L/S Credit Vs Equities
Have a offer for a mm L/S credit analyst role, and am thinking about accepting.
My main question is by taking this role, does it hinder my ability to move to a L/S equities role in the future?
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Yes, L/S credit at MM is mostly IG (maybe some HY or very liquid/large stressed if PM is thus oriented).
Investing in credits that move 3pts on earnings vs investing in stocks that move 5% on no news/factor rotation is a wildly different skillset/risk tolerance.
The day-to-day equities job is much harder, more volatile and thus more financially rewarding when things are going well. Credit pods generally have lower risk limits, not sure how much.
What’s comp difference like in credit vs equities?
The people who are good at credit make more than people that suck at equities and vice versa - it's completely dependent on performance. Credit is very different to equities. Maybe it doesn't completely shut the door, but that's not a common path to equities if that's what you want to do.
Also, equity moves are more volatile than 5% these days.
Not to hijack the thread OP but I'm having a similar dilemma. Blessed to have the option to do either, given I'm early in my career: any questions to ask oneself to help make this decision? Really I'm trying to predict for myself what I'd be better at since that's what I'm trying to solve for. I'm coming from credit but I know I have a high risk tolerance. I also have a contrarian/cynical first instinct.
OK I'll try to do this similar to how they figure out which way you'd snowboard on your first trip - pushing you and seeing what foot you naturally use to stabilize. Disclaimer: this is by no means a hard and fast rule - just a place to get you started. There are plenty of risk seekers in credit.
When you look at an opportunity is the first question how do I get screwed? Or is it how can this double? In other words are you an inherent optimist or skeptic. Again, there are both on either side but it can at least get you going.
They are totally different jobs. Best thing you can do is sit down with someone on each side and ask them about what they do, what they care about when looking at something new, what are the most important skills. That's going to be the best use of your time to figure out what's best for you. Trying to pick one to maximize comp is a stupid idea. Pick whichever one that motivates you most and that'll be what maximizes your comp.
How much fundamental analysis is done in MM L/S credit versus momentum / technical investing? Seems like you dont hold these positions for too long and generally flip daily/weekly.
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