So. This is funny. I actually work at Goldman, work in the system he talks about, and have been doing so for 5 years. You can get numbed by the experience of working here, but you don't have to be. I've become friendly with some of the best hackers I know, and for us, finance always takes a backseat to writing amazing code. Sometimes we succeed. Sometimes we fail, but we try to never say, "Meh. Good enough."
Wall Street is like any other business. Don't over-glorify working for Google and not Goldman: tech companies are in it for money too; so are startups. At least on Wall Street people tell you they're doing it for the money. It's easier to detach that way and remember that what you're doing is just a job.
That's cool. I'm surprised you say that finance always takes a backseat to writing amazing code, though.
In my experience, traders don't want cool new snazzy Google Wave. They want Excel. They don't want cool new Web 2.0 streaming quotes/risk calculations/portfolio calculations, they want VBA macros in Excel.
Even if you are working in actual trading/strategy area and write up your backtester with Python. They want your P/L in Excel. To implement the strategy though, they want it in C++.
Want to get into details as to what kind of "snazzy technology" or "amazing code" you guys are involved in? You don't have to give me corporate espionage secrets, just vague general topic.
Is it a flashy OMS/EMS/reporting/risk/quotes front-end? What kind of technical problems do you guys encounter? In terms of concurrency, security, message processing, bandwidth/latency? What kind of business problems do you guys encounter? In terms of smart-routing, risk calculations and compliance. Just curious what programmers in GS are generally involved in.
Yes. Old = good. New = bad. Tech in finance is about efficiency. Everything else does not matter. The GUIs are usually atrocious. Traders don't care, as long as they make money. Excel is abused beyond belief and there is a whole cottage industry around Excel plug-ins. A good VBA programmer can command a salary as large as a C++ hot-shot. Sad.
I also work at a bank, but don't like people who think it's just a job. They make my life more difficult and make it harder for the bank to make money.
Our department doesn't hire people like that.
(Also, pretty much nothing in the article applies to most banks these days. Sure, someone may have a burger-eating contest from time to time, but it's not like it's work-sanctioned. It's just a bunch of dudes with too much testosterone. There are bonuses, but it's silly to count on them for anything. Ask for the amount of money you want as your base pay -- they'll probably give it to you. Then enjoy the 20% or whatever as a fun extra.)
It's very much not silly to count on the bonuses. 20% extra? Try 100-300% or more in most of the positions on the trading floor. As you rise in the ranks, it's much, much more. The bonus at every level above Analyst is easily larger than the base, which, as Antonio says, is generally not that impressive. This is true at every big bank on Wall St.
Among my friends, we represented every large investment bank in NYC and many of the smaller hedge funds, so I'm sure it's representative.
Not sure how compensation is in the IT depts. at those banks, though, if that's what you're talking about. IT is probably not representative of why people go to work on Wall St, though, since it's viewed as a cost center in most banks, and it's not what Antonio is talking about in the post.
I worked in IT at GS for a couple years. 15-20% was about right for bonuses there, on average. In 2006, I got almost a 50% bonus, but that was an exceptionally good year.
You can have the attitude of "just a job" and still be a valuable asset to a company. To some people, work is "just work" and sometimes the "just a job" mentality is an extension of that.
If you ask me, its called life balance. It's just a job. It's just school. It's just money. That's just life.
You don't have to worry about them over-glorifying Google either. The general attitude on this site is that you're either working on your own startup (by far the best option), working for an early-stage startup (ok, but still second best, since its not your own thing), or you're basically wasting your time (working for "the man").
Again, everybody likes to justify their own decisions.
And the more they secretly suspect the other possibility might actually be better, the more they feel the need to poop on it. I don't feel the need to loudly proclaim how much it must suck to be a garbageman, but I do feel the need to loudly proclaim that I sure am glad I'm not earning six hundred thousand dollars a year at a big hedge fund.
Fair enough. I wouldn't mind except reading it so often gives me anxiety about my decisions. This site can be like Cosmo for nerds... I can't stop reading it, but its not uncommon that I walk away feeling 10 pounds fatter.
"Wall Street is like any other business. Don't over-glorify working for Google and not Goldman: tech companies are in it for money too; so are startups. At least on Wall Street people tell you they're doing it for the money. It's easier to detach that way and remember that what you're doing is just a job."
You may try to justify what you do that way, but it's just cognitive dissonance. "Wall street people" tend to make money in rent seeking ways, destroying or merely transferring real value. At least at Google you could be creating value, growing the economy in sustainable ways, and increasing real GDP.
My understanding is GS is company that wants to "beat the market" meaning someone else in the market is loosing. And Google's goal is to make the worlds information available to everyone and show them ads. Google seems more like a everyone wins company.
The following is from a talk at the New York Public Library.
ERIC SCHMIDT: But in fairness to those people[finance people], had they come to Silicon Valley in 1999 they would have received a far greater payoff during our little bubble. So who are we to criticize the Wall Street folks for having their bubble? It was just a bigger bubble.
WALTER ISAACSON: Do you think though that Google creates something that’s more real than somebody on Wall Street creating a financial instrument?
ERIC SCHMIDT: To be honest, not really. When I walked into the company, I said, “People pay you for this thing, these little ads?”
