How Finance is like Professional Sports

If you look at elite athletes of virtually any sport, they almost always share one thing in common: they started playing the sport at a fairly young age. Sure, there are exceptions, but very rarely do you see a world-class athlete who picked up the sport after high school.

Now, what does this have to do with finance? I was thinking about this recently since a lot of WSO posters have been complaining about the proliferation of college and even high school kids on the site. Initially I shared their frustration. But having thought about it, I realized that it actually makes perfect sense for those youngsters to ask for advice. That's because the finance game, much like pro sports, starts EARLY. To get the coveted jobs, the preparation starts earlier now than ever before.

Let's add some historical context here. Back in the not so distant past, there were plenty of people who broke into finance late and through unconventional means. Stories of hungry smart people who did not attend top schools would start at the bottom of the rung and through hard work and talent move up to the top. You had guys like the infamous Jeffrey Epstein who went from being a high school teacher to a derivatives trader at Bear Stearns before launching his own fund and making millions. Lloyd Blankfein couldn't get into Goldman out of Harvard Law so worked at commodities trading firm J. Aron, which later got acquired by Goldman.

Gary Cohn, Goldman's COO and likely heir, was an aluminum slide salesman who basically conned his way into a job as an options trader (you can read his story on the web). Chinh Chiu, the legendary dealmaker at Blackstone, got his first finance job at Salomon Brothers by driving from Buffalo to the firm's holiday party in Manhattan and networking to get an interview. I could go on and on, but you get my point. Non-traditional paths were quite common, and there was less emphasis on pedigree or whether one took the "right" path. Smart hungry hard workers were given the chance to prove themselves and were rewarded if they performed.

This is not to say that stuff like this never happens in today's finance world, but suffice it to say, the path has become more narrow and well-defined. The game now starts in high school as one's college pedigree has taken on more importance than ever before. In many ways, top financial firms have basically outsourced their recruiting to the admission officers at the top 15 or so colleges. Ambitious high school students know this and bust their ass off during their teenage years to get into the right college. Once there, the game further intensifies. Now it's about picking the right major, getting a strong GPA, extracurriculars, leadership, and the right internships. God forbid if a kid really wants to major in say history or political science. Minor, fine, but it's STEM/econ/business or bust. After 4 years of hustling, it comes down to getting an analyst job at the right bank, right group, so they can then get recruited by the top PE firms and hedge funds 2 years later. The cream of the crop who manage to accomplish this end up not only making a lot of money at a young age but get access to the best opportunities years down the road. Your FIRST job out of college is now critical because it sets you up for the rest of your professional trajectory.

I recently finished business school and had classmates who had such backgrounds as well as those who did not. The difference in access and outcome was pretty drastic despite being at the same school. Recruiters would often ask for 10 different criteria and ding anyone who did not meet all of them. Those who for whatever reason did not get on the "right" path at a young age ended up having to take jobs that weren't their ideal gigs. Of course, they are still doing fine, and the point is not to garner sympathy but rather to highlight how finance has changed over the years. I now totally get why youngsters post threads on WSO asking about college admissions, exit opps, etc. Before we make fun of them and cast judgment, let's not forget that we were once in their shoes and that the game continues to get more difficult.

Comments (50)

Sep 29, 2015

I like the effort man, good post, but not great. Very vague and generalized information..

In my opinion would've done something like:

I. Hereditary (Kind Of)
Show how there's a lot to do with who you grow up with, grow up doing, culled from birth. The best pro golfers start at age 2-4 and have parents that are golfers or in the golf game.

II. Obsessively Competitive
Show how it's extremely competitive, like the percentages and how the rigors are similar but in a different way. 100 hour weeks is similar to the effort needed to get through training camp, target undergrads for the Street = target undergrads for sports.

III. Can Still Go Undrafted and Be A Success
The same way that Romo played backup in college and is now a record breaking Dallas Cowboy's quarterback, you can come from non-target, non-major and not only get the job, but excel.

My 2 cents.

"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller.

"Live fast, die hard. Leave a good looking body." - Navy SEAL

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Sep 29, 2015

I like the effort man, good post, but not great. Very vague and generalized information..

In my opinion would've done something like:

I. Hereditary (Kind Of)
Show how there's a lot to do with who you grow up with, grow up doing, culled from birth. The best pro golfers start at age 2-4 and have parents that are golfers or in the golf game.

