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How Wall Street recruits so many Ivy League grads

127 pointsby seferphierabout 11 years ago

26 comments

nymphabout 11 years ago
It&#x27;s like so obvious, if you&#x27;ve spent any time at all working for one of these places. Or heck, even interviewing with them.<p>Here&#x27;s what it all boils down to: aside the quants, the genuinely alpha traders, and few other wonky actuarial types, most of the grunts (you know: the &quot;analysts&quot;... and the vast majority of the IT types) don&#x27;t seem to be there, or to have any other propelling motive in life, other than: (1) the above-average salary, and (2) once you&#x27;re in, you&#x27;re pretty much guaranteed to do alright -- as long as you&#x27;re willing to fit in, never even <i>think</i> of rocking the boat, and be ready and willing to continually supplicate your superiors at all times.<p>Hence the ridiculously subdued style of dress (the dainty dress shoes, the blue and bland off-white shirts), and the curiously submissive demeanor of about 80% of the people you&#x27;ll meet working there.<p>Oh, and that drug test, that everyone snickers about below their breath? Including your hiring manager? As everybody knows, it certainly isn&#x27;t there out of any concern that you&#x27;d be abusing intoxicants (after all, you&#x27;re more than welcome to get shitfaced on alcohol every night of the week -- which most nights you&#x27;ll find yourself more or less needing to, to drown out the pain, and there sheer inanity of what you&#x27;re asked to do).<p>It&#x27;s there as a gesture of supplication and obedience -- nothing more. Getting you to drop your trousers, whip our your gear, and provide a &quot;specimen&quot; upon demand -- <i>just because your superiors told you to!</i> -- isn&#x27;t an unfortunate side aspect of drug screening; it&#x27;s the true purpose of the ritual -- the very end goal, in itself.
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patio11about 11 years ago
There exist several organizations which have the general template: Hello, academic high achiever. You&#x27;ve spent <i>your entire life</i> in a series of meritocratic competitions. You&#x27;re socialized to seek the validation of decisionmakers above you, by hewing exactly to their published rubrics. This is gives you a powerful sense of self-worth, brings you status with your peers, and makes your parents feel like you&#x27;ve finally made it.<p>And now you&#x27;re graduating from undergrad. And there&#x27;s a wild, crazy world out there. And many processes in it are not judged by meritocratic competitions.<p>#%(&amp; that noise. Come do our program. It&#x27;s like everything you&#x27;ve ever done in life, except this time you&#x27;ll be paid. Here&#x27;s the application form, format for the essay, and description of the interview.<p>For a certain psychograph of young people, surrogate teachers at surrogate schools offering surrogate classes after surrogate admissions processes are <i>incredibly compelling</i>. (I rush to say that I fit this to the nines after graduation. My first job was an academic appointment and my second used exactly the above playbook to sell a job opportunity I would never have had any interest in as a quasi-study abroad option.)
rayinerabout 11 years ago
Wall Street has a few features that make it very attractive to ambitious young people:<p>1) The money. The potential to make $500k-1m&#x2F;year before 30. The odds of getting to that stage aren&#x27;t high, because of the culling at each step, but are probably better than making comparable money through a start-up exit.<p>2) Substantive responsibility. It depends on what precisely you do, but my brother is a year in and has a ton of autonomy and responsibility in his particular area. You can get this in Silicon Valley, but most of corporate America will not let a 24 year old do anything important.<p>3) Exit options and signaling. If you want to be a venture capitalist, the highest-probability route is through an NYC bulge-bracket bank. A stint at Goldman&#x2F;Morgan Stanley&#x2F;etc almost guarantees admission to a top business school, and from there a wide range of careers in corporate finance&#x2F;development.<p>The only salient aspect of the article is the bit about risk: it is true that the folks on Wall Street generally aren&#x27;t risk takers. They often make big bets, but with other peoples&#x27; money, and in any case if they are not successful there&#x27;s a soft landing for them at Harvard or Wharton.
