bnashier
June 6th, 2003, 09:31 AM
I would like to share some of my experience about financial markets hoping that it might be of use to some of you who plan to pursue careers in the financial world. Let me start with a brief introduction about myself.
I was born in a small village in district Sonepat, Haryana. Now I maintain a residence in Kurukshetra (near the University Campus); and I live in Tallahassee, the capital of Florida, U.S.A. I received my early education from C.R.Z. High School and C.R.A College (popularly known as Jat School and Jat College) Sonepat. Mathematics was my first love and it still is. I received my B.Sc.(Hons.) and M.Sc.(Hons.) from the Center for Advanced Study in Mathematics at Panjab University, Chandigarh. After spending a year at the Tata Institute of Fundamental Research (TIFR), Bombay, I moved to Canada where I earned my Ph.D. in Algebra, Number Theory and Geometry from Queen’s University, Kingston. From Canada I moved to US to become a university professor. Sometimes some of my friends and colleagues used to ask me if there are ‘untouchables’ in India. Jokingly, my answer used to be, “I don’t know about untouchables in India, but I do see many unteachables in my classes here”. Well, that joke grew on me and I decided to do something more challenging with mathematics. Thus I left my tenured professorship at Florida State University in 1997 to pursue a career in financial markets. I wanted to become an independent trader.
I knew nothing about the markets and Wall Street operations. The academic world and the financial world are world-apart. I became my own teacher and started studying the operations of firms like Merrill Lynch, Goldman Sachs, Salomon Smith Barney, CSFB, Lehman Brothers, Morgan Stanley etc. on Wall Street. Thanks to the internet that it was possible to acquire knowledge. I discovered, among other facts, that what these firms say and what they mean are rarely the same thing, and that they are totally unscrupulous in their operations and that made me understand the true meaning of Capitalism. For subsequent reference, I shall call the firms on Wall Street as the Group.
In 1995 the US market had lost its connection with the economy. The internet trading and the infusion of technology into the markets made people think differently than they used to think about investing. Corporate fundamentals became a story of the past. People became traders rather than investors. Everybody wanted to become rich quickly. People threw money in stocks hoping that someone will bail them out at a higher price; and it was happening. Companies with no business models rose to hundreds of BILLIONS in market value. ALL paper gains. People were hungry for good stories; and stories were told. Many thousands of dot com companies were born. IT experts were hired from all over the world. Pony-tailed kids were becoming millionaires simply because they added dot com after their name. The Group was playing a splendid game in fooling public. History shows that such things have happened before in US - in the 1920's and in the 1970's. History was repeating. Corporate executives became busy cooking books and showing profits/sales that were not there. Savvy players saw the disaster ahead. The bubble became too heavy to stay afloat. It started leaking in Spring 2000. It finally busted in 2001. Lot (by no means all) of scandals came to light. The Wall Street was stinking (still does) pretty badly. Thousands of so-called companies evaporated soon. A lot of people lost their life savings. When someone loses, somewhere somebody becomes rich. That is Capitalism. I had spent enough time and energy in studying the operations of the Group and deciphering their statements; and I enjoyed the reward when the bubble busted. A Jat from a small village in Haryana understood Wall Street (to some extent).
As an aftermath of the bubble, some of the operations of the Group have been affected. The US Govt. got involved and passed some laws, at least, to pacify public. The Group probably will have to exercise some caution in fooling public. But humans are forgetful and old habits don’t go away easily. CHOR CHORI SE JAYE , but HERA FERI SE NAHI!!!!! Let me not drag the stories for too long. I have plenty of Wall Street stories that might become the contents of some book. Now I shall offer a few suggestions which might be helpful in becoming successful with the Group.
1. Become a team-player. Be a good listener. They are less interested in finding out how good you are but more interested in seeing that you are a team player. There is a great book, Liar's Poker: Rising Through the Wreckage on Wall Street, by Michael Lewis. He candidly describes his experience as an investment banker with Salomon Brothers.
2. If you work as an analyst, you will find out that these analysts are simply faces to be used when the firms make statements that benefit them. Recommendations on stocks are generally issued depending on the positions of the firm and benefit to the firm. And that makes perfect sense. To become a ‘successful’ analyst depends on how great a Gapodi (Haryanavi word) you are. Henry Blodget with Merrill Lynch, Mary Meeker with Morgan Stanley, Jack Grubman of the Salomon Smith Barney are great examples. All of them were paid about 20 million dollars a year in 1999-2000 as they told the biggest lies and stories on Wall Street and brought investment banking business to their firms. Of course, they were scorned when the bubble busted. But who cares when you got that money. Two of them retired and are having fun. Each one of them barely graduated from college, and no degrees in finance but they were Gapodis.
