Beware the Financial Soothsayer…

…he can’t even match P. Phil’s record

Base Case, noun phrase, the most likely or expected scenario when forecasting corporate financial performance.

Usage Note: Financial desk jockeys from buy-siders to investment bankers to corporate CFO’s use this term as part of their regular business of prognostication.  It’s especially relevant during the grind show where the bankers and companies shamelessly stump for money to run their business (or rather, to waste on pet projects, diversifying acquisitions with “synergies”, or to pay a dividend to their Private Equity owners).

In the realms of High Finance, the business of forecasting is part and parcel of the job.  Either you’re a CEO trying to convince investors your company will never see a downturn and can only grow year after year; or a banker trying to bamboozle the syndicate of “accounts” into thinking it’s normal that the company you’re hawking has an EBITDA forecast that looks like a “Hockey Stick”; or you’re a money manager trying to convince clients you can read the tea leaves and spot the canaries dying in the coal mine to ensure you make the best picks at the best times. Continue reading →

Agnostic? Who knows? Hedge fund pros don’t waste time on matters theological…

…they’re too busy worshiping the (god) almighty dollar.

Agnostic, adjective, having no bias with respect to position in the capital structure.  Usage note:  Merriam-Webster defines an agnostic (noun) as “a person who holds the view that any ultimate reality (as God) is unknown and probably unknowable; broadly : one who is not committed to believing in either the existence or the nonexistence of God or a god.”  However, when a hedgie (an execrable moniker for “hedge fund professional”) uses the term, there’s scant chance that he’s discussing matters theological because he typically worships one thing …the almightly dollar.  Moreover, despite how glamorous he allows his friends to think hedge fund life is (all the while keeping silent on the due diligence trips to places like Detroit to “kick the tires” on the sexiest of distressed auto parts suppliers), our hedge fund man simply doesn’t have time to finalize his thinking on the existence of God (or a god).  When he’s not updating one of his many 20-tab Excel financial models, he’s making frantic calls to headhunters while his portfolio manager boss, a graduate of the “what have you done for me lately” school of management, continues to humiliate him in front of the entire firm over his last two consecutive dogshit stock recommendations. Continue reading →

When the MD hits the road, Face Time begins

Face Time, noun phrase, in investment banking, the act of putting in more hours at the office than necessary to accomplish a given day’s worth of work; typically manifested as arriving to work earlier than co-workers and superiors, and leaving work after all colleagues have undocked for the day.

Usage Note: Germane primarily to the analyst and associate, Face Time is an affectation for the purpose of leading superiors (and competing colleagues) to believe one is uber dedicated to maniacal levels of hard work and is possessed of an unquenchable lust for the honors and riches of a tenured investment banker. One of the most mysterious puzzles inside the royal domain of investment banking, Face Time has persisted as a practice among young bankers probably since the 1980’s.

It’s an oddity that defies reasonable explanation and the practice is all the more strange considering two things in particular: 1) Why would people of otherwise high levels of intelligence do this? Why would someone want to hang around the office until 10 or 11pm on one of the few evenings when they actually don’t have something work-related to do- a ridiculous assignment hasn’t been given, or one is not engulfed in the misery of managing the latest iterative change to “the document”? 2) Knowing that in most cases, the junior banker’s superiors (Vice Presidents, Directors, or Managing Directors) have come up the ranks acting out the same mindless show makes it all the more of a charade, and unlikely to convince anyone of your i-banking bona-fides. It’s an open secret and although manifestly asinine, no one can muster the courage to break the vicious cycle because if someone higher up had to do it, then “by God, the youngsters are going to pay their dues just like I did!” Like some form of Stockholm Syndrome, the young bankers strangely feel proud to be victimized office captives (at least in the early days) as a stripe that must be earned on their way to being masters of the universe. Continue reading →