Investment Banking For Dummies (For Dummies Series)

Product Information

Last updated: 20 December 2021. Whether it's in film, in books or in industry; information and misinformation about investment banking swirls around like a wild-fire. Particularly in the wake of the 2008 financial crisis, public attention has been heighted regarding this opaque and often lucrative profession. Example We use this icon when presenting some real-world examples of the concepts that we're discussing. Corporate lending: Investment banks typically help companies and other large borrowers sell securities to raise money. But large investment banks are also frequently involved in extending loans to their customers, often short-term loans (called bridge loans) to tide a company over while another transaction is in the works. Barbarians at the Gate chronicles dozens of main characters and hundreds of side characters. It helps you understand how money, legal maneuverings, and personal relationships affect strategy and finance at the highest level. In some cases, hubris, greed, and egos are appalling. Investment bankers are involved in the very onset of a company going public, and they’re the keys to making the deal happen. When investment bankers assume the role of selling securities, especially in an IPO, they’re often called the underwriters.

Investment Banking for Dummies | Bank Organizational Structure Investment Banking for Dummies | Bank Organizational Structure

Hybrid securities: Most of what investment banks sell can be classified as either debt or equity. But some securities take on traits of both, or are an interesting spin on both. One example is preferred shares, which give investors an income stream that’s higher than what’s paid on the regular equity. But preferred shares don’t come with as high a claim to assets as bonds, and this income stream can be suspended by the company if it chooses. The services investment banks provide The role of an Investment banker varies depending on the level of experience. Junior bankers, like analysts or associates, spend much time preparing financial modeling, working on company research, presentations, and deal execution. On the other hand, senior bankers, such as the directors or the managing directors, spend more time building client relations, giving strategic advice, and winning new business opportunities for their bank. Skills Required for an Investment Banking Job The critical part of the investment banking process is in the way cash is funneled from the people who have it to the people who need it. After all, traditional banks do essentially the same thing investment banks do — get cash from people who have excess amounts into the hands of those who have productive uses for it. Keep in mind that this book, like all the books in the For Dummies series, doesn’t have to be read cover-to-cover (although we’ll be flattered if you read it all). Each of the topics is broken down into easy-to-digest parts and chapters. Feel free to skip around the book to areas that interest you most, and save the parts that seem irrelevant until you’re curious about them later.

6. The Business of Investment Banking

Companies are constantly scanning the corporate landscape for other firms that may be for sale, or may own assets that are worth buying. Buying companies can be a risky proposition. After all, the only way to buy a healthy company is to offer a price higher than the current market price, called a premium. By paying up for the company, the buying company had better make the right moves to get the deal to work. Investment banks help companies on the prowl find buyout targets, make the deal, and sometimes even finance it. When it comes to the top skills that serious investment bankers must hone, the discounted cash flow analysis is certainly high on the list. The discounted cash flow is a culmination of many of the tools beginning investment bankers have to create in-depth and comprehensive models of what companies are worth.

Investment Banking: Initial Public Offerings - dummies Investment Banking: Initial Public Offerings - dummies

But despite the huge possible risks of buying companies, it’s still attractive for a variety of reasons, including the following: But these important documents can’t do you any good if you can’t find them. That’s what you find out how to do in Chapter 6. There you discover tools that make it easy for an expert investment banker to retrieve and find all the relevant data from the financial statements, even information the companies may not realized is as valuable as it is. Understanding the importance of financial statements and ratios Investment banks may seem like financial behemoths that have their hands in just about any matter that involves large sums of money. And to a large degree, that’s true. Investment banks are usually involved in some fashion when it comes to financing major projects, conducting trading in financial instruments, or developing new ways to generate capital. This book by Ray Dalio, a legendary investor and the founder of Bridgewater Associates, a multibillion-dollar hedge fund, is a must-read for anyone in the finance industry. What's it all about? Well, I could describe it as an investment banking book binge happening in slow motion:

