Gentlemen,
My question to all of you today is where will S&T be in the next 5 years. I find myself stuck in a catch 22 right now.
One part of me wants to accomplish one of my goals of breaking in and another makes me skeptical of where the whole investment industry will be and is going in the future (i.e. whats poppin on the macro level)
Are the next 5 years going to be an absolute bloodbath in the west? some of the hardest times to break in? or are some areas going to explode like clean tech?
I think all the excitement over clean tech is unfounded.
It's because it all sucks right now in all honesty. Solar Panel technology still has a way to go before it gets super efficient but I think it'll prob be our genres hottest thing or maybe i'm wrong
Lol it will eventually be all automated.
The hottest area in our lifetime will be anything in biological engineering. From curing diseases, to figuring out how to use viruses to manufacture products (this can actually be done) or creating energy, biology remains an area with enormous potential. Much like programmers of the last twenty years, biological engineers will literally code nature.
As to trading, this industry is bound to get smaller. It faces competitive threats from all sides, including government and technology. The outsized profits that existed in the past just won't be there, and spreads for flow traders are going away as markets around the world become automated. The markets that are least likely to be automated are illiquid, structured products, which require advanced degrees in mathematics to understand.
While S&T might be shrinking, banking will still be around. After all, banking is about relationships and service to clients, and will remaind so.
However, technology will ultimately change the entire investment landscape, so asset classets such as private equity and hedge funds are bound to shrink. New technological solutions are constantly being introduced to make individuals much better investors and money managers. Solutions exist to help them manage money, invest properly, and do so cheaply. Throw on a strong distaste for the industry, and you definitely will see the size of investment funds shrink. This means that the banking --> buyside fund route might become more competive, or non-existent in the long-run.
As a percentage of GDP, the last time this industry was this large was the 1920's. Things tend to expand and contract over the years, and this industry has seen its better days.
Actually, virus can't produce shit on their own. LIBOR means bacteria. They've got some species of bacteria producing oil, insulin, etc..
On a less anal note, he's 100% right. In school, it was all about how biomedical/engineering is the wave of the future. That industry is going to need extreme amounts of capital, too. None of the equipment is cheap and margins will most likely be awesome once profitability is reached because of the high entry costs/human capital requirements.
I think we may see an increase in HF and PE firms specifically geared toward investing in that industry and industries that support it..
Wow, im speechless LIBOR
So what the hell should I do with my future now, slang crack?
Nah that will be automated.
^^^ As someone who trades, what are your thoughts?
As someone who trades, I think in general the concerns noted are overly simplistic. Trading is not as simple as quoting the best spread. As someone noted, for the most part it's about risk management and risk-taking. As much as they may create machines to replicate human behavior, I feel humans will be needed for as long as I can forsee because overall risk-management skills are still necessary, and being able to adapt to changing environments is always needed. Even in the more "simple" products.
I need some serious insight, all jokes aside fellas
I think the whole argument of traders becoming obsolete is a little bit overplayed. I think that execution gets automated, but what trading at a BB really is is risk management. Even for cash equities at a bank you will have 15+ cash traders, despite the fact that execution has been very much automated. Financial markets are extremely complicated (even cash equities), and you need to have the infrastructure of traders,sales, research etc. Then you get to stuff thats a bit less liquid like single stock options and if you actually spend time on the floor you quickly realize that the traders do need to be there. The only way I think BB trading becomes obsolete is if AI is developed that can manage a book, and I think that is VERY far away.
@ derivstrading
Thank you, i can now stop tripping
BB S&T is gonna get smaller.
Agreed, BB S&T is a shrinking industry, and it's best days are over. It will continue to exist but on a much smaller scale. Every single product traded will see smaller margins and spreads due to more automated processes and transparent markets.
Humans will always be necessary in some part, but there are too many qualified people out there who can do this job. At the end of the day, trading does involve some discipline and skill, but "making" it in trading also has a huge component of luck.
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