Thoughts and musings... advice for what's next

Water Cooler Careers
#1

Wanted to share a few thoughts and see if the braintrust had any ideas on what I should be doing or if I’m heading in the right direction. Probably will sound scattered.

A little background, while trying not to share too much personal info (I’m sure the O.G.'s can piece it together but prefer not to lay it out in one spot ha): switched to finance from a different career path and currently doing SS ER at an MM. about a year in, great people, it’s been good.

At the moment, I’m just putting my head down and working very hard at work. In the evenings, if I don’t have plans, I’ll spend a couple hours a night reading (currently Howard Mark’s memos, many other things I’d like to read after). Same for weekends, just reading and thinking. Actively investing but not as much as before, only when I can find a really good deal.

Network: Despite working at a few different jobs and going to many different CFA and alumni events, I don’t really have a network. All my jobs I got by applying online, cold. I’ve tried to reach out to people in real life and to be honest, most people just aren’t helpful. In the past, I replied to every person who reached out to me but stopped after way too many nonexistent replies. Lots of “hi, I’m a stranger, will you vouch for me and let me use your network to help me find a job?” More times than not, I don’t even get a thank you back after my reply, so no more. A few AF members have given me great advice in the past though and I’m very grateful for that.

SS ER is pretty interesting but I’ll switch to BS at some point.

First off, how long should I stay at my current job before I think about moving? My resume is very scattered, since graduating college, I’ve worked for many different companies, had several breaks in employment (1 very long sabbatical), and a lot of little stints and side jobs I don’t mention.

If I do decide to leave early, which of these options would be worth it: larger IB? business school? (99% no on this, very low GPA and too much money) small or large BS firm? When is the smartest time to exit? 2 years? 4 years? with my background, should I just focus 100% and become a publishing analyst before thinking about moving?

Last year, I got a couple calls from recruiters about SS ER in NYC who were looking for people in my sector. How important do you think location is when working in finance? With my goals, would it be smart to move to one of these large financial cities and build my career there instead?

Any thoughts or advice would be greatly appreciated!

#2

The sooner you can get into a BS shop the better. It gets tougher as you spend more time on the SS because it can be perceived you think less like a buysider would (I didn’t believe this at first, but I actually found it to be somewhat true upon my own exit). The other obvious issue is comp. Many BS shops like to run lean so it gets harder the more senior you get. That all said, a senior associate or publishing analyst with a track-record of good calls, strong network, and solid industry know-how can make the shift.

Going to a top-10 MBA is another route as you get access to BS internships. A lot of funds tend to circle the M7 schools for younger talent. However, it can still be quite difficult given a lot of your peers want these jobs.

Build client relationships as best as you can; that’s the most solid way into a BS role from SS.

#3

Thanks for the advice. That makes a lot of sense and gives me a different and more accurate perspective of where I’m at.

I’ve met a few buysiders at some industry conferences and have kept in touch with them, answering questions on our research and giving my thoughts. I’ll focus on building more of those types of relationships going forward.

I’d love to do an MBA but I’m not sure if I could get into a top-10. Historically, I’ve done just okay on test like the GMAT (my SAT and ACT scores were meh) and I’d have to score really high to even be considered. If in the next few months, nothing interesting happens, I may switch my focus to GMAT studying, early fall applications, and if I get accepted, a fall 2018 start. It’d be really tough financially though; I’d probably have to work through it.

#4

Just curious, but why do you want to move to BS? And do you want to be a generalist or specialize in your industry? I personally think the city you are in will have huge impacts on your network, all else equal.

#5

I’d like to move to BS because in the long-run, I think my personality would carry me further on the BS than the SS. Someone on top of his game on the SS, I think, has charisma, presents well, enjoys marketing, along with being smart and knowledgeable. While I’ve had success in jobs that required those skills, the first few traits, aren’t really me.

When I became interested in finance, before the CFA, I learned about it by reading about Buffett (I googled, who is the richest man in the world, saw him near the top, went to the library, checked out his biography, read about Ben Graham, and it kind of “snowballed” from there). So value investing, being a contrarian, ect, really appeals to me and I don’t really get to use those principles where I’m at.

Also, I tend to like to read about a lot of different topics. It’d be more interesting to me to be a generalist and look for value wherever it is available than to focus on one sector my entire career. Sometimes entire sectors are overvalued or fairly valued. I know it’s the job the SS to identify where the hidden value may be but in my own investment portfolio, I love to dig into areas where people are in distress and panic. So I’d prefer generalist but would accept a specialist role.

Lastly, I think the skill and experience learned on the BS has a greater change of me starting my own fund or successfully managing my personal investments than those on those learned on the SS. (won’t mention this in interviews)

#6

As a generalist, what would your source of edge be? Seems to me this is something that would come up in the interview process for BS. Also, the industry feels like it’s bad time to be in active management. I wonder if it makes it easier or harder to get a spot in light of the secular trends

#7

That’s a good question and made me think pretty hard. I’d definitely answer the question in a way that includes details only on what I think the interviewer would be interested in hearing. Wouldn’t include everything here.

I’d say I’m similar to other candidates since I have basic finance knowledge (CFA charter) but my edge come from that technical knowledge, combined with a differentiated background and real experiences.