II. Obsessively Competitive
Show how it's extremely competitive, like the percentages and how the rigors are similar but in a different way. 100 hour weeks is similar to the effort needed to get through training camp, target undergrads for the Street = target undergrads for sports.

III. Can Still Go Undrafted and Be A Success
The same way that Romo played backup in college and is now a record breaking Dallas Cowboy's quarterback, you can come from non-target, non-major and not only get the job, but excel.

My 2 cents.

"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller.

"Live fast, die hard. Leave a good looking body." - Navy SEAL

Sep 29, 2015
UTDFinanceGuy:

I like the effort man, good post, but not great. Very vague and generalized information..

In my opinion would've done something like:

I. Hereditary (Kind Of)Show how there's a lot to do with who you grow up with, grow up doing, culled from birth. The best pro golfers start at age 2-4 and have parents that are golfers or in the golf game.

II. Obsessively CompetitiveShow how it's extremely competitive, like the percentages and how the rigors are similar but in a different way. 100 hour weeks is similar to the effort needed to get through training camp, target undergrads for the Street = target undergrads for sports.

III. Can Still Go Undrafted and Be A SuccessThe same way that Romo played backup in college and is now a record breaking Dallas Cowboy's quarterback, you can come from non-target, non-major and not only get the job, but excel.

My 2 cents.

Thanks for your feedback. Yeah I didn't have that much time to write it so not the strongest piece I could've written.

Let me address your points briefly though.

  1. I think raw genetics matters much more in sports while family background matters more in finance. Being a world-class athlete requires a freakish level of physical talents that very few possess. No matter how hard I try, I will never be LeBron. Most of us are physically limited, which takes us out of the running automatically. After all, most red-blooded boys fantasize about being a pro athlete, but very few of us make it. In finance, I think genetics matters less because quite frankly you don't need an extraordinary high IQ to break into and succeed in finance (few areas such as quant finance notwithstanding). Family background matters a lot though because if you look at the ones at top banks, PE firms, hedge funds, most of them came from upper middle class to affluent families where the parents were highly educated and pushed them to excel at an early age. They also knew a lot about various industries by the time they started college whereas I knew nothing about finance or consulting until like senior year in college, at which point it was sort of too late.
  2. Acceptance rates at top colleges are scary low; they make MBA admissions look like a total joke. I do interviews for my alma mater, and the kids getting dinged are stronger than a lot of my classmates from back when I was there. Very competitive and super high stakes, with massive implications for one's future.
  3. Yes, but stories like Romo are becoming less and less common in finance. I know tons of people at all sorts of firms, and very few are Romos.
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Oct 1, 2015
UTDFinanceGuy:

Can Still Go Undrafted and Be A Success

I like (III.) but I only 1/2 agree with it. Here's my shmegma:

I would not imagine initially undrafted future successes in finance to look like the non-target you described. I picture a non-drafted financial prodigy as a UPenn undergrad, handed Goldman R1, crushed every technical, failed the airport test. But since he is a rocket scientist with a penchant for the Black-Scholes model he will be successful, If only from his dark and lonely control room.

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Sep 29, 2015

Yeah, pro sports are cool but finance is:

A) Harder to get into
B) Has way better exit ops
C) Is way more alpha
D) Is way more prestigious.

I mean, c'mon. GS TMT-> Blackstone >>>>>> pro ball player!

  • Every finance groupie on WSO
Sep 30, 2015

GS SSG MSI >> GS TMT

Sep 30, 2015

Speaking of GS TMT, I know some jokers who got post-MBA jobs there. Banking at the post-MBA level is definitely not what it used to be. Post-college banking is still pretty tough since the top students at the best colleges are still going for it, and the exit opps are simply breathtaking.

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Best Response
Sep 30, 2015
MBAGrad2015:

the exit opps are simply breathtaking.

LOL ... queerest thing I've read on here in 48 hours

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Oct 1, 2015
MBAGrad2015:

Speaking of GS TMT, I know some jokers who got post-MBA jobs there. Banking at the post-MBA level is definitely not what it used to be. Post-college banking is still pretty tough since the top students at the best colleges are still going for it, and the exit opps are simply breathtaking.

