Why are you guys still interested in markets?

I don't really go on campuses anymore representing my banks at banking fairs, so for the last 2 years I have had little contact with undergrads etc...

I interviewed about 4 potential juniors recently, then decided against hiring someone without a client base. The only thing I really saw was that the guys 1) either just got laid off, or 2) could not find a single job; it was more a: "there is a job in banking, will try and get it even though i don't know about it". Brilliant people, with eye watering CVs; just an absolute shocker that they were still unemployed.

Given the massive hiring freeze, the over-bloated effectives in equities and fixed income, and the general beating banks have been taking. What makes you keep on going? The massive base salaries banks seem to pay? Or are you still hoping to get a nice bonus at some point? What's the carrot?

I'd be curious to know about people that are interested in markets strictly speaking, no bankers. Bankers are messed up in their own ways.

(And if you are still trying, keep looking, especially away from the bulge brackets; there are a few jobs out there, and if you are good you'll get it. Best of luck, because what I have seen from my friends being laid off etc... It's not a fun time to be looking for just any jobs in equity, and to a lesser extent in fixed income [kick ass year in FI, yet they are still letting people go...])

 

For a junior guy, finance is still one of the highest salaries straight out of undergrad so that might have something to do with it. ANd for a certain person, there are very few jobs like trading in terms of intellectual stimulation and culture. But the carrot is def smaller, and it does have an effect on the job because if your upside is your salary, you are going to take just enough risk to not get fired. It used to be that as a trader you were long that option, if your large bets paid off you got a big bonus, if they didnt you got 0 or got laid off. But now if you swing the bat there really is only the laid off if it goes wrong path, so now traders are short that option.

 
BTbanker:
Some of my friends who did banking internships for their sophomore summers say they couldn't handle the hours/work in IBD. That was their main driver toward S&T.
I'll be honest that is part of the reason I am avoiding IB. I want to get into HF eventually and for a while I was aiming for the IB side but I don't want to kill myself in IB for two years when I could be doing S&T and do HF just as easily.
 
kyleyboy:
BTbanker:
Some of my friends who did banking internships for their sophomore summers say they couldn't handle the hours/work in IBD. That was their main driver toward S&T.
I'll be honest that is part of the reason I am avoiding IB. I want to get into HF eventually and for a while I was aiming for the IB side but I don't want to kill myself in IB for two years when I could be doing S&T and do HF just as easily.

Sorry to break it to you, but your exit opps from S&T into hedge funds are very limited unless you're at GSPS/GSIP/et al. You're going to get stuck as an execution trader for the rest of your life... and we don't hire junior guys for that.

 

I've always been interested in companies, not markets per se. Investing in individual companies is pretty much the only thing I'm interested in besides golf and tennis. It's more like a hobby that pays well.

Most of my friends during undergrad had no idea what they wanted to do in the business world and picked banking or asset management mainly because that's what everyone else was doing. I think that's the case for most people.

All I care about in life is accumulating bananas
 

Banking's about as interesting and intellectually stimulating as a prolapsed rectum. Research positions are few and far between. Quant roles require too much education and/or are too focused on one thing. Most corporate finance roles, at least at the entry level are really just glorified accounting roles.

For those of us interested in finance, there's not exactly a whole lot of options left.

 
Best Response

I'm in sell side research, but I'll chime in. I interned at a BB and got a FT offer for IBD, but moved to research.

Deal flow in this environment is very uneven; you could easily be going into post-analyst recruiting without a major deal under your belt. And PE isn't what it used to be. I didn't really want a career in private equity; having to source deals at the senior level sounded miserable. If you remove the PE carrot, why beat yourself with the stick of an IBD analyst program?

IBD is honestly boring. You are not really exposed to the markets. You are not really learning about businesses. You are becoming a very efficient modeler with great presentation skills. Based on my experience, most modeling done in IBD (and research, for that matter) is overkill for investing. Nobody runs a DCF and finds a company undervalued by 30%. Your assumptions matter much more than the details of your model.

Investing is probably the one thing I enjoy day to day. And research is a reasonably proxy for it, and provides an exit to mutual funds / hedge funds in the future. I also have the ability to time the job market, since I am not in a 2 year program.

