a r C h a n n e l | C lif f o r
C h a n c e L L P | C lo r o x C o m p a n y | C o c a - C o la C o m p a n y | C o lg a t e - P a lm o liv e | C o m c a s t
C o m e r ic a | C o m m e r c e B a n C o r p | C o m p u t e r A s s o c ia t e s | C o m p u t e r S c ie n c e
C o r p o r a t io n | C o n A g r a | C o n d e N a s t | C o n s e c o | C o n t in e n t a l A ir lin e s | C o r n in g
C o r p o r a t e Ex e c u t iv e B o a r d | C o v in g t o n & B u r lin g | C o x C o m m u n ic a t io n s | C r e d it S u is s
Fir s t B o s t o n | D .E. S h a w | D a v is P o lk & W a r d w e ll | D e a n & C o m p a n y | D e ll C o m p u t e r
D e lo it t e & T o u c h e | D e lo it t e C o n s u lt in g | D e lp h i C o r p o r a t io n | D e u t s c h e B a n k | D e w e
B a lla n t in e | D ia m o n d C lu s t e r In t e r n a t io n a l | D ig it a s | D im e n s io n D a t a | D o w C h e m ic a l
D o w J o n e s | D r e s d n e r K le in w o r t W a s s e r s t e in | D u r a c e ll | D y n e g y In c . | Ea r t h L in k
Ea s t m a n K o d a k | Ed d ie B a u e r | Ed g a r , D u n n & C o m p a n y | El P a s o C o r p o r a t io n
Ele c t r o n ic D a t a S y s t e m s | Eli L illy | En t e r g y C o r p o r a t io n | En t e r p r is e Re n t - A - C a r | Er n s
& Y o u n g | Ex x o n M o b il | FC B W o r ld w id e | Fa n n ie M a e | Fe d Ex C o r p o r a t io n | Fe d e r a
Re s e r v e B a n k o f N e w Y o r k | Fid e lit y In v e s t m e n t s | Fir s t D a t a C o r p o r a t io n | Fle e t B o s t o
Fin a n c ia l | Fo r d Fo u n d a t io n | Fo r d M o t o r C o m p a n y | G E C a p it a l | G a b e lli A s s e
M a n a g e m e n t | G a llu p O r g a n iza t io n | G a n n e t t C o m p a n y | G a p In c | G a r t n e r | G a t e w a y
G e n e n t e c h | G e n e r a l Ele c t r ic C o m p a n y | G e n e r a l M ills | G e n e r a l M o t o r s | G e n z y m e
G e o r g ia - P a c if ic | G la x o S m it h K lin e | G o ld m a n S a c h s | G o o d y e a r T ir e & Ru b b e r | G r a n
T h o r n t o n L L P | G u a r d ia n L if e In s u r a n c e | H C A | H S B C | H a le a n d D o r r | H a llib u r t o n
H a llm a r k | H a r t In t e r C iv ic | H a r t f o r d Fin a n c ia l S e r v ic e s G r o u p | H a v e r s t ic k C o n s u lt in g
H e a r s t C o r p o r a t io n | H e r t z C o r p o r a t io n | H e w it t A s s o c ia t e s | H e w le t t - P a c k a r d | H o m
D e p o t | H o n e y w e ll | H o u lih a n L o k e y H o w a r d & Z u k in | H o u s e h o ld In t e r n a t io n a l | IB M
K O N O f f ic e S o lu t io n s | IT T In d u s t r ie s | In g r a m In d u s t r ie s | In t e g r a l | In t e l | In t e r n a t io n a
P a p e r C o m p a n y | In t e r p u b lic G r o u p o f C o m p a n ie s | In t u it | Ir w in Fin a n c ia l | J . W a lt e
Read employer surveys on
T h o m p s o n | J .C . P e n n e y | J . P . M o r g a n C h a s e | J a n n e y M o n t g o m e r y S c o t t | J a n u
C a p it a l | J o h n H a n c o c k Fin a n c ia l | J o h n s o n & J o h n s o n | J o h n s o n C o n t r o ls | K L A - T e n c o
C o r p o r a t io n | K a is e r Fo u n d a t io n H e a lt h P la n | K e a n e | K e llo g g C o m p a n y | K e t c h u m
THOUSANDS of top employers.
K im b e r ly - C la r k C o r p o r a t io n | K in g & S p a ld in g | K in k o ' s | K r a f t Fo o d s | K r o g e r | K u r
S a lm o n A s s o c ia t e s | L .E.K . C o n s u lt in g | L a t h a m & W a t k in s | L a z a r d | L e h m a n B r o t h e r s
L o c k h e e d M a r t in | L o g ic a | L o w e ' s C o m p a n ie s | L u c e n t T e c h n o lo g ie s | M B I | M B N A
M a n p o w e r | M a r a k o n A s s o c ia t e s | M a r a t h o n O il | M a r r io t t | M a r s & C o m p a n y | M c C a n n
Er ic k s o n | M c D e r m o t t , W ill & Em e r y | M c G r a w - H ill | M c K e s s o n | M c K in s e y & C o m p a n
M e r c k & C o . | M e r r ill L y n c h | M e t r o p o lit a n L if e | M ic r o n T e c h n o lo g y | M ic r o s o f t | M ille
B r e w in g | M o n it o r G r o u p | M o n s a n t o | M o r g a n S t a n le y | M o t o r o la | N B C | N e s t le | N e w e
Ru b b e r m a id | N o r t e l N e t w o r k s | N o r t h r o p G r u m m a n | N o r t h w e s t e r n M u t u a l Fin a n c ia
N e t w o r k | N o v e ll | O ' M e lv e n y & M y e r s | O g ilv y & M a t h e r | O r a c le | O r r ic k , H e r r in g t o n &
S u t c lif f e | P A C o n s u lt in g | P N C Fin a n c ia l S e r v ic e s | P P G In d u s t r ie s | P RT M | P a c if iC a r
H e a lt h S y s t e m s | P e o p le S o f t | P e p s iC o | P f ize r | P h a r m a c ia | P ills b u r y W in t h r o p | P it n e
B o w e s | P r e s t o n G a t e s & Ellis | P r ic e w a t e r h o u s e C o o p e r s | P r in c ip a l Fin a n c ia l G r o u p
P r o c t e r & G a m b le C o m p a n y | P r o s k a u e r Ro s e | P r u d e n t ia l Fin a n c ia l | P r u d e n t ia
S e c u r it ie s | P u t n a m In v e s t m e n t s | Q w e s t C o m m u n ic a t io n s | R.R. D o n n e lle y & S o n s
C o m m e r c ia l B a n k in g v s . In v e s t m e n t B a n k in g