datamattabout 11 years ago
&gt;The banks care less about their qualifications than their work ethic. Being a Rhodes Scholar doesn&#x27;t make much of a difference when you&#x27;re a young banker. More of it is being willing to stay at the office for 120 hours a week.<p>This is very, very true. In my experience, investment banking is by no means a particularly difficult thing to do, given enough capital to play around with. Quants aside, the concepts that are used (take, for example, &quot;mezzanine capital&quot;) are mostly buzzwords used to give a professional air to really very simple processes&#x2F;ideas. It is a far cry from the serious, dedicated abstract thought demanded by fields such as software engineering&#x2F;machine learning&#x2F;data science etc.<p>However, what large financial institutions need are people who are extremely assiduous to small details, have a work ethic in which 7am-11pm hours creating powerpoints are no big deal (and have good sounding qualifications to impress investors).
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jcnnghmabout 11 years ago
Goldman Sachs 2011 net income was $162,913 per employee. Average pay was $367,057. It&#x27;s harder to get data on Google, but it looks like the mid-career median salary is $141,000. Google&#x27;s Gross Profit (Total Revenue less Cost of Revenue) was $24.7B in 2011, and GS&#x27;s was $24.5B. At the same time, Google had 32,467 employees to GS&#x27;s 35,700. Yet, the Google net income was $9.7B compared to $4.4B on the GS side. The difference seems to be made up entirely by the difference in employee compensation.<p>It&#x27;s the money, stupid.
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ritchieaabout 11 years ago
Anyone have thoughts on this gem?<p>&gt; I talked to one guy who&#x27;s a former Goldman Sachs guy who left to go to the tech industry who said the adage in the tech world now is &quot;be wary when the pretty people show up.&quot;
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wtmccabout 11 years ago
The portrait of the college grad painted in the article is consistent with what I’ve seen as an undergrad at Harvard in econ and CS circles.<p>&gt; [College students want money, structure, and sex appeal.]<p>But I’ll add another motivation to the laundry list, that draws smart grads to selective&#x2F;prestigious programs (including Harvard, Goldman, Google, and even YC): Smart grads want to be surrounded by other smart grads, because they want to build peer relationships with future co-founders and business partners.
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the_watcherabout 11 years ago
Pet peeve: 120 hours a week is 17 hours a day, leaving 7 hours for sleep assuming literally nothing else is done. While those kind of numbers are often used to sum up the lifestyle of &quot;wake up at 6, get to work at 7, get breakfast, lunch, dinner, drinks with work, get home at 10, go to sleep, repeat,&quot; even that ridiculous schedule puts you at 15 hours a day, or 105 hours a week, assuming you treat weekends the same as weekdays. To hit 120 hours a week, you&#x27;d have to be arriving at work at 5 and leaving at 10 every day (or 7 and 12, etc.), and that counts all meals and breaks as work hours. No one I&#x27;ve ever met works that many hours (and I went to college with a lot of bankers). There may be the occasional day like that, or the odd week where you push 120 hours (but primarily based on one or two all nighters), but no one regularly spends 71% of their total week working, unless you count any non-leisure as work. It&#x27;s simply not possible.
dba7dbaabout 11 years ago
Wall Street is NOT building up America but is instead weakening America by causing a Great Brain Drain from every other vital industry. It is a cancer that&#x27;s eating away America. Because America is losing the brightest kids who could&#x27;ve really shined and played vital leadership roles in other industries, I feel American industries are falling behind.<p>Some quotes from the article that you should remember:<p>1. &quot;so many kids who could seemingly do anything choose to work 120-hour weeks&quot;<p>2. &quot;something like a third of Ivy League graduates going to Wall Street&quot;<p>3. &quot;They&#x27;re not just getting finance-minded kids but they&#x27;re getting the smartest kids from all fields.&quot;<p>4. &quot;give us two years of your lives, don&#x27;t see your friends, chain yourself to your desk, but we will give you this glorious life where you&#x27;re making many times what you could ever imagine.&quot;<p>These are kids really really smart, socially adjusted (enough to be accepted by Ivy League), and hard working. If they entered science&#x2F;medicine&#x2F;engineering&#x2F;etc, they would&#x27;ve added great positive impact. Probably not immediately but eventually years down the line. And now they are abandoning these vital industries that actually produce something for an industry that is basically pushing papers around and printing money in the process.<p>Seriously, WHY would anyone choose to enter a field where you have to work up the ladder (or spend years in grad school and in poverty life) and possibly live in some small towns with a hope of making a few million a year salary ONLY near the end of your career, when you can enter Wall Street and live in NYC (great city but really only for the super rich) and start making 6-7 figure salary&#x2F;bonus almost from the beginning?<p>Other major economies do not have Wall Street equivalent and so their top engineering&#x2F;science graduates don&#x27;t join finance but instead actually enter the vital industries. And these smart kids actually produce something that is tangible. I think we are already seeing the effect of this trend showing its result slowly.<p>I know we live in free economy society and all that but I think we need to find a way to &#x27;regulate&#x27; how the wall street recruits.<p>Lastly, I believe the ratio of liberal-arts majors entering Wall Street is way lower than the article seems to suggest. From what I hear, overwhleming majority of the graduates entering Wall Street after graduation are science&#x2F;math&#x2F;engineering majors.
