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I was recently invited to attend a presentation at a well-known middle market bank, where one of the managing directors gave a speech about the state of the finance industry. There were a few things mentioned which have been echoed numerous times on WSO: the industry and its compensation may never reach its peak again, technology and quants are playing a role in cutting jobs, and that things will get better, but slowly.

Essentially, he made it clear that he-- a working professional in the industry-- was not advocating trying to break in at this moment. However, me and my colleagues resisted: during questions, we kept pestering him about his thoughts on not only getting a job, but also excelling enough to reach his position or higher. Sometime later, a student asked him whether a master of finance degree would help, seeing as how it's a degree that concentrates on a high level of financial knowledge. His response shocked most of the students, though it's probably obvious to most WSOers.

"Whoever said you had to be an expert in finance to make a ton of money for your firm?"

It turns out that he himself never studied finance as a subject. He actually majored in a liberal art, then got a masters in economic theory and international relations before starting to work at a bank. Anything quantitative he would learn on the job, either through a quick google search or asking one of the quants at his office.

What he brought to the table was a unique way of thinking about trades. He specialized in foreign currencies, so his political and international knowledge proved highly beneficial in his current position. This isn't the first time I've heard of something like this.

Obviously, if you majored in finance and have a background in it, you'll be more likely to break in and find a job. But when it comes to performing at a very high level, sometimes differentiating yourself leads to a unique way of thinking that may prove to be incredibly useful. Thoughts?

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Comments (21)

  • UFOinsider's picture

    I would agree with him. At the end of the day, all this stuff is just money/deeds/debt that gets shuffled around to the next real world opportunity. The mechanics are very important to know, as evidenced by this guy's reliance on quants, but seeing the big picture is every bit as important and a lot of people who are good at numbers miss that.

    If you doubt that, ask yourself how the entire industry could implode so quickly as it did a few years ago despite having some of the most educated and hard working people on earth.

    Get busy living

  • fearless's picture

    I do think that sort of unique perspective a firm should be paying him a much bigger salary. It would make sense that a finance major would lack a global or a specific perspective on things.

  • newfirstyear's picture

    I agree with him. The most successful junior person at my firm is a guy who sits in the cube next to me and spends all day reading news, offbeat news, research papers and other random stuff. It's like his brain aggregates every news source then comes up with a thesis combining all of them.

    Being good in finance is not about who can build the best DCF, its who can bring a unique perspective.

  • WallStreetPlayboys's picture

    Suppose this is a good spot to address this question. But it would be a good idea to rephrase the question.

    "What is the best skill to learn to make a lot of money in finance?" - The answer is Sales.

    Now in order to "break-in" a degree like business/economics/finance will be much better, however once you surpass the analyst/associate level the best skill to have is sales. Within the OP's post this part stood out.

    "What he brought to the table was a unique way of thinking about trades"

    Think about this heavily for a second... He had quants working for him and had a "unique way to think about trades"... So how in the world did he get people to "believe" his "unique view" would work. The hidden answer is salesmanship.

    Even on the buyside where a hedge fund of course wants quants as well and other "numbers guys" the hidden fact is the same, you must sell your PM on your "idea" first... if it falls on deaf ears you are done.

    A Quick story:

    "A company CEO is on trial where a lawyer is accusing him of being unintelligent and unable to perform the job of his underlings. During the trial he asks him "How do you calculate a CAGR?". He responds with "I do not know". The Lawyer then rejoices, he exclaims that the CEO is inept and is below average intelligence. Once finishing his celebration the CEO stands up and asks 'Why would I need to memorize a formula or calculate an equation when I have thousands of employees to do so?'" .... The room falls silent.

    To end the point a great quote to hang above your monitor is this:

    "When did you master learning how to dig a ditch? When you have someone else doing it for you."

    Ever wonder why networking is always the best?... Sales fellow monkies.

    WALLSTREETPLAYBOYS.COM

    TWITTER @WALLSTPLAYBOYS

    Advice from Real Wall Street professionals.

