COMMENT: Buy-side traders think far too highly of themselves

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buy-side trader

If you're a trader on the buy-side, at an asset manager or a hedge fund, you probably think you're something special. After all, everyone wants to work on the buyside; you've got the job they'd kill for. This might be the case, but most people have no idea what buy-side trading jobs are like. When you're in the market, you know that they're usually occupied by mediocre individuals who like pushing buttons.

Buy-side traders are usually "execution traders." This means that they execute the trades decided upon by other people. In practice this means clicking on buy and sell buttons and selecting which broker to send the order to. If they're lucky they might get to make three clicks on their mouse when they place a trade. Impressive? Not exactly.  I’ve attended many meetings with analysts, portfolio managers and traders. The traders are always the weakest link: they usually have no clue about the general economy or themes in the market.

As with most mediocrities, buy-side traders are generally incapable of acknowledge their inadequacies. 90% of their job is to copy/paste what brokers send them on Bloomberg and to send it to their portfolio manager, but based on their behaviour you would think they're George Soros. They all claim to be incredibly busy, but spend their time watching their screens for earnings, events such as non-farm payrolls and on Bloomberg chats. In my experience many have problems processing all this information. They're only really happy when they're at an expensive restaurant or bar for broker entertainment - all the better to name drop later.

Which brings me to the worst thing about traders on the buy-side: they are snobs. And like all snobs, they like to look down on people - which, if you're a trader on the sell-side, means you. Buy-side traders wield their power over sell-side traders like ruthless dictators, and when you work on the sell-side you live in fear of their unjustified complaints. It's very easy for a buy-side trader to complain about a broker, but when you're a broker who loses your job or gets your bonus docked as a result, it's not so funny.

Not that buy-side traders care about their victims on the sell-side. I've heard them mocking sell-side traders who've been penalized as a result of their unjustified whinging. Senior managers at asset management firms turn a blind eye to their traders' snide comments because they know they keep brokers on their toes by creating a culture of fear which ensures their firm gets a good deal.

If I sound bitter, it's because I am. In the past, I have defaulted on my mortgage because of two clients who constantly complained about me. They had no real reason to do so, except that they preferred to deal with my female colleague. Banks are always looking for a reason to cut pay: who cares if 58 other clients think I'm great, they'll always focus on the two who say otherwise. - Whether it's justified or not.

Antonio Mullen is the pseudonym of a sell-side trader with a grudge.

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