Financial Modeling Self Study Program

Where else on the Internet can I go to learn about investment banking?

As I state in the “About” section of this site, there are surprisingly few reliable sources of good information about the world of investment banking.  However, that doesn’t mean there is no information out there.  Wall Street Oasis  (www.wallstreetoasis.com) is the best.  It has message boards about lots of investment banking topics and contains some great info in the archives.

I also highly recommend the blog Mergers and Inquisitions (www.mergersandinquisitions.com).  Another blog, Epicurean Dealmaker (epicureandealmaker.blogspot.com) is a little highfalutin in its verbiage for my taste but is often amusing.  There’ s some good content about the way banking really is in the archives.

In addition, most of the bulge bracket investment banks also have some good info about banking careers and the recruiting process on their websites.

Are there any good books about life as an investment banker?

The first chapter of my own book, How to Be an Investment Banker: Recruiting, Interviewing, and Landing the Job + Website (Wiley Finance), contains a detailed description of the lifestyle and culture of investment banking.  Other than that, there are really only two books about investment banking that I would recommend.  The first is Monkey Business: Swinging Through the Wall Street Jungle by John Rolfe and Peter Troob, published in 2000.  This is the tale of life as Associates at the investment bank, DLJ (later bought by Credit Suisse).  The second is The Accidental Investment Banker: Inside the Decade That Transformed Wall Street by Jonathan Knee, published in 2006.  Knee shares some of his experiences mostly as a senior banker (Managing Director) while employed at Morgan Stanley and Goldman Sachs.

Can you recommend any books about finance and the technical aspects of investment banking?

Of course, I am partial to my own book, How to Be an Investment Banker: Recruiting, Interviewing, and Landing the Job + Website (Wiley Finance) which covers accounting, finance, financial statement analysis, valuation, financial modeling, M&A and LBOs.

In addition to my own book, there are really only two books that I would recommend if you are looking to learn about the technical aspects of investment banking (e.g. valuation).  Both of these are very good introductions to the way things are actually done banking (as opposed to books written by business school professors) and serve as excellent primers.

Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions (Wiley Finance) by Joshua Rosenbaum and Joshua Pearl (published in 2009) has an excellent introduction to valuation and leveraged buyouts.  There is a short section on M&A covering only the sell side process with an extremely brief overview of accretion/dilution analysis.  There is virtually no discussion of the other aspects of M&A or of other types of investment banking transactions.  The book is available through Amazon and most book stores.

The Practitioner’s Guide to Investment Banking Mergers & Acquisitions Corporate Finance by Jerilyn Castillo and Peter McAniff (published in 2007) is available only through the publisher’s website at www.scoopbooks.com.  It is about twice as long and covers more topics than the Rosenbaum/Pearl book but is slightly weaker in its sections on valuation and LBO.

If you are looking for a more academic book on valuation, I recommend anything by the NYU professor Aswath Damodaran, such as Investment Valuation: Tools and Techniques for Determining the Value of Any Asset (Wiley Finance).

What periodicals should I read to learn more about investment banking?

The Wall Street Journal has the best coverage of U.S. investment banking activity, so if you are going to read one newspaper, get the Journal.  Most bankers say they read the Journal (which given their busy schedules, means they subscribe, let unread papers pile up in their office/cubicle for about a week and then throw them out).  If you do have limited time, reading the front page and the Money and Investing section will get you almost all of the banking related news.  The New York Times business section also has good deal coverage and the Financial Times (FT) is good for international banking news.

Beyond mainstream newspapers, the Daily Deal (www.thedeal.com) is read by many bankers.  Bankers like to say they read the Economist to sound smart but few do.  As far as the business magazines go (Forbes, Fortune, Business Week and the like), they are not very helpful when it comes to learning about investment banking.

Should I take an investment banking course or training program?

For full disclosure, the author of this site is also the founder and senior instructor of the Institute for Finance Education and Career Advancement.  Now, having said that, I am going to try to answer this question as honestly as possible.

I do think a course or training program can be very helpful to your job search, provided that you select the right one and that you get the most out of it.  The course that I teach, entitled Introduction to Investment Banking is really geared towards individuals who are or will be in the process of seeking jobs in investment banking or other areas of finance. We start off with an overview of the investment banking industry and the necessary foundations of accounting and finance.  We then spend the bulk of our course on the core skills required of junior investment bankers, including financial statement analysis, valuation and financial modeling.  We devote the entire last class session to recruiting and the job search, including an extensive discussion of interviewing.

Obviously an 8-class session like I teach is not inexpensive.  And while it will by no means guarantee you a job or even an interview, I do believe that it can really help your chances.  Having taken a course like this will differentiate your resume from your peers and should (provided that you pay attention in class and do the homework!) really enhance your interviewing skills.  As you probably know from reading other parts of this site, technical questions are an integral part of interviewing for investment banking positions.  Taking a course like this will introduce you to or refresh your memory of nearly all of the accounting, finance and valuation topics that you are likely to be asked about in your interviews.  And finally, having already been introduced to the practical aspects of life and work as an investment banker will set you apart and give you a leg up once you do start your job as an analyst or associate.