13. Investment Banks, Hedge Funds, and Private Equity

The book comprises his journey, life principles, and work principles. Dalio covers over 500 principles and sub-principles to help readers succeed in life and work. Investment banks do much more than just raise capital by selling investments. Although selling securities to raise money is arguably the primary function of investment banks, they also serve several other roles. All the functions of investment banks typically fall into one of two primary categories: selling or buying. Financing large projects: Massive projects, such as building giant bridges or power plants, usually require enormous amounts of cash up front. These projects may ultimately make money, but they require loads of cash to be built. The need for upfront cash is so great, it may outstrip the lending capacity of traditional banks, or it may be too risky for traditional banks. That’s where investment banks can come in. Investment banks gather cash by selling securities to investors with excess money looking for a chance at a good return.

Investment Banking? - dummies What Is Investment Banking? - dummies

Pignataro uses Walmart as a case study to teach readers how to perform an in-depth analysis by walking them through all the steps to develop a sophisticated financial model. Each chapter ends with review questions, case studies, and other helpful material. While we think these are the best investment banking books, our list isn’t exhaustive. That is why you should always look for more material to improve yourself and your work. Human progress takes money and ideas. But more times than not, the people with the money aren’t the same ones with the ideas. Having a mound of cash and no creative ideas only creates a mound of money. Meanwhile, an entrepreneur with all kinds of dreams can’t even break ground if there’s no cash to break ground with. From nearly being wiped out in 1929 to reaching the pinnacle of global finance, this book showcases how the firm has thrived by fostering a distinct company culture focused on finding creative solutions to problems by always focusing on their customer. Institutional client services: The biggest part of Goldman’s business is what it calls institutional client services. Here, the firm arranges and helps conduct transactions for clients who want to buy and sell everything from bonds to foreign currencies and commodities, in a process called market making. Typically, the clients of this part of the business include big financial institutions, governments, and companies.So, what are you waiting for? The world of investment banking is fascinating, and waiting for you to dive in. When you understand how Wall Street works, you’ll know how to make investment banking work for you, instead of getting worked over by the world’s biggest banks. Flip through the book, and start reading anywhere you see something interesting! Part 1 Getting Started with Investment Banking IN THIS PART … At the end of the day, the largest, most comprehensive investment banking textbook isn't going to do you any good if it only sits on a shelf gathering dust.

Investment Banking For Dummies: (2nd edition) by - WHSmith

Get ready to take a peek into the private and important world of investment banking. This book could just have easily been called Wall Street For Dummies, because it’s your guide into the complex but pivotal world that Wall Street plays in making the financial system work. Of all the investment banks, few are as well known — and even as infamous — as Goldman Sachs. The firm’s long history in investment banking and its seeming omnipresence in markets around the world cement its recognized role as a premier investment bank. Brokerage services: Some investment banking operations include brokerage services where they may hold clients’ assets or help them conduct trades. Research: Investment banks not only help large institutions sell securities to investors, but also assist investors looking to buy securities. Many investment banks run research units that advise investors on whether they should buy a particular investment.Investment bankers often find themselves playing the role of a corporate matchmaker. A big part of the job description is finding new ways to raise money and help companies restructure themselves in a way that makes them more profitable for their owners. The celebrated authors of Investment Banking For Dummies, 2nd Edition have updated and modernized their best-selling book to bring readers an invaluable and accessible volume about the investment banking industry. Investment banking operations at one firm may be engaged in some of the preceding activities, but not all. There’s no rule that demands investment banking operations must perform all the services described here. As investment firms grow, though, they often add functions so they’re more valuable to their clients and can serve as a common source for a variety of services. Build a relationship with an investment banking firm. If an IPO is in particularly high demand, you can be sure the investment banks doing the deal will be judicious with who gets shares. And in these cases, the vast majority of shares will go to the client’s own customers. If you think that buying IPOs is going to be a frequent occurrence with you, you might consider creating a brokerage firm account with one of the investment banks that’s doing the types of IPOs you’re interested in. Keep in mind, though, that the brokerage units of investment banking firms tend to charge much higher commissions and fees than discount brokerage firms, so you’re not getting something for nothing.