The Path to Treasury

I've been asked by email and your comments about how I got to be an intern at Treasury. I think it's an interesting story and one which demonstrates the value of networking.

More than a year ago in August, I flew out to New York for the first time to meet investment bankers. I was part of a larger group flying out, and the guy hosting all of us students was a vice president at Morgan Stanley. I only talked with him once over the three-day period, and he probably wouldn't have been able to pick me out of a lineup.

In October, I went back to New York and this time met with my Morgan Stanley friend one-on-one. He only had time for a five-minute chat and a bagel, but it was better than nothing. I went to New York two more times (one trip alone and one with a group), and both times I stayed in touch with this guy. I never asked him for anything, and just enjoyed learning from him and hearing stories about his work.

I interviewed at various banks and worked at a bulge bracket over the summer. It was while I was in New York again that I heard that my friend had been asked to go to Treasury to head up the housing and mortgage markets team. It seemed like a really cool role given the turmoil in the housing markets.

About a week after my internship ended, I heard through the grapevine that the intern currently at Treasury (an HBS first-year) was just finishing up and going back to school, and my friend was looking for another intern for the fall. I sent him my resume and told him I'd like to be considered for the spot. I believe that because he knew me and had kind of watched me progress and learn over the past year, he felt good about giving me a shot. I interviewed with him and another guy at Treasury, and a week later got the call that I had been chosen to be the intern!

At first I was solely focused on housing and mortgage markets, but when Fannie/Freddie/Lehman/Merrill Lynch/AIG/etc happened and TARP popped up, my friend, another guy on our team, and I all hopped on the TARP team and I spent the rest of my time at Treasury working on TARP.

I had an absolutely amazing experience. I met with over 65 CEOs of various companies of all size, did work directly for Neel Kashkari, went to industry conferences, and sat in meetings with Paulson, Bernanke, Kashkari et al. I learned a TON about the housing markets and the economy in general.

I feel like I have been very lucky to have done an internship like this. Because of the fact that I took classes during one summer while doing a local internship, I was able to skip classes during this fall semester and go out to Treasury. It's not a requirement for my school, but more just a great opportunity that I was able to take. For three months I was the only intern working on TARP (for the last few weeks another intern at Treasury did some work on the Capital Purchase Program).

It was an amazing semester, and I loved being in DC during the election. It was awesome to work in the actual Treasury building, right next to the White House. Every night I would walk out past the statue of Alexander Hamilton and look back to see the view on a $10 bill.

Being at Treasury has really got me interested in policy, and I won't be surprised if I end up working for the government again someday.

Trainwreck

Well Friday was my final day at Treasury. What an amazing run it's been! Below I'm posting a time line put together by our Markets Room that shows the events that have got us to where we are. The amazing thing is that every event after the second week of August is something I was here for.

I just had my picture taken with Neel Kashkari (Treasury's way of saying, "Thanks for working 14 hours a day, six days a week for free for the last four and a half months!") and it was pretty cool. The best part was that after the photo I got to just sit there in his office for a while and talk about things. He asked about my future plans (and he likes the bank I'm going to work for - good news), talked about life, and talked about what it feels like to run $700 B. I've been in plenty of meetings with Neel before, but this was the first time I got to just talk with him one-on-one.

I thanked him for his leadership and told him I was impressed with his composure on the Hill two days ago when so many irate congressmen and women took pot shots at him. He responded by saying that it has long been his nature to fight back when people attack him, but that he's had to work hard to acquire the ability to sit there and listen without being hostile back to hostile attackers. Much respect for Neel Kashkari.

I'm putting together a post of things I heard/experienced while at Treasury this past semester. I guess one way I can describe my experience here is like that of someone watching a train wreck in slow motion: it's incredibly interesting and intriguing, and at the same time horrifying.

LINK TO THE TIME LINE

The Perfect Book

Hey all - a few posts ago I mentioned that I had another doc to post here about how to make a perfect pitch book. One of my friends forwarded me this email, which was apparently sent out from a VP to a few Associates in some bank. Some of the suggestions here are a little extreme (ex: hand calc everything in the book???) but during the summer this was a God-send.


Many many times I was the one who was turning books and putting in the last-minute changes, and I was often tempted to just turn in the book as fast as I could. The times when I would take five extra minutes to run through this checklist (even when the VP was yelling at me and sending me emails asking me when it would be done), the books I produced were always error-free and I got a reputation for at least not making stupid/careless mistakes. Enjoy, and let me know if you have any other suggestions to add to the list here.

"Too Busy"

Sorry for the dearth of posts over the last week and a half. I'm back at Treasury after a nice break and things are crazier than ever. I was told when I first started that by mid-October there wouldn't be anything to do. Then TARP came along. Then everybody said that after the election everything would start to wind down in the "lame duck" Treasury. Well it's been nearly as busy as when we first started working on TARP, so I'm happy about that.

In that spirit, and also in the spirit of my last few posts, here is one more thing I posted on my wall to remind me to work hard. It's pretty funny, and hails from the glory days of DLJ, which became UBS LA. They were known for being more hard-core than anybody else, and you can see why. My favorite part is the calculation under the picture by the guy figuring out just how many hours he's going to be working now. (If you click on the picture below it will bring you to a site where you can download this for yourself as a pdf - I don't know how to get a pdf up here on blogger)

Some Inspirational Quotes

Like I said in an earlier post, this summer I put up quotes around my desk to remind me to work hard and to have a good attitude for those nights when I never left the office. Here are a few to think about:

"To give anything less than your best is to sacrifice the gift."
-Steve Prefontaine

This is one of my favorite quotes of all time. Pre was an amazing runner and this quote always motivates me to work harder.

"That which we persist in doing becomes easier, not that the nature of the thing changes but our ability to do so increases."
-Ralph Waldo Emerson

Another classic that helps when you are just starting out with something you've never done before. Think of it as getting ready to interview. You may struggle now, but with practice and persistence, you ability will increase.

"The heights by great men reached and kept were not obtained by sudden flight. But they, while their companions slept, were toiling upward in the night."
-Thomas S. Monson

This quote really fit well with investment banking. I liked to think that while I was putting up all the extra hours and effort and "toiling...in the night" I was actually achieving great things and learning valuable skills. Of course, most of the time when you are working in the middle of the night you're doing things that are annoying and mostly useless, but hey - the quote helped.

There are some other things I had up on my wall, many of which I'll post in the coming week. I had a guide on how to make a perfect pitch book (VERY helpful), some "rules for being a great intern" that I gleaned from the analysts over the summer, and a few other things.

Hope

Dennis left a comment on the last post that is, I think, especially important:

"I've been doing all those things, but I think you still need to keep some hope. If you don't some hope that your hard will will come into fruition, then there is no point of the hard work."

Thanks for that Dennis - you're absolutely right. While the point of my last post was to remind everybody the importance of not feeling a sense of entitlement, or sitting back and waiting for everything to come to you, it is vital to believe that your hard work will pay off.

I think having a belief, even if it's against all the odds, is what really helped me and many others to get where we are now. Coming from a non-target school (and frankly any school these days), it's easy to feel like there's no point to hard work, that there's no chance for an opportunity. Granted, nobody knows the future and where investment banking will be come next summer, but you just have to believe that if you do all the right things, you will have that chance. If you study, read, network, learn, prove yourself, and prepare, that hope grows into confidence.

There comes a time when you don't have to just hope it will happen - you will be confident that it will actually happen. That's how you want to feel when you go into those interviews - so confident that you know they would be crazy not to give you a job. You know that nobody has prepared more than you for this interview. You know that, if given the chance, you would work harder and smarter than anybody else they can find out there.

Thanks Dennis for the great reminder - we have to hope. In times like these, we have to believe there will be chances for us to do what we really want to do. And that hope can grow into a confidence that will help you to stand out when you actually do get your chance to shine.

My Investment Strategy

In meeting with various people this week at the Treasury, I learned some pretty good lessons and thought I would share one with you all. While describing the investors out there saying that we should all buy bank stock right now, based on the fact that they think things will rebound and turn around in the financial sector (and I'm not saying whether I agree or not) one visitor said, "Hope is not an investment strategy."

That is a great thing to think about as you are preparing for interviews and trying to get a job or an internship in the coming months. Hope will not get you there, especially this year.

It's not enough to hope that you'll be ready to answer the "big three" questions in the interview:

• Tell me about yourself...
  
• Why do you want to do investment banking?
• Why do you want to work for [insert name]?

If you're not ready by the time you call people for an informational interview, it's too late.