As for why finance? I grew up poor. And it sucked. I never want to be poor again. I want to be able to send my kid to Exeter / Andover. Finance is one of the very few remaining roads to the upper class. Keep in mind I am generalizing:

Medicine is a long path. You don't start making money until you are 30ish, and have mountains of debt. Remember the post "I have no money"? Every doctor is in a worse situation than that. And with government cost controls coming to healthcare and the rise Managed Care Organizations like Kaiser, I am not optimistic about physician salaries in the long term.

Law can be good, if you ace the LSAT and get into a top 14 school, then do well on their exams (graded seemingly at random). Even then, you still run the risk of failing to make partner - at that point, you are like a laid off banking VP. The legal market is arguably even more over-saturated than finance.

There isn't much else. Engineering salaries level off fairly early, and older engineers often are seen as less valuable than fresh grads. I am quite frankly not sure I could pass the actuarial exams. Accounting can be good, but you work nearly the same hours as finance but for less money; I also don't find the work interesting. Consulting is a good path, but I think I would hate the work unless I was in some specialty practice group (e.g. McKinsey's finance consulting group).

 

my thoughts/situation exactly... except I'm in trading. A lot of people in the industry still claim that trading is going to come back and we are in a good position starting in the bottom of the cycle blah blah... Does anyone actually think this? Can trading at banks recover from Basel 3 and Dodd Frank and will regulation ever lighten up?

 
confused23:
my thoughts/situation exactly... except I'm in trading. A lot of people in the industry still claim that trading is going to come back and we are in a good position starting in the bottom of the cycle blah blah... Does anyone actually think this? Can trading at banks recover from Basel 3 and Dodd Frank and will regulation ever lighten up?

Would like to know as well...

 

For me most of it is about landing a job (something connected to the markets; broker/trader etc.) that I'm truly interested in and not settling for something safe. I would hate to have dragged my sorry ass to a corporate office to work on some TPS reports for 15 years, and then look back and knew I never took a risk on something better.

Also, if one takes a job in a more corporate role they are likely to have their wages permanently depressed for their entire career based arbitrarily on them having started working in a weak economy. Maybe if one holds out for a role with a BB or market-maker, even if it's not ideal, they could eventually recoup some losses by way of bonuses or future job-advancement. (I graduated Ugrad in september 2008 and Bschool summer 2012, so if I sound scorned of my generation's career prospects, well...)

 

+1 for West Coast rainmarker.

After you get your PE job, IBD is not interesting or intellectually stimulating at all (prior to getting your PE job you can convince yourself to keep cranking and absorbing because you need things to talk about during your interviews). You will not learn anything about business. CEOs will not be calling you.

I was too risk averse for S&T, wasn't very interested in Research, so narrowed it down to IBD and Consulting. I, like many others, didn't really know what I wanted to do so I said, hell, let's do Banking --> PE.

Is PE the end all, be all? No. Am I even sure it's what I want to do long term? I have no idea. In retrospect, if I could go back and do it all again, I would go to Consulting assuming it's MBB.

 

How depressing - If I narrow it down correctly in essence what you guys are saying is: IBD is too intense, and jobs in PE are scarce and not really motivating to get to anymore. The rest of the jobs out there are not paid properly, and not challenging enough; so fall back on markets hoping that you will scrap one or two decent bonuses before it all falls down to hell.

Glad that the mood in college is as positive as on a UBS trading floor a couple of months ago...

 

I'm just going to address your last post as someone who did IBD to PE. I wouldn't say IBD is "intense". I don't think long hours are considered intense when a good 1/3 of those hours are downtime and you're surfing dealbreaker or google news.

As for PE, I think it's as close to a perfect job as I could hope for. Depends on the fund, team, investment strategy, culture, etc. but even if my PE job paid like a normal industry job I would still love it.

Not sure the point of your posts but all jobs have shitty aspects to them. That's why they're called jobs and thats why people pay you to do it.

 
SanityCheck:
I'm just going to address your last post as someone who did IBD to PE. I wouldn't say IBD is "intense". I don't think long hours are considered intense when a good 1/3 of those hours are downtime and you're surfing dealbreaker or google news.

As for PE, I think it's as close to a perfect job as I could hope for. Depends on the fund, team, investment strategy, culture, etc. but even if my PE job paid like a normal industry job I would still love it.

