Saturday, July 19, 2008

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!

Wednesday, July 9, 2008

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!

Tuesday, July 8, 2008

Long Night's Work

For the past three days I have been getting killed on this book. One analyst described what we were going through as "the gutter of investment banking." On Saturday it started. We basically just started creating a book for a meeting on Tuesday. We worked on it for a few hours Saturday and made plans to keep going through the weekend.

On Sunday I went to church and then had to come straight to work. I was there from about 11:00 am to 10:00 pm. All we were doing was aggregating information. We had to do about 10 different company profiles, accretion/dilution scenarios, shareholder information sheets, and financial data sheets. I was working with a new associate to the group. It was his first book so he was extra sensative to everything. He would have us check, re-check, then re-check again every single calculation we put into the book. Then he would have us recalculate it by hand.

Monday came along and we just went through the process: make changes, print out book, find new things to update/change/add/delete, make changes, print, etc. ad infinitum. Throw in there an occasional print off and delivery to the VP. After the VP looks things over he decides he wants to add another company in the mix, so we pull the financials, build the models, get the data, and put it in the book.

Then the VP looks again and decides that he wants to change the order that the comps are in. So you have to go back and re-format and arrange the entire book so that company #8 is now company #2 and things like that. It's just a tedious process. It wouldn't have been so bad, but the associate was constantly breathing down my neck and was really paranoid that one of the numbers wouldn't tie. We literally flipped the book over 20 times. That is about 5x more than I have EVER flipped a book. I've made books that were well over 90 pages long and this far and away exceeded anything I've done before. This guy was just excessive.

We basically built the book three times because when we were done (this was at about 11:00 at this point) he said, "Ok we're doing well. Now I want you to read every single page of the book to check for errors, grammatical changes, or anything else you might notice. I want you to have an opinion about this book when you're through." The crazy thing was that we had already flipped the entire book together multiple times and hadn't found anything. To "flip" a book just means to go through page by page looking for errors and correcting marks that someone else has made.

We continued to change little things, re-calculate numbers, and re-read slides until finally at 3:45 AM I told him that if we didn't send off the books to production we wouldn't have them printed in time for the meeting in the morning. We sent them off and I was getting ready to go home and sleep for a few hours when he said, "Ok I need you to stay here until you have flipped the printed books." So I stayed at the firm with another analyst and just waited until 6:30 when the books were finished. We finally got the books, flipped them, and put them on his desk. He had asked us to come in at 8:30 this morning to flip the books with him one last time (this is about flip #24 or 25 looking at EVERY page). I got home at 7:15, ironed my shirt and took a 15 minute nap, then came to work.

Needless to say it was a long night. In the end it wasn't so bad. It felt pretty inefficient the way we did things, but at least I can say with 300% surity that every single number in that book ties and is correct. It's kind of sad that I know the order of all 93 pages.

I guess if I had to pick a way to go out my last week this would be it. I'm not trying to complain about working long. I didn't mind that. I just didn't understand why we had to do things the way we did. But, as an intern, you don't ask those questions. You just do it with a good attitude and pretend like you couldn't be happier if you just won the lotto. The analyst I was with was really cool, and we had some good conversations while we waited for the books. It was a pretty good night.

Sunday, July 6, 2008

So for the Fourth of July I worked for a few hours in the morning and afternoon. An associate that just came into our group from another group in the bank is on his first deal. He is really paranoid about his first book because he wants to make a good impression on the senior people in the group, so he basically has been hand-checking every calculation in the book.

It's been crazy because for every number I put in he wants to know where it came from, how it was calculated, and why I did it that way. It makes for a solid book, but when you're the lowest guy on the wrung and the associate wants more and more work done, you end up working a LONG time just checking and re-checking the numbers. Today is Sunday and I put another 8 hours in on this book before we sent it off to the Vice President.

One of the things that I worked on today was company profiles. This is something I've done a lot of as an intern. Basically you put together a profile of the business segments, put historical and other financial data together with projections, pull shareholder info (basically find out who the top 10 shareholders are and how much they hold), and make a few charts with historical price data. It's about three or four slides per company, with six or seven companies in the book. You use it as a backup for your comps.

One of the hard things about scrubbing the numbers in a book is that you pull numbers from a lot of different sources, but they all have to be the same throughout the book. It makes sense that if you look on page 25 and see that estimated EBITDA for 2008 is $435, that on page 68 the EBITDA number should also be $435. The problem is that on the first page you calculated it yourself using 10-Ks and Qs and projections based on historical trends, then on the other page you take it from research reports. Basically it's tough because you have to figure out what the research analyst did to get his number and then reconcile that with your own numbers. It's a time-consuming project but it has to be done to make it perfect.

The 4th of July was great because I got to see a really good fireworks show. It rained a little, but it didn't matter. I met up with my other intern friend out here and we went down to the water. We watched the fireworks then went out with some other guys that he works with to hang out. We don't drink, but the other guys do so we went to a bar and just talked about our different experiences at different banks. It was really interesting to hear the similarities and differences between the different banks.

