Xiang Shuai Peking University Finance Course

Brokers in China are actually what we call investment banks abroad. Brokers are actually investment banks.

Investment banking includes many parts. In addition to retail brokers, there are also stocks and bonds issued by companies that need help to sell. This is the so-called securities underwriting. To engage in mergers and acquisitions, enterprises need people to match the bridge, make assessments and provide financing advice. This is called M&A, which is a typical investment banking business. There are many things we usually hear, such as asset securitization, leveraged mergers and acquisitions, private equity investment, quantitative investment, etc., which are also closely related to the business of investment banks. In fact, in the international investment banking business, the issuance of self-operated business is the largest, accounting for more than 70%, while the issuance, underwriting and mergers and acquisitions can account for 20%-30%, and there are actually few retail brokers.

Many famous foreign investment banks have their own characteristics. For example, when you talk about issuing underwriting, you will soon think of Morgan Stanley, a famous investment bank. When you talk about mergers and acquisitions, it's easy to think of Goldman Sachs. Speaking of retail brokers, it must be Merrill Lynch.

The most important ability factor of investment banks, besides professional ability, personal connections are very important. Local investment banks actually face great opportunities. Brokers and investment banks are actually the same thing. It is only because there is a gap between our brokerage industry in China and foreign investment banks that we have this illusion.

Global financial supervision system: commercial banking and securities business should be strictly separated and operated separately. Commercial banks and investment banks began to formally separate. Therefore, the term "investment bank" actually refers to the separation from the banking system and specializes in securities investment business.

The supervision of investment banks has been relatively loose, which gives investment bankers many opportunities to "open their minds and be brave in innovation".

The issuance of new shares, namely IPO, belongs to securities underwriting, which is one of the most eye-catching and profitable core businesses of investment banks. ? Underwriting is actually a process in which investment banks use their professional knowledge to help enterprises design financing products and distribution methods, choose the place for listing and distribution, and then use their own marketing network to promise to help you sell.

One of the core competitiveness of investment banks: contacts and circles. A principle when recruiting people in investment banks: you like to recruit two kinds of people, either your family background is deep and famous; Either you have a particularly good school background and graduated from a prestigious school, such as an Ivy League school in the United States. In China, these schools are basically Qing, Bei, Fu and Xiao schools.

The second core competitiveness of investment banks: professional competence. First of all, you have to have quantitative analysis ability. There is a method called "cash flow discount method", and analogy method can also be used. In addition, we can accurately grasp the customer's psychology. This process involves not only financial, accounting, mathematics and other professional knowledge, but also psychological knowledge, which is very demanding.

Red herring: prospectus. The word "red herring" gradually evolved into the meaning of shifting focus and attention. Because the prospectus is to attract investors' attention, people gradually call it red herring. So if you want to attract investors' attention, you must try your best to show the advantages and characteristics of your enterprise in such a document.

Improper handling of the prospectus may lead to abortion of IPO and failure of the whole listing. In fact, these characteristics of six walnuts can be understood as both advantages and disadvantages. At this time, how to package, how to communicate and how to express are all very particular. You need to know why the company hires investment banks. In fact, the company employs the connections and expertise of investment banks. This network and professional ability includes how to communicate with the regulatory authorities, how to understand the regulatory "compliance", and how to avoid these possible pits as much as possible in the prospectus after understanding these compliance requirements. This is an important aspect of the core professional competence of investment banks.

The ability to communicate with the A-share market regulators is one of the core competencies of investment banks. Both the United States and Hong Kong are listed under the registration system. The A-share market is called the approval system, which means that the competent government departments should not only review the form of the statements of listed companies, but also review the contents, so as to eliminate those bad companies and check the listing situation. In the United States, enterprises can go public as long as they fully perform the business of information disclosure and then register. China's regulatory authorities have been given the power of life and death, and supervision is a very abstract concept, and it is people who ultimately implement supervision. People will judge the quality of an enterprise subjectively. In this regulatory background, you will find that the communication ability between investment banks and regulators and the understanding and grasp of regulatory intentions are more important than in the United States. Therefore, it is very important to choose an investment bank with special communication skills when listing on A-shares.

Google convened a dozen investment banks at one time, and then said that you signed a confidentiality agreement, and then filled out a detailed questionnaire. On this questionnaire, Google asked the underwriting history of these investment banks like an examiner, such as how did the stocks you underwrite perform? How do you underwrite stocks? What do you think of the timing and pricing of Google IPO? Finally, Credit Suisse First Boston Bank and Morgan Stanley were selected as their lead underwriters like concubines.

