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Wall Street Oasis » Forums » Traders Train
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FI Traders > Equity Traders?
 

lostchimp's picture
lostchimp
      IA
 
(Senior Monkey, 80
 
Points)
 on 1/6/13 at 4:00am
trader

The Big Short, what an awesome book that was! It gave insights into the crash that I have never realized before, and would have never came to learn in school either. The book informed me that equity traders are looked down upon compared to fixed income traders, according to the author. The author explained of the massive size and volume of fixed income markets compared to equity markets. He also explained of the larger spreads and ability for fixed income to be bundled into the new (and largely misunderstood) pools of debt obligations.

So where does the belief that equity traders are less than fixed income traders stem from? Are fixed income traders truly greater than equity traders? Do they have higher incomes perhaps?

I have no experience or opinion on the topic, just curiousity.

  • fixed income
  • equity trading
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Markov's picture

Didn't you just answer your

Markov
      HF
 
(Baboon, 152
 
Points)
 on 1/3/13 at 12:44pm

Didn't you just answer your own question?

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Bobb's picture

What do you mean by "truly

Bobb
      AM
 
 
(Senior Gorilla, 979
 
Points)
 on 1/3/13 at 1:04pm

What do you mean by "truly greater"?

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frooter's picture

there's a lot more moving

frooter
     
 
(Baboon, 125
 
Points)
 on 1/3/13 at 1:14pm

there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade

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In reply to Markov
lostchimp's picture

Markov: Didn't you just

lostchimp
      IA
 
(Senior Monkey, 80
 
Points)
 on 1/3/13 at 1:15pm
Markov:

Didn't you just answer your own question?

I have no experience in trading. Was trying to get insight from experienced people to see where this belief comes from and the reasoning behind it.

Bobb:

What do you mean by "truly greater"?

Do fixed income traders feel as if they are superior to equity traders?

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In reply to jrtr8der
lostchimp's picture

jrtr8der: there's a lot more

lostchimp
      IA
 
(Senior Monkey, 80
 
Points)
 on 1/3/13 at 1:17pm
jrtr8der:

there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade

That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?

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frooter's picture

fixed income trading higher

frooter
     
 
(Baboon, 125
 
Points)
 on 1/3/13 at 2:12pm

fixed income trading higher paid, for most part...and bond market much larger than equities markets

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In reply to lostchimp
Bobb's picture

lostchimp: jrtr8der: there'

Bobb
      AM
 
 
(Senior Gorilla, 979
 
Points)
 on 1/3/13 at 2:47pm
lostchimp:
jrtr8der:

there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade

That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?

I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers

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In reply to Bobb
frooter's picture

Bobb: lostchimp: jrtr8der

frooter
     
 
(Baboon, 125
 
Points)
 on 1/3/13 at 3:00pm
Bobb:
lostchimp:
jrtr8der:

there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade

That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?

I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers

Fixed income is also going the way of computers....

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mxc's picture

I'm a fixed income trader and

mxc
      O
 
(Senior Gorilla, 813
 
Points)
 on 1/3/13 at 4:23pm

I'm a fixed income trader and yeah I feel superior to equity traders.

I think FI is just more interesting. More moving parts, everything is less clear, lots of room for analysis, you can try to develop an edge. Also can be more structured/leveraged.

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In reply to mxc
lostchimp's picture

mxc: I'm a fixed income

lostchimp
      IA
 
(Senior Monkey, 80
 
Points)
 on 1/3/13 at 11:37pm
mxc:

I'm a fixed income trader and yeah I feel superior to equity traders.

I think FI is just more interesting. More moving parts, everything is less clear, lots of room for analysis, you can try to develop an edge. Also can be more structured/leveraged.

Haha thanks

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mxc's picture

I was actually worried that

mxc
      O
 
(Senior Gorilla, 813
 
Points)
 on 1/4/13 at 1:58am

I was actually worried that the thread referred to someone trying to transition from FI to equities.