Eh, I don't see how candidness and an eagerness to question his own model by Schmidt changes the value proposition at all. Almost all of the time, an ad click is creating value (or a fractional expected value) where there wasn't some before, unless you have a 0% conversion rate.
Meanwhile, a huge chunk of Goldman's activity as I understand it is simply taking the "dumb money" on Wall St. Nibbling the edges, taking pieces of trades by less sophisticated investors. That's not necessarily value creation, and much of the time it can be straight extraction from the rest of the economy.
Not that ads won't get there of course - they're well on their way already with various exchanges. But presently, they have to actually be creating other economic value via conversions in order to exist.
Everyone wants to "beat the market." For every dollar McDonalds gets, Burger King is not. For every dollar Microsoft gets, Apple is not. There are no group hugs unless you work for a non-profit (and even then, for every dollar your non-profit gets, some other, equally deserving non-profit is not).
This sounds like a very zero-sum model. Do you know, that dollars don't get destroyed by spending them? (And that this doesn't even matter, because it's wealth creation that matters (supply) and not demand?)
Certainly, but assuming it can't be zero-sum leads to absurdity as well.
What about high frequency trading? Most of it is zero sum, first one to arb the difference wins. The economy doesn't derive any higher value from it if the difference would've been corrected within a couple seconds (or a few minutes) anyways. It's not the same as buying a burger.
The value investor gets an abstraction over the ocean of algos and traders trying to out-game each other. The abstraction is that there's a market price and a book depth. The deeper the book, the more stock the value investor can move around without being gimped by increasingly undesirable prices. The more traders, the deeper the book.
Finance pundits worry about the implications of traders gaming each other. Let them game each other. The value investor sees a market price backed by millions of dollars of offers within pennies of each other. Should his trades move the market, much more liquidity will spring to life. The value investor feels fine.
Hm, I think we're talking past each other although I'd like to hear more exposition on your comment because it doesn't really make sense to me.
I was talking more from the perspective of someone who's generating cash. Burger King pays suppliers for meat and whatever (or raises cows in their own operation) and you pay them for a burger. You get a burger, they get cash, pay people, value creation all around.
In Wall St, on the other hand, theoretically we should see value creation through efficient routing of capital to the right places and the people who make that happen are rewarded for their effort. In practice, I feel, it's often a video game where they manage to nibble a billion little pieces away from the value-based investors who are actually performing an economic function. So in some scenarios, they're a net drain, rather than part of a robust economy. That's where my zero-sum analogy came in. YMMV.
Yes, the difference between theory and practice can be startling in finance. But I am more wary about fleecing the customer than about counter parties in a high frequency trade. [1] And of course there's also always making money by rent-seeking behaviour. E.g. the implicit subsidy banks get in lower borrowing costs on the market once they are to big to fail.
[1] Mutual fund managers or hedge funds who take a lot of fees are probably quite a drain on your their clients returns.
> For every dollar McDonalds gets, Burger King is not. For every dollar Microsoft gets, Apple is not.
I'm pretty sure that's not the case. Apple and Burger King would probably never be what they are today without MSFT or Mac. And perhaps vise versa also.
for every dollar of ads google sells, that's a dollar their competitors don't get. they are as cut throat as anybody else, they just do a better job of making computer people feel good about it. ask their sales department if they're an "everyone wins" company.
If G-mail didn't exist I would use yahoo. G-mail is much better for me though. I win and Google wins. Yahoo looses. If GS gets in front of Citi on a trade by 2 seconds GS wins and Citi looses, no one else is involved. Unless those two seconds of "efficiency" help someone?
totally agree, its just a job. even if you work with the most hacker-friendly company, you'll eventually rant out the same way someday.
Maybe the post should be "Founding a startup with zero revenue is better than a day job" (oh thats a cliche!)
Really? Quality, not quantity. An hour with my wife is more meaningful to me than half my day at work. No job will make up for that, unless I'm changing the world. So yes. It's just a job. Your (not you specifically, but anyone) startup is just a job.
So because your wife give you a 100 happiness factor(tm), you are now indifferent when choosing between jobs that give you a 20 or 80 happiness factor?
Or are you saying that your meaningfulness bar is so high that no job can possibly clear it? What if you and your wife worked together?
For the most part, we get to choose our lives. I reject the idea that time spent working can't be meaningful.
I'm just saying that - to me - a job is just a means to some end. That end (for me) is providing for my family adequately. That I happen to enjoy what I do is an extra bonus. I'm just saying not to lose sight of why we do what we do. If you start placing too much importance on a job, you let your job define you. IMHO, it's much more empowering to remember that your job is just a tool like any other.
Agreed. My job is a means to an end, not a personal definition. I'm a husband and father first. I love the job I have now because it's just a job. I do interesting programming. I work 40, zero overtime. My time is flexible, I can come or go as I please as long as I put in the time. I can take a vacation day with zero notice.
I purposefully got a job that really is "just" a job so I could not only put food on the table but be there to enjoy it as well.
Wall Street is like any other business. Don't over-glorify working for Google and not Goldman: tech companies are in it for money too; so are startups. At least on Wall Street people tell you they're doing it for the money. It's easier to detach that way and remember that what you're doing is just a job.