Youthful Hopes and Aspirations

It’s Thursday.  Two more full days to go until that nice cold one.

Today, I started teaching the banking graduates at an Asian investment bank. What are the odds they get rich? What can they expect from their careers?

  • The banking graduate season is underway.
  • Ah, how I miss being young and optimistic.
  • What can new banking entrants expect?

Ah, The Old Days

When I first got into the financial training business, I used to laugh at the fact I was teaching programs that I couldn’t get into as a graduate.

I graduated from Villanova in 1996.   Major banks didn’t recruit from there then.  I think a few do now.  And I didn’t have a stellar academic record anyway.

I needed the help of headhunters to secure a banking role.  But it was the Roaring 90s, and even academic wastrels like me could get a job at Paine Webber or Lehman Brothers.  Everyone got a job right out of college back then.

I started in the way, way back office of Paine Webber before UBS gobbled them up.  There was a lot of paper shuffling back then, but my day-to-day job had nothing to do with the markets.

After being bored for about seven months, my headhunter got me a job at Lehman Brothers, my Uncle Carl’s old bank.

I was so proud of myself.  They offered me a whopping $36,000 a year working in a group called Global Corporate Equity Derivatives.  Now that job is called product control, and it’s the trading desk’s accountants.

I knew nothing about accountancy, other than the three classes I crawled through at Villanova.

Back then, I hated Microsoft Excel.  That’s because I didn’t know how to use it.

I tell grads nowadays to ignore Python to start with and learn Excel inside out, upside down.  The entire banking industry still runs on spreadsheets.

Bosses think you’re a damn warlock if you can make data both correct and pretty.

Had I known about Excel and macros then, I probably would’ve pursued a career in risk.  Risk management is excellent because you can talk all day about the markets but ironically not take any risk.

Even when your book blows up, ultimately, it’s the trader’s fault.

Shitfaced

Years later, I was drinking in London with my best bud Travis.  We were at the Duke of York in St John’s Wood, just around the block from where we were sharing a flat.

A very drunken Scotsman accosted us and started talking about how much he knew about the markets.

He was shitfaced.

That phrase originated in Edinburgh, by the way.  If you were out drinking until the wee hours, you ran a non-zero risk of having someone’s toilet dumped out their window and onto your head.

Hence, you were shitfaced.

“I’m the Head of Risk for Prebon Yamane.”

He said it over and over again, which is why I haven’t forgotten it.

I also couldn’t believe how a Scotsman could roll an R like a Spaniard.  It was linguistic art.  Over and over again, “I’m the Head of RRRisk for Prrrrrrrebon Yamane.”

But I bet he never hit a buy or sell button himself.

And quite frankly, you know nothing until you do.

Back to New York

Because I got bored of being a trader’s accountant, another headhunter got me a job at Credit Suisse in trader operations.  One step closer to that trading job.

All the fixed income traders I worked for at Credit Suisse were Russian, English, or MIT.  I couldn’t do that kind of math in my head.

I was fabulous at algebra in high school, but I just couldn’t grok calculus.

If my high school calculus teacher told me that the entire derivatives business runs on stochastic calculus, linear algebra, and differential equations, I’d have paid more attention to her.

All the equity traders had names like Bertrand, Sylvane, and Pierre.  French.

I told you about the mad French math curriculum in an earlier Rude, so I won’t go over it again.  But it was weird for me to see.

I now think it’s funny when people say things like, “You’ll never use that in real life.”  Sure, people who don’t use that stuff say it.

But some people do use that stuff.  Ask any science, technology, engineering, or mathematics major.

So when you listen to someone, be aware of your sample size.

And never, ever tell your kid, “You won’t use what they teach you in school.”

Casual Approach

About this time, banks started to allow casual dress.  I hated it at first.

Not because I was taking too much time to figure out what to wear in the morning.  But because it took some of the prestige out of the job.

I know this sounds crazy, but I don’t think I went into banking to become rich.

Hear me out.

I was a middle-class kid.  I had a great childhood.   I always got told about how bright my future would be.  I think I wanted to live up to that.

I genuinely thought working for a bank, along with being a lawyer, were the two most prestigious things I could do with my life.

Preposterous, I know.

I think it’s the same reason I never watched The Wolf of Wall Street or Margin Call.

Even in my old age, I don’t want to believe Wall Street is synonymous with wholesale theft.  I want it to regain its place as a pillar of our community.

I want it to accurately allocate capital, rein in excessive risk, and protect and advise those who cannot comprehend – understandably, I hasten to add – the enormous complexity and responsibility of managing your finances not just for you but for your heirs.

As silly as that all sounds, I hope these kids go into this job with the same attitude.  Almost all I’ve taught over my near 15 years of training were great kids.

But the trick is to stay good when the devil tempts us.

And my God does the devil tempt you!

I’ll keep you posted throughout the next two months on how it all goes.

Out of the mouths of babes… maybe the kids will rekindle my faith.

Because I’m pretty sure they’re not going to make anywhere near the money their moms and dads made as bankers.  Those days were over even before I left.

Until tomorrow, have a great day!

All the best,

Sean

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