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leocabout 11 years ago
There was an article maybe a decade ago in the <i>Economist</i> (I&#x27;ve never been able to find it since) claiming that being the hot industry for new Harvard Business School grads to join was, based on past performance, a solid countercyclical indicator: the MBAs started to join just as the industry had already peaked and trouble was on the horizon. IIRC it ended by observing that now (ie. then) they had started to go to Wall Street. I don&#x27;t know if that&#x27;s still true, or was actually ever true, let alone if anything similar is true of Harvard first-degree holders, but I thought I&#x27;d leave it here. ;)
the_watcherabout 11 years ago
Last comment: I majored in PoliSci. If I went back and did it all again, I&#x27;d recommend consulting (good pay, exposure to a lot of verticals). Banking would be tempting purely for the pay. I may not have worked banking hours, but I didn&#x27;t come near a banking paycheck (my hours divided by stereotypical banking hours &gt; my salary divided by a standard banking salary). Wall Street pays better than anywhere else for the background of their recruits, and the difference is so stark that unless you are a big firm consultant, the economically smart decision is banking.<p>That said, I&#x27;m happy where I am now, working on growth and customer acquisition at a really cool YC company, where I actually want to work all the time. I wouldn&#x27;t be here had I chased banking dollars.
koseiabout 11 years ago
This title is missing an important part of the actual title: &quot;How Wall Street recruits so many <i>insecure</i> Ivy League grads&quot;.
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robgeringabout 11 years ago
I&#x27;m genuinely curious -- what do these recruits actually do while working these massive hours? Is there really 80-120 hours of desk-based work to be done, or does office politics or fraternizing play a role in those hourly figures?
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ac1294about 11 years ago
Investment banking gets a pretty bad reputation in the media, and there are many misconceptions about the industry. I don&#x27;t think this article was terrible, but I do disagree with a few of the points. For the record, I&#x27;m an undergraduate student at a non-Ivy but huge feeder into investment banks.<p>&gt; They&#x27;re going because they hate risk and are terrified about what to do next and Wall Street has figured out a way to calm their anxieties.<p>This is somewhat accurate, but it doesn&#x27;t seem different from other careers. Not all of friends know exactly what they want to do when they graduate. So it&#x27;s logical for them to pick a job that is well-paying, will continue to exist for at least a few years, and offers good exit opportunities. For this reason, most of my intelligent friends in computer science are looking to work at Google, Amazon, Facebook, etc. Similarly, most of my intelligent friends in finance are looking to work at premier investment banks (or premier consulting firms like McKinsey, Bain, BCG, etc.).<p>&gt; So they created the two-and-out program. The idea is you&#x27;re there for two years and then you move onto something else. That let them attract not just hardcore econ majors but people majoring in other subjects who had a passing interest in finance and didn&#x27;t know what else to do.<p>This is absolutely correct; it&#x27;s well known that you&#x27;ll stay for 2 years and then move on to another finance world (Private Equity, Hedge Fund, Venture Capital) or perhaps business school. But the way the article describes this feature makes it sound as an evil trick. Maybe I&#x27;m the only one who gets that vibe, but I think this is a great feature for students who aren&#x27;t yet ready to commit to a career (again, not exclusive to finance).<p>&gt; And it&#x27;s amazing, anecdotally, how often you see college seniors deciding between making huge money on Wall Street or making almost nothing with Teach For America.<p>I had a conversation with a TFA rep a few months ago, and he told me that my school was the largest feeder into TFA. Yet, I have never met someone deciding between investment banking and Teach for America -- obviously two very different career options. The TFA rep also said the major with most students applying to TFA was Accounting, which makes sense because the entry job for an accounting student is not as high-paying or &quot;exciting&quot; as the entry investment banking job.