Open for Questions - Equities in Dallas
I figured I would start a thread where I just told my life story in finance and prospective monkeys and other curious lurkers could ask me questions involving my diverse experiences. Maybe it will be helpful to someone trying to make a tough decision. I currently work for an Institutional Research firm where I am Head of Institutional Sales. While I don't live in Dallas, some people do consider what I do to be the armpit of non-retail finance.
My background in pretty diverse and if you are curious why I chose to do one thing... I simply chose to do what appeared to be the best option available to me at the time:
I attended a top 25 non-target (regional target?) university and majored economics and I took a couple accounting classes. My grades were very so-so.
My first internship was at a $700 AUM fundamental value asset manager/hedge fund. They were fiercely independent (in research), long only and had 20 year annualized return of 17% at the time. I spent most my time learning about the Benjamin Graham investment philosophy and learning the very VERY basics of modeling. I could have never worked at this place because they only took on ~5 new positions a year and I would have died of boredom. I can't sit in a room thinking about stocks and doing original research for two months straight without pulling the trigger.
My next internship was with an NYSE Floor Broker. I was an "Assistant Clerk" which basically involved being everyone's lunch bitch. The most exciting experience from this was routing trades for clients. I was green enough, where I was impressed enough entering in 3,000,000 share order of BRCM. I also helped them with marketing to new clients (hedge funds). I could have never worked there because I hate standing on my feet for 7 hours straight and everyone felt like a dinosaur. Turn on CNBC today you can see the NYSE is a ghost town. Then it was more full but everyone could see the future so moral was shitty. Also, I wouldn't want to work in Manhattan in a job where you were considered to be doing really well at age 45 pulling in $200k a year. I have to say that I met some of the most interesting people I have known in my life during the job.
My third internship and my only experience with "high" finance was as a Fixed Income Summer Analyst at Bear Stearns. The year I was there Bear Stearns was named the "Best Investment Bank" to work for on Wall Street. I was lucky enough to land on the CMO Structure Desk in Financial Analytics and Structured Transactions (FAST). It was considered the best place to be in the entire bank because 1) Fixed Income was where the bank made all its money 2) MD at my desk was in charge of all the FAST interns (+100) and gave us the most full time offers 3) CMO Structure was considered the fastest track to becoming a trader -- traders were the highest paid employees at the bank. I probably could have worked there. For what we were were getting paid and compared to my other friends with investment bank internships, working 9-8/9 most days with most weekends free was pretty awesome. I didn't pursue working there because I didn't find rolling mortgage bonds all day to be that interesting. Frankly, it was probably a little over my head at the time. I remember like yesterday, while sitting in one of the lectures, a brave intern asking what would happen if real estate was in a bubble and what would happen if it burst. One of the ARMs guys explained how real estate values wouldn't drop more then 5% and the business would be fine. All of my fellow interns who took full time offers lost their jobs before they finished their contracts and most now work in fields outside of finance.
After graduating, the world of finance was in a tail spin, and a friend of mine (~30) who was a self made realestate mogul insisted I go work for him. He had just fired his property manager on his large office building in South Florida. I spent about a half a year building the last 4 stories of the building when he defaulted on his $12m loan and I was out of work again. I won't go too much into this job because it wasn't finance related but I learned some valuable life lessons and I enjoyed going to work in blue jeans and work boots.
From here I began flirting with the world of finance again. I applied and got a job with a top tier republican lobbying firm in DC. I joined their Financial Services Group and helped a variety of Mortgage Brokers, Hedge Funds, and Mutual Funds fight FINREG. While I did it all, I specialized in derivatives regulation -- and I know more then I care too about TARP and its offspring. I enjoyed what I would consider the lobbyist lifestyle... no one thinks twice if you aren't in your office for half the day, you can sip a Makers and Coke at 2pm at your desk and no one will say anything, you get paid a lot for what doesn't feel like that much work, ect. Ultimately though I came to the realization that it was my job to screw over the average American. I am a democrat and I started looking elsewhere.
And now we arrive at my current job. I interviewed with my company around my graduation, and they were impressed with me but unable to hire me because of the financial environment. I sent them an email asking if they were hiring and they were and less then a month later I was moving several thousand miles away to take a position in Institutional Equity Sales... and some very low ibanking.
People like to shit on my job and I understand why. I am a salesmen. I don't live in NYC. I work on commission. I suck at a lot of finance/accounting. It's extremely unlikely I (or anyone with my job) is going to be worth a bazillion dollars ever. I am a salesmen.