In other words, I’d sell them on the fact that I am smart (I’d do this indirectly and non-offensively, which is easier to do in person than online, so that’s why I use the word smart here) but very different.

I’d say sure, you can find someone smart from an ivy league, but that’s the safe bet, that’s the consensus, that’s what everyone does. Does it work? The metal and minings crisis of the 70s, S&L/Japan in the 80s, emerging markets 90s, tech bubbles, housing crisis… who was at the helm running the most money? People who went to the same schools, took the same courses, read the same books, had the same professors. Hell I’ve never even taken a finance course, self-taught.

My edge is that I’m different. People invest in bonds and stocks, but why alternatives? Because they are different, uncorrelated (usually), and the top managers can generate significant alpha.

I can provide additional examples (how I poured money into energy when everyone was running away, european debt crisis, election, ect ect) but that’s just off the top of my head. I think my answer may offend a few people (i’d research their backgrounds before) but at this point in my career, I can’t sell them that I’m the consensus and have the same edge as everyone else (which by definition isn’t an edge). I’d finish with a “take away”, “not for everybody” close “Ultimately, it’s up to you. If you want pedigree, there’s a lot of qualified people who would gladly accept a role here. But if you want someone who is truly differentiated, with solid principles and conviction, and a passion* for investing, I’m your guy.”

*I know we, me included, railed on a guy on a thread earlier about this, but if you build your pitch right, you can use it. You just can’t lead with it.

#8

Since I don’t work in the institutional part of the industry, I may be overstepping my boundaries dishing out advice here… but I think what would really impress someone hiring you for BS would be a developed schema and understanding for risk management. People get so hung up on how much they can return, but I would want to know the plan of action when the market does not want to cooperate… which will be most of the time :slight_smile: What good is a edge, if you don’t know how to manage a losing position or even when you should say you are wrong?

… B TW, if you are going to sell yourself as a contrarian/ fade the hubris kind of manager… then risk management is even MORE important! These guys are mostly wrong and survive by making the most of winners and cutting losers with discipline.

#9

That’s good advice, I’ve been trying to beef up my risk management by studying the memos above, (he has a great memo on risk he wrote in the early mid 2000s if anyone is interested. Also position sizing (read a book about Kelly criterion a while back,need to dig more into that)

But ya, suggestions like that are what I’m looking for, I’m trying to plug any gaps, not just for interviews but to improve my understanding of the field.

#10

I was listening to an interview with Jerry Parker of Chesapeake Capital (thanks rawraw!)… mentioned his positions were profitable only 40% of the time. That would imply that risk management is even more important than being right :slight_smile: I know traders aren’t cool on this forum, but if you want to learn about risk management, those guys get it better than anyone. Read Market Wizards.

#11

wow 40%

#12

Hi. Before going to buy side, I think you should focus on transferring to a sell side job at a more prestigious bank. This is just the typical transition that I’ve seen people do: random job -> 2nd tier firm sell side -> better firm sell side -> buy side. Even if you can go straight to buy side from a middle market firm, you will probably get a better opportunity if you come from a big firm.

The transition to a big firm, I think, is pretty doable. Frankly, firms are cutting their underperforming senior staff and hiring cheaper people who can do the same work. You probably fit the criteria for the latter category of people (I’m not saying you will be underpaid, but the old type of compensation packages that older, mediocre people got were just ridiculous and unsustainable). From big firm sell side, you can contemplate your next move - buy side or whatever.

#13

^This.

#14

A move to a bigger bank will give you both a bump in comp as well as more visibility to bs

#15

^This is mostly true. It depends though on which SS firm he is at now and what his responsibilities are. If he does mostly lead-analyst level work, in which he interacts with clients a lot, then a BB firm might not be better. I came from a small-shop where I was a lead. When I went BB, I was shocked at how little my AVP/VP peers interacted with clients, planned NDRs/seminars/conferences/etc… Additionally, their ability to make good stock calls and present on the morning call was pretty mixed IMO.

Your lead pretty much makes or breaks your experience. My lead and I clashed a lot. He hogged client lists, didn’t want us on the call, we couldn’t plan client events/NDRs, etc… Basically he didn’t want to do any work, but wouldn’t get out of the way for anyone else who did.

#16

^Correct, for senior level folks you are running your own franchise, so it’s different.

#17

Interesting thoughts… hmm, people I’ve noticed do like big names, even if not in the same industry. I’ve been in several very distinct career paths and have always moved up to the big name before switching to the next path.

I’m not doing marketing and rarely present so not lead analyst level work.

The more I think about it, maybe going to a big bank might be a good answer. I’d get the name, maybe the experience would be better and I would be there for the long haul, and I don’t, I’ll have an easier transition to BS (mentioned above).

Again, good thoughts, appreciate them.

#18

.

#19

I got a pretty interesting BS senior associate opportunity sent to me by a recruiter today (I have a couple who send me stuff from time to time). Impressive backgrounds on the partners, small firm. Their investment philosophy is similar to mine.

From my experience, and like greenman’s thread in the WC, small firms have their pluses and minus.

How easy is it to move from small BS to big BS, if things don’t work out as planned?

My guess is if I can present proof of performance, I should be okay?