<p>&gt; Being a young banker seems like an incredibly miserable existence. The people you follow are beyond unhappy.<p>Yes, some of my friends who did investment banking internships (it&#x27;s near impossible to get the full-time offer without an internship) ended up being miserable. However, some enjoyed the internship very much, and they return for full-time. Again, this isn&#x27;t unique to banking. I&#x27;m had an engineering internship at a top tech firm, and I haven&#x27;t enjoyed it as much as I expected either. Nevertheless, some of my friends in similar roles at other tech firms are probably enjoying their experience.<p>&gt; I talked to one guy who&#x27;s a former Goldman Sachs guy who left to go to the tech industry who said the adage in the tech world now is &quot;be wary when the pretty people show up.&quot;<p>This is not common. I&#x27;m majoring in Finance and EE, so I&#x27;m one of the few people who would potentially be making this decision. If we&#x27;re talking about choosing between banking at Goldman Sachs and working on the acquisitions team at Google, then sure, that&#x27;s a legitimate argument. But the only time students are making the decision between being a software developer at a tech firm and being an investment banker is when they apply for college and decide on their major.<p>Overall, I didn&#x27;t think the article was horrible, but there were a few things I wanted to clarify. And although I don&#x27;t plan on working for an investment bank, I hate to see the career ridiculed by misconceptions. I saw in another comment that it doesn&#x27;t really take intelligence to work at an investment bank or it&#x27;s not really difficult to do. Please don&#x27;t insult a career if you&#x27;ve never really experienced it. Some bankers may not be very smart, but others are ridiculously intelligent and great at their job.
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the_watcherabout 11 years ago
The people who stick around Wall Street are the people who fit the stereotype. The others are people like my brother, who went to Stanford, wanted to learn something, and had a passing interest in finance. They paid him well enough to set him up to be able to take a pay cut (on a total comp basis, not hourly) for a better lifestyle, and gave him a ton of really valuable training. After 2 years, he moved on to private wealth management, and loves it. He may not be a stereotypical example, but he didn&#x27;t go to Wall Street in a risk averse move. He went because it let him learn while being paid well.
yodsanklaiabout 11 years ago
&gt; They&#x27;re going because they hate risk and are terrified about what to do next and Wall Street has figured out a way to calm their anxieties.<p>Isn&#x27;t it a bit far-stretched. It&#x27;s clear to me they&#x27;re going because it&#x27;s by far the most lucrative path. It&#x27;s not surprising that 1&#x2F;3 of ivy grads are looking to make as much money as they can.<p>&gt; Being a young banker seems like an incredibly miserable existence.<p>When I graduated, many of my school mates went to work in the financial industry (not investment banking though) and they didn&#x27;t look miserable to me. Retrospectively, it looks it was a good career choice.<p>This article sounds biased. It&#x27;d be interesting to have a more objective account about this type of jobs.
joncooperabout 11 years ago
A related Quora answer I wrote a while ago:<p><a href="http://www.quora.com/Investment-Banking/Why-are-there-so-many-short-careers-in-investment-banking/answer/Jon-Cooper-2" rel="nofollow">http:&#x2F;&#x2F;www.quora.com&#x2F;Investment-Banking&#x2F;Why-are-there-so-man...</a>
the_watcherabout 11 years ago
&gt;&gt; A lot of kids graduated with a degree in sociology or English literature and feel they don&#x27;t know any skills that will help them get a job.<p>PoliSci major here. You don&#x27;t have any skills you learned in school that can help you get a job. However, if you went to a good school, you should at least be able to demonstrate that you can learn fast, which is one of the more useful skills out there. A lot of jobs require skills that simply aren&#x27;t taught in school, so being self motivated and a quick study can be more valuable than anything.