Not sure the point of your posts but all jobs have shitty aspects to them. That's why they're called jobs and thats why people pay you to do it.

The point is mainly: what's the mood for market on college campuses. I am not too worried about M&A as there are still millions of people wanting to work in that field... Given the recent massive layoffs in my field, doughnut bonuses, etc... What drives students to try and get a job in markets.

(M&A has suffered as well, but exit opps are still there, and even if you want to keep doing that job advisory still need a lot of people)

 
SanityCheck:
I'm just going to address your last post as someone who did IBD to PE. I wouldn't say IBD is "intense". I don't think long hours are considered intense when a good 1/3 of those hours are downtime and you're surfing dealbreaker or google news.

As for PE, I think it's as close to a perfect job as I could hope for. Depends on the fund, team, investment strategy, culture, etc. but even if my PE job paid like a normal industry job I would still love it.

Not sure the point of your posts but all jobs have shitty aspects to them. That's why they're called jobs and thats why people pay you to do it.

Seriously, IBD is a fucking breeze compared to PE. Nothing I did in banking actually mattered; after your first 8-12 months you can pretty much do it on autopilot with very little real stress.

 

I thought about the above a lot. I find research to be really interesting, and hopefully to be able to run a hedge fund later on in life. Very few positions such as research or S&T require you to have such an interest and master of what's going on throughout the world.

It's that or working for some government agency and the like (that is paid well, as well).

 

You don't have to work at a BB to like markets. A lot of people are headed to prop shops and hedge funds, and they're doing quite well. Smart colleagues, casual dress, good hours, and incredible bonuses (if you're good, otherwise you're fired). My experience at a prop shop was that the young guys there were far happier than the people I met at a bulge bracket's S&T, though job security was worse.

 

I think the BB--> PE route is interesting to me because of certain aspects of it. I'd rather not work BB and would rather work at a smaller advisory firm or something. I think certain aspects certainly evoke a kind of romantic nostalgia, especially as an American reading about the Morgan family, Drexel, etc. The masters of industry and so on.

Realistically, I don't know why more IB people don't go into public service. Seems like there are some very interesting jobs in that sphere and, while not public sphere, firms like NERA and economic, labor, engergy consulting are definitely something interesting.

I agree with above post though. I grew up relatively poor. Still am, since I'm in college. I don't even care to become unseemingly rich, I just want to have some security in my life to pursue other things such as education. I'd actually right now prefer going into school again and getting masters-->Phd in mathematics or engineering, but honestly can't imagine taking on any more debt and spending more time spending money on these things. IB is a path to better security for me and I think most people. Maybe a lot of people would disagree, but I don't think most people get into finance to make billions or even millions. I know that's not why I'm in it.

"History doesn't repeat itself, but it does rhyme."
 
streetwannabe:
I agree with above post though. I grew up relatively poor. Still am, since I'm in college. I don't even care to become unseemingly rich, I just want to have some security in my life to pursue other things such as education. I'd actually right now prefer going into school again and getting masters-->Phd in mathematics or engineering, but honestly can't imagine taking on any more debt and spending more time spending money on these things. IB is a path to better security for me and I think most people. Maybe a lot of people would disagree, but I don't think most people get into finance to make billions or even millions. I know that's not why I'm in it.

That's kind of curious to me. If you want to do more school, why not take a job that offers more free time to take courses on the side?

 
George Soros:
streetwannabe:
I agree with above post though. I grew up relatively poor. Still am, since I'm in college. I don't even care to become unseemingly rich, I just want to have some security in my life to pursue other things such as education. I'd actually right now prefer going into school again and getting masters-->Phd in mathematics or engineering, but honestly can't imagine taking on any more debt and spending more time spending money on these things. IB is a path to better security for me and I think most people. Maybe a lot of people would disagree, but I don't think most people get into finance to make billions or even millions. I know that's not why I'm in it.

That's kind of curious to me. If you want to do more school, why not take a job that offers more free time to take courses on the side?

I've thought about doing this, however believe that I'd like to dedicate my full time to academia if I have the given chance. I've been working a part time job in college and it just sucks. Given the course I would like to follow, I think it'd be extremely difficult to work and do any courses in math.

