Friday, September 28, 2012

- Some Wall Street Career Advice

I'm hiring. So in addition to talking to placement agents, a few weeks ago I put an Ad out on Bloomberg jobs - mainly because it's free. Turns out it's probably worth what you pay for it. The vast majority of the people who have come in from the Ad are completely unqualified. It's unfiltered so that's what I expected, but I didn't imagine that the applicants would turn out to be as bad as they actually have. They're so bad in fact that I think a little unsolicited career advice for the Wall Street labor pool is probably worth writing.

Here then is some advice about how to avoid at least a couple of the mistakes that others (far too many others) have made with regard to advancing your career on Wall Street.

1. Based purely on the fact that there are a lot of people who want to do it but very few who actually do, you have to assume that managing money is harder than it looks. If you're working in the back office someplace, that means that you probably can't do it. If you think this is incorrect and that managing money is actually an easy thing if you can just get past the guards at the palace gate, then you are absolutely not qualified to do it. I say this from the perspective of a guy who started his career in research not trading, and has made the transition you're thinking about.

The ratio of successful money managers to non decision making staff is probably 10,000 to 1. And while a Managing Director job in charge of Swaps settlement at a large bank isn't very glamorous, it still pays about 900K per year. Set your goals accordingly.

2. If you really believe that you're that one very rare person who can make the transition to a decision making role, then convince the people you're working with now. If the people who know you won't take a flier on you then don't expect me to. Come back to me in two years with a profitable track record and I'll treat you like a serious contender. But without that profitable track record (and that means showing me evidence of it, the more verifiable the better) I can't risk anything on you.

3. About that track record. I talk to a dozen geniuses a week who are doing things similar to what you are. This gives me a unique perspective on what the markets can and cannot yield in terms of alpha. So please don't think you can show me a falsified data set as your returns and 'fool me' with it. Connecting market based logic and reason with the results it produces is basically my whole job now. There is no BS'ing your way into a role like this one.

4. As a hiring manager looking to place senior staff, your passion means absolutely nothing to me. That may have helped you get your first internship, but at this point it's assumed.

This is Wall Street - work address of the smartest most self motivated people in the world. 100% of the people you're competing with for this job are geniuses (at one of my previous employers even the girl answering the phone had an IQ of 150). So your "dedication to delivering excellence" sounds to me like something a worthless politician would say. Show me proof - real numbers. That's really the only thing that's going to convince me of anything. Without them, see suggestion 1.

5. Just because you were good trading market X before it dried up doesn't mean you'll be good in Y market now. The world is more than a bunch of correlated data streams. On a related theme, options are not your salvation. An illiquid market gives you an advantage as a flow trader at a bank, but we're a hedge fund. There is no flow. We only eat what we kill and there won't be any bailout coming when you blow up the firm because you didn't really understand what adding options to your strategy would do to your risk profile.

6. A high Sharpe ratio isn't necessarily a good thing. If you're as smart as you think you are, then you should already know why.

I know the odds of this getting to the actual people who are sending me their resume's is very small. But many of the readers of this blog are financial industry professionals, so I figure - adding this to our community dialog can only help me and others in my position. In truth, these are only a few of the common mistakes, and they are almost all a product of people who either think much more of themselves than others do, or that are acting out of desperation and are therefore willing to do irrational things.

These are just a few items. I have to stop now because I have to interview someone. I may add the others later in the comments.

1 comment:

ikaika said...

It's funny. I was at another forum where a poster asked "Why would you give Obama A Second Term? State your reasons:"

The answers given form the left obviuously:
"He is the most qualified person for the job now as he was in 2008"

I chuckle when I hear Obama's Qualifications, espescially with a non-verifiable or referrable Curriculum Vitae.

When -you ask them about Romney's Qualifications, it is as if he never worked a dayin his life or even attended school.

I hate to say it, but if Progressives - as they call temselves - are shaping the future labor pool, we are so screwed.