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.
Tuesday, July 8, 2008
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!
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.
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
Comps
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.
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.
Sunday, June 29, 2008
Kicked out of . . . McDonald's?
Today was a good day. I sold my furniture in the morning. It actually was a pretty big pain because I had to dismember my loft bed before the guy came over to get the furniture. Then, when he was here, as we were taking the last parts of the bed down, one of the metal pieces of the bed slipped and flew right into the wall. It broke a hole in the wall about 2 inches in diameter. SO now I'll probably have to pay for that.
I ended up offering to ride out to Queens with the guy to help him unload the stuff since it was a pain to load it up. Do a good turn daily, right? It made for a long morning, but at least I got rid of my furniture and I don't have to worry about that any more. It also means I'm sleeping on the hardwood floor tonight. Oh well, it's only one night and only the second time of my internship that I'll have to sleep on the ground.
At work today I got staffed on a buy side deal that is really interesting. It's looking that I'll be working in the model so that is cool too. The two analysts on the deal told me they wanted me on it because they knew I was "the most capable intern" to be on this deal. Always good to hear when the internship is winding down.
In the evening I met up with a good friend who is out here visiting for the weekend. We had some great Indian food, then went to McDonald's for some ice cream. This guy that I was with is probably the smartest kid as far as investing goes that I've ever met. He just knows TONS of stuff about all sorts of different things, so it's always really interesting to sit down and talk with him. We talked about everything from pair trades and double short ETFs to the investment banking club at school and how we want to help out rising juniors next year.
After a while of talking a security guard came over and said, "We have a table limit here, and since you've been here for like an hour and a half, we're going to have to ask you to leave in about 10 minutes." We looked at him like, "Is this a joke?" But he was serious. It was just so weird because there were tons of empty tables around, so it wasn't like he needed to clear some space for customers. He just said that we had been there long enough unless we wanted to buy some more food. Since when does McDonald's have a table limit? He came back a few minutes later and told us we needed to leave. I was still just shocked at this, but it was actually pretty funny. So yes, I have been kicked out of McDonald's by a security guard because I was there too long after ordering my food. Awesome.
We went and met up with another friend and went downtown to hang out. At about 1:30 I decided to head home because I have to move tomorrow and I'm tired. I got on the subway and started heading back to Harlem. After a few stops, I thought it would be good to switch to an express train. Bad move. I waited 30 minutes for the next train to come. Then, when it finally came, I kind of fell asleep. I woke up and suddenly forgot which train I was on and, thinking I was still on the first train, got off at 96th street because the 2 train doesn't go to where I need to go. Well right as the train pulled away I realized that I had in fact been on the A train, which would have taken me right to where I needed to be. So I had to wait another considerable amount of time before the next A train came to get me home. It was a LONG ride home.
So it's been fun in Harlem. I never really saw any crazy stuff, but I saw today that it has the highest crime rate in New York. But even though it's a tough neighborhood, how many people in Harlem can say they are so crazy and "hard" that they had to be escorted out of McDonald's by a security guard? That's right Harlem. Eat your heart out.
P.S. Can you tell it's four in the morning and I'm not thinking quite right.
I ended up offering to ride out to Queens with the guy to help him unload the stuff since it was a pain to load it up. Do a good turn daily, right? It made for a long morning, but at least I got rid of my furniture and I don't have to worry about that any more. It also means I'm sleeping on the hardwood floor tonight. Oh well, it's only one night and only the second time of my internship that I'll have to sleep on the ground.
At work today I got staffed on a buy side deal that is really interesting. It's looking that I'll be working in the model so that is cool too. The two analysts on the deal told me they wanted me on it because they knew I was "the most capable intern" to be on this deal. Always good to hear when the internship is winding down.
In the evening I met up with a good friend who is out here visiting for the weekend. We had some great Indian food, then went to McDonald's for some ice cream. This guy that I was with is probably the smartest kid as far as investing goes that I've ever met. He just knows TONS of stuff about all sorts of different things, so it's always really interesting to sit down and talk with him. We talked about everything from pair trades and double short ETFs to the investment banking club at school and how we want to help out rising juniors next year.
After a while of talking a security guard came over and said, "We have a table limit here, and since you've been here for like an hour and a half, we're going to have to ask you to leave in about 10 minutes." We looked at him like, "Is this a joke?" But he was serious. It was just so weird because there were tons of empty tables around, so it wasn't like he needed to clear some space for customers. He just said that we had been there long enough unless we wanted to buy some more food. Since when does McDonald's have a table limit? He came back a few minutes later and told us we needed to leave. I was still just shocked at this, but it was actually pretty funny. So yes, I have been kicked out of McDonald's by a security guard because I was there too long after ordering my food. Awesome.
We went and met up with another friend and went downtown to hang out. At about 1:30 I decided to head home because I have to move tomorrow and I'm tired. I got on the subway and started heading back to Harlem. After a few stops, I thought it would be good to switch to an express train. Bad move. I waited 30 minutes for the next train to come. Then, when it finally came, I kind of fell asleep. I woke up and suddenly forgot which train I was on and, thinking I was still on the first train, got off at 96th street because the 2 train doesn't go to where I need to go. Well right as the train pulled away I realized that I had in fact been on the A train, which would have taken me right to where I needed to be. So I had to wait another considerable amount of time before the next A train came to get me home. It was a LONG ride home.
So it's been fun in Harlem. I never really saw any crazy stuff, but I saw today that it has the highest crime rate in New York. But even though it's a tough neighborhood, how many people in Harlem can say they are so crazy and "hard" that they had to be escorted out of McDonald's by a security guard? That's right Harlem. Eat your heart out.
P.S. Can you tell it's four in the morning and I'm not thinking quite right.
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