Stupid Interviewers and Stupid Interviewees

I hate seeing stupid interviewers as much as I hate seeing stupid interviewees. Stupid interviewers turn away excellent candidates and ask completely irrelevant questions. Stupid interviewees just waste my time. At least the latter doesn't hurt my firm.



You can tell an interviewer is stupid if he obviously has some canned questions to ask you. The obvious ones are that stupid light-bulb problem (brain-teaser having to do with figuring out how three light bulbs relate to three light switches in another room, it's a stupid problem because you either get it or you don't and you usually get very little about how they think from the problem) or "how do you value a call option?" A good interviewer will focus on your resume and be able to pick out details that seem interesting that they can quiz you about. When it comes down to it, an interviewer for a junior position should be looking for aptitude not knowledge or experience. We should be looking for the smartest people who can pick the most up in the shortest period of time, not the kid who happened to have an internship last year. Some of the best people I've met have had no background in finance (art major anyone?) but rocked the brain teasers and critical thinking problems. Granted you should still be able to do some good math, even if you're an art history major. No dice if you're mathematically illiterate. Most of the moron I see interviewing are just looking for finance knowledge. Those guys are clearly going to get mediocre talent who already had internships or studied finance in school. Not necessarily the best and the brightest.



I'll do another post one day for interviewing tips, but for the most part you can't help a stupid interviewee. It's like asking a snail to contemplate calculus.

Resume Pet Peeves

There are some really stupid things people put on resumes. I know some of the things I'll list here are sometime touted by career counselors. They're stupid. Here's the list:

1) Objectives. Your objective with your resume is to land the specific job for which the resume holder is hiring. Nothing else. Stop putting that touchy feely shit on your resume. It just makes it more generic. Technically your resume should be changed for each job you apply. That way it's customized for the role. Objectives are stupid. There is only one objective the recruiter cares about.

2) High school. Unless you went to some elite prep school, no one care what high school you went to or what you achieved in high school. Elite prep schools are those big shot ones in NYC and the boarding schools famous for churning out preppies (Phillips Andover Academy and Choate Rosemary Hall come to mind).

3) Hobbies. While hobbies make for great conversation fodder when I'm not interested in the candidate any more, they certainly won't get you hired. Maybe they'll get you a date (if you're female, hot and have a cool hobby). If you're looking for people to join you in your hobby, go post a personal on yahoo. If you're looking for a job, don't waste precious real estate.

4) 14 point font / white space. As mentioned above, the real estate on your resume is precious. It's probably confined to one page, maybe two. Don't waste it with huge font, superfluous white space (both on the margins and in between lines). It should look nice and legible, but it should not have lots of white space like the menu to a nice french restaurant.

5) Stupid mistakes. Don't be a moron. If you can't get a fucking resume right, why would I trust you with my money?

It also annoys me when the GPA isn't listed (probably means it was low). It also annoys me when relevant classwork is listed, but I don't mind that as much (it instantly gives me something to grill you on). Note that everything on your resume needs to be known cold. If I were your interviewer, I'd take specifics on your resume and delve deep into the details. If you can't explain it thoroughly then you're toast. "I forgot because it was a long time ago" is a lame idiot's excuse. I had a guy tell me he couldn't do some chemistry problem I gave him because it was over two years ago. It was a lot longer than that for me, bud, and I haven't touched chemistry since. To me that says you didn't learn it completely the first time. You're out.

Resume Drop!

It's that time of year again when eager youngsters are dropping their resumes into these anonymous black-holes (actually, I think most are posting their resumes online, but everyone knows these might as well be black-holes too). Then people like me get a mass of papers (or more likely a giant pdf file) to sort through and pick out who sucks and who doesn't. I might be a bit late in this because I assume most people have already dropped their resumes if I'm already receiving them, but perhaps it will help next time.

First hint, it's more about who sucks than who's good. Don't spell words incorrectly. Don't forget pieces of information (e-mail address, phone number, address, etc). Don't have shitty formatting of your resume. Don't have too much white-space. Don't have it be more than one page (unless you hold a PhD or you've worked for several years full-time--hell, I've seen lots of good PhD and experienced folks with great one-page resumes too).

Second hint, while experience is important, a few summers is going to mean nothing a year from now. Having an internship doesn't necessarily mean you are the most gifted in the crowd. It does, however, often mean that the person had the drive to land an internship last year. That drive matters. So even if you didn't have an internship, what did you do last summer? Did you do something that showed drive, determination and a passion for something? Or did you take the summer to be a beach-bum?