It's not enough to hope that you won't be asked to walk somebody through a DCF valuation. You have to know that sucker backwards and forwards, inside and out. You have to take the time to pick a random company and build a DCF yourself so you make sure that you know it.

It's not enough to hope that you'll get interviews on campus when the banks come (if they do). You need to be SURE that you'll get an interview by networking with bankers and having them confirm that they'll go to bat for you. You need to be visiting every bank getting interviews everywhere because you just don't know which banks will even be around by next summer. You need to know by January 15th that you'll have interviews at multiple places.

It's not enough to hope that you'll be able to explain in a real general sense what's going on in the economy. You need to be talking with people in the markets, reading blogs and news articles and the WSJ, and making sure that you can tell people why we got where we are and what we need to do about it.

You see, hope is great and it's actually a really healthy thing to be optimistic and hope for the best in these times. But these are days to take action. These are days to be proactive. To rely on your own hard work to really make things happen.

In the immortal words of William Henley's Invictus:

Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
for my unconquerable soul.

In the fell clutch of circumstance,
I have not winced nor cried aloud.
Under the bludgeonings of chance,
My head is bloodied, but unbowed.

Beyond this place of wrath and tears
Looms but horror of the shade,
And yet the menace of the years
finds and shall find me unafraid.

It matters not how strait the gate,
How charged with punishment the scroll.
I am the master of my fate;
I am the captain of my soul.

One of the things that I did over the summer was to put up inspirational quotes around my desk that motivated me to work hard, continue learning, and do the best I could. I'll post in the next day or two some of those quotes that you all can read and get fired up and ready to get those internships and jobs.

Blog freaking out?

Is anyone else seeing that all of my posts are suddenly double-posted? Please comment...

Professional Modeling

Some thoughts on learning to build models. Keep in mind that I still have a ton to learn on my own, but these are some ideas that have helped me to get where I am today.

I. Financial Knowledge

If you are going to build a financial model, it just makes sense that you need to have some basic knowledge of finance in order for it to be a functioning model. The goal of a good model is to be fully integrated and dynamic, meaning that changes flow through the entire model and everything still balances. Models also need to be flexible enough to test different scenarios and to make changes according to management projections and the projections of your associates who sometimes like to "massage" the numbers.

If you just want to build a basic DCF model, then read the Vault Guide and you will be ready to go. If you're going to be interviewing, you should be able to "walk somebody through a DCF" anyway, since you WILL get this question in most interviews you will have.

For more complex models, you might need to study up on accretion/dilution, purchase accounting, and other more in-depth accounting and finance issues in order to conceptually understand what is going on in your model. There are a ton of good valuation books out there, so grab one and learn something!

II. Start with somebody else's model

Before you just start from a blank screen, get a hold of another model (preferably a simple model so it's easier to follow) and begin by working your way through. Go line-by-line and make sure you understand not only how the model works, but why the functions are set up the way they are, and what happens when you change inputs.

You need to understand the "flow" of a model before you can build one. As you go through a model, try to see how the different financial statements link and fit together. Notice how changes on one statement flow through the model and affect your outputs.

Once you've gone through the entire model and feel like you understand what is going on, it's time for the hard(er) work to begin.

III. Re-build the model

At this point it's good to either pull the 10-K and 10-Qs from the company of the model you've already worked through, or you can just copy the numbers out of the original model. I think it's better to pull the SEC docs because that's how it is when you make your own model.

Work through building a model that's just like the one you already looked at. You are basically just rebuilding the exact model that you are familiar with so that you can say you've done it yourself. Hopefully as you go through this you will start to learn better how to use Excel and how to save time using shortcuts.

As a side note, most firms have some kind of coloring system in their models. I like to make inputs (numbers that I get from 10-Ks and -Qs) blue and calculated numbers black. I've also seen people putting numbers pulled from other tabs/sheets in green and negative numbers in red, but whatever is easiest for you.

Once you've completed the model, making sure that everything works just as well as the original, then do it a few more times! Each time try to rely less and less on the original and more and more on your own intuition and understanding.

IV. Build your own model

Now that you feel comfortable re-building a model, pick a company that you would like to model out. Go to http://www.sec.gov/ and find their 10-K and most recent 10-Q. Build a model with their numbers, reflecting all of the nuances of a different company. You can still refer to the original model if you get stuck, but hopefully by now you are figuring out how to build a basic operational model with all three statements (and a debt schedule and depreciation schedule if you're getting a lot better).

Building models for various companies is good practice and really causes you to learn the more nuanced parts of a model.

The final test will be to see if you can open Excel, pull some SEC docs, and build a dynamic operational model. Once you have mastered the operational model, you can move on to more complex models like LBO models or merger models. They all require the basic understanding of how financial statements fit together and how changes in one place flow through the rest of the model.

There are lots of training programs out there that can teach you modeling skills. I personally think the best learning comes when you just figure things out on your own, especially since you will get formal training when you start at a bank. But I can also see great benefits in learning things the correct way the first time, instead of teaching yourself incorrectly.

Like I said at the beginning, this is just a BASIC overview of a process, and there are a lot more things I could have mentioned about modeling. I'll probably continue to post about modeling as I get farther along in the model I'm building, just because that's what's on my mind these days.

As a personal goal, I want to be able to build solid LBO and merger models before I start. I figure that if I build a model a week, I'll get there by next summer. Who wouldn't want an analyst to come in already feeling comfortable building models. From the various types of models I saw over the summer, it's obvious that no matter what preparation I do there will still be tons to learn, but I figure the more I can come up the learning curve on my own, the faster I'll be able to take in the more advanced stuff on a real deal.

Good luck, and good modeling!

And congrats to President Obama.

Learning to build models

Hey all,

I'm working on a post about modeling, and wanted to share some thoughts about learning how to build a model. I'm building one right now based on another model, as you can see below. Stay tuned for some info on learning how to build models and learn excel.

Vote!

Hey all -

Don't forget to vote today! I woke up early and stood in line for two hours, but still voted and made it to work on time. My personal thoughts on who to vote for are largely based on the economy and a desire to be able to be the one to decide where my money goes instead of letting the government do it for me. But however you decide to vote, just get out and do it!

Good luck -

The Analyst

Short-lived idea

So the ring-management tool already exists. But not yet on my blackberry, and apparently not on the phone of that CEO...

Invention Idea

As I was sitting in a meeting the other day with the CEO of a major investment bank, and the head management teams of two other major financial services firms (thankfully none of them asked what I was doing in the room!), I was surprised that three times cell phones went off in the middle of the meeting. I guess it doesn't just happen in high school and college classes.

Then an idea came to me. Why not make your Outlook calendar or Google Calendar have the capability of synching with your black berry to adjust the ring setting on your phone based on what you have on the calendar? It seems like most of the time, people just forget to put their phone on "Silent" before they go to class/a meeting. If your phone did it for you, you wouldn't have to worry at all.

As you put in new events into your week, there could just be one more option asking you to choose the ring setting on your phone for that time. You could have an option on your phone to turn on or off "Calendar Ring Mode" in which the ring settings automatically follow the calendar. No more embarassing ringing in class/meetings/church/movies.

We already have phones that will ring differently depending on who is calling, so it can't be that hard to just set a ring schedule based on your Outlook calendar. Maybe this already exists, but I haven't seen it anywhere. Can someone make an iPhone app that does this and let me know about it?

Resources

I thought it might be helpful to list some of the resources I used over the past while to get up to speed on investment banking, the economy, and different banks.

Books:

• Liar's Poker
• Monkey Business
• Barbarians at the Gate
• The Accidental Investment Banker
• A Demon of our Own Design
• The World is Flat / Hot, Flat, and Crowded
• Tipping Point
• Financial Shock: A 360º Look at the Subprime Mortgage Implosion (great summary of what's happened, even though he published before all the real crazy stuff happened)
• Valut Guide for Investment Banking / Vault Guide for Finance Interviews
• Running of the Bulls (about Wharton - I read it to see what the competition is like :)
• Never Eat Alone (book about networking)
• Goldman Sachs: Culture of Success / House of Morgan / other books on specific firms
• When Genious Failed

There are tons of other books but these are just a few that I've read in the past year.

Websites:

• www.mergersandinquisitions.com
• www.leveragedsellout.com
• www.investmentbankinginterviewprep.com
• www.wallstreetoasis.com
• www.realclearmarkets.com / www.realclearpolitics.com
• www.fiercefinance.com
• www.dealbreaker.com
• www.ibankingfaq.com

Again, there are tons of websites out there with good information, but these are some of the sites I look at frequently (some obviously for fun and some for information).