  • In reply to WallStreetPlayboys
    aicccia's picture

    WallStreetPlayboys wrote:
    Think about this heavily for a second... He had quants working for him and had a "unique way to think about trades"... So how in the world did he get people to "believe" his "unique view" would work. The hidden answer is salesmanship.

    Even on the buyside where a hedge fund of course wants quants as well and other "numbers guys" the hidden fact is the same, you must sell your PM on your "idea" first... if it falls on deaf ears you are done.

    If you're consistently "selling" bad investing thesis's, eventually its not going to matter how good you are at "salesmanship", no one is going to listen to you. However if your investing thesis's consistently do make money, eventually you won't need to sell your ideas. People will put money down and believe in you as soon as soon as you've got a new idea.

    You think Warren Buffet, George Soros, John Paulson, and many others became successful simply because they're the best salesmen?

    "It's not that I'm so smart, it's just that I stay with problems longer." - Albert Einstein

  • In reply to aicccia
    TheSquale's picture

    aicccia wrote:
    WallStreetPlayboys wrote:
    Think about this heavily for a second... He had quants working for him and had a "unique way to think about trades"... So how in the world did he get people to "believe" his "unique view" would work. The hidden answer is salesmanship.

    Even on the buyside where a hedge fund of course wants quants as well and other "numbers guys" the hidden fact is the same, you must sell your PM on your "idea" first... if it falls on deaf ears you are done.

    If you're consistently "selling" bad investing thesis's, eventually its not going to matter how good you are at "salesmanship", no one is going to listen to you. However if your investing thesis's consistently do make money, eventually you won't need to sell your ideas. People will put money down and believe in you as soon as soon as you've got a new idea.

    You think Warren Buffet, George Soros, John Paulson, and many others became successful simply because they're the best salesmen?

    You're missing the point here. We are talking about rules, not about exceptions.
    Fact is you will never ever be as successful in investing as the guys you quote so you better learn how to sell.

  • derivstrading's picture

    People on this site get waay too caught up in paths and moulds you have to fit. No, you do not need to be a finance student to succeed in finance. And no, being a liberal student doesnt all of a sudden make you have a "unique" perspective on stuff.

    At the end of the day, its all about whether you can add value in the environment you are in, and that is the sole determinant of whether you succeed or not. And that is up to the person, and how smart, flexible and open to new challenges they are. You might have 0 programming knowledge, but lets say you see an opportunity in your team where you can make things more efficient by reading up a bit on vba and constructing something. It doesnt matter if you are a finance, liberal arts wtv major, all that matters is that you can spot a window where you can add value, and then be smart enough to execute on it. There will be so many things you come across that you have never had experience with before, that it really doesnt matter what your background, but rather the fact that you are intelligent enough to find solutions to problems when they arise. Its like people on this site think that what you study defines your skills and abilities. I didnt do much highly advanced maths, but if there is something at work that I think requires a piece of knowledge I dont have I just try and find the resources to fill the gap. You learn on the job, because unlike school most jobs are always changing, and you will never really be fully 100% pre prepared with the knowledge you need, most of the time you just need to figure shit out on the way, and its how well you can improve in these istuation that determines whether you are succesfull.

    Saying someone is successfull because they did a liberal arts major or they did a maths major is just hugely wrong.

  • AQM's picture

    Like half the people in my banking class did liberal arts majors? I don't know why people are so adamant about STEM majors, all the kids who major in STEM are really awkward and can barely hold conversations. We have a lot of STEM majors apply to our bank and the #1 thing we're told to look for is whether they're "normal" because a lot of the time they're not.

    Also if you have a 3.9 as a math and physics major, you would probably be much more prosperous going into academia. If I could be so smart in as tough of a major, I would be at NASA or Google doing much more important stuff then historical PE ratios lol

  • WallStreetPlayboys's picture

    I see your point.

    The thing is look up all the "top ranked" Research Analysts.. Now look up when they upgrade and downgrade stocks... You'll see they are not very good.

    Now look at their paycheck....

    So yes on the buyside performance is all that matters. Now think higher level again.

    Lets say you suck terribly at picking stocks... If you're AMAZING at sales... you can convince someone to hire you again in the same position.

    The power of sales is unstoppable long-term.

