Morning Coffee: What no one tells you about trading careers. The types of people who work for big banks
Most traders pursued that career path with visions of making it rich completely unaware of the risks involved in that line of work.
Sean McLaughlin, a proprietary trader and a Chicago Board of Trade member who specialized in equities, commodity futures and options for close to two decades and most recently worked as the director of community for financial communications platform StockTwits, tells a cautionary tale.
After two decades of trading, McLaughlin has realized that his resume “makes a dry desert bed appear fertile,” he has “little or no transferable skills that ‘check the right boxes’ for recruiters and machines that scan your online job application.” He regrets spending too little time networking because he was solely focused on building his trading account.
Unable to make enough money trading independently or find an in-house role, McLaughlin finds himself out of money and desperately needing to find some income to support his family. Now that McLaughlin’s savings are gone, he feels “alone…. inadequate…. lost. Scared. Anxious. Depressed. In debt. Unhealthy. Unloved. Afraid of losing my family.”
He writes in a Medium blog post: “The crushing weight of a lifetime of poor financial and career decisions seems to be collapsing around me all at once. I’ve prided myself on my stoic ability to quietly and privately shoulder my struggles — shielding my friends and my family from the maniacal ups and downs of my trading career. But the burdens are suddenly and swiftly becoming unmanageable.”
In seven months of job hunting, McLaughlin has landed only one face-to-face interview, which he said went well, but they decided to hire someone else. He's seeking help from a therapist and says that, "if you’re an aspiring trader and you’re focused on managing risks and not blowing yourself up as you learn — that’s very good. But it’s not enough. You need to also consider the opportunity costs of spending your time trying to make it in this profession against time better spent building a career elsewhere. I wish I had given this some thought in 1997, not 2017.”
Mamas, don’t let your babies grow up to be … traders.
Separately, Bloomberg has got some interesting figures on ethnic diversity across major banks. Guess what? They show that most banks employ mostly white people! Especially at the top. Lower down the ranks, however, Asians are popular – especially at places like Goldman Sachs and J.P. Morgan (there are also a lot of Hispanics at Citi, but it's not clear whether this is in the commercial bank). Notably, there are very few black leaders in banks, despite years of diversity programs.
Evercore Partners CEO Ralph Schlosstein said his goal is to make his investment bank the “most elite” independent advisory firm in the world, so he declines to hire B+ talent, biding his time until a top-tier candidate comes along. (Bloomberg)
Lazard, Evercore and Moelis – all of which offer a varying mix of consigliere services to countries as well as capital-structure, capital-markets and restructuring advice to companies – each exceeded analysts’ estimates by wider margins than their bulge-bracket peers. (New York Times)
Deutsche Bank says there’s “lower client activity resulting from low volatility in the market.” (Business Insider)
Eleven members of Deutsche Bank's management board waived bonuses of €38.4m ($44.8m) because that the kind of guys they are. (Business Insider)
Credit Suisse hired the ex-CEO of Instinet, Anthony Abenante, to its equities trading business from private equity firm Aquiline Capital Partners. (Business Insider)
Banks planning to shift parts of their operations from London to other European cities because of Brexit will have to increase salaries because of a skills shortage. (Bloomberg)
Treasury Secretary Steven Mnuchin said that the Trump administration is working with bank regulators to roll back post-crisis rules such as the Volcker Rule and the system of determining which financial firms are considered “too big to fail.” (WSJ)
Goldman Sachs is launching a new digital lending platform and partnering with Fidelity. (Reuters)
Apollo Global Management has raised $24.6bn to set the record for the largest private equity fund ever. (Reuters)
Millennium Capital Management’s annual pre-tax profit declined 34%, from £58.9m ($77m) in 2015 to £39.1m ($51m) in 2016 – taxes and partners’ compensation ate up all but £5m ($6.6m) of that. (HFMWeek)
You won't make big money as an AI developer. (The Register)
You could always work for the British Royal Family. (BBC)
Photo credit: Rogue Trader (1999), directed by James Dearden, starring Ewan McGregor as Nick Leeson, produced by Granada Film Productions and Newmarket Capital Group