? The founders of Google, they are very different. They just keep telling jokes during roadshows and often refuse to answer investors' questions. Google firmly holds the pricing power in its own hands. For example, in its listing application, Google claimed that it hoped to raise $2.718281828 billion. Most people in the investment banking industry will think this number is funny, but it is actually the top ten irrational numbers e, so this "stupid" technical momentum is very obvious in the whole listing process of Google, and? Google still insists on not changing, although it is very complicated, but I am willful and have to raise so much money.

In July before listing, Google revised the expected price space of its IPO to $65,438+$008-$65,438+$035. It was more than seven times the price of other benchmark companies in the market at that time. Google said that this price is my own judgment, so such a high price and such a tough attitude have aroused great resentment from Wall Street and mainstream media. Merrill Lynch withdrew from Google's IPO project, and other investment banks began to discredit Google at this time. Finally, Google made a very small concession and set the issue price at $85. It is also unique in its pricing method, adopting a pricing method called "dutch auction":

The first step, the listed company issues its own announcement, announcing the maximum number of shares to be issued and the potential price range of shares;

The second step, investors start to submit orders at the same time after seeing this announcement, and then write clearly on the order, how many shares I am willing to buy at what price;

In the third step, according to a high-to-low auction method, the investor with the highest bid can buy shares first, and the final settlement price is the price at which all shares are sold.

For example, Google issued 65,438+000 shares, and then you bid $90 for 80 shares, and your friend bid $88 for 80 shares, so you will get 80 shares first and your friend will get the remaining 20 shares. But the final settlement price is the price of all stocks sold, which is 88 dollars.

Why can companies like Google and Facebook be so capricious? These enterprises are very powerful and powerful. The company is strong enough and has willful capital.

This is an era when money is becoming less and less valuable. In the old world, money was expensive and scarce, so those with money had the right to speak. Money is not so valuable, and everyone is chasing after the project. What is the most important thing for a good project?

Human capital is the most critical, and entrepreneurship is the most critical. Therefore, the discourse power of enterprises and entrepreneurs is getting stronger and stronger. The more high-tech industries with concentrated human capital, the greater the initiative of enterprises. For those who have dreams and abilities, the times we live in now are the best. If we seize the opportunity, everyone may be on the cusp.

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, with highly concentrated resources, while new york is the economic center of the United States, the political center of the United States is Washington, and the cultural center is Boston, so new york is one center and Beijing is three centers. New york has gathered the resources of the economic center, but what resources has Beijing gathered? It is the political, cultural and economic center of resources. So we have always said that buying a house is actually the potential of the city. Beijing has more resources than new york, so there are more additional resources for houses. Considering that the total population of China is four times that of the United States, which city do you think will have stronger demand? Okay, this is the demand side.

Let's continue to look at the supply. The effective supply of housing in Beijing is much less than that in new york. Why? As the oldest developed market economy, new york's real estate market has high efficiency, good liquidity, high occupancy rate and few idle houses. Many houses in Beijing have low utilization efficiency and high vacancy rate. Many houses are empty after being bought, which reduces the effective supply of houses. For example, in fact, many houses in Beijing are not for sale. For example, so many houses in state organs and institutions are not for sale, which actually greatly reduces the effective supply of houses. Also, due to some factors of urban planning, the houses in Beijing are all limited in height, so you can see that the houses in Beijing are short and not dense at all, while the houses in Manhattan Island in new york are very high and dense. There is a data that every square meter of land in Manhattan can build 1 1 square meter of houses, but how much can Beijing Second Ring Road build? Houses smaller than 1 m2. Well, in this way, the housing supply in Manhattan is ten times that in Beijing. So in terms of supply, which city do you think has less supply?

A house is actually nothing more than a commodity, and its price is determined by the relationship between supply and demand. The demand for housing in Beijing seems to be greater than that in new york, and the supply is less than that in new york. If we consider that China is still in the middle and high-speed growth period and will enter the ranks of high-income countries in 2023-2024, the high probability event is to become the world's largest economy in 2030. So from the perspective of demand and supply, Beijing's housing prices should never be lower than new york's.