I also don't believe FI is going the way of the computers. Sure, spot FX, govies, vanilla swaps, we have automated market makers. But the rest is just too bespoke

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In reply to jrtr8der
Bobb's picture

jrtr8der: Bobb: lostchimp

Bobb
      AM
 
 
(Senior Gorilla, 979
 
Points)
 on 1/4/13 at 12:24pm
jrtr8der:
Bobb:
lostchimp:
jrtr8der:

there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade

That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?

I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers

Fixed income is also going the way of computers....

Yes and no. There are some products that are more automated as said above. The corp bond market is becoming more electronic as well other prouducts are just to complex at the moment

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In reply to Bobb
zeropower's picture

Bobb: jrtr8der: Bobb: l

zeropower
      ST
 
(Senior Orangutan, 486
 
Points)
 on 1/4/13 at 2:06pm
Bobb:
jrtr8der:
Bobb:
lostchimp:
jrtr8der:

there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade

That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?

I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers

Fixed income is also going the way of computers....

Yes and no. There are some products that are more automated as said above. The corp bond market is becoming more electronic as well other prouducts are just to complex at the moment

Unless we're talking esoteric swaps and other OTC products, every fixed income instrument has machines in it, whether market-making, or just trying to catch the bid/offer before the big dumb money that comes in and starts taking levels with no regard to getting the best fill.

Defintely more opportunities in FI (might as well label it FICC) trading than equities. Eq traders are considered the dumbest guys in the room since credit/bonds always lead stocks (more an axiom than empirically tested, but i digress..) and we FI traders have way more variables to look at when deciding upon a trade than simply this single company's cash flows.

I've oversimplified, but perhaps that's fitting to such a question.

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mxc's picture

Let me add to what I said The

mxc
      O
 
(Senior Gorilla, 813
 
Points)
 on 1/5/13 at 5:32am

Let me add to what I said

The only link between stock A and stock B will be a form of correlation, whereas in fixed income you typically have a relationship like product A = product B + basis.
E.g:
German 10y = rates + asset swap spread
Spain 10y = German 10y + spread
Bund repo = Eonia + GC spread
Cross-currency swap = FX forward + 2x vanilla IRS
Corporate bond = CDS + CDS basis => bond - CDS = basis package = funding

etc.

One thing I can think of in equity that is fixed income-sy is index arb, where you trade the future vs. underlyers and get long/short the funding...

I guess equity vol is more interesting though

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In reply to mxc
zeropower's picture

mxc: One thing I can think of

zeropower
      ST
 
(Senior Orangutan, 486
 
Points)
 on 1/5/13 at 11:04am
mxc:

One thing I can think of in equity that is fixed income-sy is index arb, where you trade the future vs. underlyers and get long/short the funding...

Yes, i.e. delta-one desks and all the equity finance and index arb in between. While equity derv's are interesting, i still wouldnt classify them as being anywhere near FI.

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derivstrading's picture

A lot of the posts in this

derivstrading
      ST
 
 
(King Kong, 1,367
 
Points)
 on 1/5/13 at 12:37pm
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mxc's picture

You have binary payoffs in

mxc
      O
 
(Senior Gorilla, 813
 
Points)
 on 1/6/13 at 5:22am
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In reply to mxc
derivstrading's picture

mxc: You have binary payoffs

derivstrading
      ST
 
 
(King Kong, 1,367
 
Points)
 on 1/6/13 at 8:08am

S&T Careers - The only trading interview guide you will ever need

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In reply to derivstrading
leveRAGE.'s picture

derivstrading: mxc: You

leveRAGE.
      ST
 
 
(King Kong, 1,162
 
Points)
 on 1/6/13 at 9:38am
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confused23's picture

and generally these more

confused23
     
 
(Senior Monkey, 90
 
Points)
 on 1/6/13 at 12:49pm
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Working9-5's picture

derivstrading hit the nail on

Working9-5
      ST
 
(Gorilla, 614
 
Points)
 on 1/6/13 at 2:10pm

CNBC sucks

"This financial crisis is worse than a divorce. I've lost all my money, but the wife is still here." - Client after getting blown up

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mxc's picture

No, I've never run a vol book

mxc
      O
 
(Senior Gorilla, 813
 
Points)
 on 1/6/13 at 5:18pm
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BTbanker's picture

