What does an impending recession mean for students wishing to pursue a career in finance?

It seems like everyone and their mother is predicting an upcoming global recession within the next couple of years. There was a discussion about this in a thread earlier. https://www.wallstreetoasis.com/forums/60-chance-o....

The purposed causes of the recession are diverse, as well as the predictions of its scale and impact on the global economy. But what does this all mean for students seeking careers within the finance industry in the near future? As a member of the Class of 2021, should I be concerned? If a recession does occur, what would the hiring market look like? Do you guys think it may be a bad time to enter finance in the next couple of years?

Comments (64)

Best Response
Apr 15, 2017

You're career will span 4 decades (at least). There will be booms and busts. Consolidations and divestitures. Layoffs and hiring sprees. Do what you want, network and be resilient.

Or work for the government and be a leach on society.

Apr 15, 2017
TNA:

You're career will span 4 decades (at least). There will be booms and busts. Consolidations and divestitures. Layoffs and hiring sprees. Do what you want, network and be resilient.

Or work for the government and be a leach on society.

time to tighten your leash and go back to doghouse

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Apr 15, 2017

Thanks for the response! I completely understand that there will be highs and lows to everyone's career, but my question is do you think that the hiring market will be stable 3-4 years from now? I'm terrified of the notion of spending thousands on a college education on a finance degree whose job market is dry. I'm currently trying to decide between medicine and finance and although I understand that everything will work out in the end, I rather have that end come sooner than later!

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Apr 18, 2017
SUPERSAM76:

Thanks for the response! I completely understand that there will be highs and lows to everyone's career, but my question is do you think that the hiring market will be stable 3-4 years from now? I'm terrified of the notion of spending thousands on a college education on a finance degree whose job market is dry. I'm currently trying to decide between medicine and finance and although I understand that everything will work out in the end, I rather have that end come sooner than later!

Finance and medicine are highly different career paths. Which do you prefer? There is no one here with a crystal ball who can predict the timing of the next recession. Even so, top candidates still get jobs in bad economies. Make yourself a top candidate if you want to pursue finance.

I was a fringe candidate due to transferring as a senior (+ 5th year) and late realization that I wanted to pursue finance. In a good economy, I probably would have gotten my desired job in IB. Instead, I graduated at the height (bottom?) of the tech bubble bursting and started in middle office at a BB and moved up from there, later transitioning over to IB. It all still worked out.

If you become a doctor, you will be more or less guaranteed a job. We have a massive physician shortage in the US. I am now in healthcare and work directly with doctors. Job satisfaction for physicians is extremely low these days. Make sure you are passionate enough about medicine if you want to take that route, particularly if you'll be left with hundreds of thousands in debt.

Apr 18, 2017

If you could predict exactly how the market will do in 3-4 years, everyone on this site including myself would not be in banking. Take 4x leveraged loan from the bank and invest.

Go into the field you want, network and work hard and you will be fine. You can scour LinkedIn and find countless 2009 grads who ended up just fine as well as 2008 grads who were quickly laid off from BS, Wachovia, Smith Barney and the likes, and hell even Arthur Anderson in 2001 who were quickly re-hired

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Apr 15, 2017

The "experts" missed 80, 01, 08, Brexit, Trump, and hopefully Frexit... don't take their lip service seriously.

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Apr 18, 2017

I hear you on this, but another part of me wonders if we have a bit of recency bias towards believing that these things have higher probability than they actually do.

not going to change how we invest, just an interesting intellectual exercise

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Apr 23, 2017
TippyTop11:

The "experts" missed 80, 01, 08, Brexit, Trump, and hopefully Frexit... don't take their lip service seriously.

I remember 07/08. The experts called a recession. They did not call a crash.

One thing to bear in mind is that most recessions and most market pullbacks aren't as bad as what happened in 2008.

Apr 15, 2017

Do you think a prospective finance student in the late 1920s wasn't asking the same thing?

Apr 15, 2017

Interesting question. I always get the impression that the Roaring Twenties gave people a sense of invincibility. Like nothing could possibly go wrong in the Good Old United States of America. There had been slumps before, but nothing like the Great Depression of the 1930s. I'd imagine that the general populace really didn't see it coming, but there were some who warned of the impending danger. Economists and investors like Ludwig von Mises and Jesse Livermore predicted accurately that a collapse was imminent.

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Apr 15, 2017

That's true, there are aspects of every cycle that are going to be different. Prior to the Great Depression, it was certainly a lot more speculative than today's environment (with a lot less oversight) but the Financial World did eventually recover (Thanks to WW2) and has seen many booms/busts since that time that could make someone question a career in Finance.

As long as the the US Government doesn't shut the door on the Financial World and there is a currency to be utilized, it will endure and there will always be ways to make money (even in recessions). I wouldn't worry too much about what is forecasted for the future. The best thing you can do is keep your eyes and ears open, use what is going on in modern times as great learning experience (especially if you are able to live in it), and make a strong career out of it.

Apr 18, 2017

Dude just gave a great response to a somewhat rhetorical question. Well played.

Apr 18, 2017

Livermore was bankrupt within 5 years of calling the Great Depression and accumulating a $100 million fortune. The John Paulson of the interwar period?

Apr 16, 2017

Bump

Apr 18, 2017

Dude just apply some common sense; if a recession does happen, then the hiring market will be shit. There's nothing you can do about it and you certainly can't predict it. If you want to get into finance then do your studies and try to break in, you probably will.

Apr 18, 2017

1) What's your next best alternative?
2) Why do you believe finance will be negatively impacted by a systemic recession but that field won't? The reason we called the last recession the 'Financial Crisis', is because it unusual for a recession to be that specific to a single industry.