commercial bank
 C o m m e r c i a l B a n k i n g , In v e s t m e n t B a n k i n g . . .

Pr ivate contr acts

An investment bank

10
C o m m e r c i a l B a n k i n g , In v e s t m e n t B a n k i n g . . .
 C o m m e r c i a l B a n k i n g , In v e s t m e n t B a n k i n g . . .

equity

12
 C o m m e r c i a l B a n k i n g , In v e s t m e n t B a n k i n g . . .

G la s s - S t e a g a ll Re f o r m

Glass-Steagall Act
 C o m m e r c i a l B a n k i n g , In v e s t m e n t B a n k i n g . . .

14
 C o m m e r c i a l B a n k i n g , In v e s t m e n t B a n k i n g . . .

T h e B u y - S id e v s . t h e S e ll- S id e

sell-side

buy-side
 C o m m e r c i a l B a n k i n g , In v e s t m e n t B a n k i n g . . .

For more information on hedge fund, investment management,

and other finance careers, go to the Finance Career Channel
Vault Career Guide to Hedge Funds
Vault Career Guide to Investment Management
Vault Career Guide to Venture Capital
Vault Guide to the Top Financial Services Employers
 The Wall Street
Journal Journal

B e a r s v s . B u lls

bull mar ket

bear mar ket

Dow J ones Industr ial Aver age

 T h e Eq u it y M ar k et s

Source: Dow Jones & Co.

lar ge caps
small caps

Nasdaq Composite

18
T h e Eq u it y M ar k et s
 T h e Eq u it y M ar k et s

Cor por ate profits:

