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.