Apr 18, 2017

My alternative would be pursuing a career in medicine. Although I'm sure a recession would impact the medical field, it's not like people will stop getting sick. People always need doctors, I suppose. I do understand what you mean about the unusual impact of the last recession in the field of finance. Hopefully we learned our lessons then, lest history is doomed to repeat itself.

Apr 18, 2017

Medicine and finance are pretty unrelated paths man - don't you think there's probably a better way to decide between the two without having to rely on the projected probability of a recession?

Good news is, you'll be fine either way!

Apr 18, 2017

I, along with many other users, graduated in the wake of the financial crisis, you'll be fine. offers may get reneged, starting salaries may not be as high, but there's always opportunity, and you should not let fears of a recession change your strategy.

Apr 18, 2017

Thanks for the advice!

Apr 18, 2017

A recession is a natural part of the economic cycle and it doesn't have to mean that the next one will be anywhere near as bad as 2008.

My money is on another tech bust, equity valuations on tech are just insane and now Tesla is worth more than Ford and GM. Don't get me started about SNAP. If Uber was in the market it'd probably be trading around $100B and they've been having a lot of issues of late. If there's a tech crash then it'd be a bad day to be a programmer. But that doesn't mean that you shouldn't get a degree in CS because tech will bounce back the same way that finance will after a recession.

Go to a good school, work hard, and you'll find a job. I was recently hired into the worst oil market since the 80s and a lot of our people think that this one tops the oil bust in the 80s. You'll be okay OP.

Apr 18, 2017

Thanks for the advice. Congratulations on your recent hire and I wish you all the best!

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Apr 18, 2017

name me one economist that got wealthy off his/her predictions

Apr 18, 2017

Soros

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

Apr 18, 2017

Georgy boy is not an economist. He's more akin to a macro trader or arbitrage opportunist. He's also mad because he bankrolled a losing candidate.

Apr 21, 2017

He's bat shit insane, but Peter Schiff &a many other Austrians.

Apr 18, 2017

Are you ibanking or bust?

Apr 18, 2017

From my extremely limited and probably naive perspective, I'm really only interested in investment banking or MBB management consulting. Of course, I am sure there are a number of other roles in finance that are great too, but I have yet to hear about a financial career that offers more mobility than investment banking. Again, sorry if I'm being ignorant!

Apr 18, 2017

No one really knows if there will be a recession. You can hedge by throwing in some math/CS to go along with your finance. You can also go to grad school for a year if job market is soft when you graduate.

Apr 18, 2017

Do you think that majoring in biology and minoring in economics would be a safe way to hedge?

Apr 18, 2017

/delete - paraphrasing above

Apr 18, 2017

Figure out what makes you happy

Apr 18, 2017

The eternal goal! Hopefully I find myself to be happy regardless of what I end up doing.

Apr 18, 2017

Can we turn this into another 'AI is the greatest existential threat post'? Interested to hear everyone's input.

Apr 18, 2017

OP, have some cojones.

Sure, there's a risk that you graduate in May '08 and are promptly laid off without a year of experience under your belt. As others have said, there's a good chance you'll bounce back. I think what you're really worried about is the economy going bust and you falling off the deep end entirely - don't worry about that. That's no way to live your life, and it's not likely to happen anyway. The only finance people I know who couldn't climb back into the tower after 08 are those who fell from the top - and that has less to do with the difficulty of getting hired in a recession and more to do with the difficulty of getting back into the fold when you're a former MD, you're expensive, and you have severance contract clauses weighing you down.

Look, you seem like an enterprising young man, so I'll add something I haven't seen others add above: If you're truly exceptional, then the shittiest time is the time to get in the game.

Paulson's bank account was created not in spite of, but because of his willingness to engage in the largest economic crash in a century.

Medal of honor recipients are elevated to glory because they charge into losing odds and prevail, not winning ones.

LBO specialists make millions by purchasing companies that are on the verge of bankruptcy and turning them around.

Traders make money by buying low and selling high.

Stable situations are not the stage on which greatness is acted out.

Remember: Risk versus reward

Believe in yourself and embrace whatever odds may come. In the words of Phillips Brooks:

Do not pray for easy lives. Pray to be stronger men. Do not pray for tasks equal to your powers. Pray for powers equal to your tasks. Then the doing of your work shall be no miracle, but you shall be the miracle.

Apr 18, 2017

Thanks for the advice! I hope that I might be at the right place at the right time to seize one of those opportunities. I think my greatest concern was just completely being shut out of a job, but you make an interesting point about being able to bounce back relatively quickly.

Apr 18, 2017

Circumstance rarely presents us with a right place and a right time. More frequently it presents us with the present, and you have to decide what options you'll pursue. Just realize that you can't seize the opportunities offered by the present until you begin to see them as a challenge rather than a risk.

My Tl;DR is that while a risk-mitigating approach to life keeps things stable, it will also diminish rewards. If you really want to have stellar success, you have to stop making risk mitigation the primary driver of your decision making.

Think of opportunity like exercise. Most people don't like to exercise because our natural reaction to it is "this is painful and therefore should probably be avoided".

Once you've been around the block a few times, you'll realize that like exercise, a lot of opportunity is about embracing the pain and realizing that on the other side of the gauntlet is a reward. Sure, you might get burned passing through the gauntlet, and you should be rational about those risks and your appetite for them, but don't fall into the mental trap of thinking that stellar rewards lie anywhere else than on the other side of a risk. Many a humdrum life has been spun out of that whole cloth.

Apr 18, 2017

Circled back to say that your positive attitude when replying to other users was refreshing (though initially disconcerting to a jaded asshole such as myself). If you maintain that as a member of the workforce, you'll be successful, recession or not.

Apr 18, 2017

It means you should go work on the fixed income desk. smirks

Apr 20, 2017
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Apr 21, 2017
Apr 23, 2017