Investment Banking For Dummies

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This comprehensive book on investment banking by industry practitioners Joshua Rosenbaum and Joshua Pearl excels at breaking down complex technical concepts into accessible lessons. That is why it’s been called a teaching manual for aspiring investment bankers. Equity Research – The research department of an investment bank comes up with various research reports on the industries or other companies and helps its clients with investment decisions. Tip Investment bankers have no shortage of techniques that make their jobs easier. You’ll find those marked with the Tip icon. This book by Michael Lewis is a semi-autobiographical book describing the author’s experience as a bond salesman during the late 1980s. Given how important investment banking is to how Americans save and invest, it’s critical to understand what investment bankers do and the role they play. Traditional banks are easy to understand. They take in deposits from consumers and businesses, and then lend out the money to companies or consumers. But the duties of investment banks are quite different. Instead of taking deposits, investment banks sell securities. The proceeds from selling these securities, in some cases, then go to finance usually massive projects that might be too risky for traditional banks. Projects investment banks take on often fall into one of several categories, including the following:

Investment Banking for Dummies by Matthew Krantz isn’t a deep dive into investment banking, nor does it dive into unique investing philosophies or tell personal stories. Nevertheless, it’s a solid primer on the subject, presented easily. As a result, you’ll learn critical fundamental deal-making concepts applicable throughout your career. 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. Wrap your head around the complicated world of investment banking with thisunderstandableand comprehensive resource Investments: Investment banks typically serve the role of a middleman, sitting between the entities that need money and those that have it. But periodically, units of investment banking operations may invest their own money in promising companies or projects. This type of investment, often made in companies that don’t have investments that the public can buy, is called private equity. Given how desired shares of hot IPOs are, it’s not surprising that investment bankers hold them very closely. Investment bankers’ role in the IPO process remains one of their most high-profile functions. The investment bankers are in charge of helping the company promote itself to prospective investors and determine how much to sell the shares for.

2. Principles

Asset management fees: Some investment banks help their clients make decisions on how to invest their money. Investment banks generate asset management fees when they help clients decide which securities they should buy or sell.

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. We wrote this book not only to help you understand what’s done on Wall Street, but also to show you how to use some of the financial tools that help measure financial performance. After reading this book, you’ll know how Wall Street works, and how to put its secrets to work for you. About This Book Paul Pignataro is an acclaimed author, banker, and M&A consultant who has written several books on these topics. This text is a practical guide to understanding and performing fundamental analysis. After the tumultuous changes in the investment banking business following the financial crisis of 2007 through 2009, the entire landscape changed. Following the banking crisis, investment banks needed capital. Some of the most storied investment banks, unable to raise money, merged with other banks or became commercial banks themselves. Suddenly, the financial system was comprised of behemoth banks that have the deposit-taking abilities of banks but also engage in investment banking. The result is the formation of several mega-institutions that many people fear are “too big to fail,” including the ones shown in the table.

Table of contents

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. If you are a beginner new to investment banking and looking to break into the industry, you must be well-versed in basic finance concepts since interview questions will test your financial knowledge. This includes knowing how to build a discounted cash flow (DCF) model, create a comparable company analysis, conduct due diligence, value a company, etc. By understanding the main technical concepts in these books, you will be better positioned to succeed as an analyst or associate. 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. First published in 2011, Liaw goes over how the investment banking industry changed after the 2008-2009 financial crisis, especially after 3 of the top 5 investment banks disappeared. In addition, it discusses options for professionals looking to enter the field or advance their careers in the post-2008 era. The book coversallthe crucial topics required to understand the fundamentals of the industry, including:

Investment banking is one of those disciplines that you can delve into for decades and still not master. There are corners of investment banking that go well beyond the understanding of the capital markets and even the mechanics of gathering information about companies and their needs for investment to continue to grow. 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.You may not live in Manhattan, under the shadow of the giant skyscrapers of Goldman Sachs and Morgan Stanley. You may not even be involved in the financial industry — your only dealings with a bank may be when you stop to take money out of the ATM. As some reviewers say, “Finally, we have someone lifting the curtain, with refreshing candor and engaging prose; this book takes us inside the world of investment banking in the 1990s.”

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 Without a careful study of Warren Buffet, the “Oracle of Omaha” and self-made investing billionaire, no investment banking education would be complete. Some say this book is a better telling of Buffett’s life and work than his autobiography. However, this is not a fairytale of a man’s life. Instead, it’s a gritty account of his business and work. 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.

Introduction to Investment Banking

My list of the 5 best investment banking books above is as good as any place to start. They're mostly aimed at beginners, and therefore represent a good point to jump onboard with this reading challenge. 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. Here, we have seen the complete structure of investment banking for dummies. You can also look at high-level investment banking training focusing on Excel-based financial modeling, pitch book preparation, and corporate finance concepts, making it easier to answer technical questions in investment banking interviews. Recommended Articles Tip Investment bankers know it’s not necessary to read financial statements from cover to cover like a book. Financial statements, like For Dummies books, can be read in sections — you jump to areas that interest you at the time. Additionally, some of the best insights that come from the financial statements result from putting the numbers through the paces by applying financial ratios, which we introduce you to in Chapter 8. Zeroing in on past transactions