Keep in mind who the author

BTbanker
      IB
 
(Senior Neanderthal, 5,340
 
Points)
 on 1/6/13 at 6:23pm

"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan

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BTbanker's picture

Dp

BTbanker
      IB
 
(Senior Neanderthal, 5,340
 
Points)
 on 1/6/13 at 6:22pm

"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan

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In reply to BTbanker
lostchimp's picture

BTbanker: Keep in mind who

lostchimp
      IA
 
(Senior Monkey, 80
 
Points)
 on 1/6/13 at 7:31pm
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In reply to mxc
lostchimp's picture

mxc: You have binary payoffs

lostchimp
      IA
 
(Senior Monkey, 80
 
Points)
 on 1/6/13 at 7:33pm
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shaorio's picture

on wall st. its all about how

shaorio
      ST
 
(Monkey, 33
 
Points)
 on 1/7/13 at 11:26am
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In reply to mxc
derivstrading's picture

mxc: No, I've never run a vol

derivstrading
      ST
 
 
(King Kong, 1,367
 
Points)
 on 1/7/13 at 1:20pm

S&T Careers - The only trading interview guide you will ever need

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larasing's picture

FI mostly trades OTC hence

larasing
      AM
 
(Senior Monkey, 76
 
Points)
 on 1/7/13 at 1:45pm

See my WSO blog

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In reply to lostchimp
larasing's picture

lostchimp: Do fixed income

larasing
      AM
 
(Senior Monkey, 76
 
Points)
 on 1/7/13 at 1:47pm

See my WSO blog

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In reply to jrtr8der
larasing's picture

jrtr8der: Bobb: lostchimp

larasing
      AM
 
(Senior Monkey, 76
 
Points)
 on 1/7/13 at 1:49pm

See my WSO blog

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In reply to mxc
larasing's picture

mxc: I'm a fixed income

larasing
      AM
 
(Senior Monkey, 76
 
Points)
 on 1/7/13 at 1:51pm

See my WSO blog

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In reply to derivstrading
larasing's picture

derivstrading: mxc: You

larasing
      AM
 
(Senior Monkey, 76
 
Points)
 on 1/7/13 at 1:54pm

See my WSO blog

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In reply to derivstrading
larasing's picture

derivstrading: mxc: You

larasing
      AM
 
(Senior Monkey, 76
 
Points)
 on 1/7/13 at 1:54pm

See my WSO blog

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In reply to larasing
derivstrading's picture

larasing: lostchimp: Do

derivstrading
      ST
 
 
(King Kong, 1,367
 
Points)
 on 1/7/13 at 3:09pm

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The Company makes no claims that the Materials may be lawfully viewed or downloaded outside of the United States. Access to the Materials may not be legal by certain persons or in certain countries. If you access the Web Site from outside of the United States, you do so at your own risk and are responsible for compliance with the laws of your jurisdiction. These Terms and conditions are governed by the internal substantive laws of the State of New York, without respect to its conflict of laws principles. Jurisdiction for any claims arising under this agreement shall lie exclusively with the state or federal courts within New York, New York. If any provision of these Terms and Conditions are found to be invalid by any court having competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions of these Terms and Conditions, which shall remain in full force and effect. No waiver of any term of these Terms and Conditions shall be deemed a further or continuing waiver of such term or any other term. Except as expressly provided in additional terms of use for areas of the Web Site a particular "Legal Notice," or Software License or Material on particular Web pages, these Terms and Conditions constitute the entire agreement between you and the Company with respect to the use of Web Site. No changes to these Terms and Conditions shall be made except by a revised posting on this page.

PRIVACY POLICY

The Company recognizes that you are concerned about privacy. We are committed to preserving your privacy and safeguarding your sensitive information. The following statement describes the general information-gathering and usage practices of our sites.

Our staff, contractors, Internet service providers and others involved in this site follow this policy or similarly strict policies regarding your Information.

Disclosure

The Company is committed to fully disclosing our policies regarding the collection, use, maintenance, disclosure and security of personal information obtained from users of our site. The term "personal information" includes a name, address, email address, or any other information which could be used to contact you directly or to identify you personally.