In addition to all of this, as I was getting ready for interviews I found lists of I-banking interview questions and would go through the lists, making sure I had a good answer for every single question. I probably did this for hundreds of questions, but I didn't want to get caught off-guard. It worked well; I never had an interview question that I hadn't heard before (or at least something very similar to it, to which I could easily tailor my pre-determined answer). I'm working on putting together some materials such as a model, interview questions, and other stuff that will be helpful. I'm short on time these days but it will be coming.

Other:

• Wall Street Journal (read it every day!)
• Financial Times
• New York Times
• Business Week (usually just skim through the copy in the business school)
• The Economist (also just read the copy in the business school)

There are obviously way more sources of information that you can possibly take in, but I've just made it a habit of always having something to read. I'll walk to class and read on the way. I read when I wake up, get home, whatever. A thirst for knowledge is vital to understanding what's going on in the world and being ready for investment banking, where the learning curve is steep.

I'm sure you all have other resources that are helpful - post a comment to share what is helpful to you!

Late Nights

Hey all -

Sorry for the infrequent posts. Next time I get put on a team managing $700 billion I'll have done this before so I'll know how to handle the pressure and time commitments better :). Things are crazy and stressful, but I feel confident that we're moving in the right direction with what we have to work with. I'm learning a ton and am having a blast out here.

Anyway, I wanted to write a post about what it's like to work for 100 hours a week. This is one of those things that you hear a lot about, but it's hard to know what it's like until you've done it. That said, I'll take a shot at describing it. Current bankers can add comments to correct/augment anything I say.

When I first started banking this summer I was so excited and motivated to perform well that I actually looked forward to my first really late night. It came on a Thursday if I remember right. It was about 9:40 PM and I was reading through some primer on the Oil and Gas industry. An associate came over to my desk to see what I was up to and then asked me if I would "help him go through a few things." That translated into going through spreadsheets filled with data and checking all the numbers in them to make sure they were consistent throughout a 100-page pitch book.

Because I was so "gunner" I was excited to "jam" for a few hours. I finished up around 2am and felt great. I was a real banker - working late into the night, coming out onto the street and grabbing a black car as some random tourists watched.

Well this whole attitude soon left after it happened six days in a row. I began to see that it wasn't an anomaly to stay until 2am, but it was normal. When you start to work 100 hours a week or more, things inside you start to change. I could literally feel my brain slowing down toward the end of the week. After a few days/weeks you start to lose track of what day it is. The only way to tell is by what clothes people wear. When you see a VP wearing flip flops you know you are in the weekend (but you won't know if it's Saturday or Sunday).

It's just a strange feeling that comes over you. Your whole life is suddenly regimented. You don't do anything except work. You wake up, take a shower, find some clothes and a new tie, then head to work. You work all day long, get yelled at and build models till the middle of the morning, then you head home. You get home, fall in bed, then wake up and do it all over again. It's a weird cycle to be in because you start to feel like there's nothing else in your life. I guess it's true, but it's just a weird feeling to experience it.

I thought it would be really hard to work that much, but it's not that bad. Physically your body just makes the adjustment and you keep going. You're usually always kind of tired, but I was surprisingly less tired than I expected that I would be. I would imagine that after two years your body wouldn't "handle it" as well as mine did during the internship, but it wasn't too bad.

The hard parts are mental. You have to force yourself to work really hard for many many hours every week. Plus, you never know when you'll be able to leave and do something else besides banking. It's the uncertainty that's hard, not the long hours. You can't plan things in advance very well because when you do the associate will dump stuff on your desk again.

Now that my hours at Treasury are trending back towards the banking summer hours, I'm starting to remember the feeling. It's 2:15 am right now and I'm going strong. When the time comes for you all to get into banking, don't be afraid of the long hours. It's helpful to remember that while you are working the equivalent of two jobs, you are also learning a ton more than your friends who are working 40-50 hours a week.

Sorry if this is rambling and not helpful. If it sucked, just blame the long hours!

Time to go to New York

It's that time of year again.

Things are starting to get cold, full-time recruiting is slowing down, and college football is in full swing. It's about time to get to New York.

One of the key steps for me in getting an internship and a job on Wall Street was actually going there and meeting face-to-face with professionals at the different banks. In the fall of my junior year, I flew myself to New York four times before interviews started, each time meeting with new people and cultivating relationships that eventually led to interviews and lasting friendships.

To have a successful New York trip (and this applies to San Francisco as well), there are a few things you need to do in preparation:

• First of all, you need to contact people at banks. Hopefully you've been doing this since the summer time, but if not, it's ok. You're still ahead of the game as far as internships go. A good way to find people to contact is through your alumni network. Probably the best way would be to go through previous interns, because they obviously know multiple people at the bank. The tricky part there is that you have to make sure the intern that you ask for contacts is willing to "go to bat" for you. Because they don't have much leverage, if they recommed you and you screw it up, they will look terrible.
  
  So in contacting people working on the street, usually what I would do is send a SHORT introductory email telling them who I am and asking if there's a time that we could talk. When it got to be a little closer to interview season and I felt confident about my resume, I might also send my resume along so they could "get a better idea of my background." When asking for a time to call, I basically would leave things wide open. I figured that if I need to miss part of a class then it would be worth it if I could have a solid call with somebody at Goldman or Credit Suisse.
  
  Once the phone call is scheduled, there are a lot of things you need to do to prepare for the call. It's like a first date - you have to impress this person enough to want to meet you again. So what you do is spend a ton of time preparing and you leave them completely impressed with how much a junior in college knows already. Leave no doubts in their mind about your abilities, desire, or intelligence.
  
  You can prepare in a number of ways. Here are some of the things I did: Google the person I'm going to call to find out everything I can about them on the internet; talk with people who know them and/or have worked with them to find out what group they're in, what deals they've done, and what interests they have; read the entire website for their firm, and come up with specific reasons why I would want to work there as opposed to any other bank; research any big deals that their bank has done and have a few questions about the deals; read the WSJ every day so that I can talk about current events; make sure I can answer (1) Why do you want to do banking? (2) Why do you want to work at this firm? and especially (3) Tell me about yourself / Walk me through your resume.
  
  With enough preparation (focusing not so much on the technical stuff and a lot more on the fit / general knowledge stuff), you will come off as somebody who really cares about all this stuff.

• Assuming the call goes really well, I would have already planned a date in late October / early November / late November / early December / late December / early January (pick any combination of these, but especially the later part of the year if you can only go once). As I wrap up the call I would say something like, "Hey Bryan it's been great talking with you and I've learned a lot. I wanted to let you know that I'll be in New York from November 4 through November 8 to meet with people at various banks. Obviously I'm extremely interested in your bank. Do you think you could pencil in a few minutes for me to take you out for a coffee sometime in there?"
  
  Do this 15x and you'll have a solid trip. The one thing you have to be careful of is over-booking yourself. During my second trip to New York, I had a tight schedule where I was supposed to go from one bank to another with only about a half hour inbetween when the first visit ended and the next began. The banks weren't far apart, but what I didn't account for was after my first interview, the analyst wanted to introduce me to the other analysts in his group and some senior people on the floor. Of course it was great to meet other people, and it showed that the analyst had enough confidence in me to introduce me around, but it meant that I was late for my next appointment. The worst thign you can do is set up an appointment and then not show up. Key takeaway: always plan enough time to meet new people after an interview.

• Make sure you get as many business cards as you can, because when you meet these people you are going to want to stay in touch. You don't want to be annoying, but maybe a monthly or bi-weekly update would be good. Think of some reason to get in touch and then reach out with a short email and a quick question. If something great happens like you find out you got a scholarship or the football team you know this analyst loves goes to a bowl game, send them a quick email. The personal stuff is especially good because it connects you on a different level than desperate college kid wishing for a job.
  
  After a while I started having a tough time keeping up with all the contacts. I put together a spreadsheet dedicated solely to managing my contacts. Each row had name, number, firm, position, how we met, last interaction date, last interaction (what happened) and "Next Steps." The last column was important because every time I talked to somebody I would update and plan for the next interaction. Using this saved me many times and I had to check every day to see who was due for an email.
  
  I usually sent a few emails a day and made maybe 4-5 calls a week for a good three months straight. When the time came for interviews, it was easy to reach out and get these people to pass my resume along.

Good luck as you go out and meet people this fall!

p.s. I know that last year I really wanted to look at models that people have made and am wondering if anyone is still interested in seeing models that bankers use. Post a comment if you're interested and maybe I'll put a link up. Quick thought though - the most important thing going into my internship wasn't my ability to build a DCF model, it was understanding finance and knowing ALL the Excel shortcuts!

