Saturday, July 26, 2008

Banking, Subways and Arbitness


It has been about 3 months since landing in Mumbai. 3 months of being an IBanker. 16 hour days have become the norm. Weekends are spent working. Life has become a series of pitches, DCF models, WACC calculations and relative valuations. There is probably more caffeine in my blood than in an average CCD and my eyes are invariably a shade of red. These are all things I was fully aware of even when I decided to accept my PPO and make a career out of investment banking. What is worrisome is the way my thinking has changed… The other day MJ and I had gone on one of our quests to find a Subway open at 12 am. While downing a veggie delite, we happened to discuss one of our instructors. It took us some time to realize that we had reduced a living breathing human being into a revenue model. In fact we had also reduced him to a variable (albeit independent) in trying to figure out if it was possible to predict his income based on the state of health of the investment banking industry. What worries me even more than the sheer “clinicalness” of the approach is the flaw inherent in such an approach. In the urge to reduce everything to numbers, I tend to run the risk of ignoring the potential that might be hidden in a situation/opportunity that I might have ignored due to my inability to quantify it or worse still might not even be aware of due to sheer ignorance. MJ, of course was more worried about the “clinicalness” aspect, but that is because she is better than me in quant and modeling.

Highly arbit post, but that’s what my life has become these days.

p.s. – Hil, before you point it out… everyone is better than me in quant.