<p>
</p>
<p>I think you are missing Awped’s point. He’s not saying traders aren’t important, just that the work they do (such as providing liquidity) is pretty boring and arguably lacking in meaning. I suppose if I looked back on my career and reflected on what I had accomplished, and all I could say was I provided liquidity to markets or made money for my firm then yeah…I might have to agree it’s pretty unsubstantial</p>
<p>FYI: people in S&T and hedge funds spend most of their time doing research and building models that are far more mathematically complex than the powerpoint, accounting and data entry typically done in most IBD/M&A groups. There is a reason far more Phds in economics/math/physics/nuclear engineering work in S&T and HFs than in IBD or M&A.</p>
<p>Also, hardly any deals between two individual companies have macroeconomic implications, since the most exciting thing that happens is a merger between two large firms, or a takeover. A few companies may see some movement in their stock price… and life goes on. M&A is an inherently small scale, micro level phenomenon. S&T (FICC, not necessarily equities) and global macro funds model actual macroeconomic developments, on a global scale, constantly. Currencies and commodities are as macro as it gets.</p>
<p>I’m not saying one is better than the other, each person has their preferences. But to say figuring out the accounting details of two firms that are going to become one, is more ‘macro’ than national economies, currencies and resource supplies would be a pretty tough position to defend. S&T is quite client driven as well I should add. Hedge funds a bit less so, but still it’s client money at the end of the day.</p>
<p>aston, how can traders have the most important job in the US economy yet still have their work be characterized as “meaningless”?</p>
<p>BTW, to everybody out there–IB work is far too glamorized. As an analyst, you will never be in charge of meeting Fortune 500 CEO’s nor will you ever take a meaningful international trip on behalf of the firm. You will, however, be stuck in a cubicle and asked to do what amounts to data entry and mouse clicking in Excel.</p>
<p>The job of a trader is much more interesting. You’ll be responsible for monitoring global news just as it is released, and based on imperfect information and under a great deal of uncertainty, you have to reach a conclusion on such news within seconds or have the market eat you alive. The process is the same but that can be said for anybody (ex. all you’re doing as a teacher is standing up in a class and speaking) but I assure you, no two days are alike. Just enter a trading floor and compare the open work environment consisting of constant excitement and yelling to the cramped, quiet workplaces of M&A and you’ll pick up on what I mean.</p>
<p>It’s all about personality… are you a poker player? It’s a simple (perhaps tired) analogy, but they have a lot of similarities. One of the traders I spoke to once said, “It’s like playing a video game all day.” </p>
<p>Obviously its not perfect, but if you think about it, it is a game in many ways. Look at it this way, your competition is a bunch of very intelligent people with great educations, who are very well informed and supported by good research teams. It’s like playing poker with Phil Ivey, Daniel Negreanu, etc. and if you are successful, beating them. There is satisfaction in that for a lot of people.</p>
<p>
Important and meaningful aren’t necessarily the same thing. For instance, the people who wash dishes at my school’s cafeteria are vital to the functioning of our dining hall system, but their work is hardly meaningful.</p>
<p>I guess you could measure how meaningful a job is by the impact you make on your environment and the people around you. To that extent, I would say that yes, teaching is more meaningful than trading. </p>
<p>Nobody is glorifying the life of an analyst sitting in a cubicle, but it’s not like you’re going to be “eaten alive” by the market doing flow trading your first year.</p>
<p>Either way, if you want to be in trading or mergers and acquisitions? What will matter is if you are, in fact, good at it. Trading is very tough and it is tough to be good at it over the long term, and the P&L numbers are going to determine whether or not you continue in it, anyway. M&A, the more people you know, the better you are at building relationships, and the wealthier and better connections you have to begin with, this is going to determine where you start and how you procede. That you have to be fast with the numbers in both of these things goes without saying, but in M&A you NEED to be good with people and in Trading you really need to not care about people at all. Just for a different perspective.</p>
<p>Awesome replies. =) Based on the above conversation I think trading really is right for me. I’m too young to worry about giving back to society right now, and I don’t think I have the luxury to choose between careers and settle for the most meaningful one. Perhaps later in life I can worry about all that, which leads me to my next topic. Exit opportunities. Is it true that if I become a trader all I can do is trading / join a Hedge fund? I don’t anticipate quitting trading, but if I’m fired, or if I absolutely suck at trading, what backup options do I have?</p>
<p>It’s pretty true, you have a very intense but limited skillset in that it is pretty much only transferable to other market positions. If you want to go into corporate finance, for example, you’d likely have to get an MBA for the transition.</p>
<p>That’s not bad. But an MBA doesn’t seem a bad trade, if I get to do a career I really want to do (as compared to one which I really don’t [IBD]).</p>
<p>I agree with C-Revs. Most trading roles give you a highly specialized skillset, especially on the fixed-income side. You may become an expert on European power swaptions, for example, but will have little to no exposure to other securities. If you’re on a macro desk or on the equities side, you’ll get more broader exposure, but it’s still very hard to transition directly to the corp finance side. But of course, that’s what getting an MBA is for. Once you’re in b-school, anything’s fair game. The only thing you lock yourself out of is PE, which as an industry is notoriously anal about hiring people who have done PE pre-MBA, which in turn is difficult to break into without doing IBD.</p>
<p>
That’s another thing you should be aware of. It’s hard to suck at investment banking if you put enough effort into it, but you can definitely suck as a trader even if you work really hard. The people who make millions trading are usually extremely smart or have a very good instinct for the market (often both). There are definitely traders that make a lot more than bankers, especially at the higher levels, but the odds of you being one of them is stacked against you.</p>
<p>Trading is also much more scalable than banking, which means a bank would rather hire one good trader and give him a large portfolio than hire half a dozen mediocre traders.</p>