Need for Speed

How fast can a human being possibly use Excel?  This is not an easy question to answer.  However, it's frequently a very important question to the younger people that work in investment banking, PE or hedge funds, because much of their livelihoods are tied to Excel.  Particularly in banking, the faster your execution speed is overall, the less miserable life becomes.  Speaking of miserable, for the week that I was exposed to Training the Street, they introduced us to their version of the "Excel speed test," which was a formatting exercise typically completed in a minute, but sometimes completed as quickly as 30 seconds.  I never finished it, so you could probably call me slow.

Regardless, I do know a thing or two about speed relative to Excel. Here is what it takes:

How fast (or slow) of a typist are you?

1. Typing speed - If you can't type at least capably, you can give up any hope of using Excel any faster than that old MD that doesn't check e-mails or use Excel since he started working before computers and high-yield debt existed. Typing speed is like the 40-yard dash for football players: raw speed. You could type 130 WPM (probably equivalent to a 4.2 second 40), or you could only type 50 WPM (offensive lineman speed). Anything below that range, and you should probably consider changing professions.
2. Shortcut/function knowledge - Even if you are the greatest typist in the world, you can't do much financial modeling (at least quickly) without knowing your way around Excel.  This is the same reason track stars cannot always be great football players; speed is no guarantee that they know the playbook and how to play (think of John Capel vs. Randy Moss).  So for maximum speed, you need to know things like CTRL + 1, CTRL + arrow keys, etc.  Having the ability to type out a Steven King novel in a couple of hours may help, but not much since you aren't writing novels in the spreadsheet.
3. Brainpower - Some might argue that this is tied to typing speed, which is partly true, but I want to highlight the importance of a good memory, quick recall function, etc.  You may have posted on the side of your cubicle (a good Asian friend of mine used to call it a "cubic") a sheet listing commonly used keyboard shortcuts.  Does this help you?  Maybe, but certainly not in significantly increasing your speed.  If you just transitioned from Excel 2003 to 2007 and are looking for the command for "Page Setup" (ALT, P, S, P), scanning the sheet and then typing the command is not very efficient.  Similarly, if you somewhat remember the function and have to think about it for 10 seconds, that's not very efficient either.  But if you know every function off the top of your head, you'll obviously operate much faster than others who need to refer to either their physical or mental cheat sheets.

The good news: all 3 of the aforementioned attributes can be significantly developed with the proper amount of repetition.  One year of banking analyst experience will yield roughly 5,000 hours of work, much of which is sadly just improving your computer skills through repetition.

So how fast is fast?  Well, Mrs. F-One can type 120 WPM.  That's pretty fast.  I can build a 3-statement model while using one hand to eat buffalo wings in less than 15 minutes.  Maybe you're not impressed, but given that I only type 80 WPM with TWO hands, that's not bad.  I've often mentioned to friends that if Mrs. F-One and I were to produce a child that gets all the right traits, this child would be the Lebron James of investment banking.  The other child would probably get cut from middle school basketball.  Anyway, I would gladly let Le-One go straight from high school to the pros.  The only part I want to avoid is Gloria James banging Delonte West in the team hotel.

I'm taking my talents to Wall Street...as soon as I unlodge this basketball from my dong.

There are obviously many ways to improve Excel speed, some of which I will discuss in future posts.  In the mean time, I strongly suggest 1) continuing to work hard while making an effort to memorize more functions/keystrokes and 2) http://www.freetetris.org/

Enjoy while Mrs. F-One gives me a beatdown for suggesting that our future child should become a banker,

F-One