Treasury Update

Hey everybody -

Sorry it's been a while since I've posted. As you all can imagine, things at Treasury have been absolutely crazy (and, for those of you that think I should have said "at THE Treasury," for some reason people just say "at Treasury").

These are amazing times and the list of superlatives keeps on growing:
Largest ever bankruptcy
Largest ever bank failure
Largest ever drop in the DOW (points, not percentage)
Largest ever government intervention

It's crazy to think that in the short time I've been at Treasury so much has changed in the world of finance. I've had the chance to be working on the TARP (Troubled Asset Relief Program) team and it has been incredibly interesting. Obviously I can't post too much about what I've been working on, but needless to say it's amazing to be here. One thing I can say is that there are incredibly smart people working on this right now, and Americans can have confidence that the best people in the country are working on this huge problem. Well, the best and smartest...and me! Don't worry too much - I'm not involved enough to mess it up anyway :).

I try to read the criticisms out there to know what concerns people are having with this problem. For the vast majority of criticisms, I'm pleased to say that we have already discussed them and worked out solutions. Most of this stuff just isn't public knowledge yet, so I can't elaborate, but I'm confident that as time goes by America will see that this isn't just haphazardly thrown together, but it's a plan that has been thought through to extreme detail. I'm glad that it finally seems like people are at least understanding that this isn't just a "Wall Street Bailout" but is, in fact, a stabilization of the economy and will help people both on Main Street and Wall Street.

The link below is an article published in the New York Times back in 1999. It's about Fanni Mae and is very interesting because the author predicted exactly what was going to happen. I guess foresight in this case is 20/20.

New York Times Article

Valuation Methods

Here's a common question:

"How do you value a company?"

There are a ton of ways to answer this. I'll just list a few ways to do it:

1. Discounted Cash Flow
2. Comparable Transactions
3. Comparable Companies
4. LBO valuation
5. Sum-of-the-parts
6. Liquidation value

There are even more but usually if you list five or six that is enough to sound smarter than the average American (one of many things that you could say to sound smarter than the average American I guess).

More interview questions to come...

Bulge Bracket vs. Boutique

In general my full-time interviews were actually less technical than my internship interviews. I think the type of interview you get (technical vs. fit) is very dependant on the interviewer and what type of mood they are in. In pretty much every place I've interviewed I've had a mix of interviews where some were very technical and some were not. As a general rule, the more senior you go, the less technical the interview will be. My toughest technical interviews were all with analysts or associates.

I want to make a quick comment about the whole boutique vs. bulge bracket issue. I've interviewed with and received offers from bulge brackets and top boutiques, and I think it would be helpful to look at the pros and cons of each.

Bulge Bracket Banks
Obviously the past week has drastically changed the landscape for bulge bracket banks. The positives of working for one of the uber-bulges is that most banks (and, based on this weekend, even Morgan Stanley and Goldman) will have a capital base to support their actions that is more steady than it has historically been. In other words, it's good to work for a place like JP Morgan because they have such a huge balance sheet that they can be a part of any deal, regardless of the size.

Bulge brackets are generally well-established and have very structured training programs and procedures in place. Everything is already planned out for your next two years. You'll be one of many thousands of employees, and the bank has learned how to best teach you the ropes.

Your bulge bracket experience will give you the opportunity to try out many different products (be it M&A, debt/equity offerings, IPOs, etc) and you will generally get a very broad experience. One downside to all of this is that you might feel like another cog in the machine. It can be hard to feel like you are making a significant impact when you have 14 people on a deal team. Sometimes your deals will involve people from many different groups across the bank. One deal I worked on this summer involved our industry coverage group, the M&A team, and the lev fin team. Each team played a part, and we all had to collaborate a lot to get the book across the finish line.

At a bulge bracket you are part of an analyst class that likely contains over 100 analysts. You build a huge network and if you are proactive you can make connections across the firm. You won't have a lot of "senior exposure" (although I think it's kind of overrated anyway) because there are so many levels between you and then MDs. This summer I don't even think I spoke to any MDs more than three times, let alone working closely with them on a deal. As an analyst you will work extensively with associates and some with vice presidents.

Boutiques
Boutiques are a different story. Most boutiques are relatively new (Lazard, if it qualifies as a boutique, being a notable exception). They don't have lending or trading platforms but focus solely on advisory work. Many of the top boutiques focus specifically on M&A and Restructuring. So you won't get a chance to model out a debt offering or an IPO, but if you are looking to go into Private Equity, it's M&A experience that will get you the job anyway.

The training programs at boutiques will typically not be as structured or long as the BBs. You will still receive training but will be required to learn more on the job than in the classroom. This is why many boutiques tend to favor analyst coming in with some kind of finance background or experience.

Deal teams at a boutique will usually be 3-4 people. There will typically be an analyst, associate, VP, and MD. There might be a few more people, but not usually. The analyst will typically "own the model," meaning that the analyst builds the model and makes any changes along the way. At the boutiques I talked to, the analysts told me that they build models from scratch, whereas bulge brackets tend to be more prone to using templates.

Boutiques have an analyst class of 10-25 analysts. Analysts are given significant responsibility on deals. The risk of boutiques is that deal flow is determined by your MDs more than the name of your bank, whereas at a bulge bracket like Goldman Sachs, sometimes you win deals based on your name and not so much on the MD.

Exit opportunities at the very top boutiques are generally very good (comparable to Goldman or MS). While at a bulge bracket you would generally need to be the top analyst in your group to get interviews at the top PE shops (unless you work in Goldman TMT or Morgan Stanley M&A), if you perform well at a top boutique you can get those same interviews.

So in the end there are risks/rewards with every decision. At a bulge bracket you have a large capital base and do deals with many products, while at a boutique you are focused exclusively on advisory work. Bulge brackets have large analyst classes and well-structured training programs, while boutiques have small classes and lean deal teams, forcing you to "learn as you go." Exit opportunities are similar, but are probably a little easier to come by if you can get into a top boutique as compared to a relatively strong group at a bulge bracket.

How the Financial Statements are Related

Here is the pdf file I was talking about which shows how the three financial statements are connected. You'll probably never have an interview that covers every single connection, but it's good to know and understand anyway. Enjoy.

How the Financial Statements are Related

How to be Remembered

Around this time of year, the investment banks start coming on campus to give presentations and meet potential employees. One of my friends working at Citi told me about a recruiting trip he recently went on to a well-known school. I asked him if he met anyone interesting, and he said that he was actually really not impressed with the students at the school.

"I was asked some uber-generic questions all night long, and felt like nobody really wanted to know anything about me or my job, they just wanted to go through the motions of talking to the recruiter."

I actually remember the days of being at those recruiting socials and I definitely am guilty of asking some lame questions to recruiters. Luckily, I'm working this semester so I won't even be attending a single one of those events. But in order to try and help you all out a little, I wanted to make a few suggestions about these types of events.

First of all, try to think about things from the recruiter's point of view. You're going to a school where you may or may not have attended, but either way you probably don't know more than a handful of people. You've been working for the past 70 hours straight and know that the work is just piling up while you're talking to some kid about "work/life balance." In the end you will have to sit down with your team and talk about anyone that stood out in your mind, and you'll probably have to go through a mountain of resumes before it's all over. What you're really looking for is to meet somebody unique that you can tell really wants to do banking, and also that you would feel fine recommending for further interviews.

Now, when thinking of things like this, you can easily make a few goals for yourself. First of all, you want to be prepared so that there's no question in the mind of the recruiter whether you know your stuff or not. Second, you want to ask smart questions that don't sound like you got them out of the Vault Guide. The recruiter has probably been asked, "So tell me what kinds of deals you've been working on" more times than he/she would want to repeat. Third, you want to have a really great resume to hand the recruiter so that when they take a look as you're talking to them, they'll be impressed enough to listen.

Last October, I brought my resume to a recruiter from Credit Suisse. He was actually just standing there taking resumes and critiquing them, telling students, "Change this. Take this off. You have a few mistakes here or there. If you ever turn in a resume like this you won't get a job on Wall Street..." I was a little nervous but had spent significant time getting my resume prepared for that night. When he took a look at my resume, he scanned it over and said, "Now this is a resume that I like to see. It's perfect."

My resume wasn't actually that great, but I had just prepared it in a way that it would look good. The recruiter told me that very night that he would get me interviews for an internship, which he did. I ended up getting an offer from CS.

One hard thing for me was knowing what kind of questions to ask. I think more important than having a list of questions already written down that you want to ask is just being able to carry on an interesting conversation with somebody. Instead of asking them, "Why do you like Goldman?" you could say something like, "I know that Goldman has a very collaborative culture. What kind of experiences have you had working across divisions to get a deal done?"