20
 T h e Eq u it y M ar k et s

Interest r ates:
Inflation

in d iv id u a l

ear nings per share

 T h e Eq u it y M ar k et s

S t o c k V a lu a t io n M e a s u r e s a n d Ra t io s

pr ice to ear nings r atio

Earnings
Company Stock Price P/E Ratio
Per Share

22
 T h e Eq u it y M ar k et s

Earnings Estimated Growth

Company Stock Price P/E Ratio
Per Share Rate in EPS

PEG r atio

EBITDA

Vault Guide to Finance Interviews

 T h e Eq u it y M ar k et s

Enter pr ise value (EV)

For more information on valuation, bond pricing, and other

finance interview concepts, go to the Finance Career Channel
Vault Guide to Finance Interviews
Vault Finance Interviews Practice Guide
Vault Guide to Advanced and Quantitative Finance Interviews
One-on-one Finance Interview Prep with Vault experts

24
 T h e Eq u it y M ar k et s

V a lu e S t o c k s , G r o w t h S t o c k s a n d M o m e n t u m
In v e s t o r s

Value stocks

Growth stocks
T h e Eq u it y M ar k et s
W h a t is t h e B o n d M a r k e t ?

B o n d M a r k e t In d ic a t o r s

yields
basis points
 F i x e d In c o m e M a r k e t s

yield cur ve

upwar d sloping yield cur ve.

inver se
yield cur ve.

Treasur ies

spread

28
 F i x e d In c o m e M a r k e t s

credit
r isk

credit watch
 F i x e d In c o m e M a r k e t s

Rating S& P Moodys

Source: Moodys Investors Service and Standard and Poors

interest r ates

30
F i x e d In c o m e M a r k e t s
 F i x e d In c o m e M a r k e t s

inflation

32
F i x e d In c o m e M a r k e t s
 F i x e d In c o m e M a r k e t s

Fix e d In c o m e D e f in it io n s

Types of Securities
 F i x e d In c o m e M a r k e t s

Economic Indicators
N Y U Law | St ern M BA | H arv ard | W illiam s | N o rt h w es t er
K ello g g | A m h ers t | Prin c et o n | Sw art h m o re | Yale
P o m o n a C o lleg e | W elles ley | C arlet o n | H arv ard B u s in es
S c h o o l | M IT | D u k e | S t a n f o r d | C o lu m b i a L a w | P e n n
C alT ec h | M id d leb u ry | H arv ard Law | W h art o n | D av id s o
W as h in g t o n U n iv ers it y S t . Lo u is | D art m o u t h | Y ale Law
H av erf o rd | B o w d o in | C o lu m b ia | Bo alt S c h o o l o f Law
W es ley an | C h ic ag o G S B | N o rt h w es t ern | C larem o n
M c K en n a | W as h in g t o n an d Lee | G eo rg et o w n Law
U n iv ers it y o f C h ic ag o | D ard en M B A | C o rn ell | V as s ar
G rin n ell | J o h n s H o p k in s | Ric e | Berk eley - H aas | Sm it h
B ro w n | B ry n M aw r | C o lg at e | D u k e Law | Em o ry | N o t r
D am e | C ard o zo Law | Van d erb ilt | U n iv ers it y o f V irg in ia
H am ilt o n | U C B erk eley | U C LA Law | Trin it y | B at es
C arn eg ie M ello n | U C LA A n d ers o n | St an f o rd G SB
N o rt h w es t ern Law | Tu f t s | M o reh o u s e | U n iv ers it y o
M ic h ig an | S t an f o rd Law | Th u n d erb ird | Em o ry | B o al
H a ll | P i t t | U T A u s t i n | U S C | In d i a n a L a w | Pen n State
B Y U | U C h ic ag o Law | B o s t o n C o lleg e | P u rd u e M B A
W is c o n s in -M ad is o n | T u lan e | D u k e - Fu q u a | U N C C h a p e
H ill | W ak e Fo res t | P en n | C alT ec h | NYU Law | Ster
M BA | Harvard | W illiam s | N o rt h w es t ern - Kello g g
A m h ers t | Prin c et o n | Sw art h m o re | Y ale | P o m o n
C o lleg e | W elles ley | C arlet o n | H arv ard Bu s in es s Sc h o o l
M IT | D u k e | S t a n f o r d | C o l u m b i a L a w | P e n n | C a l T e c h
M id d leb u ry | Harvard Law | W h arton | D av id s o n
W as h in g t o n U n iv ers it y St . Lo u is | D art m o u t h | Y ale Law
H av erf o rd | Bo w d o in | C o lu m b ia | Bo alt S c h o o l o f Law
W es ley an | C h ic ag o G S B | N o rt h w es t ern | C larem o n
Surveys on thousands of top programs
M c K en n a | W as h in g t o n an d Lee | G eo rg et o w n Law
U n iv ers it y o f C h ic ag o | D ard en M B A | C o rn ell | V as s ar
College MBA Law School Grad School
G rin n ell | J o h n s H o p k in s | Ric e | Berk eley - H aas | Sm it h
B ro w n | B ry n M aw r | C o lg at e | D u k e Law | Em o ry | N o t r
D am e | C ard o zo Law | Van d erb ilt | U n iv ers it y o f V irg in ia
H am ilt o n | U C B erk eley | U C LA Law | Trin it y | B at es
C arn eg ie M ello n | U C LA A n d ers o n | St an f o rd G SB
N o rt h w es t ern Law | Tu f t s | M o reh o u s e | U n iv ers it y o
M ic h ig an | S t an f o rd Law | Th u n d erb ird | Em o ry | B o al
H a ll | P i t t | U T A u s t i n | U S C | In d i a n a L a w | Pen n State
B Y U | U C h ic ag o Law | B o s t o n C o lleg e | P u rd u e M B A
 T r e n d s In I- B a n k i n g

