An Econ Professor, Prospective IB's, And The 99%

It’s almost been a year since I began with WSO and I think I’ve come to get a feeling about what’s it’s like to go through the IB process. Perhaps some go into college with nothing more than a pipe dream of owning a corner office as head of an IB team. At one time I know I had similar aspirations but my later experiences in trading wiped that out like a shaken Etch-A-Sketch. However, I want to share with you monkey's a different perspective from a London Economics Professor who shares their observations on socially awkward quants, brainwashing of prospective IB's, and my take on the 99% of those who fail. Read on to see the whole controversy with a link to the full version complete w/Q&A…

Anthropologist and Journalist Joris Luyendijk ventures into the world of finance to find out how it works and writes for the Banking Blog hosted by The Guardian and interviews various professionals, their working lives, and anonymously shares their insights. The following is a summary of an article from May 8th with the most relevant and controversial content.


STUDENT QUANTS
The professor defines a quant as a student who's strong in maths, extremely good at recognizing patterns, and very detailed with a strong psychological need for structure. They’re so good at these things that they may even exhibit Asperger-like qualities. However, as a result of their superior analytic abilities…

Quants don't have very good social skills. If you react to a quant in a way that requires empathy, this is difficult for them.”

For example, 10-20% of the professor's students are enrolled in an ethics class. They think that if a semester of ethics were required, engaging in more complex ethical issues would cause many of them to fail. Why? Quants are disconnected from the world, miss aspects of social reality, and are naturally less attuned to it.

They conclude, this is key to understanding today’s banking culture.


PROSPECTIVE IB'S
The professor finds it striking how students trap themselves and are brainwashed into a banking or bust mentality and here's how they see that unfold…

From the very first week, freshman herd into student associations that organize CV classes geared toward their sophomore year where there’s intense pressure to get a highly competitive internship at a BB. Pressure can be so intense that some students don’t even have time to study and fail and if you’re not in the upper-second class, forget it! Further, the only grade that really matters is the cut-off established by banks and it doesn’t matter how it’s achieved, it just needs to be met. Meanwhile they're students who realize they’re grades don't cut it to even apply and they,

…literally think their lives are over, 21-year-old kids who have been led to believe that either you get into a top paying bank, or it's a cardboard box…”

WHAT'S THE 99%?
I think pursuing an IB position ought to be thought of more in terms of an assumed probability. Instead of focusing all of a prospect's expectations and mental energies on a 1% opportunity they ought to diversify into the 99% of other probable career paths. Think of it as a portfolio manager. Would you direct all of your investments into a 1% outcome OR play it smart and hedge your bets on the 99% probability of all other investments?

Further, if you focus only on the 1% then you're missing the larger purpose of college, to apply what you’ve learned in new and different ways instead of fitting into cookie-cutter job classifications. With that said, I’ll end by sharing what I a broker told me during my intership at Merrill Lynch when I told him I wanted to be an IB,

You don’t know what you really want to do until you reach about 30.”

THANK YOU
...for sitting tight and reading this far. I’m sure you monkey’s have a lot to say about this post and I encourage you to read the full article and the Q&A HERE.