The point is that when you ask a question, you show that you have done a little more homework than everybody else. Most firms like to tell the world about about all of their accomplishments, so go to their website and take a few notes about what makes this bank unique.

You might ask about what the bank's relative strengths are compared to its peers. For example, "When you, Goldman, Morgan Stanley, and UBS come to a bake-off, what is it about Citi that will win the deal? What does Citi bring to the table that is unique?"

I don't think I need to make a list of questions you can ask, but just point out that if you just spend some time thinking a little before you go and talk, you can make a great impression.

Question about depreciation

Another classic question that I've gotten a few times is something like this:

"Imagine that you have a company and suddenly you find out that you reported your depreciation expense incorrectly. You now have an additional $10 million in depreciation. How would this change be reflected in all three financial statements?"

I've actually received some form of this question about six times as I've interviewed. As always, you want to keep things simple and just go through everything methodically. Here's how I might go about answering this:

"I'll start with the income statement. Your depreciation expense will increase by $10 million, which will decrease your operating income by $10 million. Assuming (to make life easier) that you have a 40% tax rate, then your net income will decrease by $6 million after accounting for the tax shield you get from added depreciation expense.

"This net income will flow onto the statement of cash flows, so the net income will be decreased by $6 million. But, you will add back the $10 mm in depreciation so your net change in operating cash flows will be a positive $4 million.

"On the balance sheet, your accumulated depreciation increases by $10mm, so your net PP&E will decrease by $10mm. The cash balance increases by $4 million (from the cash flow statement), so the asset side of the balance sheet nets to a negative $6mm. No cash is actually paid out, but in essence your tax shield increases by $4mm so your cash position increases. On the liability/equity side, your net income, which decreased by $6mm, flows into retained earnings and therefore balances with your assets."

One time at Lazard I was asked, "You have been depreciating your assets using a double-declining method, but you now change to a straight-line method. What does this do to the financial statements?"

This question is similar but there's just one more little caveat. Can you think of it?

I've got a pretty cool pdf file that shows how all of the financial statements are connected. I'll post it on here soon.

What a week

The past week has been one for the ages. We will probably never see another span of carnage on Wall Street like we have seen for the past 10 days. With Fannie and Freddie going under, followed by Lehman, Merrill, and now AIG, the entire finance world is changing. And with Morgan Stanley and Goldman down well over 20% today, who knows if they will even outlast this crazy time.

With all of this turmoil, it becomes even more necessary to have a great resume and be ready for interviews. A quick update - my kidney stone is no longer in my body, but the effects of the little rock are still being felt today. Kidney stones suck!! Also, I got some offers - one at another bulge bracket bank and one from a top boutique. So that was GREAT news given the other things going on this week. Now the tough part is deciding where to go. I am definitely blessed to have options this year.

So I thought I would write about some of the other interview questions I've faced over the past few months, as well as some of the ways I've answered these questions. Keep in mind that I'm not an expert and could very well miss some things. That said, I've received an offer from every firm with which I've interviewed, both for internships or full-time, so I feel like I can at least take a crack at some of these questions.

The most common technical question I've gotten at every bank I've interviewed with is "walk me through a DCF." I think everybody knows in their mind what a discounted cash flow model does, but what I've found is that there's a certain way to answer this question that makes your life easier. When I first started interviewing I really wanted to show people that I know what I'm talking about, and I went into great detail about every part of a DCF calc. What happened though was that I would get bogged down in the details and end up not sounding very smart.

Now when I answer this question, I like to begin with a very simple answer and allow the interviewer to drill down however he/she would like to. For example I might say something like this:

"The goal of a DCF model is to derive the enterprise value of the firm. I do this by calculating the unlevered free cash flows of the firm, then project them forward for about five years (or whatever time horizon you are looking at). I then calculate a terminal value (TV), and discount the TV and the FCFs back to the present value at the cost of capital to get my enterprise value."

Done. At this point, the interviewer knows that I understand the DCF, and they are free to ask me deeper questions. Some interviewers I've had will stop me as I go along to ask questions, but most let me go to this point and then say something like, "Ok great. Can you tell me how you would calculate the free cash flow of a company?"

"Sure. Starting with EBITDA, you subtract D&A, then multiply by (1-tax rate) to get rid of the tax cash, then add back D&A, take out CAPEX and the change in net working capital, and you have free cash flows."

"And what is net working capital?"

"Current assets less current liabilities."

"Great. How do you calculate a terminal value?"

"Well it depends on the deal. If it's a strategic deal, you'll probably use a perpetuity model since they want the asset for the long term. If it's a financial deal the sponsor will want to sell in the terminal year and you'll use a multiple, like EV/EBITDA."

You get the picture. I just give the answers in a way that shows that I know what I'm saying but I don't try to tell it all at once. They might ask you about how to calculate a discount rate (use WACC), how to calculate WACC, how to get CAPM, and even how to unlever/relever beta. Whatever it is, just be ready for it, but start basic and work your way into the nitty gritty.

One more question about accretion/dilution that I got this summer was something like this: "If you own a company and want to do a quick back-of-the-envelope calculation of acc/dil, how would you do it given a particular target? In other words, what information would you need to do a quick calc?"

"Well a P/E ratio would be great."

"That's right. So lets say your company has a P/E of 18 and the target's P/E is 21. Will the deal be accretive or dilutive? Why?"

"Dilutive because their P/E is higher than mine. In essence I would have to pay more per dollar of earnings than my own company is worth, so the EPS would decline."

Here are a few more random interview questions:

"What's the square root of 2,025?" (The answer doesn't have to be right on - it's 45 - but you just have to be close. They want to see how you can out loud reason through some mental math)

"What is 2/3 + 3/4?" (Just take a deep breath and think back to seventh grade - you can do this!)

"So you worked a little in a fund. Pitch me a stock." (On this one I pretty much always go with my favorite stock that I've bought - PARL - because it's an interesting company to talk about. I would suggest that you are ready to talk about a few investment ideas, and also that you pick companies that the interviewers have never heard of. You don't want to say "GM" and then find out that you're talking to the MD on that account)

"If you had $1 Billion to invest for your school, how would you do it?" (Again you can pretty much say whatever you want, but don't be stupid and say 'Short Goldman with the whole fund because I don't believe in the pure play model!' Just be rational with how you answer most questions and you'll be fine)

I'll be posting more questions/answers in the next little while. Sorry again for the long delay. I'm working at Treasury so you can all imagine what a week it's been around here with Fannie, Freddie, Lehman, Merrill, and AIG all blowing up. Anyway, keep the comments coming about the types of posts you'd like to see.

The Resume

Alright. So here are a few thoughts about resumes. As any person can quickly find out through some Google searches, there are plenty of sites with tons of advice about how to write a great resume for investment banking. I'm debating about posting various versions of my own resume up here (with the names taken off of course) so people can see how my resume has evolved over the past year and a half.

I think the important thing with resumes is that you spend the time NOW to get it into shape. No matter if you're a senior or a junior, this is VITAL to getting interviews and jobs. In addition, when you go to visit people already in banking, they will almost always ask to see your resume at some point. If your resume isn't already "bankified" then you're in trouble. On the other hand, if you're a junior and you can send somebody a resume that looks ready and it's only September - you are in a great position.

I know that for juniors especially it seems almost unnecessary to spend so much time on your resume when you won't even have to turn it in for a few more months, but it is well worth it. Plus, you'll constantly be updating your resume as you gain new experience or think of better ways to describe what you've already done. I'm still changing mine all the time to better reflect who I am and what I've done. The key is that your resume, no matter how little experience or leadership you have, meets the basic banker standard.

Last June I thought that my resume was solid. I had spent a while working it over and I was sure it was awesome. I had read all of those sites on the internet and really tried to follow the advice there. Then the President of the Investment Banking Club sent me his resume as an example, and I was embarrassed that he had ever seen my resume. Just the format of his resume made mine look very basic. I totally remade my resume based off of his format, and my resume continues to resemble that format today.

A quick word about using other people's resumes to make your own. Obviously it's a STUPID idea to just copy what other people have written. Think about it - when you get into an interview anything on there is fair game. If you've embellished or exaggerated or even just flat out put down stuff that you haven't done, the interviewer will be able to tell right away and you immediately lose any chance you might have had. It's also just dishonest. That said, I don't see any problem with getting ideas from other resumes. Like I said - the current format of my resume is based on a resume I saw over a year ago. There are certain styles of describing things that I have imitated from other resumes. You have to make it your own, but there's nothing wrong with getting ideas from other people. Just NEVER copy and be totally honest, and you'll be fine.