So what's the situation now? Now, in comparable locations and grades, Beijing's housing prices are about half that of new york. The average price in the core area of new york is about 6,543,800+4,000 RMB, and that in Beijing is about 70,000-80,000 RMB. Let's take a look at high-end apartments. The price per square meter in new york is about 300,000 RMB, and that in Beijing is about 6.5438+0.5 million RMB. Therefore, assuming that China's economy continues to develop steadily and its social and political structure continues to be stable, compared with new york, Beijing's housing investment potential is huge.

House price is a reflection of a country's economic growth and a city's comprehensive competitiveness. Its price is determined by the relationship between supply and demand after combining many factors. In the past, the rise of urban housing prices in our country was mainly caused by economic growth and urbanization, so the future housing price changes will still follow this logic, economic growth and urbanization.

At present, the per capita income of China is only 1/5 of that of developed countries such as the United States and Japan, and there is still a lot of room for growth, while the urbanization rate of developed countries is 80%, and that of China is about 57%, which also has a lot of room for development. Therefore, from the two dimensions of economic growth and urbanization, China still has a lot of room. This also proves that the fundamentals of urban housing prices in China are still very stable.

In the process of urbanization, the population will further gather in big cities. Remember that China's population base is four times that of the United States and more than 10 times that of Japan, and the population of large and medium-sized cities in China will increase in the future. So you see that the regulation has been so strict in the past two years, the overall house price has not dropped, and many places are still rising. What does this mean? This is not to say that everyone is irrational, but to prove 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 have finished the relationship between economic growth, urbanization and housing prices, the next answer is, if there is no bubble in housing prices, why do countries have so many regulatory policies?

This involves a deeper understanding of the housing price problem. You can ask, if there is no bubble, isn't the government going to regulate housing prices? Think carefully, in fact, there may be many reasons for the government to regulate housing prices, the most important of which is the distribution of wealth.

China's economy has grown too fast in the past decade. What is it like? Like a speeding train, people who buy a house in a big city are like buying a ticket, but there are also many people who will be pulled away from their wealth because they can't get on the train because of various opportunities. Therefore, many low-and middle-income people can't afford to buy a house, and young people who have just entered the workplace can't afford to buy a house. In this way, if house prices rise too fast, the wealth gap in this society will become larger and larger. People who don't buy a house will never be able to afford it, and they will become more and more desperate, uneasy at work and depressed.

What is the most important pillar of a society? After all, people are still people, and people should have hope when they are alive. There is no hope, which is a particularly terrible state and will cause many problems. Therefore, from the perspective of social prosperity and stability, our country should introduce regulation to prevent housing prices from rising too fast. In this way, people who have not bought a house can also find ways to buy a house, and people with particularly low incomes should also introduce a policy of affordable housing to truly realize "home ownership", so that society can be stable.

Therefore, the regulation of real estate is not to regulate the price level, but to regulate the rate of increase, so that house prices do not rise too fast, which regulates the distribution of social wealth and is a stable state of long-term stability of the country.

In fact, every city is different, and the location, age and land nature of each house may be different. In the final analysis, the development of a city is the development of people, so will the future population trend be towards big cities or small cities?

At present, the rate of big cities in China, that is to say, the population of big cities with a population of over one million accounts for a very low proportion of the total population, which is less than half that of the United States, Japan and other countries. This figure is about 64.7% in Japan and 23.8% in China.

0 1 investment bank: Banks that don't do banking business pursue high risks and high returns, and have fewer regulatory restrictions, so they will be better at financial innovation, such as money funds, asset securitization and venture capital.

02? Issuance underwriting (1): the matchmaking center of the investment market. In the underwriting business of securities issuance by investment banks, investment banks use their professional knowledge to help enterprises design financing products and methods, then choose the issuing place and use their own marketing network to sell securities products.

03? Issuance underwriting (Part II): I want to make a prospectus. It is an important document for investors to communicate with regulators, especially reflecting the packaging ability and professionalism of investment banks.

The principle of recruiting people at Goldman Sachs is a bit like Harvard's enrollment, and it likes people who are tall, extroverted, have certain leadership and are good at communicating with others. People who enter Goldman Sachs have all kinds of backgrounds, which means it is not very important to study what major. For college students, as long as they have basic financial knowledge, it is enough.

But Goldman Sachs attaches great importance to people's soft power, especially one's way of thinking and the way to solve problems when encountering problems. ? Today, I will introduce you to three representative interview questions of Goldman Sachs.

Question 1: When the time is 3: 15, what is the angle between the minute hand and the hour hand?