However, I think there is a lot to like about my job.
I don't think most monkeys on here can touch my quality of life. While I make very low 6 figures my money goes so much farther then here then in NYC. Most importantly, I only work 9-10 hours a day. I think the longest day I have ever worked was 13 hours and I have NEVER worked a weekend.
We technically are an investment bank, so I do have an opportunity to do things like capital raises and some M&A which I participate directly in.
My job, aside from making phone calls and emails to clients is watching the stock market. I feel like if I got fired tomorrow, the whole experience would be worth it because now I am confident I can run a good PA for the rest of my life.
I meet pretty cool people. One of the easiest ways for me to make money is to take company management on the road. Because of our research relationships -- we get the CEO's, CFO's and VP IR's of major corporations to go on trips with us to meet with clients. Our clients, who ideally become your friend, are analysts/pm's/cio's and the highest paid people in the world. Talking to them on a daily basis gives you are really interesting perspective and you feel more in touch then 99% of the people who you hear talk on CNBC.
If you aren't great at sales (I am so-so) but respected, you can get into an alpha capture program. I got invited to join 2 of the most prestigious about 9 months in. Basically, rather the calling up and telling someone to buy or short a stock you simply run a portfolio and they send you a check each month. Both of mine have been good for around $5000-20,000 a month each and I have yet to be in the top 7% of portfolio managers.
Also, it is possible to make a pretty large non NYC income. Given the market is completely different but my small firm made almost $7 million in 2007.
Finally, while I acknowledge I don't think contributing much to society, I am not causing any harm.
Well I didn't really mean to write a book but I just kept writing, and now I am bored so I am stopping. There is a lot more I could have said above so if something isn't clear or you have a question -- just ask. Ill log back on Tuesday. Cheers.
Awesome post thanks! Can you
Awesome post thanks!
Can you talk a little bit about how you got that lobbying job? and what you were doing? It sounds interesting
"You miss 100% of the shots you don't take. -Wayne Gretzky. Said by Michael Scott." - Michael Scott
interdasting
interdasting
thedude wrote: It's extremely
It's extremely unlikely I (or anyone with my job) is going to be worth a bazillion dollars ever. I am a salesmen.
It would be good for us youngsters if you could explain this one. I have seen S&T guys on messageboards defend institutional sales to death (versus IBK), arguing that the bonus potential is huge. Why is this not true? Isn't S&T meritocratic?
Short Lucifer wrote: Awesome
Awesome post thanks!
Can you talk a little bit about how you got that lobbying job? and what you were doing? It sounds interesting
Hey. Thanks for taking the time to read the post. I got the lobbying job by applying. I have a decent bit of experience working on campaigns and I spent the summer before college interning for a politician. The Financial Services group at my firm was the weakest division and when I started talking to the IR woman interviewing me about all the financial products I understood (and she looked at me like I was speaking chinese) I knew I was money. So the firm was considered one of the top white shoe lobbying firms in DC. I don't want to give the name because it would connect too many dots on linkedin. We represented a variety of interests from Fortune 100 companies to countries to non profits. One client I had was a multi billion dollar hedge fund with a large derivative position. I would keep them updated on legislative developments as well as trying to shape legislation for their benefit ex. blurring the definition of an end-user ect. The Firm really did everything from advising labor unions how best to apply political pressure to cabinet members facing an important decision, to helping clients identify eligibility for federal funding, to advising sovereign wealth funds on politically sensitive investments in the US. Ignoring the 4 partners, employees made between 60-500k a year based upon their perceived value and the size of their accounts. The firm made almost $20m one year.
bortz911 wrote: thedude
It's extremely unlikely I (or anyone with my job) is going to be worth a bazillion dollars ever. I am a salesmen.
It would be good for us youngsters if you could explain this one. I have seen S&T guys on messageboards defend institutional sales to death (versus IBK), arguing that the bonus potential is huge. Why is this not true? Isn't S&T meritocratic?
Hey thanks for responding -- I think it matters what you are selling and where you are selling. 1) As an institutional equity salesperson, I am a stock broker for hedge funds. What I am selling is extremely liquid and being sold by any number of much cheaper options. Explained otherwise, people don't have to trade through me at .03 or .05 or .10 a share. The only reason people give me money is if a) they like me and/or b) they think I am value add to their performance. I am not 100% positive but I imagine I could make more as an institutional sales person selling large illiquid mortgage derivatives. The second point addresses where I work. I work for a small institutional research b/d. I don't have 40 analysts and 300 names under coverage that you might find at a bigger bank. Hedge funds can only justify paying me so much because they can only get so much research from me. That wasn't a great answer because I am not really sure which posts you are referring to. It would be within the range of possibility that I could make 7 figures at my current job but I think that's very unlikely -- because I'm not a world class salesman.
