On a recent Monday morning, several dozen recent college graduates took their seats in a lower Manhattan conference room to begin their training as Masters of the Universe, 2010 edition.
“We know you all went to good schools, and some of you probably know a lot of economic theory already, but we’re going to teach you the nuts and bolts of finance,” said Valentina Savelyeva, a former JPMorgan analyst who quit her job in 2006 to train brand-new bankers, traders, and consultants (and at least one reporter) in the ways of Wall Street.
Savelyeva’s company, Training the Street, will teach anyone willing to fork over the $6,000 tuition for a five-day “core skills” workshop. But most of the firm's classes in financial accounting, corporate valuation, and merger/buyout analysis are packed with new hires from firms like Goldman Sachs, Morgan Stanley, Citigroup, and Deutsche Bank. Every year, more than 20,000 young financiers participate in a program Training the Street founder Scott Rostan calls “banker boot camp.”
Savelyeva's first assignment: Take a sloppy, ill-formatted spreadsheet and clean it up as quickly as possible. As the class raced to align numbers and reformat cells, she mentioned that the record belonged to an analyst at the investment firm Moelis & Co., who finished in 35 seconds last year. I was still trying to change font sizes when Savelyeva called a halt to the contest after seven minutes.
In the post-crisis era, Wall Street’s competitive ethos is clearly alive and well. During our lunch hour, two Credit Suisse traders walked through Hermès placing bets on the price of cuff links, watches, and other luxury items — The Price Is Right meets the Robb Report. One trader set the over/under on a leather horse saddle at $20,000; the other took the under for a dollar, flipped over the saddle’s price tag — $4,500, plus tax — and pocketed the buck with a smile.
Despite the turbulence and gloom in the financial sector — banking analyst Meredith Whitney estimated recently that between 40,000 and 80,000 financial workers will be laid off in the next eighteen months — the new financiers seemed in decent spirits as they followed along with Savelyeva's marathon lessons on CAPEX synergies, enterprise value multiples, and something called “sweeping the revolver” (which sounds like a raunchy dance move but is actually a technique for paying down corporate debt).
“Remember, guys: Instead of typing out the sum function, you can just hit alt-equals and press enter,” said Savelyeva, leading the group through a five-year projection of amortization expenses for the handbag manufacturer Coach, Inc. “We’re saving time here! This should bring some joy to your hearts!”
The work of a first-year Wall Street analyst — creating models, projecting earnings, making pitch books for client meetings — is largely the same as it was before the collapse of Lehman Brothers and Bear Stearns, and the exacting nature of the job requires a certain kind of hard-nosed, no-nonsense pragmatism that makes big-picture moralizing impossible, or at least extraneous. As one participant put it, “I can misplace one comma and lose my firm 10 million dollars." These are foot soldiers, not warrior philosophers.
Still, Rostan, who founded Training the Street after a short stint in Merrill Lynch’s mergers-and-acquisitions division, thinks the crisis has bred a generation of reflective young capitalists. “Our students are a much humbler group now than they were in the nineties and early 2000s. They’re more appreciative of the opportunities they have.”
And in that, Rostan may be right. The demographics of young finance tell a familiar story — blue-bloods in the investment banks, former athletes on the trading desks, machismo and decadence at a premium — but it is possible to find hints of a new, more self-aware Wall Street culture taking shape.
One new analyst (who, like all the class participants, asked not to be named) told me that the scandals and losses of the last three years had given him conflicted feelings about working at a big bank. “I want to pay off my loans, get out of banking, and do something good for the world,” he said. “This industry swallows people.”
After the last class, I walked through the financial district with another classmate, a first-year analyst at Lazard, who agreed that satisfying today’s young Wall Streeters will require more than big bonuses. As if prompted by divine order, a red Porsche convertible pulled up to the corner of Stone and Broad, driven by a middle-aged man with slicked-back hair and Gucci sunglasses.
“See that?” the Lazard analyst said, rolling his eyes. “That’s ridiculous. No matter how much money I make, I never want to be that guy.”