I took a class when I first got into the business school about writing and we did a section on resumes. The teacher talked about the importance of having lots of white space and even drew a "golden triangle" on a resume to show the concept. This could not be farther from the truth on a banking resume. You basically have only one sheet of paper to define your entire life. You should use every possible bit of space you can. Of course, it has to be clean and aesthetically pleasing, but you really have to pack things in from top to bottom.

Here are some key ideas when you write a resume. Like I said, you can find this stuff all over the place, but it's worth another mention.

First of all, Bankers like results. One of the big mistakes that I've seen on a lot of resumes is that people just list bullet points of what they did (I've definitely been guilty of this as well). Not only do you need to list what you've done, but you need to tell what the result of your work is. You need to show that because of you, things got better. Banks want to hire people that add value and make a difference, so be sure that as much as you can you talk about results, not just experiences. When you spread those comps this summer, what was the point? When you built that DCF, was it used in the presentation? Did the client go through with the deal? Results matter.

Another thing is that bankers love to quantify things. As often as you can, add numbers to your experiences. This relates to the results part. Talk about how much more efficient your company is now that you're there. Talk about how many security systems you sold last summer, and how much more that was above the average. List what percentile your ACT score was. Just do whatever you can to quantify and add context to the words you put on the paper.

Unless you have a really great and relevant experience, I wouldn't put anything more than 4-5 bullets for any one job/experience. The exception to this would be under your "Personal" or "Interests" or whatever kind of section at the bottom of the resume. Here you just kind of list all of the random accomplishments and interests that you have, including languages you speak, awards/certifications/skills you have attained, and (if you want) interests you have. I tend not to put my interests on the resume. I figure putting down what sports team I like or what I do in my spare time isn't what's going to get me a job. I've heard stories about how interviewers see something on the resume that they totally relate with, but in the end I believe that they will take somebody with solid experience and great qualifications over someone who likes the same TV show as they do. It can be a good way to start conversations though, and pretty much all of my friends have an "Interests" bullet on their resume.

When I was really trying to get my resume up to snuff, I read all of the suggestions online and tried to do everything they said. But, like I wrote above, this still wasn't enough. It took me actually seeing and talking to somebody who had already gone through the process of getting an internship and full-time job for me to realize what my resume needed to look like. I'm still changing and updating things on my resume, but I feel confident that whenever I send someone my resume, they will give it a good look. It's important that you don't just turn in your resume for a job without getting some outside feedback. The best thing is to get somebody that knows about banking to look at your resume. If the person don't know what it means to do a sum-of-the-parts valuation, then they might not give you the best feedback.

So here's the deal. I've been getting some requests from people to look at their resume. I've seen tons of resumes (including reviewing resumes this summer for full-time candidates) and can give solid advice on what bankers are looking for. There are various online resume review services that are all very expensive. Mergers and Inquisitions has a good one but it's $200. If anybody wants an independent, line-by-line look at their resume, send it my way. I can make suggestions, give you some ideas, and help you get your resume looking great. And instead of charging $200 or more, it'll only cost $30.

The reason I'm charging for it is obvious - time is precious and we all have to support ourselves! That said, I want to offer a high-quality review for much less than what is available today. Here's how it would work:

You get your resume prepared. You can take your personal info off if you want. A lot more important than your address is what your resume actually says!

When you're ready, you pay the $30 through PayPal and then send me your resume. I'll go through it line-by-line and return specific comments, suggestions, and ideas that will help your resume get noticed. If you have questions, need clarification, or want me to help you change anything, just send it back and we'll do that as many times as you want until the resume is pristine and ready to be sent to any bank on the street. Often you might not know anyone at a bank, so your resume is the only chance you have of getting an interview.

If you have further questions or are ready to send me your resume, email me here.

Regardless of whether you have me look at your resume or not, make sure that before you send it to a bank, you feel totally confident that they would want to interview after they have seen your resume.

I will continue to write posts about interview questions, networking, lifestyle, a little about my current job at the US Treasury, and anything else I feel is relevant. As always, keep commenting and let me know what you'd like to hear more about. The next post will be more about interview questions I've had and some ideas on how to go about answering them.

Resume post to come...

Hey everybody. Turns out that this whole kidney stone thing is more painful than I originally thought. I've written most of the resume post but near the end felt like taking a knife and cutting out my kidney to stop the pain. Needless to say, I didn't finish the post. It'll be coming...

Ouch

Well as if things couldn't get any weirder, check this out.

And, by the way, I'll be posting later on today about resumes. Sorry for the long breaks between posts.

So on Thursday night I took a bus from DC to New York because I had final rounds at a bank. I stayed with a good friend who just started at a bulge bracket bank and has been working like crazy. He didn't even get home till after 3am and that has been par for the course for him since he's started. I guess that's what you have to expect. The amazing thing is that in addition to all the work he's doing, he's made time to build some sweet models in preparation for private equity interviews coming in a few months. Props to him!

So I had the final rounds on Friday. It was pretty standard - there were six interviews of about a half an hour each. Three of them were with managing directors, one with a principal, and two with associates. Like other places, the associates and the principal gave me pretty technical interviews, and the managing directors just wanted to hear about my life, talk about their past experiences, and answer questions about the firm.

The technical stuff was actually pretty challenging - probably the toughest I've ever had. They based a lot of the questions off of what's on my resume, so one of the first things an associate asked me about was accretion/dilution. This girl was sharp - she worked at Miller Buckfire doing restructuring, then went to Goldman's sponsers group for two years, then went to McKinsey for two years advising on corporate finance, then finally went to Harvard Business School and on to her current job. Nice background. She had me walk her through different scenarios such as 100% cash, 50/50, and 100% stock, and asked me to talk about what would make the deal accretive or dilutive in each scenario. The only thing I needed her help on was remembering how assets are written up or down in a purchase and how that can affect accretion or dilution.

She then asked me about a DCF model I built over the summer. Usually I've just been asked how to walk through a DCF, which I did for her. But along the way she would ask me things like, "So on this deal, what were the COGS? What were the revenue drivers? What kind of operating expenses were there? When talking about discounting, she wanted to know what discount rate I used and why/how I got to that rate. She asked if we discounted at beginning/end of year or if we used the mid-year convention. I said mid-year because cash flows don't all come at the beginning or end of the year, so mid-year tends to smooth it out. She said that was right and said, "What about the terminal value?" I answered, "Well that one you discount from the end of year because you want to discount the full last year before you sell." She responded, "Exactly right - that's a very common mistake so good job." Whew!

The other associate I interviewed with gave me a case study. He said something like, "Assume you have a company that owns 15 coal refineries in North America, the rights to build more refineries in 10 other places, and then you own an electrical power plant in South Africa where the price of electricity swings 1000% percent a day. How would you value this company?"

I said I would do a sum-of-the-parts, which was correct, but then he wanted to know how I would value each piece. The coal refineries are pretty solid so I said I would use a traditional DCF with steady-state assumptions. The rights to build were dependent on how rare they are, so I said I would have to use some comps and decide what the real estate was worth, as well as finding out how feasible it would be to build. Lastly, the South African asset could be valued using a DCF, but you would have to use a really high discount rate to account for the swings in value. I also said you could use comps to see what other people are discounting similar assets at.

He seemed to be ok with my answers, and I took another deep breath. Thank goodness!

Overall the rest of the time I was just asked to walk through my resume. One guy asked me what my two greatest strengths are as an analyst. I said my initiative and ability to learn quickly. I wasn't really asked anything else other than things specific to my resume. Luckily I have enough varied financial experience that it usually provides plenty to talk about over a half an hour and the interviewers don't have the time to get crazy with thier questions.

This firm is pretty selective so they were only interviewing one other guy with me. They sent the two of us along with four analysts out to lunch after our interviews. That was a cool experience because we just got to shoot the breeze with the analysts and ask them what it was "really" like working there. From what I can tell it sounds like an awesome place.

So sorry if you aren't all interested in what a final round interview is like, but I thought I would share some of the questions that were covered. I was hoping for some brain teasers but I didn't get any.

Anyway, the crazy stuff happened after I left the interview. I got back on the bus to go down to DC, and immediately my lower abdomen on the right side started to hurt. My back was also sore, but I figured that it was the horrible seats on the bus more than anything else. The girl I was sitting next to could tell that I was in a lot of pain and kept asking me if I was alright.