Third hint, don't close any doors. It doesn't matter whether you want to be in private wealth, trading, banking, a big firm or a small firm. It doesn't hurt to apply and act as if you really want the job. A lot of people will disagree with this because they would rather you not waste their time, but from your perspective it's every man (or woman) for himself. If you get a job you don't want, great. Now you have the option (and satisfaction) of turning them down. The worst situation to be in is the unemployed schmuck after graduation. You might as well be doing something and gaining some experience as you work toward that dream job (and having cash makes life a lot nicer too).

Good luck.

Not High School

It often annoys me when new analysts and associates are still at the psychological level of a high-school kid. Look kiddies, high school ended four or more years ago. Get over it. You're no longer in the "cool crowd" and it's no longer cool to be hazing the nerds. I see this most commonly from the greased up European guys and "high maintenance" girls (no offense to anyone who believes they fall into one of those two stereotypes). The sad thing is it's most commonly those nerds who get ahead these days. Wouldn't you want to be friends rather than enemies with the guy who's going to be climbing that corporate ladder fastest? I dunno, I think I would.

Seriously though, analyst training and associate training can be stressful enough with out going back to the cliques that develop in high school. Most people get over themselves during college, I think, but a select few groups still feel the need to create the hostile environment that comes with the cliques. There's nothing wrong with finding a group of friends (yes, friends tend to be of similar demeanor and have similar interests), but the silly high school style antics need to be extinguished. I know when I have a new analyst that seems to have not gotten over the high school mentality I tick him down one notch in my mind. I'm certainly not going to have someone that immateur promoted closer to managing people. That would be a disaster.

Learn the Lingo - SIV what?

Alright so the recent crisis is all about SIVs, ABCP and the like. Let's talk about this for a bit.

SIV - Structured Investment Vehicle. So most people don't really understand how these work (I didn't really know how they worked until I did some research a couple months ago when this fiasco started to come up). SIVs are similar to conduits or SPVs used for other structured products like MBS and CDOs. They are a legal entity that holds a bunch of securities. SIVs in particular are like mini-banks. They borrow short term and lend long term and make money off the spread--just like a bank. Usually SIVs stick to ABS and high grade bonds, mostly ABS.

ABS - Asset Backed Securities. These are securities created by pooling things like car loans, credit cards, student loans, airplane loans, etc. Generally they are tranched up to various credit ratings. Most of it is pretty high-grade since they are backed by an actual asset that could be sold off if necessary.

CP - Commercial Paper. Commercial paper refers to the world of super-short term borrowing.
Companies often issue commercial paper as a cheap way to borrow very short term. This financing is often used a bridge financing to keep their cash-flow timing balanced (say you receive money en-masse in the winter, but tend to have to borrow extra during the summer because your working cashflow isn't as good in teh summer).

ABCP - Asset Backed Commercial Paper. ABCP usually refers to the commercial paper issued by an SIV. They are considered asset backed because the SIV acts as a intermediary taking cashflows from the ABS and turning it into shorter term lending via the CP market. If anything should happen, the SIV could theoretically liquidate the ABS and pay off its debts.

Money Markets - The CP market is often considered the money market. You know those money market savings accounts at banks? Yea, they invest in CP. There are also treasury money market accounts which invest in treasury bills as opposed to CP. CP tends to yield more. Generally bills and CP are considered minimal risk, but as our current crisis shows CP is not risk free.

So hopefully this helps clear up why our financial world is in chaos. First off, if SIVs really started to go illiquid, billions of dollars of money market holders would feel the pain. That's consumers with money market accounts earning negative savings. That could be an issue. Next if the ABCP market dries up, so goes the ABS market as well. Since SIVs provide the liquidity needed in the market to pull these ABS off bank/dealer balance sheets and into the general public, this market drying up would stop ABS issuance to a large extent. That could be an issue to all sorts of consumers who need to take out credit in the form of car loans, student loans, credit cards, etc. Now you see why this SIV thing can have such an impact on our consumer.

My Apologies

I just checked the e-mail address attached to this blog and I have something of a backlog it seems. I'd had a hectic couple of months and had all but forgotten about it. I've decided to take a few minutes every morning to reply to e-mails and post here, so I'll eventually get to your e-mail. Hopefully I'll be posting more regularly as well.