38
T r e n d s In I- B a n k i n g
T r e n d s In I- B a n k i n g
T r e n d s In I- B a n k i n g
 T r e n d s In I- B a n k i n g

BusinessWeek

BusinessWeek
In it ia l P u b lic O f f e r in g s

initial public offer ing

 S t o c k an d B o n d O f f erin g s

bulge br acket

Hir ing the manager s.

beauty contest

lead
manager co-manager s

Due diligence and dr afting.

due diligence

prospectus

the pr inter

Mar keting.
roadshow

44
 S t o c k an d B o n d O f f erin g s

under wr iting discount

Fo llo w - o n O f f e r in g s o f S t o c k

follow-on offer ing

 S t o c k an d B o n d O f f erin g s

N e w a n d O ld S h a r es

46
 S t o c k an d B o n d O f f erin g s

Market reaction.

Dilution

The process.

B o n d O f f e r in g s

public
debt
 S t o c k an d B o n d O f f erin g s

For more information on valuation, bond pricing, and other

finance interview concepts, go to the Finance Career Channel
Vault Guide to Finance Interviews
Vault Finance Interviews Practice Guide
Vault Guide to Advanced and Quantitative Finance Interviews
One-on-one Finance Interview Prep with Vault experts
M e r g e r s & A c q u is it io n s

M&A

Acquisition
 M & A , P r iv at e P lac em en t s , an d Reo r g s

Mer ger

tar get representation acquirer representation

50
M & A , P r iv at e P lac em en t s , an d Reo r g s
 M & A , P r iv at e P lac em en t s , an d Reo r g s

P r iv a t e P la c e m e n t s

pr ivate placement

Pr ivate Placement Memor andum

52
 M & A , P r iv at e P lac em en t s , an d Reo r g s

Fin a n c ia l Re s t r u c t u r in g s

restr ucture
 M & A , P r iv at e P lac em en t s , an d Reo r g s

54
U s e t h e In t e r n e t s m o s t t a r g e t e d

jo b s e a r c h t o o ls f o r f in a n c e

p r o f e s s io n a ls .
cor por ate finance

deal teams
 C o r p o r a t e Fin a n c e

T h e P la y e r s

Analysts

58
C o r p o r a t e Fin a n c e
 C o r p o r a t e Fin a n c e

Pay scales

60
 C o r p o r a t e Fin a n c e

T h e Ro le o f t h e P la y e r s

MDs and sales calls

pitches
 C o r p o r a t e Fin a n c e

62
 C o r p o r a t e Fin a n c e

Pitchbook preparation

The pitch
deal team

Selecting the managers

 C o r p o r a t e Fin a n c e

Organizational meeting

Group Typical Participants

64
 C o r p o r a t e Fin a n c e

Due diligence
Due diligence

Drafting the prospectus

prospectus
 C o r p o r a t e Fin a n c e

66
 C o r p o r a t e Fin a n c e

Designing marketing material

The roadshow (baby sitting)

roadshow
red herring
 C o r p o r a t e Fin a n c e

Phase 1 Hiring the Managers

Selecting the
Pitching /
Managers in
Beauty Contests
the Deal

Phase 3 Marketing

Amend the
Designing the
Prospectus
Roadshow Slides
Per Comments
& Presentation
from the SEC