As far as it being meritocratic, absolutely. I haven't been doing this for very long. Make almost as much as people working just as long at GS IB. And I work less then half the hours. Lot of people would say that sounds very compelling. (Side Note: I interviewed to work under a Financial Advisor at MSSB in DC named Marvin McIntyre (google if you want). He made like $7 million last year. The potential in financial advisory is huge if you are 1/bazillion. I know a whole lot more financial advisors making 30-50k a year. In almost any meritocracy you can find 1 or two people making it rain).
It's always been interesting
It's always been interesting to me to see what distinguishes institutional equity folks from each other — and to see why they want to bother paying the extra cost. Do you feel that funds will continue to be willing to pay the premium for your services for the foreseeable future? How about 20 or 30 years down the road? What sort of innovation do you see in your industry?
Thanks!
"When I was young I thought that money was the most important thing in life; now that I am old I know that it is."
- Oscar Wilde
"Seriously, psychology is for those with two x chromosomes."
- RagnarDanneskjold
UncleMilty wrote: It's always
It's always been interesting to me to see what distinguishes institutional equity folks from each other — and to see why they want to bother paying the extra cost. Do you feel that funds will continue to be willing to pay the premium for your services for the foreseeable future? How about 20 or 30 years down the road? What sort of innovation do you see in your industry?
Thanks!
I guess you would say what distinguishes our firm 1) our relationship with management. everyone tries to say this but it's only true for a few firms. Our CEO and to a lesser extent the rest of us actually hang out with management of a lot of the companies we cover socially 2) my firm has been around for almost 20 years, my ceo has been around for 30 and is well known in some circles. the "name" is very important because firms pop up and disappear every day 3) the quality of our analysts. some people would swap 2 & 3
What distinguishes a successful salesmen is are you likeable? and are you sharp? can you fool people smarter then you into believing you are smarter then them? Everything else falls behind.
I think we already see that funds won't pay what they used to (weak volume right now isnt helping). I imagine that trend will continue to a lesser extent. There are quite a few studies that have looked into the value of buy/sell/hold ratings and their questionable benefit. I think PM's will always value analysts expertise on a conversational basis. Obviously the crackdown on special networks helps my business but at the same time I see a lot of hedge funds relying more on internal research. Hedge funds continue to pay for access to management for the conceivable future. As long as portfolio managers continue to think they can beat the market by picking stocks, there will be a decent number of them willing to pay someone else to do the dart throwing for them.
oh your grammar and your
oh your grammar and your spelling ....
Quote: My first internship
My first internship was at a $700 AUM fundamental value asset manager/hedge fund
LOL you mean $700 MM right
ERGOHOC wrote: oh your
oh your grammar and your spelling ....
Hey, I wrote all that with only 1 contact!
My first internship was at a $700 AUM fundamental value asset manager/hedge fund
LOL you mean $700 MM right
yes lol.
Bravo +1
Bravo
+1
Great post, I'm curious about
Great post, I'm curious about comp ; what do 50th, 75th, top 10% percentile earners make as salesman?
Also, have you ever compared the career to PE Business Development - any thought?
Very cool. When you say you
Very cool. When you say you could run a solid PA, do you mean you could actually live off yours?
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Are you the same thedude from
Are you the same thedude from xtremesystems? I remember posting there when I was looking to build a pc
Seems like the OP here
Seems like the OP here certainly fits the mold of a typical salestrader. Being in the same position myself its crazy to see how different at different shops have totally different attitudes/values. Overall would say this is how the average salestrader lives. There is of course always another story to be told.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
Good Post, thank you
Great post, thanks for
Great post and a great
When do you sleep?...Sunday
thedude
Great post. I had never heard
Fantastic post!!! Made my day
manopete wrote: Great post,
Rumplesmoothspin wrote: Great
You mention the comp model
bortz911 wrote: thedude
Ok so if you are just sales
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
trade4size wrote: Ok so if
What do you think is your
I banana back
Good Stuff. Will read your
Do you get paid a base salary
What do you read in the
You said you sometimes get to
Hey thedude,
What does an Equity Salesman
bortz911 wrote: thedude
The one who does not fall, does not stand up
Hoogerman wrote: What do you
Hi thedude, Why do you want
TraderDaily wrote: Hi
thedude wrote: TraderDaily