Is it really that bad?

I think that ER is uniquely disappointing for many. That’s because it’s not understood as well as IB, consulting, tech, law, medicine, and most other “prestigious” professional careers that graduates of elite schools pursue.


A lot of students think, “this is going to be amazing…I get to do meaningful analysis and writing (rather than move around logos on PowerPoint slides), I’m going to meet management and investors rather than be shut away in a bullpen, I’m going to be treated like a human being, and, I’m going to do all this…plus make roughly the same pay as my friends in IB … working ~20 fewer hours per week.


Then…you realize that all of those things are (at least partially) false. As a junior, you’re very much moving around logos in PowerPoint. You’re left behind to toil in the bullpen while the senior analysts travel and meet management. An earnings week is as bad, if not worse, as anything an IB analyst stares down, and, if you’re in a hot sector, you’re working more than the average IB junior… for meaningfully less pay. All that, and you’re faced with constant talk about how there’s no amazing PE exit at the end of the rainbow… and top-tier investment buyside roles are extremely difficult to land.


It’s demoralizing, for many. But why? Because people often enter it thinking that it is an alternative to IB. They enter it with the wrong mindset.


Despite the “busywork,” I still think that sell-side ER is the best place in the street to learn, from zero, how to analyze a company for investment potential; from a skills perspective, I think it’s the single best training ground on the Street. It’s also, in some ways (and I know this will sound cheesy), and “Ellis Island” of Wall Street… I’ve seen people from science, from data consulting…even mid-level employees within the hospitality industry… break in, and go on to have meaningful careers in finance they never thought they’d have, using ER as their entry point. It is also the closest non-quant junior role that the sell side has to a meritocracy; if you can model, write, pitch, and defend, there’s nothing keeping you from being on the trajectory for a seven-figure HF PM role. You’ll get the recruiter reach-outs and the opportunities. You just have to be really, really good to seize them.


So, in some, if your attitude is: “I’m going to transition into finance, get world-class training, become the absolute best analyst, and fight for a top-tier buyside role or die trying,” there’s no better entry point than sell-side ER.


But if you’re a college sophomore and you’re just trying to apples-to-apples which path, IB or ER, will provide you with the highest risk-adjusted and even hour adjusted comp + exits for an average performer, I’m telling you now, choose IB. It wins hands down.


As most of us — whether we admit it or not — are in category two (and there’s nothing wrong with that), I think that a lot of people in ER either regret it and wish they were in IB, or would have preferred IB from the outset but view ER as “the job they got, and better than not being on Wall Street.”


And, yeah, if you take 20 finance-bound Ivy grads and give them a choice between IB and ER, probably 18 will pick IB. And maybe one who picks ER will do so because they simply don’t want to work IB hours, and will hope for a “cushy” seat in a quiet sector. But that remaining one…the one pursuing ER for the love of the game … for him or her, the sky is the limit. He or she is my vote for “most likely to succeed” in this industry, hands down.