A Look at STEM⋅E's Investment Banking and Stocks Talk
— Boston, MA
This past weekend, STEM⋅E hosted their premiere talk of the year on investment banking and stocks. The event began with a webinar about the investment banking profession, followed by hands-on stock analysis and purchase, led by Andria Balogh, Executive Director of the STEM·E Youth Career Development Program.
For the first portion of the talk, STEM⋅E invited Dominic Smith, an energy and power investment banker from Wells Fargo. Smith began with a brief introduction about himself, describing his schooling, including a BS in mathematics from Morehouse College and two graduate degrees: an MBA from Rice University and MS in aerospace engineering from University of Michigan. Before launching into professional details, Smith offered his favorite advice; “challenge yourself.” Tmentionhe best way to progress is to take on new challenges, something he lives by every day of his life.
With those encouraging words, Smith gave an overview of investment banking, explaining the role and details, including raising capital for corporations, governments, or other entities. Smith then discussed three important aspects of the job that he does every day: reading the news, analyzing industry deals, and presenting data to his clients. He emphasized the importance of reading from multiple news sources and paying attention to bias. He taught students to deeply analyze company data to determine the best course of action to reach their goals, whether that be an IPO, selling bonds, or initiating a company merger. Smith also highlighted the importance of clear and detailed presentations, explaining “you’re dealing with people who have high IQs, and they pay a lot of attention to details, so when you deal with these people, you have to present your data so they can get a grasp very quickly because they don’t have a lot of time.”
Speaking of time, Smith also described how time-consuming and rigorous his job is. Even when dealing with young students, he did not sugarcoat when it came to pros and cons of his career. He stated that the role is time-consuming and, therefore, involves certain sacrifices. "You have to meet that deadline, and it's just the nature of the beast. When you have an industry that is fast-paced and exciting, it will be packed with pressure.” While his words emphasized the weighted responsibility of the job, his positive attitude showed that the good far outweighs the difficulties. Those who love to learn will find that the job entails rapid learning and lots of reading, but, in return, pays extremely well.
"When you have an industry that is fast-paced and exciting, it will be packed with pressure."
After Smith shared his valuable knowledge, he opened up the presentation to the students, assigning them with a case study on advising a company interested in buying other companies or investing in a new product. The kids, though just learning about investment banking, formulated valid solutions, showing the impact of Smith’s teaching.
As Balogh took over, the hands-on participation continued as students not only solved case studies, but actually purchased their first stock (with parental management and supervision). Balogh tasked participants with finding a stock that followed a series of guidelines to help them make the right choice for long-term trading, such as buying something that interests them, buying from a company they know, and buying from a company that has future potential. Before giving them time to find a stock, she told the students, “make sure that your dollar is being put towards something that you actually want to see grow," because giving money to a company would be giving the company an opportunity to affect the world. Inspired by this concept, the students were sent off to find and purchase a stock.
When the students returned, they shared their findings, and, unsurprisingly, students were largely influenced by the Covid-19 pandemic. Students wisely connected that medical companies, like Johnson and Johnson, would have good monthly and yearly predictions based on vaccination progress and public health awareness. Some saw potential in airline companies, with a possible rebound from the recession once travel restrictions are lifted. Other students saw value in online stores, such as Amazon, because of the increase in online shopping due to stay-at-home orders. It was clear that, in just a couple of hours, these kids were grasping the lessons and enthusiastically applying it to the real world.
To finish off, Balogh told the students to track and analyze their stock progress. She accentuated the importance of starting early in investing and how it can greatly impact the approach and progress of trading, already recognized by student participants. With the teachings of Smith and Balogh, the kids learned many valuable lessons about investment banking, stocks, and the beneficial habits and attitudes necessary for future success.
To find out more about STEM⋅E's free Talks, visit https://www.steme.org/events.
And if you missed this opportunity to learn about investment banking and stocks, keep an eye out for the recordings, which can be purchased on our website. Be sure to sign up for our monthly newsletter email to stay up-to-date about new events and purchasing these recordings!