Managers Set Up
Roadshow Begins
Roadshow Meetings

68
 C o r p o r a t e Fin a n c e

Phase 2 Due Diligence & Drafting

Organizational
Meeting with Due Diligence
All Parties

Meeting at the
Drafting the
Printer and Filing
Prospectus
the Prospectus

Stock Begins
Roadshow Ends &
Trading the
Stock is Priced
Next Day!
 C o r p o r a t e Fin a n c e

The end in sight pricing the deal

70
 C o r p o r a t e Fin a n c e

T h e T y p ic a l W e e k in C o r p o r a t e Fin a n c e

Monday

Tuesday
 C o r p o r a t e Fin a n c e

Wednesday

Thur sday

Fr iday

Satur day

Sunday

72
 C o r p o r a t e Fin a n c e

Last 12 Months Data ($ in millions)

Company Sales EBITDA Net EPS Stock
Income Price

Valuation Measures
Company Shares Market Net Enterprise
(millions) Value Debt Value

Ratios and Multiples

Ent Value/ Ent Value/ Price/
Company Revenue EBITDA Earning
C o r p o r a t e Fin a n c e
C o r p o r a t e Fin a n c e
 C o r p o r a t e Fin a n c e

76
C o r p o r a t e Fin a n c e
 C o r p o r a t e Fin a n c e

78
 C o r p o r a t e Fin a n c e

Overall, w hat Goldman does exceptionally w ell is create a team

culture. And w hat that really means is people respect young
bankers' opinions and look out for the development of junior
bankers. Juniors' opinions count and everyone' s included on
calls. Analysts and associates are encouraged t o contribute.
They' re not locked in a room running numbers. People expect
you to have an opinion. It' s a place w here people have a very
low t olerance for egos and obnoxious behavior. There' s no
yelling and screaming.

- Goldman Sachs insider

 C o r p o r a t e Fin a n c e

Monday

Tuesday

Wednesday

80
 C o r p o r a t e Fin a n c e

Thur sday

Fr iday

Weekend
 C o r p o r a t e Fin a n c e

Fo r m u la s Fo r S u c c e s s
C o r p o r a t e Fin a n c e
For more information go to
www.vault.com/finance
Translation: I am w illing to buy them at a price of $73.125 per
$100 of face value. As mentioned, the $10 million represents
amount of par value the client w ant ed to sell, meaning the
trader w ill buy the bonds,
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

plus accrued interest (to f actor in interest earned bet w een

interest payments).

Translation: Please buy at a higher price, as I w ill get a higher

commission.

spread

86
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

T r a d in g T h e B a s ic s
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

floor broker s

tr ader s

bid-ask spread

88
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

inventor y
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

long

shor t-selling

90
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

P&L

inside mar ket

outside mar ket

Client tr ades.

Propr ietar y tr ades.

 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

92
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

Ex e c u t in g a T r a d e

small lots tr ading

 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

94
In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

96
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

retail tr ades

block tr ading

At the mar ket.

Wor king the or der.

 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

For more information on sales & trading careers, go to the Vault

Finance Career Channel
Vault Career Guide to Sales & Trading
Vault Career Guide to Hedge Funds
Detailed 40-page employer profiles on top employers like Goldman
Sachs, Merrill Lynch, CSFB, UBS, JPMorgan Chase, Morgan Stanley
and more

98
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

T r a d in g T h e P la y e r s

desks
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

Regional Fr amewor ks Tr aditional Progr ams

Cler ks.

Tr ading assistants.

Note: Clerks and trading assistants at some firms are hired with the possibility
of upward advancement, although promoting non-MBAs to full-time trading
jobs is becoming more and more uncommon, even at regional firms.

Wall Street Analyst and Associate Progr ams

Analysts.

100
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

Associates.

Block tr ader s.