You've made several references to IBD as being a shitty post-MBA path. To me, it seems like IBD is still quite a high-paying gig post-MBA for the people who are not able to get a job in PE / HF (read: the people who did not have a PE / HF background before their MBA).

Would you say that there are still many better options than IBD out there for MBA students who do not have a PE / HF background? If so, please elaborate.

Solid post by the way.

Oct 4, 2015

Please, please tell me this is a joke.... wow

Oct 1, 2015
juniormistmaker:

Yeah, pro sports are cool but finance is:

A) Harder to get intoB) Has way better exit opsC) Is way more alphaD) Is way more prestigious.

I mean, c'mon. GS TMT-> Blackstone >>>>>> pro ball player!

- Every finance groupie on WSO

LOL wouldn't even be surprised if some WSO clown said that

Sep 29, 2015

Great Post. Unfortunately I figured out about Finance too late. I think i'll have to start in Big 4 and work my way up from there via. MBA. It's getting more and more competitive.

Sep 29, 2015

Competition for spots in IB at top banks has become insane, even considering the current migration of many students to Silicon Valley. More and more, this is becoming a game for kids with wealthy parents. When you consider the current cost of school, the fact that many poor and middle class students have no idea what IB is until they get to college (often times too late), the insanely competitive admissions as top schools that require test scores and extracurriculars that are basically attainable only by the rich (or extraordinarily talented), and the increasing emphasis on having quality pre-junior year internships (which are generally unattainable unless you have family connections), it's becoming clear that its harder and harder for kids from middle class and lower backgrounds to compete. Of course, it's not impossible, but I feel that we're headed for a crisis point because colleges continue to raise the total cost of going to school, acceptance rates at top schools continue to plummet, and there is more and more competition for fewer and fewer spaces at top firms.

P.S. Funny that current kids are way less competent than the old guard was at their age. Kids nowadays have their efforts focused exclusively in the domains of their schooling and professional lives, which frequently handicaps their ability to adapt to new and unfamiliar situations. Furthermore, the ability for students to cheat and half-ass their studies has becoming increasingly easy, which only compounds current problems.

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Sep 29, 2015

I don't understand why people think it was easier to go from poverty to riches in the past. Of anything, it is much easier now as the traditional power structures and entrenched corporations are being up-sided by new technology and lower barriers to entry. Besides the few exceptions you guys named, most of the people you guys probably look up to were from affluent families and went to top schools. Yes, it has become more competitive, as has everything, but besides that not much has changed. The goal for most people should be to improve their lives and hopefully have a better life than their parents - this does not mean going from poverty to billionaire status, but from poverty to lower middle class.

Sep 30, 2015

Successful people are going to be successful regardless of what industry they end up in. Investment banking is a really shitty example, you're talking about an extremely competitive and saturated pool of applicants. Take Goldman Sachs for instance, they get 250,000 applications each year for IB roles.

Understanding the importance of pedigree and how that impacts your inertia is important, but it's far from the only means to great success. My advice for every 18 year old would be to join the military for 4 years, get your school paid for and crush it while you're there. It will set you up for all the success you need if you play your cards right.

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Sep 30, 2015

Man this is really silly IMO. All the structures on the 'path' are the result of tons of kids competing with each other and doing what they are told. The skilled in finance is not the result of their ability to stick with a highly refined 'path.'

Sep 30, 2015

its shitposts like this that make me think this site has run its course.

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Sep 30, 2015
Cookies With Milken:

its shitposts like this that make me think this site has run its course.

Patrick has promised to write me a one million dollar check to write a non-shit post that changes your mind about this site. But, because I love this community, I'm willing to write that post for $800K.

What do you want me to write about to make you believe in WSO again? Please keep it related to a topic I can write about quickly because I'm taking a discount.

@WallStreetOasis.com
@AndyLouis

Sep 30, 2015

What did I just read...?

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Sep 30, 2015

So you're saying that people who didn't do the "path" are screwed?

Sep 30, 2015

Finance is nothing like Pro Sports.

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Oct 1, 2015

Agreed with the OP. To continue the analogy, we should start a Fantasy Finance league where we can set up teams and draft finance stars, with points awarded based on comp and league tables. It'll be a great resume booster for the college kids here to have on their resume for OCR to really demonstrate that passion for banking.