Yesterday I actually got tickets to see Wicked. I didn't win the lottery that they have going there, but some girl that won ended up giving me her ticket because she couldn't use it. It was awesome - I was on the front row in the middle and could see everything just fine. It was cool to see the faces of the actors and catch the nuances on stage that you miss from the back row.

Well it was a good weekend and now I'm going into my last week. Weird. Wish me luck!

Friday, July 4, 2008

Secret Sauce

Yesterday was a good day for me. One of the four guys from my school that are at Lehman Brothers working full-time called me up and asked me to have lunch with him. He said that HR had called him and said that my reviews were really great, that he had $50 dollars, and that he should take me out to lunch and "sell the firm." Sounds good to me!

We went to an awesome Chinese restaurant and just talked about a lot of different things. He gave me a lot of great advice and answered a lot of "off the record" questions I had about the firm and what to do if/when I got an offer.

Later on last night, we had a meeting with all of the summer interns. They had us sit five or six to a table, with two or three empty chairs as well. Then they had two or three people from every industry (coverage) group just spend about 8 minutes at each table to tell us about their group and why it was the best at the firm. It was a lot like I imagine speed dating to be. I really liked hearing about different groups in the firm. I was really interested in the private equity groups, as well as real estate and retail/consumer. In the end though, I'm really glad that I ended up in the natural resources group.

At the end of the meeting they told us that instead of waiting until the end of the summer, they will tell us if we have an offer or not in our final interview next Friday! That was a big surprise, but it was also a relief. I don't want to have to wait all summer to find out. So on my last day I'll get my final review, then find out if I have an offer to come back. It's pretty much an open offer without a specific time frame, which is also really nice. The offer won't be for a specific group, but just to come back to IBD.

In the fall the incoming analysts will visit different groups for about a week trying to figure out what group they want to be in. Then, similar to how you get a group as an intern, you put your top choices. The group also lists their top choices, and then HR does the match making. Obviously if you were in a group as an intern and you did well, you have a very good chance of getting back in. If I come back, I will most definitely be in this group again. I wouldn't want to be anywhere else.

So the past few days I have been really busy with a few projects. I feel like I'm really "getting" it now. The analysts and associates I work for don't have to walk me through everything any more. They just fill me in on what's going on, give me an assignment, and expect me to go get it done. It's cool to feel like I'm adding value and am putting out good work without having to be walked through it. If we need to spread 10 comps, I can do it. If we need to put together some valuations for a football field, I can do it. Of course I have a TON to learn and pick up, but it just feels good to actually know what's going on in a small way and to be able to contribute instead of always being a liability to the group.

Today was a lot of wait, then jam, then wait kind of stuff. We had to wait for markets to close because we wanted our book to be as of today's stock prices. So as soon as markets closed we started to update the book. Because a lot of things in the book depend on stock prices, it took a really long time to make sure that all the numbers in the entire book "footed" and that multiples were the same on page 10 as they were on 85. We worked through the process and fixed things that a summer associate had screwed up, and finally we got it done. One of the analysts took me to Starbucks to thank me for doing a good job this summer. It's weird for everybody to be saying goodbye when we still have a week left.

One last cool thing I did today. I went out and got my shoes shined. If you've never done it, try it! You walk away feeling like you are an MD. It's crazy how much a $2.50 shoe shine can do for your confidence. I should have done that in week 1 so that I would have just killed the internship from the start. Seriously before my next interview I'm getting a shoe shine. It's my new secret sauce.

Tuesday, July 1, 2008


So today my junior mentor took me out to lunch at a really nice restaurant. It was extremely good - I couldn't believe food could taste like that. For the two of us it cost about $150, all paid by the firm. Nice little present to the summer intern.

Today I spread comps for the deal that I'm working on. It actually took a long time because these companies get really complicated with the way they handle certain kinds of debt. Also, they are MLPs which means that they have a strange corporate structure that has to be handled differently than normal companies. I had to spread about 20 companies, so it took me a really long time.

When I would start on a new company, I would basically pull the 10-K and most recent 10-Q. Then I go through the financials, filling in all the information. The reason you need the K and the Q is because there's an LTM (latest twelve months) section. You basically take the 10-K number, add the 1Q 10-Q number, then subtract the previous year 1Q 10-Q number. This leaves with you with the previous 12 months' number.

I also had to calculate EBITDA and about 10 other metrics like leverage ratios and solvency ratios. For each company I had to also pull research reports to find analyst estimates for 2009-2011. A lot of what you do as an intern is finding numbers and plugging them into Excel. After pulling all the data I aggregated the comparable metrics into one place and put it into presentation format. It felt good to finish up a project in one day. Right as I was finishing, I got more work to do. I decided to take a break to write in this since it's been a few days.

It's really strange that I only have two weeks left. I decided that I was not going to waste a second of the next two weeks. I'm going to rebuild a merger model and an LBO model just so I'll be familiar with it. I don't usually have spare time, but I figure that if I stay an hour or two more every day I can get it done.

It's crunch time.