    If you can convince someone to buy $1M worth of dog crap there will always be a spot for you. Is what it is.

    WALLSTREETPLAYBOYS.COM

    TWITTER @WALLSTPLAYBOYS

    Advice from Real Wall Street professionals.

  • In reply to derivstrading
    SirTradesaLot's picture

    derivstrading wrote:
    People on this site get waay too caught up in paths and moulds you have to fit. No, you do not need to be a finance student to succeed in finance. And no, being a liberal student doesnt all of a sudden make you have a "unique" perspective on stuff.

    At the end of the day, its all about whether you can add value in the environment you are in, and that is the sole determinant of whether you succeed or not. And that is up to the person, and how smart, flexible and open to new challenges they are. You might have 0 programming knowledge, but lets say you see an opportunity in your team where you can make things more efficient by reading up a bit on vba and constructing something. It doesnt matter if you are a finance, liberal arts wtv major, all that matters is that you can spot a window where you can add value, and then be smart enough to execute on it. There will be so many things you come across that you have never had experience with before, that it really doesnt matter what your background, but rather the fact that you are intelligent enough to find solutions to problems when they arise. Its like people on this site think that what you study defines your skills and abilities. I didnt do much highly advanced maths, but if there is something at work that I think requires a piece of knowledge I dont have I just try and find the resources to fill the gap. You learn on the job, because unlike school most jobs are always changing, and you will never really be fully 100% pre prepared with the knowledge you need, most of the time you just need to figure shit out on the way, and its how well you can improve in these istuation that determines whether you are succesfull.

    Saying someone is successfull because they did a liberal arts major or they did a maths major is just hugely wrong.


    What a great post. Everyone on this site should read this twice. I'd throw you a mountain of SBs if I had any.

    adapt or die wrote:
    What would P.T. Barnum say about you?

    MY BLOG

  • earthwalker7's picture

    the most successful folks know BOTH how to sell and how to invest. There are many brilliant minds that don't make it, and plenty of inflated windbags who can shovel poop in good markets but who are out of a job when the market is down. Monkeys, best to do both. Learn to invest wisely, master the technicals and maths and understand the finance, and simultaneously learn to SELL. It ain't that hard. More of a factor of being a decent person, and keeping in close touch with people so that they'll want to take your calls.

  • earthwalker7's picture

    the most successful folks know BOTH how to sell and how to invest. There are many brilliant minds that don't make it, and plenty of inflated windbags who can shovel poop in good markets but who are out of a job when the market is down. Monkeys, best to do both. Learn to invest wisely, master the technicals and maths and understand the finance, and simultaneously learn to SELL. It ain't that hard. More of a factor of being a decent person, and keeping in close touch with people so that they'll want to take your calls.

  • In reply to derivstrading
    gg2's picture

    derivstrading wrote:
    People on this site get waay too caught up in paths and moulds you have to fit. No, you do not need to be a finance student to succeed in finance. And no, being a liberal student doesnt all of a sudden make you have a "unique" perspective on stuff.

    At the end of the day, its all about whether you can add value in the environment you are in, and that is the sole determinant of whether you succeed or not. And that is up to the person, and how smart, flexible and open to new challenges they are. You might have 0 programming knowledge, but lets say you see an opportunity in your team where you can make things more efficient by reading up a bit on vba and constructing something. It doesnt matter if you are a finance, liberal arts wtv major, all that matters is that you can spot a window where you can add value, and then be smart enough to execute on it. There will be so many things you come across that you have never had experience with before, that it really doesnt matter what your background, but rather the fact that you are intelligent enough to find solutions to problems when they arise. Its like people on this site think that what you study defines your skills and abilities. I didnt do much highly advanced maths, but if there is something at work that I think requires a piece of knowledge I dont have I just try and find the resources to fill the gap. You learn on the job, because unlike school most jobs are always changing, and you will never really be fully 100% pre prepared with the knowledge you need, most of the time you just need to figure shit out on the way, and its how well you can improve in these istuation that determines whether you are succesfull.

    Saying someone is successfull because they did a liberal arts major or they did a maths major is just hugely wrong.

    best post i've read on wso. if only i read this earlier....