With markets puking over the prospects for low global growth, the resurrection of the eurozone crisis and Ebola, things don’t look fortuitous for the bumper crop of new analysts and associates just starting their careers in finance. Long term, however, this year’s juniors may be thankful that they cut their teeth during the turmoil of late 2014. At least so says Patrick O’Shaughnessy, a portfolio manager and blogger at Millennial Invest, who got his first job in summer 2007 – just ahead of the global financial crisis.
“Between July 2007 and the summer of 2008. I was learning fast and enjoying myself,” says O’Shaughnessy who shamelessly admits that as a philosophy graduate he only went into financial research because he got an internship at O’Shaugnessy asset management – his father’s firm. – “Then disaster struck..right away we were in crisis mode.” O’Shaughnessy was upbraided by a stressed client who accused him of being an impotent adolescent. He says: “Those were terrifying times.. I was yelled at a lot. I questioned my career choice.”
Ultimately, however, O’Shaughnessy says the crash taught him a lot of invaluable lessons: “I learned more about markets in those 12-months in front of clients than I did across all three levels of the CFA program. Markets are, at their core, about emotions and how you handle them. It is so easy to be brave from a safe distance, to say that you will be cool when the tough times come. During 2008-09, I learned that that is naïve bullsh*t.
“It is hard to act rationally as markets spiral downwards,” O’Shaughnessy adds. But learning to act rationally in the face of chaos is a key lesson for markets professionals: “This may be one of those rare chances to take advantage of volatility,” he concludes. Analysts and associates on the trading floor may want to remember those words in weeks to come.
Separately, somewhere is building out a whole new fixed income team. Bloomberg reports that Liquidnet just hired Jonathan Grey, a former Morgan Stanley MD, as head of fixed income sales in London. It plans to hire more fixed income staff, “in the coming months.”
The EU’s bonus caps are stupid. “Let me be blunt, the bonus cap is the wrong policy, the debate around it is misguided, and the best thing I can say about allowances is that they are a response to a bad policy. They are not a good solution,” says Andrew Bailey, head of the Bank of England’s Prudential Regulation Authority. (Financial Times)
Steve Cohen’s family office is doing just fine. It’s generated a gross year to date profit of $1.8bn and trading profits of $800m since the summer, despite losing $400m on stock positions when the S&P plunged this month. (DealBook)
Never mind that Goldman’s net profits were up 50% from a year ago. Its stock was down 3% on Thursday. (Financial Times)
Goldman’s trading business performed worse than JPMorgan’s and Citigroup’s when compared with the second quarter. – Its trading revenue fell 11% from Q2, versus a gains of 2% at Citi and JPM. (Bloomberg)
Goldman Sachs has hired a lot of tech staff, says CFO Harvey Schwartz. – “Back in 1999, we had approximately 3,000 people in our technology division. Now we have nearly 8,000. They represent close to a quarter of the firm.” (Seeking Alpha)
Blackstone has $42bn of ‘dry powder’ and thinks all this volatility is creating investment opportunities. (DealBook)
If you work in FX trading, you should probably be at Barclays. Citi, Deutsche, JPMorgan or UBS. (Bloomberg)
Exane just hired a team of bank researchers from Credit Suisse. (Financial News)
London metals trader is sitting out of the market and playing at being Simon Cowell while he waits for the right job. (Bloomberg)
Ex-Sberbanker accused of being a ‘cokehead’ and mentally unstable has won an employment tribunal ruling and is demanding £14m in compensation. (Evening Standard)
Working more than 40 hours a week is useless. (Inc)
Would you pass the work life balance test? (Undercover Recruiter)
Morgan Stanley man offers advice on how to dress. (Businessweek)