Is this industry going to die before I retire?
Seems like the outcomes are skewed more towards the top 5% or so of traders/investors than ever. Fees are compressing, launching a new fund is harder than ever, and it feels like for the amount of work I'm doing now to beat my benchmark, my predecessors 30 years ago were getting paid much more for (from anecdotes and reading I've done). So many of the PMs at my middling shop are people who just bounced around different shops for a few years at each before getting burned/blown up each time. I don't want my job security to be so precarious after I get married and have children and a mortgage.
It takes like 2 good years to hit a reasonable walk away number. If you're at it starting your mid 20's, you should have a snowball in the mid to high 7's / low 8's by the time you're 40. I haven't had any good years and am already in the low 7's and I just turned 30. focus on the next 2-3 years. Things change slower than people think.
low 7's as in $2M+ or $1M+? might seem like semantics but makes a big difference haha
its 1.something now, will be 2 in a few months. I've also never gotten paid well (and won't this year). I've just survived and had a few fluke singles, a gap double here or there type years. No donuts though. I'm like 40th percentile and if I just survive another 5 years I'll be where doctors and lawyers spend 30 years grinding to get to. I've never understood the pity party amongst HF people.
how old are you? and prob yes.
Mid twenties
It’s understandable to feel uneasy about job security in an evolving industry. Focusing on building a robust skill set, networking, and exploring diverse roles can help mitigate these concerns and enhance your career prospects moving forward.
My uncle made like 100 million running a tech beta hedge fund back in the 2000s. Why the hell does it have to be so hard 😭😢
So this is just a natural part of the cycle. Right now, we've been in such a long time cycle of the rich getting richer, corporate consolidation, and increased competition over the top 5-10% leaving the bottom 90% to fight over scraps. This has happened in most nations and empires since the dawn of time, from the Romans to US in the pre depression era. It happens, and it will continue to happen until the cycle breaks. This isn't isolated to finance either; tech, industrials, and basically every other area of the US economy is seeing this cycle play out.
We are, however, starting to see cracks. People are angry. Around the world, we're seeing people watch this play out in real time and choosing to reject the status quo. Nepal, Bangladesh, Indonesia, Morocco, Sri Lanka, and many other nations are seeing backlash to the current economic conditions.
So don't give up. It can't stay this way forever, or else we'd get a revolution. The common man is at his breaking point, having endured enough. The cycle eventually breaks, and then we get to rebuild a new system, similar to how we rebuilt in the wake of WW2 that led to the 50s, largely regarded as an era of massive economic growth and prosperity for the average American.
At least, that's my own view. Things could also get worse. But IMO, history tends to repeat in some capacity.
Way I see it, this trend - accumulation of wealth at the top at the expense of the 90% - hasn't been cyclical, but consistent. Consistent ever since we extracted ourselves from the Malthusian scissors and entered modern industrialized society where owners of capital stood to disproportionately benefit from economic growth. There is a reason why our so-called liberal democratic capitalist society is denoted as such: the terms are inseparable by virtue of their inherent mutual compatibility (much to say here, but I'll spare you the details). This is to say, to break the trend of inequitable wealth accumulation would require a serious attempt at overturning our liberal democratic political regime, which, as much as it may seem to be happening already under 47, is a reality that none of us are prepared for or should ever desire.
We've seen the top pop before. In the wake of the robber barons and WW2, our economy reset in a lot of ways, with higher taxes and more emphasis on prosperity for the middle class. We still had billionaires and incredibly rich people, but the disparity in opportunity and wealth was not nearly as omnipresent as it is in the modern economy.
The facts remain that, as people get more and more angry, eventually something breaks. Either we get a progressive politician like FDR or Teddy, or we end up with populist uprisings. I hope for the former, but looking at who the frontrunners for 2028 are, I'm not exactly the most optimistic it won't be the ladder.
The problem with your cycles theory is that AI (once we get to AGI, which may be within the next 5-10 years) can replace labor on a scale never seen before. The AI evangelists like to soothe AI fears by comparing it to moving from hand looms to mechanical looms but AI has the ability to completely remove the human from production, once the technology reaches a certain point. This gives the people at the top, the ones with the assets, unprecedented wealth generation and even less incentive to throw scraps to those lower on the pyramid. Already, we have seen hiring for entry level white collar jobs take a sharp dive (despite the technology being relatively bad), reducing social mobility.
This is all under the assumption AGI comes. I've written pieces on this site about this before, but the TLDR is that we're still decades away from solving the computational and logical problems these models face. I did applied math as an undergrad and spent 3 years in an Ai lab, and in my day to day job we're increasingly working with ML, and as a result I read most of the papers coming out today related to Ai. I can say, with utmost certainty, that AGI really isn't coming anytime soon, unless someone magically creates some way to break the way transformers work or have some breakthrough in some other area.
Fiat is definitely dying. Many would argue it's already dead. Two things are for sure... the value of the dollar will continue to fall, and prices will continue to rise.
In my opinion, crypto (specifically Bitcoin), is the key to avoiding this mess. Digital commodities and currency are the future and the train can't be stopped. I'd advise to start buying now. As much as you can, as fast as you can.
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