Cheers,
QT

What's the Difference Between a Bond and a Bond Trader?

Old joke. What's the difference between a bond and a bond trader? The bond matures.

Last night I was once again reminded of this old joke and how oddly true it seems to be. Our industry keeps people young. Where in other industries guys with families would go home to their family every night, people in our industry go out well in to their 40s (actually I think one of the guys who was out drinking with us last night was at least 50). One of them went home once and attended his daughter's softball game and then came out to drink. He apparently kept his daughter's backpack in his car though, so she kept calling to complain she couldn't do her homework. I thought that was entertaining.

If you're planning a night out with the co-workers, don't be afraid to ask some of the older guys too. They may turn you down, but they'll appreciate the invite. There's a pretty good chance they'll come out though, which is fun in itself (seeing your boss piss drunk can be pretty amusing).

Friends and Allies

Wall Street is a very very small world. Yesterday I met the head traders for two desks at one of the i-banks (I'm a client). Turns out one of them was my last boss's good friend as they had worked together on a swaps desk for over five years. They worked out together and generally created havoc together in NYC. Not only that, but they were the same analyst class as my current sales coverage at another bank. Yes, everyone knows everyone. And now they're all in high powered positions.

This happens especially frequently at the top six-seven banks (DB, JPM, GS, CS, BoA, Citi, MS). The exchange of talent between these banks (except maybe GS) is rapid and often occurs due to lots of friends moving together. It's pretty scary if you think about it. Basically, the friends you make now will effect your career growth in the future. That is unless you're the top dog, in which case the friends you make will probably end up much in your debt. Even in that case though, it's important to be friends with the best people so that you can take them with you. Being a former quant (and nerd and geek), I would normally be the last person to advocate all this touchy feely shit, but knowing the right people can mean the difference between being a VP for ten years and making MD before 30. Of course you still need to have the pnl, sales credits, etc, but it doesn't hurt to also have someone in a high place pulling for you.

_____-Size Envy

One thing that never helps anyone is envy. Envying your buddy's promotions and bonus-size never helped anyone. In fact the resentment that usually builds usually detracts from performance. Now there's nothing wrong with some friendly (or unfriendly) competition. You should certainly be looking to compete with everyone you know to make the most, do the most, be the best. Just don't let it degenerate to stupid jealousy. What you should be doing is look at what they might have done right that you did not. Are they taking good risk? Did they do better in their classes/training? Are they making the right connections/friends? Life's not necessarily fair (they may have family connections, they may just be smarter and better looking, who knows), but that doesn't prevent you from making the best of your situation. Lever up on what you have and take your shot at catching up and surpassing them.

This extends to firm-size envy, reputation envy, title envy, stack-size envy (for the poker players), and the more vulgar boob-size envy (girls), dick-size envy (guys), height envy (short people). None of this is really productive. Jealousy is stupid, as is gloating. Use your facilities to the best of your ability. Keep your wins quiet, but take the recognition you deserve. And, perhaps more than anything, count your blessings. You've got more going for you than you probably think.

Keep your head high and your view positive. The confidence in itself will help you along.

Step Up or Step Behind

One thing I see consistently in top performers in the industry is the desire and ability to grab additional responsiblity. A lot of people shed responsibility like a nympho sheds her skirt. Sooner or later upper management realizes if you're adding value to the firm and how you're doing it. If they look at your profile and realize that you don't actually have any real responsibilities, you'll be the first to go in an industry downturn. Those who do well grab all sorts of odd responsibilities (from organizing club/recreational events, to recruiting and training new employees, to managing others' work when they're on vacation) eventually get noticed as the ones holding the train together and get promoted.


There are two reasons why you should be taking as much responsibility as you can. The first reason, as outlined above, works as insurance against being fired and as a way to stand out. The second reason is that you will learn more and gain new skills by taking on additional responsibilities. You can learn management skills, presentation skills, even risk management skills from various random jobs you may take on to better the firm. Those skills will eventually come in handy, no matter how you may have acquired them.

That being said, this post was labeled "step up or step behind" for a reason. It is unreasonable to take ALL responsibilty for everything. Eventually this labels you as a nuisance and/or a micro-manager. The key is to take responsibility for new things that add new value to the firm and teach you new skills. Then you have to learn to give responsibilities to the next eligible character. Eventually you will be viewed as a leader who takes on new tasks and teaches/delagates other tasks to junior people. Being labeled as a leader, teacher and mentor will take you far. Part of being a leader is being able to train people to replace you.