Hopefully I'll have the time and money someday to pursue further academic advances, but for the time being, I'll happily pursue the finance path as I feel that it gives you a basic understanding and comprehension of knowledge in general.

"History doesn't repeat itself, but it does rhyme."
 

I really can't explain why... the idea of trading/investing in stocks, bonds, etc. just seems really fascinating.... When my parents explained how the owner of the Red Wings (Mike Ilitch) made all of his money (investing), something stuck with me. I'm more interested in the technology sector (not sure how that would work out as a trading job) because I've always read about consumer tech products and like to keep up on them. I'm unsure whether or not I want to continue to try to get into trading though, at least atm... I'm not sure if the risk of a trading job (stability) would be worth it given my current circumstances. I keep changing my mind when it comes to whether I want to work as a programmer or trader. I'd eventually want to start a business if I were to become a programmer anyways. I like the idea of eating what you kill, but trading allows you to profit off of businesses without putting all of your eggs in one basket like I would have to do if I started a business today.

If your dreams don't scare you, then they are not big enough. "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.
 

I am making my decisions based on a simple calculation. I am currently in an economics program and my SAT scores were reasonably good. I want to make lots of money. I dont really care about having free hours or "work/life balance." In five years, I might care more. Not now. What's the best paid option? Finance. QED.

The crisis may have altered the pay that underlies this calculation but I believe the calculation itself is still valid. Of course it's a little iffy because the changes are so recent and all the effects may not, I think, have been "priced in" to the pay figures. But all you can do is predict from past events. If you've got a crystal ball, let me know.

Everything else that I say at interviews is an evasion. This is a dilemma for me right now since I dont know whether I should bother to make up fake reasons for wanting to go into finance ("Those pitch books are really nifty...") or semi-openly admit that "rewards" are a strong factor in my decisions, even if those rewards need to stem from hard work.

 

Disjoint, I am a 2nd year in ST. To answer your question based on personal experience and interactions the interest from college students are due to: 1. Phenomenal base pay given alternatives 2. Lack of understanding of the structural changes facing the industry. Very difficult to really know what Dodd Frank really means if you've never sat at a desk and had a budget to make before 3. Did not think through the tradeoffs that they are willing to make for the pay. There's stress, always have to think about the job etc. To those of you that say that ST is shorter hours, you might not be there, but you never switch off. I know many traders that get up regularly in the middle of the night to check prices and miss sleep due to performance of their book or for sales people not closing enough deals. For me that is the worst feeling in the world. 4. Their friends are trying to get into it.

A question for you Disjoint, how would you pitch it? I personally don't see myself in ST in 6 months time. Every day, it feels like I'm working with the industry equivalent of those fishermen that risk their lives on the water to catch fish that are no longer there anymore due to overfishing.

If one is going to work that hard, one can start a business and sell it for a few million in a few years.

 
cacambo:
Disjoint, I am a 2nd year in ST. To answer your question based on personal experience and interactions the interest from college students are due to: 1. Phenomenal base pay given alternatives 2. Lack of understanding of the structural changes facing the industry. Very difficult to really know what Dodd Frank really means if you've never sat at a desk and had a budget to make before 3. Did not think through the tradeoffs that they are willing to make for the pay. There's stress, always have to think about the job etc. To those of you that say that ST is shorter hours, you might not be there, but you never switch off. I know many traders that get up regularly in the middle of the night to check prices and miss sleep due to performance of their book or for sales people not closing enough deals. For me that is the worst feeling in the world. 4. Their friends are trying to get into it.

A question for you Disjoint, how would you pitch it? I personally don't see myself in ST in 6 months time. Every day, it feels like I'm working with the industry equivalent of those fishermen that risk their lives on the water to catch fish that are no longer there anymore due to overfishing.

If one is going to work that hard, one can start a business and sell it for a few million in a few years.

