| Topic Name: |
Which Has More Prestige? |
| Message Name: |
Keep your two cents... |
| Date Posted: |
05/24/2000 |
| In Reply To: |
I had the same challenging decision you had
and I'll tell how I made my decision.
But first let me dispell the myth about limited exit options for those who go into
S & T. Robert Rubin was from the trading side
of the business and it didn't hurt his ascent
from Treasury Secretary to Vice-chairman of Citigroup.
The most important thing in this business is relationships and your ability to develop a network that will help you bring in business
in the latter stages of your career. In CF some banks do give you exposure as an analyst or associate but how much time do you really get to go out and meet people????
In terms of skill-sets, building a model is not all that difficult given someone has taken the time and effort to complete an MBA.
What else do you learn in CF that is sincerely a skill and not "memorization" of procedures or rather centred around "time management".
In my view on the S&T side you learn what the capital markets want, and how they work. What deals will the market like and what ones they won't and why? Your ability to analyze a situation and act quickly for profit are key. If you can work and thrive
under pressure S&T is ideal.
Some may say S&T is simply from a technical
viewpoint. To me the most difficult thing to learn and build is relationships. (I am ignoring the proprietary trading areas of IB). You can learn anything that CorpFin guy does, and deal with any pressure that may be put on you....but can a corpfin guy make a decision on risking 100mm of the banks capital to put up a trade in 2 min...
As for opportunity you create your own, build enough relationships on the street and
you can go anywhere.....
S&T pay for MBA grads is comparable to CF pay. On a per-hour basis it far exceeds CF.
As for technology eliminating highly paid S&T professionals....when a computer can reassure an institutional client that he/she is making a good decision let me know.....
I went into S&T, but I have several relationships on the CF side of the business
more than happy to bring me on, not because
I'm a rocket scientist, but because of the institutional client relationships I've built....
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| Message: |
1) Robert Rubin was a risk arb, which is actually a lot closer to Corporate Finance (M&A specifically) than standard S&T. You'd have an easier time getting a job on a risk arb desk with a background in M&A than S&T. Regardless, there are far more examples of people moving from Corporate Finance to corporate governance than from S&T to corporate governance.
2) Relationships ARE everything in business, but look at WHO you'll be building relationships with in Corporate Finance versus S&T. In Corp Fin you'll be building relationships with CEOs and CFOs. In S&T you'll mostly be building relationships with other S&T people & Research people on the buy side and sell side. Which relationships will help you the most if you want to be a CEO some day?
3) Wake up! Computers can ALREADY reasure institutional clients that they are making a good decision! How do you think Mike Bloomberg became a billionaire? He invented a "computer" that helped eliminate the informational asymetries between institutional investors and sell-side S&T professionals. These asymetries had been exploited by the sell side for years (read about the Frenchman in Liar's Poker). Institutional investors will trust their Bloomberg over a sell side salesman any day, because the Bloomberg has no alterior motives.
4) Technology is also decreasing the need for S&T people because it allows each Salesperson to service more (and larger)accounts and Traders to trade more order flow/size. When banks merge, who are the first to go? S&T people. Will banks ever put the decision-making process in the "hands" of a machine? Probably not in our lifetime, but technology means there will be less and less decision-makers (read: S&T professionals) necessary.
Sorry, but your arguments ring hollow.
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