Sales-tr ader s.

Str uctured product tr ader s.

Der ivatives
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

Note that in Trading, job titles can range from Associate to VP to Managing
Director. But, the roles as a trader change little. The difference is that MDs
typically manage the desks, spending their time dealing with desk issues,
risk management issues, personnel issues, etc

102
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

T r a d in g T h e Ro u t in e
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

104
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

Here s a look at a day in the life of a sales-trader, given to us by an

associate in the Equities division at Lehman Brothers.
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

106
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

For more information on sales & trading careers, go to the Vault

Finance Career Channel
Vault Career Guide to Sales & Trading
Vault Career Guide to Hedge Funds
Detailed 40-page employer profiles on top employers like Goldman
Sachs, Merrill Lynch, CSFB, UBS, JPMorgan Chase, Morgan Stanley
and more
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

In s t it u t io n a l S a le s T h e B a s ic s

retail broker

institutional salesper son

PCS

108
In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

In s t it u t io n a l S a le s T h e P l a y e r s

Sales assistants:

Associates:

110
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

Salesper son:
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

112
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

por tfolio manager

 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

Here s a look at a day in the life of a sales associate in the Fixed Income
division at Bear Stearns in New York.

114
In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

116
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

P r i v a t e C li e n t S e r v ic e s (P C S )
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

118
In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )
 In s t i t u t i o n a l S a l e s a n d T r a d i n g (S & T )

120
 Res earc h

T h e P la y e r s a n d T h e P r o d u c t

Research assistants

Research associates

122
 Res earc h

Research analysts

II
Institutional Investor
 Res earc h

II

Institutional Investor
II

Note: As they progress in their career, research analysts receive titles

similar to investment bankers, namely VP, SVP and ultimately MD.

124
 Res earc h

However, the tasks of a research analyst tend to remain somewhat

consistent once the analyst level is reached, with perhaps more selling of
research and traveling involved at the most senior levels, and more
oversight of a group of more junior analysts.

Ra t in g s S c o r e c ar d

Industr y research repor ts

 Res earc h

Company-specific research repor ts

Initiation of cover age:

Update:

Change of r ating:

126
 Res earc h

Mar ket commentar y

Economic commentar y

Fixed income commentar y

 Res earc h

128
 Res earc h

T h r e e M o n t h s in Re s e a r c h

ear nings season

 Res earc h

130
Res earc h
 Res earc h

Shows the dollars of liquid assets (convertible into

Quick Ratio
cash within 30 days) available to cover each dollar
of current debt.

Cur r ent Ratio Measures the margin of safety present to cover any
possible reduction of current assets.

Contrasts the amounts due creditors within a year

Cur r ent Liabilities with the funds permanently invested by owners. The
to Net Wor th smaller the net worth and the larger the liabilities,
the greater the risk.

Cur r ent Liabilities Compares the companys total indebtedness to the

venture capital invested by the owners. High debt
to Inventor y levels can indicate greater risk.

Fixed Assets to Net Wor th Reflects the portion of net worth that consists of fixed
assets. Generally, a smaller ratio is desired.

Collection Per iod Reflects the average number of days it takes to

collect receivables

Inventor y Tur nover Determine the rate at which merchandise is being

moved and the effect of the flow of funds into a business.

Assets to Sales This rate ties in sales and the total investment in
assets that is used to generate those sales.

Sales to Net Measures the efficiency of management to use its

Wor king Capital short-term assets and liabilities to generate revenues

Measure the extent to which the suppliers money is

Accounts Payable to Sales being used to generate sales. When this ratio is
multiplied by 365 days, it reflects the average number
of days it takes the company to repay its suppliers.

Return on Sales Reveals profits earned per dollar of sales and

(Profit Margin) measures the efficiency of the operation.

Retur n on Assets This is the key indicator of profitability for a firm. It

matches net profits with the assets available to earn
a return.

Retur n on Net Wor th Analyzes the ability of the firms management to

realize an adequate return on the capital invested by
(Retur n on Equity) the owners of the firm.