People who have studied geometry in junior high school can easily solve this problem, but some people in American universities who talk big and mix diplomas really can't. In the words of my friend at Goldman Sachs, there are many fake diplomas in American universities that need to be screened out.

Taking such a simple exam will quietly brush out many people with poor mathematical foundation and insensitive to numbers. An undergraduate majoring in finance knows everything clearly when you ask him to calculate compound interest, but he has long forgotten junior high school mathematics. A good financial person should be extremely sensitive to numbers, while human beings themselves are not sensitive to big numbers.

Question 2: How many planes are there over new york at any time?

This is obviously a way to test candidates to collect information and then start solving problems. As for the final answer, it doesn't matter Of course, it is impossible to make a wild guess.

Usually, people with a little common sense will know that there are three international airports near new york. If one plane takes off every three minutes and lands at the same time, the three airports will take off and land two planes in about one minute.

If the speed of the plane before landing and shortly after takeoff is calculated as 300 kilometers per hour, and the diameter of new york is about 30 kilometers, that is to say, the plane stayed over new york for 6 minutes during takeoff and landing. Therefore, there are an average of 2x6= 12 planes over new york at any time.

Of course, if the interval between takeoff and landing is two minutes, or four minutes, the result will be different, but it doesn't matter, it won't affect the result of the interview.

In addition, starting from different information sources, different paths can be used to solve this problem.

For example, if we know that one of the airports, Kennedy Airport, takes off and lands about 420,000 flights a year, and if this airport is busy 18 hours a day, the result is similar to that estimated by the previous method. For this kind of problem, the way to solve the problem is much more important than the answer.

Why does Goldman Sachs ask such a question? Because in order to estimate the size of a market and the scale of a company's potential income, this is the process of collecting information and doing logical reasoning.

The third question: If you are compressed into a pencil-high person and fall into a juice blender, how do you get out?

This test has two main purposes. One is to see if the candidate can open his mind and be creative. The other is to see whether the candidate is interested in such a strange question.

1. Don't try to climb out by yourself, but try to ask for help, such as shouting, even making a phone call when your mobile phone is still around, or writing down help information in a glass container. In fact, any idea of trying to climb out by yourself is unrealistic.

In the workplace, we should especially know how to work with the help of others. When you encounter difficulties, don't always think about solving problems beyond your ability.

I have seen such employees in both Google and Tencent. They fell into a technical problem. A person spends many days thinking hard, but he just doesn't get to the point. In fact, asking colleagues around you will soon solve the problem. Although there are not many such employees, this kind of problem is unacceptable.

People at Goldman Sachs say that for a financial company like Goldman Sachs, everyone must understand that when encountering such a big trouble as falling into a blender, they must seek help instead of trying to solve the problem by themselves. In fact, every time companies such as Goldman Sachs encounter big troubles, they will turn to other financial institutions for help first. If not, they will seek government help, as they did in the last financial crisis. Looking back at the boundary problem we talked about earlier, trying to climb out of the blender is crossing the line.

Some thoughtful people gave some answers. In addition to the above help, I suggest you go back and think about who made me as small as a pencil and who threw me into the blender to avoid the next tragedy or trouble.

It is also pointed out that if a person is only as big as a pencil, his brain is not much bigger than the eraser on the head of the pencil, and his intelligence is definitely pitiful. It is impossible to come up with a good solution and he will not be aware of the danger. From this, these people suggest that our own intelligence cannot solve complex problems, and we need external tools such as computers.

Compared with ourselves, today's financial market is far more complicated than a blender. In front of it, we are just a small person with a brain as big as rubber.

If you can think of any of these three answers, this question is considered to be a very satisfactory answer.

In addition, when interviewing graduates, Goldman Sachs will also ask some questions about financial common sense and communication skills.

From the way Goldman Sachs selects young people, I see the following principles:

0 1 Basic professional knowledge is a must. As I said last week, college students must learn some professional skills. The basic skills of communicating with people are also needed, which is why I have always stressed that four years of college need to turn an ignorant person into a social person.

What kind of thinking a person uses to solve a problem is more important than knowing the answer. Goldman Sachs is no different from Google and Microsoft.

Know the limits of your abilities. ? If you encounter problems beyond your ability, you should turn to others instead of acting foolishly. China people often encounter the so-called ceiling puzzle in multinational companies. According to my observation, one of the reasons is that they are not good at asking for help.

Elites from all walks of life in the world have some characteristics, such as being good at solving problems and paying more attention to methods than simple results.