Use and Disclosure Limitations

The Company only uses personal information about its Web site users for specific purposes. We do not share user information with third parties except when we have told users about the disclosures, when we have prior consent, or when required by law.

Use Policy: When the Company gathers personal information from users, we ask for permission first. We also disclose, at the time of collection, how the information will be used by us. Personal information is used for activities such as auto-completion of commonly-used forms and helping us contact you when you solicit information from us.

Disclosure Policy: We do not normally disclose personal information to anyone outside of the Company unless we have previously informed users about the disclosures. However, some data may be used from time to time by outside contractors, including auditors or consultants, to assist us in carrying out necessary financial or operational activities. These uses will be consistent with this privacy policy and all contractors using this potential personal information must agree to safeguard it, to use it only for the authorized purpose, and to return it or destroy it upon completion of the activity.

The Company might be required to disclose personal information in response to a valid legal process such as a subpoena, search warrant or court order.

Although unlikely, it is possible that we may have to make certain disclosures to ensure the security of our Web site, to protect its integrity, or to take precautions against potential liability. In any of these situations, we will take any reasonable steps to limit the scope of the data disclosed.

Web Logs: The Company maintains standard Web logs that record basic information about visitors to our Web site. These logs contain: * The Internet domain from which you came to our Web site. * Your IP address. An IP address is a series of numbers which uniquely identifies your connection to the Internet. Although it is possible in some instances, certain types of IP addresses may be used by interested persons to identify users but we do not attempt to identify users in this way. * The type of browser (e.g., Internet Explorer or Netscape) and operating system (e.g., Windows 98) you use. * The date and time you visited the site, and the pages you saw.

We use Web log information to design our Web site, identify popular features, and in similar ways. We do not try to identify individuals from Web logs or to link Web logs to other user information. However, if someone tries to damage our Web site or use it in an unauthorized or illegal way, we may share Web log information with law enforcement agencies. The Company may provide aggregate information such as the number of users who visit particular pages of the site, or the number of people who link to certain external sites from our site, to other parties.

Changes to Privacy Policy

The Company's features and services will change over time and our information-gathering practices and policies may also change.

While our philosophy of protecting user information from inappropriate uses and disclosures will not change, this policy will be updated occasionally to include any change that materially affects the collection, maintenance, use, or disclosure of personal information.

Forum Topics

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  • I would like to know which desks at BlackRock have the highest prestige. I am assuming that Fixed Income desk is probably THE desk to work at, prestigewise. Any thoughts on the other desks? How do the various desks at BlackRock fair prestige- and performancewise to their equivalent at other...
    The question of Prestige
  • Currently taking the Advanced Modelling course in BIWS and this is some heavy lifting. I am convinced that this is the most relevant in terms of modelling skills for IBD (other than a direct IBD SA role). I know that most people just put it as a one-liner under their "Skills" section...
    BIWS Advanced Modelling Course under relevant exp in Resume.
  • Anyone looking for an interesting class to attend, a HF manager I know is teaching a class titled "How to think about the market like a Hedge Fund Manager". He is a former equity analyst and HF manager of Surfview Capital. Very bright guy that now runs the website "estimize". ...
    HF Class being taught in NYC (Soho)
  • I'm a recent graduate trying to break into asset management and do equity research. In order to stand out, I have been trying to cold email a few analysts/PMs investment write-ups that I've made and asking for feedback, in attempt to stand out. Unfortunately, I've had little to...
    cold emailing with investment ideas
  • I've seen quite a few, what do you think are the...
    Best Wall Street movies?
  • None of you were afraid of the possibility of a female from your same firm (HR, same group, whatever) being on there as well and then things get awkward at the...
    How many of you use or have used dating websites before?
  • Hi everyone, I've decided to push off my graduation and complete my degree this upcoming fall. Basically did this because I want to take part in the next recruiting cycle. That being said, I know I can't tell HR / anyone with hiring authority that I "delayed my graduation so I...
    Pushing off graduation until December
  • Test...
    Testing
  • Finance and consulting are very client-focused industries. So are short males, let's say between 5'3 and 5'7, at a substantial disadvantage in a IB/PE/Consulting career? Does it matter less in getting to the top at a...
    Being a Short Male
  • <b>For many of us in United States, the TI-83 Plus is the quintessential (pre-college) calculator</b>. It was required for many classes (e.g. AP Calculus) and the $100+ price tag 10+ years ago did not do wonders for the wallet. Still, the multi-line interface, matrix operation...
    Pricing Power of the TI-83 Plus
  • I graduated from high school and got accepted to Western's Ivey (AEO) but since I actually haven't started or completed first year I didn't include it in my resume. I know the resume is two pages and I have no idea which work experience I should remove. Any help is...
    High School Grad Just Entering Uni Resume Review
  • Just wondering whether BB recruits for 1st yr analyst posiion after their summer training session? I mean..is it possible to receive offer even after the training session? Afraid it might shut the door...
    1st yr IBD Analyst position available even after the training session?
  • We all have them. The friends that think everything is going to be okay, just because they went to a top 50 business school and have have a GPA above a 3.5. They will say things like "Employers aren't going to expect me to have relevant work experience. I have't even graduated...
    What Happens to Finance Grads That Don't Have Internships?
  • Hey all, Let me preface that the question is nitpicky but when these firms are judging you by a single piece of paper everything seems to count. I've read on a number of sources that most firms want to see M/CR on the SAT= 750/750 as a minimum. The Math score is ESPECIALLY important to...
    SAT vs ACT - Importance of Math
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Upcoming Events

