| Topic Name: |
Ode to all the 'arrogant' ivy league idiots |
| Message Name: |
Re: Change |
| Date Posted: |
08/20/1999 |
| In Reply To: |
Did you go to Columbia or Chicago? Do you really think I-banking is going to be revolutionized that much within the next five years? Even if underwriting fees are brought down from the standard 7%, don't you still think that the top firms are going to be able to charge significant fees (4-7%)? If not, if you were about to enter B-School would you focus on consulting instead? Just curious to hear your perspective. |
| Message: |
Neither Chicago nor Columbia. Sorry if I made sweeping statements. Perhaps 5 years is being a little drastic, but the squeeze in margins will happen. Reasons: 1) Every commercial bank wants to be a player in I-banking 2) E-underwriting may have had a slow start, but every CFO will soon realize that it?s the best way for them to raise the optimal capital and get the value of their company right. Why let some hundreds of millions go to the institutional investor who will unwind their stakes during IPO? 3) Everyone has access to real-time trading prices these days. The competitive advantage in information flow that brokerages have over the individual investor has diminished. The margins in the sales & trading business of I-banks will suffer. It?s very affordable for corporations these days to execute their own hedging positions electronically. Why call the salespeople at I-banks?
To A.E.: All I can say is, do what you love. In every industry, there are some promising new aspects. Technology is a means not an end. Drugstore.com is about drugs, not the internet. Yahoo is about media, not the internet. If you like computers, all I can say is, what else? (It?s such an obvious simple choice. You can?t go wrong)..If you?re dead set on finance, well, Europe?s mutual fund business is 5% developed of that in the US and the rest of the world even less. As the world?s pension systems get privatized, the money out there to be managed will be enormous.
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