Weaker folks might be trying to horde their work to themselves as a way to guard their jobs, but this approach is outdated. In the new rough-and-tumble world of finance it's up or out. If you're not being promoted, you're being fired. Keep yourself moving up by taking on the next job and making sure others know how to take over your old job. One of my mottos I tell people who work for me is "if I'm not teaching you to take my job, then I'm failing at my job." Implied is "if I'm not learning to take my superior's job, then I'm failing at my job."

Weekends

The most interesting thing about the weekend is the options it allows people. The chunk of free time available to individuals and how they use it really distinguishes one from another. At work everyone may seem equally determined and intelligible, but how they choose to spend their free time separates people into distinct individuals.

Many of the most successful people I know live breathe and die their work. It envelopes every aspect of their life. On weekends they inevitably end up in the office to do work of some sort. Usually they go voluntarily to fix something up to be better/faster/smarter on Monday. Top traders have their second workstation set up at home so they can trade from home. This makes it even easier for those folks to continue to improve their work at home. I'm afraid I tend to separate most i-bankers out of this category because they are forced to work weekends, as opposed to doing it out of the desire to make their models more robust (I'm sure there are a few bankers out there that research better ways to model and value companies, but I just haven't met many).

This drive is what puts people ahead--taking their own time to gain more knowledge, make models better, optimize their machines. Often the same people start looking at the rest of their life in a similar fashion. Every interaction is a deal, a structure, a trade. Every person is a counterparty.

Is it worth it? Many bankers, traders, salespeople become drones at work and try to live their life outside work separately. Others allow finance to consume them and start thinking of everything as if it were a transaction. Which has become more consumed by their occupation?

Where are you going to fall? Are you a two year "see what it's like" person? Are you a life-long financier? Are you just doing it for the money and fund your outside lifestyle? Whatever you may be, wear your title with pride and do not judge others. Two-year trials are made fun of as "quitters" or "weak." Lifers are known as "losers" or "souless." Those doing it for the money only are known as "sellouts" or "whores."

None of these motives for being in finance are "right' or "wrong" in themselves. Really every occupation has their array of motives. Clearly I've made my choice. I spent my free time writing, reading and thinking about trading. My passion is the markets and my personality is competitive. I know this makes me happy. I know plenty of people who aren't happy in their current role and have plenty of choices that would make them happier. Don't let finance be your default. Make it a choice.

Making the Leap

So there was a question about my new job and what prompted me to move. Well, it's actually not as different as it sounds. I still trade prop, primarily, but I have a few other functions as well. I do a hedging function for the bank on a global portfolio basis. So if the firm as a whole seems to have certain risks on, my boss has the mandate to hedge these large risks. We do quite a bit of volume in this sense, as at times the risks skew one direction in many different areas. These hedges tend not to be too frequent, so we trade prop in our "free" time (i.e. when we're not creating new analytics to view the global portfolio risk).

There wasn't much thought involved in this. I'm still at the same firm and still trading prop. I get a cooler title and more pay. Plus a big name in the firm called me personally to put me in the role. No-brainer, they say.

So what should you think of when making a change? Here are some bullet points:

Growth
* Does the role have more responsibility?
* Will it give me more firm-wide visibility?
* Will the job put me in a position to succeed?
* Is there growth potential from the new post?
* Who will mentor me? To whom will I be reporting?

Finances
* Does the role put me in a position to get paid now?
* Does the role put me in position to get paid a lot more in the future?

Role
* Will the work be engaging to me?
* Have I become redundant or stale in my current role?
* Will I have fun?
* Are the people in the group the types with whom I want to work?
* Will I be happy?

Absolutely the most important are the role being engaging, the role giving growth prospects, the position being a role in which you are set up to succeed, and the prospects of high pay in the near future. Don't be blinded by the prospects of an immediate bump in pay or a title. The important pieces are being able to grow into someone important in the firm and on the street. Pay comes to anyone who survives long enough on the street. Yes, pay comes quicker to some, but try to look at your lifelong earnings not just your next two years. Being a trader, it's sometimes hard for me to take the long view too, but it's definitely paid off.