Investment banking business includes many blocks, in addition to retail brokerage, there are companies to issue stocks, bonds, need someone to help sell out, which is called securities underwriting; enterprises to engage in mergers and acquisitions, need to matchmaking, assessment, provide financing proposals arrangements, which is called mergers and acquisitions, which are very typical of the investment banking business. And we usually hear a lot, like what asset securitization, leveraged mergers and acquisitions, private equity, and quantitative investment, also belongs to the investment banking business has a close relationship. In fact, in the international investment banking business, the issue of self-supporting business is to do the most, probably accounted for more than 70% of the proportion of the issue, underwriting, mergers and acquisitions, probably accounted for 20% -30% of the retail brokerage is actually a very small piece.
Many famous foreign investment banks are very distinctive, for example, you talk about the issue of underwriting will soon think of Morgan Stanley, which is a well-known investment bank. You talk about mergers and acquisitions, it is easy to think of Goldman Sachs. When you talk about retail brokerage, it's definitely Merrill Lynch.
The most important factor in the ability of an investment bank, in addition to its professional ability, its network is a very important point. Local investment banks, in fact, are facing great opportunities. Brokerage firms and investment banks are actually the same thing, only because there is a gap between our Chinese brokerage industry and foreign investment banks, so it creates such an illusion.
The system of global financial regulation: commercial banking and securities business to be strictly separated, the implementation of separate business. Commercial banks and investment banks began to formally separate. So the term "investment bank" actually refers to the separation from the banking system, specializing in securities investment business.
The regulation of investment banks has always been relatively loose, which gives investment bankers a lot of opportunities to "open their minds and make innovations".
The IPO, or IPO, is the underwriting of securities, which is one of the most eye-catching and lucrative core businesses of investment banks.
This is the first time that an investment bank has been involved in the underwriting of securities.
One of the core competencies of investment banking: connections and circles. One of the principles of investment banking recruiting: like to recruit two kinds of people, either you have a deep family background, after the famous family; or you have a particularly good school background, graduated from a famous school, such as the United States Ivy League, in China is basically the Qing, North, Fuxing, Jiaotong the few schools.
The second core competitiveness of investment banking: professional ability. First you have to have the ability to quantitatively analyze. There is a method called "discounted cash flow method", you can also use the analogy method, in addition to a very accurate grasp of the customer's psychology, this process not only involves professional financial, accounting, mathematical knowledge, but also involves psychological knowledge, the requirements are very high.
Red Herring: Prospectus. The term "red herring" has slowly evolved to mean a distraction. Since the prospectus is designed to attract the attention of investors, gradually everyone called the prospectus a red herring. So if you want to attract the attention of investors, you have to do your best to show the strengths and characteristics of your business in such a document.
An improperly handled prospectus can lead to an IPO miscarriage, and the entire listing will fail. In fact, these characteristics of six walnuts, you can understand both as strengths and weaknesses. At this time, how to package, how to communicate, how to express, that is very delicate. You have to know, why do companies hire investment banks, in fact, companies hire the investment bank's network and professional ability. This network and professional ability, including how to communicate with the regulatory layer, the regulatory "compliance" is how to understand the understanding of these compliance requirements, how to try to get around these possible pits in the prospectus, which is a very important aspect of the core professional ability of the investment bank.
In the A stock market and the ability to communicate with the regulator is one of the core competencies of investment banking. The United States, Hong Kong listing is the registration system. A stock market implementation of the so-called approval system, that is to say, the government authorities not only to review the form of listed companies statements, but also to review the content, to eliminate those bad companies, for the listing of the gatekeeper. In the U.S., companies can go public as long as they fully fulfill their disclosure obligations and then register. In China, the regulator is given the power of life and death, and regulation is a very abstract concept, and the final implementation of regulation is human. People are the ones who subjectively judge whether a company is good or bad. In such a regulatory context, you will find that the ability to communicate between investment banks and regulators, and the understanding and grasp of regulatory intent is more important than in the United States. So it's really very, very important to choose an investment bank with exceptional communication skills to go public in the A-share market.
Google one time called more than ten investment banks, and then said you sign a confidentiality agreement, and then fill out a detailed questionnaire, on this questionnaire Google like an examiner to ask these investment banks underwriting history, for example, what is the performance of your underwriting stock? How did you underwrite the stock? What is your opinion on the timing and pricing of Google's IPO? In the end, they chose Credit Suisse First Boston and Morgan Stanley as their lead underwriters like a princess.