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<em>Mod note: make sure to see the great comment below by CompBanker</em> I come from a small town where nobody had ever heard of consulting or IB. I was fortunate enough to attend a top target college (a good Ivy) and land a gig in IB at a BB/EB. I'm starting full time this...
Finance Culture - Personalities
<strong>Background</strong> I randomly discovered WSO nearly seven years ago just weeks after I secured a FT MM IB position. The website was extremely nascent at the time with only a few thousand registered users. The majority of the users were college students with only a handful...
How WSO has enhanced my IB/PE career
<em>Mod note: for the tl;dr version, skip down to "Circa 1960"</em> First, some background. I’m going to explain how we got to where we are today in order to frame our place in history and our model of life, so bear with me...
Your Model of Life Is Wrong
After over one year in the making, the <strong><a href="http://www.wallstreetoasis.com/2013-wso-compensation-report-full">2013 WSO Compensation Report</a></strong> is here! Access to the FULL 108 page 2013 WSO Compensation Report is <strong>100%...
2013 WSO Compensation Report has Arrived
Where do i even start..I learned so much from this forum. The brutally honest opinions, sincere willingness to help, the technical information and random tips on everything has been absolutely crucial for me landing this offer. Coming from a non-target I didnt get that 3rd year SA position at...
Thank you WSO! Got my FT Offer! ADVICE NEEDED
When I first started as a PE analyst, I constantly struggled with judging the amount of time I should spend on reviewing sourced deals. How much time is enough to really get a handle on the company’s revenue streams? How granular do I need my analysis to be on industry threats? With this...
Misguided Efforts: A Cautionary Tale
Fellow Primates, We are looking for 1-2 students on each campus to help WSO in its sales efforts to student clubs/career centers, and overall promotion at your school both online and on the ground. Below is a description of the position and benefits...thanks in advance for your help! <a...
WSO is Looking for Campus Reps For Summer/Fall 2013 (and beyond)
<a href="http://www.wallstreetoasis.com/forums/basic-guide-ramping-up-on-a-company-with-public-information-part-1-of-3 ">In part one</a> we covered the basics of understanding a company, which involves reading the S-1 filing, reading the quarterly reports and understanding...
Basic Guide Ramping Up On A Company With Public Information (Part 3 of 3)
Any Asset Management people here who could give me some insights on it, such as the nature of the work, the pay, the hours, the potential for career advancement, ect? I was looking into IB before but I've decided that I would rather pursue a career that's more intellectually...
Asset Management a better choice than Investment Banking?
<img src="//img.pandawhale.com/48721-Sexually-Oblivious-Female-Meme-Ze2w.png" alt="Sexually Oblivious Female Meme - Favorite Position? I would like to be a CEO.">
If you could be the richest person in the world with your dream job only as a public virgin forever would you do it?
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