Below is an excerpt from Michael Lewis’ book “Big Short”. They are the observations of a succssful hedge fund guy named Danny at Frontpoint. How accurate do you think he guessed about those buy side, sell side pepple? Thougths? -------- The people rising out the hole in the ground on the northeast corner of Madison avenue and 47th street at 6:40 in the morning revealed a great deal of themselves, if you knew what to look for. Anyone in that place at that time probably worked on wall street for instance. The people emerging from the holes surrounding Penn Station where Vinnie’s train arrived at the exactly the same time, weren’t so easy to predict. “Vinnie’s morning train is only 55% financial because that’s where the construction workers come in, says Danny Moses. “Mine is 95%.” To the untrained eyes, the wall street people who rode from the Connecticut suburbs to grand central were an undifferentiated mass. But within that mass, Danny noticed many small and important distinctions. If they were on their blackberries, they were probably hedge funds guys, checking their profits and losses in the Asian markets. If they slept on the train, they are probably sell side people - brokers who had no skin in the game. Anyone carrying a brief case or a bag is probably not employed on the sell side as the only reason you carry a bag is to haul around brokerage research, and brokers don’t read their own reports, at least not in their spare time. Anyone carrying a copy of the New York Times was probably a lawyer or a back office person, or someone who work in the financial markets without being “in the markets”. Their clothes told you a lot too. The guys who run money dress like they were going to a Yankee’s game. Their financial performance was supposed to be that all mattered about them, so it causes suspicion if they dress too well. If you saw a buy side guy in a suit, it usually meant that he was in trouble or scheduled to meet with someone who would give him money. Or both. Beyond that, it was hard to tell about a buy side person from what he was wearing. The sell side, on the other hand, might as well have been wearing their business cards. The guy in a blazer and Khaki was broker at a 2nd tier firm, the guy in the $3,000 suit and the hair just soaped was an investment banker and JP Morgan or someplace like that. Danny can guess just where people worked by where they sat on the train. The Goldman Sachs, Deutsche Bank and Merrill Lynch people who were headed downtown edged to the front, though when Danny thought a out it, few Goldman people actually rode the train anymore. They have their private cars. Hedge fund guys like himself, worked uptown and so exit and Grand Central to North, where taxis appeared half hazardly out of nowhere to meet them. The Lehman and Bear Sterns people used to head for the same exit as he did. But they were done. One reason why on September 18th, 2008, there weren’t nearly as many people arriving at the northeast corner of Madison avenue and 47th as there were on September 18th, 2007.
The one hedge fund manager I know rocks a black polo tee with a red horse, polo shorts and $900 driving loafers Every-Single-Day. He’s basically awesome. Borderline obnoxious. He has a Bentley Conti GT (2010) and a Porsche 911 Turbo (2009) in a town where the average annual income is around $25,000/year.
He sounds right regarding the blackberry statement.
“Their clothes told you a lot too. The guys who run money dress like they were going to a Yankee’s game. Their financial performance was supposed to be that all mattered about them, so it causes suspicion if they dress too well. If you saw a buy side guy in a suit, it usually meant that he was in trouble or scheduled to meet with someone who would give him money. Or both.” Agree 100%. Sell-side guys are always in suits, whereas buyside guys normally, only wear a suit if they have a client appointment.
Iginla2010 Wrote: ------------------------------------------------------- > Agree 100%. Sell-side guys are always in suits, > whereas buyside guys normally, only wear a suit if > they have a client appointment. FO buy side rarely if ever meets with their clients (i.e. fund investors). Traditionally speaking, they ARE the clients on wall street.
The comment about the clothing is definitely true. Having met a good number of hedge fund managers, it’s almost a prereq that you dress like you really don’t care, which, if you’re worth hundreds of millions of dollars, might easily be true. I’ve actually never seen my boss wear a suit. We’ll be sitting there with a management team, literally about to throw down a nine figure sum to try to buy them out, and he’s wearing khakis that have seen better days and a plaid wool shirt – basically, looks like he threw an outfit together from JC Penny’s off the sale rack. That said, if you have the cash, nobody cares.