?The founders of Google, who were very different, just kept telling jokes during the roadshow, often refusing to answer investor questions. Google put the pricing power firmly in their own hands, for example, in the listing application, Google claimed that it hoped to raise 2.718281828 billion U.S. dollars, most of the investment banking industry will hear this number will find it very funny, but in fact, this is an irrational number of e of the first ten, so this kind of "cute" of the
By July before the listing, Google modified its IPO price space to 108-135 dollars. It was more than seven times the price of other benchmark companies in the market at the time. Google said this price is my judgment of myself, so such a high price and such a strong attitude caused a huge backlash from Wall Street and the mainstream media. Merrill Lynch withdrew from Google's IPO program, and some other investment banks began to discredit Google at this time. Finally, Google made very small concessions and set the issue price at $85, which is unique in its pricing method, taking a pricing method called "Dutch auction":
The first step is for the public company to make an announcement about the maximum number of shares to be offered and the potential price range for the shares;
The second step is for investors to see the announcement and start submitting their orders at the same time, and then write down clearly on the order form how many shares of stock they are willing to buy at how much they are willing to pay for them;
The third step is for investors to bid for their shares according to an auction in a ascending order, with the highest bidder getting first priority. The highest bidder gets first dibs on the shares, and the final settlement price is the price at which all the shares are sold.
Let's say Google issues 100 shares, and you ask for 80 shares at $90, and your friend asks for 80 shares at $88, so you get first dibs on the 80 shares, and your friend gets the remaining 20 shares. But the final settlement price is the price at which all the shares were sold, which is $88.
Why are Google, and Facebook, so capricious? These companies are bullish and strong. They're strong enough to be able to do what they want.
This is a time when money is becoming less valuable, and the original world was expensive and scarce, so people with money in their hands held the right to speak. Money is no longer so valuable, everyone is chasing a good project. What is the most critical thing in that good project?
Human capital is the most critical, entrepreneurial spirit is the most critical, so enterprises and entrepreneurs are getting stronger and stronger voice, and the more high technology content, human capital concentration of the industry, the greater the initiative of the enterprise. For people with dreams and abilities, the era we are now living in is the best era, seize the opportunity, everyone may stand on the wind.
The best investment is to invest in yourself and make yourself a hot talent.
1. First let's look at the demand. Beijing is the political, economic and cultural center of China, and the resources are highly concentrated, while New York is the economic center of the United States, the political center of the United States is Washington, the cultural center is Boston, so New York is a center, and Beijing is three centers. New York gathers the resources of the economic center, and what resources does Beijing gather? It is the resources of the political, cultural and economic center. So we have been saying that buying a house is really about the potential of the city, and Beijing gathers more resources than New York, so the additional resources for the house are going to be more, and then considering that China's total population is four times that of the U.S., which city do you think is going to have a stronger immediate demand from a demand perspective? Well, this is the demand side.
2. Let's move on to supply. The effective supply of housing in Beijing is much less than in New York. As the oldest developed market economy, the efficiency of the New York real estate market is very high, the liquidity is very good, the occupancy rate is very high, there are very few idle houses. The utilization efficiency of many houses in Beijing is very low, the rate of idleness is also very high, a lot of houses bought is empty, all these reduce the effective supply of housing. To make an analogy, in fact, many houses in Beijing are not for sale, for example, so many state organs and institutions are not for sale, which in fact also greatly reduces the effective supply of housing. There is also the fact that due to some factors in urban planning, Beijing's houses are limited in height, so you can see that Beijing's houses are very short and not dense at all, while the houses on Manhattan Island in New York are all very tall and dense. There is a data, every square meter of land Manhattan can build 11 square meters of houses, and how much can be built in the second ring road of Beijing? Less than 1 square meter of house. Well, when you look at it this way, the supply of housing in Manhattan is more than ten times that of Beijing. So in terms of supply, which city do you think has less supply?
A house is really nothing more than a commodity, and its price is determined by supply and demand. The demand for housing in Beijing looks to be greater than in New York, and the supply is less than in New York. You then take into account that our country is still in a period of medium-high growth, about 2023 to 2024, we will enter the ranks of high-income countries, the probability of events in 2030 will become the world's largest economy, so you look from the demand, supply and two points of view, Beijing's housing prices should not be lower than New York how.
So what is the situation now? Now in comparable districts and grades, Beijing's housing prices are about half of New York's. The average price in New York's core areas is converted to the average price in New York's core areas. The average price in New York's core area converted to RMB is about 140,000, and Beijing is about 70,000 or 80,000 on average. If we look at high-end apartments, the price per square meter in New York translates to about 300,000 yuan, and Beijing is about 150,000 yuan. So assuming that China's economy will continue to grow steadily and its social and political structure will continue to stabilize, Beijing's housing stock has great investment potential compared to New York.