It's a tough one - I sit next to the cash ST; I am a derivatives sales so do a bit of delta 1 similar to cash, but mainly options. I still have a very marginal value in the fact that the products I trade are not liquid enough for people to just go around me and do DMA. If you are in a big bank I'd be looking to get cosy with the derivatives guys. If you are tight with a few accounts and they do derivatives, try to get some of that flow, obviously it can get a bit political so it's for you to deal with this situation. But one move you can do is start executing some futures, it's simple and you have less chances of fuck up. The traders are going to love you for bringing flow, your boss will be relatively happy you are taking an initiative, the only people you will piss of would be derivatives sales people; as the head of the desk, if a junior cash ST is trying to sell some derivatives product and is doing a half ass job at it, I'll try to keep him printing while making sure his P&L counts for my desk. So you only have some upside, as long as you manage to deal with the people around you properly. The grass is always greener on the other side, and I have always wanted to do something else; but you will find that it is a 100 times easier to try to slowly move internally, especially at your level. Just make sure not to totally move, and only move after you have sassed it out a bit.

For example I tried to do a bit of structured exotics, and after banging my head against the wall with a few clients I realised this was not for me, and I had much better chances of making cash on the flow side.

And I hear you about over fishing, except in this case I'd make an analogy with Alaska salmon. The Japs used to buy all the salmon from Alaska, you could make 200K in a summer, and fuk all the rest of the year. Then farm raised fish came along, and the Japs stop consuming it. Think of farm raised as DMA... There is still some demand for wild Alaska salmon, but it's the fund that have the luxury to do it.

If you are at a bank with a good ECM franchise, you will be needed to place deals, so at least you will be useful on primary issuances... But deals have dried out as well there, but that will come back. What will not come back is a need for ST in the secondary trading market..

  • To all the people talking about going to HF and PE as the end goal. You need to understand very few people really end up doing that. Most people make a career out of banking whether it's M&A or ST and Trading. HF at the moment have been decimated, unless you can bring a trading strategy with you, set it up and they give you some capital to run it on; there is no real need to hire juniors... Very few people from ER make it to hedge funds, from M&A only one of my friends went to a fund. What you still have is asset managers, pension funds etc... you can still get hired there. But HF are very strict in who they get now a days, they won't chance it on a kid... A good trader might get a job in a hedge fund, but that's about the only person I can see them hiring...
 

I just like the culture and people in trading. All traders are degenerates.

I don't accept sacrifices and I don't make them. ... If ever the pleasure of one has to be bought by the pain of the other, there better be no trade at all. A trade by which one gains and the other loses is a fraud.
 

Ok, I yield. Perhaps it's because I am at a good shop. Now if a trader with a good position at GS/MS/JPM can't move to the buyside, who can? Surely those macro funds are not run by IB monkeys. You need someone who has been managing risk.

 
mxc:
Ok, I yield. Perhaps it's because I am at a good shop. Now if a trader with a good position at GS/MS/JPM can't move to the buyside, who can? Surely those macro funds are not run by IB monkeys. You need someone who has been managing risk.

I'm with you there... there are certain guys that can get hired, but think about how small a % of traders fall into both (1) a good bank and (2) a good, relevant group. Furthermore, the hedge fund industry as a whole has been shedding staff, trying to improve AUM/investment professional.

+SB for not making this a silly fight.

 

someone on here said before that people at prop shop employees make more money than hedge funds on average until you get to the bigger hedge funds and you hold a higher position... is that true? kinda makes me think that working your way up at a prop shop then moving to a hedge fund after you've proved yourself makes sense if it's really that hard to get a job at a hedge fund if you're a trader

If your dreams don't scare you, then they are not big enough. "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.
 
wolverine19x89:
someone on here said before that people at prop shop employees make more money than hedge funds on average until you get to the bigger hedge funds and you hold a higher position... is that true? kinda makes me think that working your way up at a prop shop then moving to a hedge fund after you've proved yourself makes sense if it's really that hard to get a job at a hedge fund if you're a trader

Prop shops have ridiculous turnover and only a few people succeed and get paid. They are also typically more trading-oriented, which is not compatible with most hedge funds.

 

then what's one of the "safer" jobs when it comes to trading? s&t? what are most hedge funds? doing investing? or...?

If your dreams don't scare you, then they are not big enough. "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.
 

Well then I guess my question is do prop shops have more turnover than other firms that are involved in trading? is the amount of people that actually get paid significantly lower at prop shops than other trading firms?

and yeah... what are hedge funds more involved in? investing?

If your dreams don't scare you, then they are not big enough. "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.
 

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