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Do Investment Bankers Do Drugs?

Common Misconception About Investment Bankers

I remember interviewing this student from a very technical and academic school. He had a 4.0 GPA, had high 90’s in all of his quantitative courses and could play multiple instruments – he was even in an orchestra! He answered every one of my technical questions with ease and went deep down the rabbit hole discussing purchase price allocation under a contemplated merger scenario (loser).

I really wanted to give him an offer – he had obviously worked hard his entire life and was bowing to me to show his appreciation of receiving an invitation to interview. Apparently he attended all of the information sessions for every bank, including Wells Fargo, and never got a call.

His posture was bad and his suit was extremely baggy. He did not style his hair, which is a big faux pas for me. He also smelled bad.

However, I was willing to give him the benefit of the doubt – I could tell him to go to Nordstrom and swap out his 50% off Men’s Warehouse gear for Hugo Boss. I could tell him to spritz on some deodorant. I could tell him to brush his teeth. And even if he was a little bit awkward, analysts do not really get to go to client meetings anyway. I really wanted to make it work for this kid.

“Do you have any questions for me?”

“Thank you so much for the opportunity! I am so excited to possibly work in finance – I want my life to be like Wolf of Wall Street too!”

“Sorry, what is it that you think we do here?”

“You do drugs and party very hard. But you work hard too! I love it!”

Suffice to say he was not asked to come back to meet my superiors, but this is a good segue into dispelling some of the common misconceptions about finance folk. Also – the Wolf of Wall Street was not an investment banker and neither are the guys in Boiler Room.

So from my experience, do investment bankers do drugs?

Wall Street, Inside Job, Margin Call, The Big Short – Hollywood Villain

The media loves to portray the evil capitalist banker character where daddy got him into Dartmouth and he keeps a drug habit. That a 70 year old director on RBC’s board was caught possessing a large quantum of cocaine (hitting the slopes at 70, very bad stress on the cardiovascular system) did not help.

The short answer is yes. Investment bankers do drugs. However, incidence of drug use does not seem to be higher than for any other profession. Investment bankers are people.

The difference is that owing to larger disposable income than the general population, investment bankers who do indulge in these vices tend to do it more frequently (drug habits are not cheap) and the events where they do partake tend to be more lavish and opulent. These stories are commonplace but I will refrain from details to preserve the integrity of the blog.

However, investment bankers with Class A drug habits also tend to be more reserved around drug use than drug users outside the industry. Believe it or not, finance has cleaned up substantially since the financial crisis in terms of what image corporates want to convey – anything that is perceived as reputational risk to the firm is not tolerated and discipline is meted severely. So those who partake will only do so amongst close friends and far away from any firm-sponsored events. If you are caught with drugs you will be fired.

Now for a history lesson, the number of degenerates was far higher pre-crisis, especially as there was less media scrutiny and investment banking was less meritocratic (more of an old boy’s network). The further away from HR, the more pronounced the problem – especially in expatriate centers that required experienced bankers shifted over from London or New York.

Also, the party culture seems to be stronger in capital markets groups and the trading floor. Just an observation.

Adderall and Focus Drugs for Investment Banking

This is the real problem – and amongst junior investment bankers only. Adderall is a prescription drug that helps with focus. Starting off in university where students pop adderall cram twenty hours of study right before the exam, people have found that it is equally useful for modeling and turning comments at breakneck pace. From a rough outside look, prevalence is more or less the same as the above illicit drug use.

Especially in coverage or industry groups, investment banking analysts have a mountain of mind numbing work to churn through late into the night on a regular basis. So for a large number of junior bankers, especially ones who have offers from KKR or Carlyle and cannot afford to get fired, they revisit their old college buddy Adderall.

VPs and above obviously do not need this because they do not need to punch in numbers and test things on a computer for 16 hours a day.

There are obvious drawbacks to getting too cosy with a controlled substance. I have met ex-bankers who have developed dependence to the drug and are completely scatterbrained without regular use. Their brains are fried.

I never did drugs and neither should you. It is simply not necessary for the job – putting headphones in with the right BPM or ambient music is good enough for focus and good habits in front loading work can help with deadlines. Sacrificing health for wealth, and not that much of it, is never a worthwhile trade.

CultureDo The Hours Get Better in Investment Banking? · Paying it Forward – the Investment Banking Coffee Chat · Woodstock for Capitalists: The Berkshire Hathaway AGM · Why Investment Bankers Are Bad Investors · Are Investment Bankers Good Investors? · The Investment Banking Staffer · A Very Investment Banking Christmas · Other Phenomena in the Investment Banking Jungle · Hangover Banker · Some Investment Banking Things · Business Golfing Primer – Beginner to Scratch Golfer to Sergio Garcia · Sports and the Trading Floor · Why Do Investment Bankers Work So Much? · Do Investment Bankers Get Sick? · Participating in Office Fantasy Football (And Other Games) · What Does A Bad Week In Investment Banking Look Like · Checking Your Work in Investment Banking · Do Investment Bankers Do Drugs? ·
ex investment banking associate

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