House prices are a reflection of a country's economic growth and a city's overall competitiveness. Its price is determined by supply and demand after integrating various factors. In the past, the rise in urban housing prices in our country was mainly due to economic growth and urbanization, and the future changes in housing prices will still follow this logic, economic growth and urbanization.
At present, China's per capita income is only 1/5 of that of the United States, Japan and other developed countries, there is still a lot of room for growth, and the urbanization rate of developed countries is at 80%, and our country is at about 57% of the level, and there is a lot of room for development. So from the economic growth and urbanization of these two dimensions, China still has a lot of space. This also proves that the fundamentals of China's urban housing prices are still very solid.
In the process of urbanization the population will further gather to the big cities, and keep in mind that our country's population base is large, four times that of the United States and more than 10 times that of Japan, and in the future the population of China's large and medium-sized cities will increase. So you see in the past two years the regulation has been so strict, the overall housing prices have not declined, many places are still rising, what does this mean? This is not to say that everyone is irrational, but just proves that China's economic growth is very stable, and the pace of urbanization has not stopped, so the demand for housing in the city is still very strong.
Well, after we finish the relationship between economic growth, urbanization and housing prices, the next answer is, if there is no bubble in housing prices, why does the state have to come up with so many regulatory policies?
This involves a deeper understanding of the problem of house prices. You can ask a rhetorical question, if there is no bubble, the government does not need to regulate housing prices? If you think about it carefully, there may be many reasons why the government has to regulate housing prices, and one of the most important is the issue of wealth distribution.
China's economic growth rate in the past decade is too fast, like what? Like a speeding train, those who bought a house in the big city as if they had bought a ticket, but there are also many people because of a variety of opportunities did not get on the train, so they will be in the wealth gap. So there will be a lot of low and middle-income people can not afford to buy a house, there are young people who just entered the workplace can not afford to buy a house, and if this goes on, the price of the house rises too fast, the wealth gap in this society will become bigger and bigger, and those who did not buy a house can never afford a house, more and more hopeless, the work is not at ease, and the mood will be very depressing.
What is the most important pillar of a society? In the end, it is still people, and people live to have hope, no hope is a particularly terrible state, will produce a lot of problems. So from the point of view of social prosperity and stability, our country should be introduced to regulate, so that housing prices do not rise too fast. So that people who do not buy a house can find ways to buy a house, on the particularly low income people but also the introduction of housing policy, the real realization of the "Home Ownership Scheme", so that social stability.
So real estate regulation is not to regulate the price level, but to regulate the speed of increase, so that the price of housing prices do not rise too fast, regulating the distribution of social wealth, is a stable state of the country's long-term stability.
Each city is actually different, and the location, age, and nature of the land may be different for each house. The development of the city is ultimately the development of people, so the future population trend is to big cities or small cities?
At present, China's big city rate, that is to say, more than one million people in big cities accounted for the proportion of the total population is still very very low, less than half of the United States, Japan and other countries. This figure is about 64.7% in Japan and 23.8% in China.
01 investment banks: banks that do not do banking business, the pursuit of high-risk and high-yield, less regulatory restrictions, so they will be more adept at financial innovation, like money funds, asset securitization, venture capital VC,
02?Issue underwriting (above): investment market in the matchmaking center.... Investment banking securities issuance underwriting business, investment banks to use their expertise to help companies design financing products and methods, and then choose the place of issuance, the use of their own marketing network to sell the process of securities products.
03?Issue underwriting (below): think prospectus. Is an important document for investors and regulators to communicate, especially reflecting the packaging ability and professionalism of investment banks.
Goldman Sachs recruiting principle is a bit like Harvard admissions, like high, outgoing personality, with a certain leadership and good communication with people. The company's main goal is to provide the best possible service to its customers," he said. "The company's main goal is to provide the best possible service to its customers," he said.
However, Goldman Sachs places great value on people's soft power, especially their way of thinking and their ability to solve problems. The first is that the company's business is a very important part of the company's business. Today I'm going to introduce you to three representative interview questions from Goldman Sachs.
Question 1: What is the angle between the minute hand and the hour hand when the time is 3:15?
This question learned junior high school geometry is very easy to calculate, but in the U.S. University of some boastful, mixed diploma people really can not calculate, with my friends in Goldman Sachs words, the U.S. University of a lot of fake diplomas, need to be screened out sieve.