A few times I went in the bathroom stall at the back of the bus and just sat there because it was more comfortable than my reclined seat. I was in the worst pain I've ever felt - it was excruciating. And there was nothing I could do to alleviate it - no matter how I stood or sat the pain was still almost unbearable. I didn't know what to do - I couldn't go anywhere and I was on a bus going down a highway. Finally after three hours we stopped to drop some people off in Baltimore. I grabbed my stuff and just got off the bus. I ran to a taxi near the bus stop and said, "Take me to the hospital!" I think it kind of startled the taxi driver because he drove like a maniac on the way over - I guess he didn't want me to die in the back of his cab.

I got to the hospital and there were probably 80 people waiting in front of me. Some of them had already been there for eight hours. I signed in and told the nurse that I was in terrible pain. She put me at the top of the priority list, but I knew that even at the top of that list I would still be waiting for a while. I got some blood drawn and gave a urine sample, then just sat and waited to be called. About four hours later they called me back. After sitting there waiting for another hour in the hospital bed, they finally came in and gave me some medicine to ease the pain. Wow - that was the worst 5-6 hours of my life by far. Nothing I've ever felt compares with that pain.

I got a CT scan and it turns out that I have a kidney stone! I thought those only appeared in older people, but apparently somehow I got a kidney stone. I've heard it said that the pain is comparable to giving birth, so to all of you women out there, I bow down and thank you for that wonderful service you provide to humanity. You are amazing to handle that multiple times!

I finally was released at about 3:30 am and was wondering how I was going to get back to DC. When I ran off the bus I wasn't really thinking ahead about the fact that after I left the hospital I would still be an hour away from DC. Luckily, my dad had made a few calls in the meantime and some guys from my church, whom I had never met before, just showed up and took me all the way home. People in the Church are just like that - willing to help a total stranger. It's amazing.

So now I'm at home with some narcotics and things are better than yesterday. The stone is still inside of me somewhere but the doctor said that the worst pain comes when the stone moves from your kidney to your bladder, so hopefully the worst part is over for me.

This isn't really what I expected to do during over the weekend, but I've also learned to expect crazy stuff to come up all the time.

Let me know if you like hearing about interviews and I'll post some more questions from various interviews I've had over the past few months.

The Ultimate Day

Saturday was pretty fun. I met one of my (seven?) roommates and he is pretty cool. He's doing a PhD at Georgetown in Economics so he will probably be giving me advice this semester on how to fix the economy :). We went to a park near to where we live and met up with about 10 other people and played ultimate Frisbee. I'm amazed how seriously people take this game on the east coast. I had never played until I went to college, but people out here are really good at it. They can throw a Frisbee in ways I didn't even know were possible. A few of the guys on my team were extremely good so I usually just threw them a pass and then ran for the endzone. They could pretty much always get it to me.

Washington DC is so different from New York. It's quiet and pretty. I think it would be a cool place to live if you're 30 and have a family.

So someone asked how I'm able to do this internship and still graduate from school. It just turned out that I only have one semester worth of classes left to graduate, so leaving school for a semester won't be a problem. I was planning on taking really fun classes like golf, skiing, cooking, Shakespeare, and stuff like that in my final semester, but now I'll just have to take the required business classes. I figured it would be worth it to spend a semester at Treasury at a time like this.

I am kind of sad when I think about what I'll miss this semester. We're supposed to have a really good football team, so I'll have to watch all the games on the TV instead of actually being there. All of the recruiting events where firms show up and bring free pizza and tell you why you should work for them - I love those things. I'll pretty much miss them all as well. Last year as a junior I went to pretty much every banking and consulting info session I could because it is a great way to network and meet people for when you want to interview for an internship. The same people come back to interview you, so if you can get them to remember you then you're in great shape.

Last year I met a guy from one of the bulge-bracket banks that came on campus who was out hiring for full-time in October. I talked with him a lot and gave him my resume. He called me back the next day and told me he wanted to interview me! It turned out that he thought I was graduating in 2008 (even though I told him I was a junior and my resume said "Graduation 2009"), but you can bet that when internship season rolled around, he actually called me and asked if I would be at the info session because he wanted to catch up and help me get ready for interviews with his bank.

Another guy I met in October took a look at my resume, liked it, and then told me that he would get me an interview with his bank. He then proceeded to threaten me that if I screwed up the interview he would basically kill me, but I promised him that I would destroy the interview. In the winter, he did in fact get me an interview, and I did in fact destroy it - I got an offer from that bank. I didn't end up taking the offer, but it's just another example of how important it is to meet people when they come on campus for the full-time hiring. Even if they say that only seniors are allowed in the info sessions (which is extremely rare, usually anyone can come), if you can just get some one-on-one time and hand them your resume, you will be in a great position.

This all assumes that your resume looks good. I'm going to write a post soon about resumes, but at this time last year was when I was making some major revisions to my resume. It went from having Chuck E. Cheese (my first high school job) on it to looking like a banker-worthy document. I've put over 100 hours into that resume, and I continue to update it constantly. It's one of those things that you need to get up to a certain quality level as soon as possible.

Resume post to come...

History repeats itself

I don't know what it is about starting internships, but for some reason I always end up spending my first night on the ground. I flew out to Washington DC today and this morning the guy that just moved out of the place I'm moving into called me and said that he took the bed that was there and that there won't be a bed for me. Great. Apparently he's going to help me find a bed, but it's already 9:45 PM and I'm sitting on the floor of an empty bedroom. Oh well, at least I'm inside the house instead of out on the street like in New York. I guess the last internship turned out pretty well so hopefully this is a good sign that things are going to work out.

It's a bit different being in Washington DC because I've never been here before. I know maybe 3 people in the whole city, and not even that well. when I was in New York I had been there multiple times before and knew 30-40 people. I actually just want to get to work here because I think that will help me get over feeling alone out here.

I've been reading primers and news articles on the housing markets and it looks like it's going to be a very busy time for me out here. I'm still not exactly sure what I'll be doing on a day-to-day basis, but whatever it is it will be interesting stuff.

So as far as the job search goes, I haven't accepted my offer yet and am talking to other places just to see what else is out there. It's amazing to me how different it is when you contact people and you can say, "I have a full-time offer at XX bank and this fall I'm going to do an internship at the Treasury." Whereas before they would give me some excuse about why they couldn't help me out, suddenly all these people are interested in talking to me. That's great with me, but it's interesting to see how things change when people think you might add value to their firm. It's been WAY easier to contact different banks and get opportunities to meet with people, even at firms that were not even an option before.

Well I'm going to go create a place to sleep, but the internship is getting started!

Back of a $10 bill

Hello everybody -

Just a quick note to let you know that I'll be continuing my blog! I got an internship for the fall semester working at the US Treasury in Washington DC. While I probably won't talk a lot about what I'm doing there day-to-day, I'll keep you all filled in on recruiting season and how things turn out with accepting offers and things like that. Once again, if you have questions then post a comment!

I'm going to work on the back of the $10 bill!

Home sweet home

Well I'm home. What a weird/peaceful feeling. Provo, Utah is about as different from New York City as you can get. I was actually kind of sad as I rode in a cab at 3:45AM this morning heading out to JFK. I rode past Columbus Circle, through midtown, and over the East River and on towards JFK. It's sad to leave the City, and I've absolutely loved living in New York for the past two months. It's a fast-paced, energetic place and everybody is so driven to be successful. It's motivating just being in the City. I'm really glad that I have an offer to come back because I think that two years (at least) in the City will be an amazing experience.

So over the past few days I've been meeting with various people at different banks. At each place the message was basically the same: This is the worst year in the past decade or so for trying to get a job on Wall Street, and you should be very happy that you have an offer to go back to your bank.

They usually then talk to me about my experience and I share about some of the deals that I worked on this summer. At a few of the places, the people told me to send them my resume but were careful not to promise anything other than HR taking a look. That's all I'm asking for anyway. I'm confident that no matter where I end up, especially if it's back where I summered, it will turn out to be a great experience.

It's important that if you have an offer you are aware how much time you have before you need to make a decision. You don't want to put off your decision just to put it off, because the longer you wait for no reason the more chance you have of losing confidence from the people you worked with. My bank told me that I have as much time as I need, but that probably means that they would like to hear back in the next month or two. I don't actually have the specific terms of my offer, so I would like to wait to see those before I sign anything.

In the meantime, I'm back home! It's been so nice to just rest and take it easy. I have plenty to do here at home and am already getting work to do from the job that I have out here, but it's been nice to relax a little and not have to worry about getting staffed on a deal at 11:00PM on a Friday night.

