Equity Research vs. Market Making - Best Route To Trading / Managing Money?
The title says it all - I met a contact and he could get me into equity research or trading (market making), both for BB's. It has always been my dream to trade on the buy-side for a living so either one of these could be a good start. I feel that my personality is much better suited towards trading but I'm not sure how often market-makers move onto trading prop. I was also on linkedin last night and saw people who managed to move from research to a prop desk.
What is the best route to trade / manage money for say, a hedge fund in the future (Ex: Steven A. Cohen)?
Equity Research:
Pros: You actually learn about the ins and outs of companies / sectors, useful for if you are trading a certain sector in the future.
Cons: You don't learn how to trade.
Market Making:
Pros: You learn how to trade and make quick and calculated decisions, better suited towards my personality.
Cons: Very specialized, easy to get pigeonholed, you don't really learn the nitty-gritty about how companies operate, how hard is it to move to the buy-side?
Assume that in either position, I would get my CFA.
Bump
Bump
what's wrong with market making. Hedge funds sound fun and all, but during the August of 2007 1000 of them failed. For all the 1X6 + earnings you hear about there's also the rest majority who don't make near that. There's nothing wrong with working at an Investment Bank your whole life, honestly, IMO it's more secure and a better feeling to walk into a rather tall skyscraper then into some random 2 story bldg in some parking lot in CT.
I never said anything is wrong with market making. It's that most market makers eventually want to transition to the buy-side via a HF.
Market making isn't exactly secure either...you generate too many losses and you're out
That said, I think you're aiming too low with going to proprietary a hedge fund. If you spend five or ten years as a market maker saving up your bonus money, nothing is stopping you from starting up your own prop-shop that focuses on market-making. Actually, most of the prop shops were set up by former market-makers.
That said, there's a lot of brilliant people in research and it's a very nice lifestyle after a few years. IMHO, it's hard to go wrong picking a field that you would enjoy but everyone else your age is ignoring.
Prop trading on the other side of the wall is way overated on this site. There's a significant edge to taking prop positions on a hot flow seat when you can see how your clients are positioning themselves.
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