What about a simple question like this, which doesn't move the needle and brushes away many people with poor math fundamentals and insensitivity to numbers? A study of finance undergraduate, you let him calculate the compound interest he calculated clearly, but the junior high school math has been forgotten. A good financial people, to be extremely sensitive to the numbers, and human beings themselves happen to be insensitive to the big numbers.
The second question: how many airplanes are in the sky over New York at any given point in time?
This is clearly a test of the candidate's ability to gather information and then begin to solve the problem, and it doesn't matter how many answers are given at the end, but of course, guessing is not an option.
There are three international airports near New York, and if each airport takes off one plane every three minutes and lands one plane at the same time, the three airports take off and land about two planes a minute.
The speed of an airplane before landing and shortly after takeoff is 300 kilometers per hour, and the diameter of New York is about 30 kilometers, which means that the airplane is in the sky over New York for six minutes during takeoff and landing. So there are on average 2x6=12 airplanes over New York at any given moment.
Of course, the results would be different if the airplanes took off and landed at two-minute intervals, or four-minute intervals, but that doesn't matter, it doesn't affect the outcome of the interview.
Also, there are different paths to solving this problem from different sources of information.
For example, if it is known that one of the airports, JFK, takes off and lands about 420,000 airplanes per year, and if the calculation is based on the fact that the airport is busy for 18 hours per day, the results obtained are similar to those estimated by one of the previous methods. For this kind of problem, the way the problem is solved is already much more important than the answer.
Why would Goldman ask such a question? Because to estimate the size of a market, the size of a company's potential revenue, is the process of gathering information and doing logical reasoning in this way.
The third question: If you were compressed into a pencil high and fell into a juice blender, how do you get out?
The main purpose of this question is twofold. One is to see if the candidate can be creative with his or her ideas. The other is to see if the candidate is interested in such strange questions.
1. Instead of trying to climb out on your own, you could have tried to find a way to call for help, such as shouting, or even calling if you had your cell phone on you, or writing a message inside a glass container. The truth is that any attempt to climb out on your own is unrealistic.
In the workplace, we especially need to know how to work with the help of others. When things get tough, don't always try to solve problems that are beyond your abilities all by yourself.
I have seen such employees in Google and Tencent, they are stuck with a technical problem, a person spends a lot of days thinking hard, but just can not get to the bottom of the problem, in fact, to find around the colleague to ask the problem soon. Although there are not many such employees, this kind of problem should not be.
Goldman Sachs people say, like Goldman Sachs such a financial company, we must understand that in the encounter into the blender this big trouble, must seek help, rather than rely on their own to try to solve the problem. In fact, every time Goldman Sachs and other firms get into big trouble, they first look to other financial institutions for help, and if that doesn't work, they look to the government for help, as they did during the last financial crisis. Recall what we said earlier about boundaries, trying to climb out of the blender on your own is beyond the boundaries of what can be done.
2. There are also answers from more thoughtful people who, in addition to the above help, suggest going back and thinking about who made me as small as a pencil, and who threw me into the blender, so that you can avoid tragedy or trouble next time.
3. It was also pointed out that if a person is the size of a pencil, and has a brain no bigger than the eraser on the end of a pencil, their intelligence must be so low that they are unlikely to be able to think of a good solution, or to realize that danger exists. From this, these people suggested that our own intellect is not really capable of doing much about complex problems, and that we need to use outside tools like computers.
Today's financial markets are much more complex than a blender compared to our own, and we are in front of it, but we are just a little person with a big rubber brain.
Anyone who can think of any of these three answers will have answered the question very well.
In addition, Goldman Sachs in the interview graduates, will also ask some financial general knowledge and communication skills with people.
From the way Goldman Sachs selects young people, I see several principles:
01 Basic professional knowledge is necessary, ? This is just as I talked about last week that college students always have to learn a little bit of specialized skills. Basic skills in communicating with people are also necessary, which is why I have always emphasized the need for four years of college to turn a clueless person into a social person.
02 What kind of thinking a person uses to solve a problem is more important than knowing the answer, ? This is no different between Goldman Sachs and Google or Microsoft.
03 Know the boundaries of your ability. ? If you encounter a problem that is beyond your ability, you should ask for help, rather than doing it yourself. Chinese people in multinational companies often encounter the so-called ceiling confusion, according to my observation, one of the reasons is not good at asking for help.
The world's elites from all walks of life have some ****ty things about them, such as they are good at problem solving, and are more interested in ways and means than simply wanting results.