These next few weeks will be very interesting as I try to figure out what I want to do with the offer and where I'll end up next year. I'll keep you all posted!

Crossing the Finish Line

Well it's over. Sorry it's been so long since I last wrote. The last week of the internship was the longest and best for me. Every single day I was at the office getting slammed. The funny thing was that the other interns really didn't have much to do. All week long I was working like crazy and they were kind of playing around and just coasting to the end. I think what happened was in the last three weeks, people in my group started to see that I was there to work and that I could do the job well, so they started depending on me to help them when they needed something to get done.

This was a very good thing to happen. I didn't come to New York to play around and to leave the office at 7:00. I came to get a job offer and to learn as much as possible, so if that meant staying until the early hours of the morning then I was happy to do it.

In the past week I put together a pitch book by myself. That was pretty exciting. Well I wasn't totally alone, but I was basically the analyst on the book working with a summer associate and a full-time associate to make sure I did it right. It was 90+ pages so there were lots of slides I put together, but it was all things I had done before so it went pretty well. We were looking pretty closely at three companies, so for each one I did a detailed profile with financial information, various valuations (dcf, comps - transaction & trading, acc/dil, etc), shareholder information, defense profiles (what kind of policies they had in place to fight against a takeover), and other industry-specific stuff. It was a good experience.

This entire week the interns everywhere in the firm have been going nuts trying to figure out who will get offers and who won't. It was (almost) funny to watch how paranoid people are and how they would read into every situation. One summer told me, "Dude I just walked by the staffer's office and he wouldn't look me in the eye when I went by. I don't think I'm getting an offer." My bank typically accepts a high percentage of the intern class to come back, but since markets are so difficult this year, they are cutting back.

One cool project that I worked on this week came in my last two days of the internship. The star analyst of our group pulled me aside and told me that he needed me to help him in building an integrated model for a company. We actually had to build a model for three companies, so he wanted me to do one and he would do the other two. I've worked a lot with this analyst and he really trusts my work, but I was surprised that he would be willing to just let me build the entire model on my own. Of course he checked it and we went through it together, but I built it out from scratch.

The model was integrated in the sense that it had the three financial statements and they were all connected. So one change of the model on one statement flows through all three financial statements. I built a debt paydown section and a revenue build-up section. The revenue buildup was basically just a separate part of the model where we break down all the incoming revenues and allow for different variables to determine the revenue levels. It's important when you build a model to be able to adjust certain variables and have them flow through the entire model.

So I spent my last two days working on that model. On Thursday night, the entire intern class had a big party at a club near the bank. It was an open bar and they had the top floor of the club sectioned off for people from the bank. I only got to go for the last 10 minutes because the rest of the time I was jammin on the model. I didn't mind though, because it was a great experience and I can always go to a club in two weeks when I'm not trying to get an offer.

On Thursday they told us the schedule of our final reviews. For some reason I was slotted to go first, even though alphabetically either by first or last name I shouldn't have been first. The order of the reviews caused even more speculation among the interns. It turns out that the last two people to go didn't get offers, so speculation was actually correct for once.

On Thursday after the intern event I came back to the office (at about midnight) and helped an analyst finish up some work she was trying to get done. One thing I've learned is that if you can do anything to help people get home earlier they will love you. That's a question I asked a lot this summer - "Hey what can I do to get you home earlier tonight?" The analysts LOVE when you ask that because they can tell that you "get it." You understand that your role as an intern is to make their life easier, whether you do that by making copies of stuff or actually building a model. It doesn't matter what you do, it's more the attitude you have and the willingness you have to get any job done.

One reason that some people from Ivy League schools didn't get offers this summer is because they had too much of a sense of entitlement. They felt like since they go to the "best" school they should of course get an offer. I think it was for sure an advantage to me to have come from a non-target school because I always felt like I needed to prove that I was still just as good (if not better) than the Ivy League kids.

After helping the analyst finish up I went over to my desk and started to clear it out. It was kind of a sad thing to do. One thing that my group always says about me is, "Man this kid LOVES banking. We've never met anybody that loved to bank like you do." What better comment could someone say? The reason I got the reputation that I did is because I really do love it. When I got asked to work on a model for the first time, I had a smile so big the analysts made fun of me for the rest of the day. They thought it was hilarious that I was so excited, but deep down they also really liked the fact that I cared that much. You want to come away from your internship with the group feeling like you absolutely love this stuff. And it helps if it's true.

Like I said - it was sad clearing out my desk because I really have loved this internship. It's been so amazing to be working on Wall Street and actually doing the work that I've wanted to do for so long. The people in my group were fantastic and I learned SO much. I even asked my staffer if I could stay for the rest of the summer and work for free. He said no because of obvious reasons, but again the message I was sending out was that I wanted to be here and I loved to bank.

I stayed up until 3AM writing a thank-you card to every person in my group that I had worked with. I wrote a card to every intern, every analyst, every associate, and most of the VPs. I didn't write to any of the MDs except for my mentor. It took a long time, but you would not believe how well that went over the next day. Every single person in the group came in the morning to find a Thank-you card sitting on their keyboard. So many people came over to my desk just to say how much they appreciated the card.

I treated each card like I do emails: if you're going to write a bunch of people, take the time to write each person an individualized letter instead of spamming out the same message to everybody. I tried to be personal and specific with each person, and the results were amazing. Many of the analysts pinned up my card on their wall and thanked me numerous times. It's amazing how just saying "Thanks" can be so effective. And the greatest thing is that I really was grateful for how much they taught me and helped me get through the summer. It's hard saying goodbye to people that you've spent about 80-120 hours a week with for the last 8 weeks.

So on Friday morning I came in wearing my favorite tie. I didn't really talk to anybody; I just went to my desk and thought about the summer. At 9:45 I had my review so I went up to the conference room where my staffer and an HR girl were sitting. I walked in and the first thing the staffer said was, "Well you've done a great job this summer and we'd like to extend an offer for you to come back full-time next year." I was floored! I expected that they would talk about my strengths and weaknesses, then at the end tell me the decision.

So for the rest of the time in there they just asked me about what they could do to get me to sign the offer. They told me that there will be a "Sell day" where they fly everybody back to NYC and basically wine and dine you and try to get you to sign the offer. I told them I would think about it and let them know soon what I was going to do.

In the mid-summer review, they read many specific comments that my reviewers had made about things I had done well, but in this review they didn't even tell me any of the comments. Well I take that back. I was told that one of the questions on the review sheet was something like, "This person performed at the level of: 1) Below summer intern 2) Summer intern 3)First-year analyst 4)Second-year analyst" They told me that every one of my reviewers put me as either a first- or second-year level. It was funny to hear that because I am so obviously below all of the first and second years, but that's how people saw it I guess.

The told me some other good and flattering things about how I had done really well relative to my peers, but all that didn't really matter. The most important thing to me was that I had an offer! In these markets, which are the toughest to get a job in in the last 10-15 years, it is HUGE to have an offer.

I'm staying in New York for a few more days to meet with people at other banks and to just kind of feel out some other options, but it is a tough market and some banks aren't really even looking to bring anyone else on. Not that I'm too concerned because my group that I would go back to is top on the street at what they do, but it's always good to play it safe and just find out if there are other opportunities.

Well this has been a long post and I'm sorry it's been a while since I last wrote. I did it! The internship is over and I have an offer. Of course there are many things that I could have done better but I feel like I learned a ton and I came away a better person. In the next few days I'll keep posting about how things are going with meeting other banks and how I'm going about that process, since if you want to get a job next year you'll probably have to do something very similar this coming fall/winter. I'll also be posting some of the lessons I've learned and other things like that.

On Friday after I got the offer I just kind of hung out the rest of the day. Well, I also did some random jobs for associates that were still working, but for the most part I just printed out different presentations that I wanted to keep and packed up all my stuff. I ended up staying in the office until 8:00PM even though the other interns left long before that. It was just sad to leave and I knew I was going to miss it. All the analyst came together when I said I was going to leave and we kind of just talked about some of the fun stuff we had done this summer. I told them all what I had really appreciated about each one of them, then hugged everybody and walked away. It was weird leaving, but I'm happy. I'm going to have lunch with the second-term interns and the analysts from my group this coming Wednesday, so I will get to see them all again.

On Saturday I slept in until 1PM. It was amazing. I've never slept that much in my entire life, but it felt so good to not do anything all day long. My body is worn out but now I have the rest of the summer to just relax.

So the internship is over. I hope this blog has been helpful in some way to get a look at what it's like to be an intern. Like I said I'll keep posting and if you have any other questions about my experience, just post a comment and I'll respond. Thanks for reading!