Personal Trading Experience on Resume
I manage a very small portfolio of my own and make big bets on specific stocks, rather than diversifying in even as much as 3 stocks sometimes. Because of this, I've won some big bets and lost others, but I'm technically up 106% in the last 1 year (yes I can prove that). Should I say that I have a 106% return? I feel like it sounds stupid and shows that I take unnecessary risks; basically that I don't practice good investing habits.
Rising junior applying for S&T SA btw
I feel like you might want to spend more time talking about your strategy and risk Management Strategies rather than the actual returns
106%? Weak.
218% YTD.
Put it on there and be ready to discuss your strategy. Save the returns for when they ask about it.
I used to have it when I was doing recruiting, had returns compared to benchmarks and listed a few holdings that I was prepared to talk about. It's something good to talk about but don't go crazy with anything more than 2 bullet points and don't expect interviewers to be blown away impressed
Personal Finance Experience (Originally Posted: 01/23/2013)
My PA is up 64% in the last 13 months vs 19% for the S&P 500.
What should I write on my resume:
1) " Up 64% managing a portfolio of equities and options."
2) "Up 100%+ managing a portfolio of equities."
Truth be told, I took a crash course on what not to do when trading options. I feel I can hold an intelligent conversation about them and I learned many things the hard way, but ultimately most of my options trades have put me in the red. If I were to calculate the IRR of the equities portion of my portfolio, I am confident it would be over 100% in the last 13 months.
What kind of position are you applying for?
In most cases, people are going to discount the returns you mention for something like this. But, at least it shows you have interest in the market. If you feel compelled to include returns, I would annualize the returns. It would be more interesting to me if you showed what sort of vol you had to achieve that return. Instead of showing the absolute return, you could say you outperformed the S&P 500 by X%, just so they know you didn't just get lucky as to when you bought into the market.
I'm applying for pretty much anything and everything I can find at this point. I'd love love an ER/HF/IB summer internship and I'd be willing to work for free, but I'd be willing to settle for a PWM internship, delaying my graduation and trying again next year. My main concern is that I'm a lower level Junior (transferred twice) and have zero finance experience (unless an inside sales job at a credit card processing company counts,) so I'm trying to mention as much personal finance experience as possible on my resume, with the hope that the interviewer will start talking to me about stocks and hopefully I can prove to someone that I have a brain.
Unfortunately, I did not have much volume to achieve those returns. I am a concentrated value investor and only invested in a handful of companies throughout this time period. My plan to take down the "you got lucky argument" is to know my investments in and out and master my pitch on those companies. I feel most undergrad students have no idea what actually moves stock prices and generates alpha. I feel if I can clearly demonstrate I know the answers to the three golden questions of investing 1)What is the instrinsic value of the asset? 2) Why has the market mispriced it? 3)What catalysts need to occur for it to reach its intrinsic value? I can convince the interviewer I am more than lucky.
Note: I'm pretty sure I stole those three questions from somebody on this website. Whoever it was... thank you. They've changed my life
Sounds like you have a good story. Annualize the returns is my main suggestion.
I never worked in banking, so take this with a grain of salt, but I would be worried that the interviewer in banking might be concerned that you have a fundamental misunderstanding of their business if you are touting your stock picks. Maybe someone from banking could comment on that.
Thanks for the help.
And haha, I can definitely see that being a banker's interpretation. I'm considering using different resumes for IB than ER and HF internships. I honestly don't have much of an interest in IB, my passion lies in investment management and I'd much rather go the ER route than IB, but like many others on this forum I'll do an IB stint for the sake of resume building, if it is the best option on the table.
Is Trading Your Account Impressive To HF's & IB's ? (Originally Posted: 11/29/2015)
Would being profitable on your own personal trading account be impressive to investment banks/hedge funds when I graduate undergrad in finance ? I have been profitably trading the spot fx market and equity futures for over a year with a small amount of money, also planning on adding options to my portfolio.
Would having traded 3 years profitably during college be impressive to hedge funds/investment bank when I graduate even if it was only on a small capital base of several $1000 ???
From another forum:
"The easiest way to go from retail trader to institutional trader is to minimize retail trading and develop the skills that are posted in the job ads.
There is a danger that if you spend too much time retail trading, you will be overly expressive in your trading views and interviewers will see you as a piker. Which you seem to understand.
Entry level jobs at institutions aren't interested in your market prognostications. And, rocket scientists are dime a dozen. So, what the entry level candidate really needs is to present the ability to work on the plumbing."
"I know you don't want to hear the truth and prefer to keep living the fantasy. But, regardless, i will speak truth
It is impossible to go from retail to institutional trader unless you hide the fact that you ever traded retail from your employer.
Institutions don't want retail traders and will avoid them like the plague. They want folks who they can train from the start or those with the experience they happen to be looking for at the time.