Oct 5, 2015
Hugh Myron:

Agreed with the OP. To continue the analogy, we should start a Fantasy Finance league where we can set up teams and draft finance stars, with points awarded based on comp and league tables. It'll be a great resume booster for the college kids here to have on their resume for OCR to really demonstrate that passion for banking.

Hah just the other day I was thinking about a Daily Fantasy Portfolio Manager. Should be fairly easy to track objective performance although everyone has a different benchmark. I'll take Jeff Gundlach round 1.

Oct 21, 2015

@WallStreetOasis.com @AndyLouis sounds like something you guys should start. Then we could see who are the real "Value investors". Maybe just try to be similar to the simulators online but with an added leaderboard that links to your WSO account?

Oct 1, 2015

You lost me at the title... Finance is NOTHING like professional sports. No one networks their way into the NFL. Also Jimmy Graham played basketball through college.

This is fucking stupid. High school kids have no business being on here because they have never had a full time job let alone work in finance.

If you really want to make sports references.. IB is like high school. You need go go to the right school with a great program to noticed by colleges in order to get a scholarship.

College sports are pre-MBA PE in that you have to be selected to play and there are tiers.

Then everyone gets kicked out. Some move on, but some get to stay on the path to post-MBA

In summary. 95%+ of people in finance love making sports comparisons and talking sports but less than ~10% actually played NCAA college sports. Go back to your pitch books fucking nerds

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Oct 1, 2015

have you found a job yet Brady?

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Oct 1, 2015
thebrofessor:

have you found a job yet Brady?

Didn't you read the post? He MBA'ed so he isn't on the path. He is taking the road less traveled to fame and fortunes

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Oct 5, 2015

I thought he was gonna enroll in another MBA program after graduating

mbavsmfin:

I don't wear watches bro. Because it's always MBA BALLER time!

Oct 1, 2015

Yeah you wish. Finance is a bunch of fat men who have never been good at sports acting like it's the NFL.

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Oct 4, 2015

The highest levels of pro sports (as an athlete) are more cutthroat and rely far more on innate talent. On the other hand, you can make MD at a top bank with a 120 IQ and by simply knowing the right people. Or making GS TMT out of college by cheating your way through and coming from a wealthy, well-connected family.

Oct 4, 2015

If anything, I'd use startups as an example for this kind of comparison. Some of those guys have invested everything in their ideas, with absolutely no plan-B. No cushy jobs to fall back on, no safe or linear career paths. It's fuck or walk. Just like many would-be pro athletes.

If you for some reason can't make the cut in high-finance, I can guarantee that there are excellent "lesser" career options out there. (Even though the college kids around here make it sound like you might as well be flipping burgers, if you can't land a job on the Street)

Oct 21, 2015

Well, at least Finance doesn't give you head-trauma, jacked up knees and heart-attacks at age 40 because of all the PEDs.

So there's that.

Oct 21, 2015
sla-slom:

and heart-attacks at age 40 because of all the PEDs.

1980's bro-science... keep listening to the media haha

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Oct 21, 2015

beat me to it. as if lack of sunlight and working 100 hour weeks is healthy too...

sidebar: you ever heard the details of bobby bonillas contract? best deal in finance/sports I've ever heard of.

Oct 21, 2015

Is this a serious question?

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Oct 21, 2015

well yes

Oct 21, 2015

well yes

Oct 21, 2015

Sports 100%.
If you have the abilities necessary to do both at a high level, you can parlay even a modestly successful pro career into a HUGE competitive advantage in most professions, including finance. Even college sports are a big resume/networking boost.

True there's some risk of long-term injury (concussions in football, but also other wear-and-tear damage) but come on. People die in car crashes and skiing accidents all the time, and carpal tunnel syndrome is for real.

Oct 21, 2015

Well, they are not mutually exclusive options. Go for the pro sports but make sure you are at least looking at it realistically on whether or not you have a shot at making a decent living from it. Pro sports will most definitely help you in interviews and life but you can't stick to it 10 years and expect to get a entry level job at 33. Let me know if you have any specific questions.

Oct 21, 2015

Sports will get you laid way more by way higher quality talent, which is what it is ultimately all about.

Oct 21, 2015

I'd play semi-pro golf if it would guarantee even just 50K a year.

"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller.

"Live fast, die hard. Leave a good looking body." - Navy SEAL

Oct 21, 2015

Sports. ...Obviously

Oct 21, 2015
Comment
Oct 21, 2015