Source: Dun & Bradstreet

132
Res earc h

II
 Res earc h

Fo r m u la s f o r S u c c e s s
Res earc h
 Res earc h

For more information on investment research careers, go to the

Vault Finance Career Channel
Vault Career Guide to Investment Management
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Insider profiles and employee surveys for top investment management
firms, including Fidelity Investments, Vanguard Group, T, Rowe Price,
CalPERS and more.
Manager s
 S y n d ic at e : T h e G o - b e t w ee n s

Under wr iter s
under wr iter s
S y n d ic at e : T h e G o - b e t w ee n s
S y n d ic at e : T h e G o - b e t w ee n s
 S y n d ic at e : T h e G o - b e t w ee n s

book

flipper s

over subscr ibed

 S y n d ic at e : T h e G o - b e t w ee n s

pr icing call
S y n d ic at e : T h e G o - b e t w ee n s
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M o reh o u s e | U n iv ers it y o f M ic h ig an | S t an f o rd
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U C h ic ag o Law | B o s t o n C o lleg e | P u rd u e M B A
W is c o n s in -M ad is o n | T u lan e | D u k e - Fu q u a
U N C C h a p e l H ill | W ak e Fo re s t | P e n n | C alT e c h

Surveys on thousands of top programs

College MBA Law School Grad School
 A p p en d ix

G lo s s a r y

Annual repor t:

Asset management:

Audit:

Auditor :

Bond spreads:

Bulge br acket:

Buy-side:

Cer tified public accountant (CPA):

Char tered Financial Analyst (CFA):

 A p p en d ix

Commercial bank:

Commercial paper :

Commitment letter :

Commodities:

Common stock:

Compar able company analysis (Comps):

Consumer Pr ice Index (CPI):

Conver tible bonds:

Der ivatives:

Discount r ate:
 A p p en d ix

Dividend:

Equity:

ERISA:

The Fed:

Feder al funds r ate:

Financial Accounting Standar ds Boar d (FASB):

Financial accounting:

Fixed income:

Gener ally Accepted Accounting Pr inciples (GAAP):

Glass-Steagall Act:
 A p p en d ix

Gr aham-Leach-Bliley Act:

Growth stock:

Hedge:

Hedge fund:

High-gr ade cor por ate bond:

High-yield debt (a.k.a. J unk bonds):

Initial public offer ing (IPO):

Institutional clients or investor s:

 A p p en d ix

Lead manager :

League tables:

Lever aged buyout (LBO):

The Long Bond:

Making mar kets:

Mar ket capitalization (mar ket cap):

Merchant banking:

Money mar ket secur ities:

 A p p en d ix

Mor tgage-backed bonds:

Municipal bonds (Munis):

Mutual fund:

P/E r atio:

Passive investor :

Pit tr ader s:

Pitchbook:

Pr ime r ate:

Pr ivate accountants.

Producer Pr ice Index:

 A p p en d ix

Propr ietar y tr ading:

Prospectus:

Public accountants.

Request for proposal (RFP):

Retail clients:

Retur n on equity:

Roadshow:

S-1:

S-2:

Sales memo:
 A p p en d ix

Secur ities and Exchange Commission (SEC):

Shor t-ter m debt:

Specialty fir m:

Syndicate:

T-Bill Yields:

Tax-exempt bonds:

10K:

10Q:

Treasur y secur ities:

Under wr ite:

Value stock:
 A p p en d ix

Yield:
 A p p en d ix

Re c o m m e n d e d Re a d in g

Capital Instincts: Life as an

Entrepreneur, Financier, and Athlete

Barbarians at the Gate: The Fall of RJR

Nabisco

The House of Morgan: An American Banking Dynasty and

the Rise of Modern Finance

Goldman Sachs: The Culture of Success

The Great Game: The Emergence of Wall Street As a

World Power

The Robber Barons

Liars Poker

The Money Culture

When Genius Failed: The Rise and Fall of Long-Term

Capital Management

Monkey Business: Swinging Through the Wall

Street Jungle.

Den of Thieves

156
 A p p en d ix

American Banker Fortune

Business Week Institutional Investor

The Deal Investment Dealers Digest

The Economist Investors Business Daily

Forbes The Wall Street Journal

U s e t h e In t e r n e t s m o s t t a r g e t e d

jo b s e a r c h t o o ls f o r f in a n c e

p r o f e s s io n a ls .
A b o u t t h e A u t h o rs

Tom Lott

Derek Loosvelt