Being a retail trader will kill your chances at being hired."
No. While it won't hurt (unless you have 7 bullets about it), having a relevant internship will be significantly more valuable.
Trading your own account: NO
Being able to talk intelligently in an interview about what strategy you are using, why you think it has an edge, and the risk management principles that you use, in the process showing that you follow markets, have an interest in the career and can think analytically and commercially: YES
Spot on, this...
What about to prop firms ?
The ones where you dont put up your own capital.
Why should it change my answer? Why would anyone be impressed with just being able to open an account and randomly punt around?
While interviewing for prop firms, I was asked in most interview processes if I traded for myself. I told them all how I didn't think I could beat the market sufficiently (if at all) on my own after taxes and other costs on my fairly small capital base, so I did not try and instead put my savings in low expense index funds. I did, however mention my involvement with the student managed investment fund at my university.
This answer seemed to go over very well with most interviewers and I ended up receiving several offers at legit firms.
I agree with derivstrading. Being a "profitable" trader is bullshit unless you can talk about why your strategy works, how you're dealing with risk/drawdown, how you developed and backtested your strategy, etc.
No, unless you can speak intelligently about why you did what you did. Anyone can make a killing out of luck. Only if you can support your strategy can it make you look good. Otherwise, it's just an opportunity for an interviewer to grill you on something you can't back up.
this may be anecdotal, heard of a guy who opened a really small account ($400) just a few years ago and grew that $2mm+ through very aggressive risk taking even before attending uni. got his own terminal etc while in high school and although he started off as price action trader, as his acct size grew he networked with sellside traders & strategists over bbg chat and evolved into a macro trader. people took notice of this kid and he's now being mentored by a well known fund manager (think Alan Howard, Platt etc). i realize that having a trade generation and risk management process etc are critical, but lets not get it twisted: returns are the only thing that matter to investors. it's far far easier to sound smart and portray a compelling story about your process than it is to trounce all benchmarks in a difficult trading environment with very low drawdowns and a huge sample of trades. i also know quite a few PMs who won't even bother interviewing candidates if they don't manage a PA.
Not sure your argument makes much sense. The 400 --> 2m (which id need to see audited results to believe) if real was due to great trade generation and risk management. Its not the return, its the process behind the huge return.
i realize this guy is an outlier case so i wouldnt expect u to believe me. from what ive heard he maxed out leverage and often risked 25% of his acct on a trade to just make 5-10pips. so i can't give the guy credit for risk control, esp during those initial years. he was a discretionary trader but fairly methodical, ran an intraday mean-reversion type strategy which perfectly fit the regime of '10-'13. after punting around as a retail trader for 5y, he now trades on a bank fx platform (not Citi, DB, UBS etc but close).
my main point was that having a great track record, even if a PA, is incredibly valuable when trying to transition to the buyside. i actually agree with you - in most cases it would be bizarre for a person to get hired because of their retail trading experience.... and while it would be ideal if a person could craft a tight story about their investment philosophy, risk management approach and all that jazz, if a person has an exceptional track record that spans for a few yrs then i believe that one could potentially skip all of that, particularly for trading oriented roles. you'd be surprised how many discretionary macro types largely place trades based on 'intuition', and manage risk with fixed trade sizes and tight stops...
Intelligent insight with no returns is meaningless, but returns with no insight is construed as luck. At least the applicant showing insight can build upon it and become profitable, were as the 2nd applicant's luck will fade, and he lacks the foundations to adjust.
From a recruiting perspective, why not look for both though? I mean, how many people can achieve consistent positive returns over a long time period without being able to articulate their strategy? I would assume zero.
Overall, you are both correct in what you are saying. Marco's quoted example obviously showed both insight and results.
"Intelligent insight with no returns is meaningless"
I HEAVILY disagree. Just because a trade loses money post fact, doesnt mean it was a bad trade pre fact. Now if a strategy has bad returns for an extended period of time, then clearly there is something wrong with it, but as long as that is then taken as experience of what doesnt work then its still useful knowledge. You go through a lot of stuff that doesnt work before you find something that works in trading.
derivs is correct, of course... I have interviewed a lot and I approach statements about PA trading exactly as he described it.
How would y'all react if one has a PA with good returns based on a strategy with a good rationale, but it is systematic and the interviewee doesn't want to describe the particulars? Would you be annoyed?
Describe the nuts and bolts.
I respect if someone wants to keep their trade secrets private but I do expect you to be able to describe the general edge and how you developed the strategy / think about risk. I have yet to come across a strategy that can't be described in general terms to a satisfactory extent without divulging too much info. That being said, if you supposedly have an amazing strategy and you won't tell me anything at all about how/why it works or how you developed it, I'm probably going to write you off completely.
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