001skyabout 11 years ago
<i>I talked to one guy who&#x27;s a former Goldman Sachs guy who left to go to the tech industry who said the adage in the tech world now is &quot;be wary when the pretty people show up.&quot;</i>
the_watcherabout 11 years ago
Also, working for TFA in the Mississippi Delta after living in LA, NYC, or SF, you can easily save a ton of money simply because staples and housing cost so much less (my roommate at UCLA did Mississippi Delta, and while he probably could have made more somewhere else, his savings after 2 years were pretty impressive - although that may have been a skill unique to him).
the_watcherabout 11 years ago
The HN title of this leaves out a key adjective: How Wall Street recruits so many insecure Ivy League grads.<p>Insecure is an important one, without it, I clicked thinking that the &quot;how&quot; should be obvious, and the the right question is &quot;why.&quot;
karzeemabout 11 years ago
People always talk about the money, but specifics are tough to come by. What is the typical salary for a first-year I-banker? How about the median for the ones who make it to year five and year ten?
wehadfunabout 11 years ago
why do these junior bankers do that require 120hr a week of work?<p>What kind of salery do they get after 1 - 10 yeard of working
pbreitabout 11 years ago
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michaelochurchabout 11 years ago
This guy has a fairly good understanding of entry-level finance culture but no clue about the Valley.<p><i>You get the sex appeal and allure of the tech industry</i><p>Lolwut. Sex appeal? Maybe <i>Mad Men</i>&#x27;s Michael Ginsburg was on to something.<p><i>Now it&#x27;s people who are well adjusted, good looking graduates of elite institutions. It&#x27;s gone from weirdos in pocket protectors to the guys who used to go to Wall Street.</i><p>Carpet-baggers. And they aren&#x27;t any better (or worse) looking. Same with bankers. On average, they&#x27;re average looking. What they are is more assertive, while engineers tend to be meek doormats. True-blue engineers don&#x27;t get driven out because business people are better looking, but because they&#x27;re more assertive. Blaming it on &quot;pretty people&quot; is refusing to take responsibility. Gates, Jobs, Bezos, and Ellison are average-looking at best.<p>Ok kids, so here&#x27;s what the analyst program is really about. When you&#x27;re in school, deadlines are easy to meet and well-tested. If you miss a deadline that 20 of your peers made easily, then either something bad happened or you fucked up. People coming out of school tend to have a &quot;deadlines is deadlines&quot; mentality, because they&#x27;ve spent 16 years in a world where almost all deadlines were well-tested and could be met by anyone with a work ethic (and a stable home, and no health problems, but we&#x27;re sampling from the upper-middle class here). The difference, in business, is that many deadlines are untested and arbitrary. Some deadlines you absolutely have to meet. Most are just some guy&#x27;s opinion, and as long as you aren&#x27;t personally responsible for the miss, it doesn&#x27;t matter.<p>Soft-side finance and biglaw have larger-than-normal proportions of deadlines that actually matter and want to put people through a wringer to see who has the unconditional (again, &quot;deadlines is deadlines&quot;) work ethic and who doesn&#x27;t. In some businesses that are heavily relationship-based, having at least one person on the team with an unconditional work ethic can be a lifesaver.<p>It&#x27;s bad for tech that it answers to such people, though, because the sorts of people who tend to have an <i>unconditional</i> work ethic are a disaster in any line of business that requires vision. It&#x27;s the tradeoff between subordinacy, strategy, and dedication (pick two). People who are subordinate and dedicated (unconditional work ethic) will never be strategic, which means they&#x27;ll be poor at choosing what to work on. They&#x27;re great in analyst positions and maybe as VC-funded founders (because the VCs are the true executives) but absolutely useless in decision-making roles.
cones688about 11 years ago
&gt; In previous lives, I&#x27;ve worked as a tennis-camp counselor, a juice bar barista, and a Biblical slave for a bestselling author. (Long story.) I&#x27;ve also written for magazines like GQ, Esquire, ESPN: The Magazine, and SPIN. I live in Berkeley, California.<p>Interesting the author has no finance experience ever, which makes me question his motives.
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