3. If you have some great ideas, don’t just throw them at swine. Michael Bloomberg, now the billionaire Mayor of New York, worked with Salomon Brothers. He had an idea. He tossed it to his boss who felt threatened. Keep in my mind that your bosses are probably lot more stupid than you think they are, but they are very smooth talkers in this business. Then Michael Bloomberg left the firm and made his idea into a dream by creating the largest financial news network - called Bloomberg TV.
4. A traders job is a psychological game. Businesses don’t rise or fall 10-20% in a day or week. But stocks do. Trading is a game- highly manipulated by the Nasty Group. The Group thinks and believes that they are gods; indeed, the entire pension money of the US public is under their control and that makes them act like gods in Capitalism.
Once again, be a team player, very pleasant like a sales-person, and you will be fine.
Thanks for reading, and I hope it helps some.
I was born in a small village in district Sonepat, Haryana. Now I maintain a residence in Kurukshetra (near the University Campus); and I live in Tallahassee, the capital of Florida, U.S.A. I received my early education from C.R.Z. High School and C.R.A College (popularly known as Jat School and Jat College) Sonepat. Mathematics was my first love and it still is. I received my B.Sc.(Hons.) and M.Sc.(Hons.) from the Center for Advanced Study in Mathematics at Panjab University, Chandigarh. After spending a year at the Tata Institute of Fundamental Research (TIFR), Bombay, I moved to Canada where I earned my Ph.D. in Algebra, Number Theory and Geometry from Queen’s University, Kingston. From Canada I moved to US to become a university professor. Sometimes some of my friends and colleagues used to ask me if there are ‘untouchables’ in India. Jokingly, my answer used to be, “I don’t know about untouchables in India, but I do see many unteachables in my classes here”. Well, that joke grew on me and I decided to do something more challenging with mathematics. Thus I left my tenured professorship at Florida State University in 1997 to pursue a career in financial markets. I wanted to become an independent trader.
I knew nothing about the markets and Wall Street operations. The academic world and the financial world are world-apart. I became my own teacher and started studying the operations of firms like Merrill Lynch, Goldman Sachs, Salomon Smith Barney, CSFB, Lehman Brothers, Morgan Stanley etc. on Wall Street. Thanks to the internet that it was possible to acquire knowledge. I discovered, among other facts, that what these firms say and what they mean are rarely the same thing, and that they are totally unscrupulous in their operations and that made me understand the true meaning of Capitalism. For subsequent reference, I shall call the firms on Wall Street as the Group.
In 1995 the US market had lost its connection with the economy. The internet trading and the infusion of technology into the markets made people think differently than they used to think about investing. Corporate fundamentals became a story of the past. People became traders rather than investors. Everybody wanted to become rich quickly. People threw money in stocks hoping that someone will bail them out at a higher price; and it was happening. Companies with no business models rose to hundreds of BILLIONS in market value. ALL paper gains. People were hungry for good stories; and stories were told. Many thousands of dot com companies were born. IT experts were hired from all over the world. Pony-tailed kids were becoming millionaires simply because they added dot com after their name. The Group was playing a splendid game in fooling public. History shows that such things have happened before in US - in the 1920's and in the 1970's. History was repeating. Corporate executives became busy cooking books and showing profits/sales that were not there. Savvy players saw the disaster ahead. The bubble became too heavy to stay afloat. It started leaking in Spring 2000. It finally busted in 2001. Lot (by no means all) of scandals came to light. The Wall Street was stinking (still does) pretty badly. Thousands of so-called companies evaporated soon. A lot of people lost their life savings. When someone loses, somewhere somebody becomes rich. That is Capitalism. I had spent enough time and energy in studying the operations of the Group and deciphering their statements; and I enjoyed the reward when the bubble busted. A Jat from a small village in Haryana understood Wall Street (to some extent).
As an aftermath of the bubble, some of the operations of the Group have been affected. The US Govt. got involved and passed some laws, at least, to pacify public. The Group probably will have to exercise some caution in fooling public. But humans are forgetful and old habits don’t go away easily. CHOR CHORI SE JAYE , but HERA FERI SE NAHI!!!!! Let me not drag the stories for too long. I have plenty of Wall Street stories that might become the contents of some book. Now I shall offer a few suggestions which might be helpful in becoming successful with the Group.
1. Become a team-player. Be a good listener. They are less interested in finding out how good you are but more interested in seeing that you are a team player. There is a great book, Liar's Poker: Rising Through the Wreckage on Wall Street, by Michael Lewis. He candidly describes his experience as an investment banker with Salomon Brothers.
2. If you work as an analyst, you will find out that these analysts are simply faces to be used when the firms make statements that benefit them. Recommendations on stocks are generally issued depending on the positions of the firm and benefit to the firm. And that makes perfect sense. To become a ‘successful’ analyst depends on how great a Gapodi (Haryanavi word) you are. Henry Blodget with Merrill Lynch, Mary Meeker with Morgan Stanley, Jack Grubman of the Salomon Smith Barney are great examples. All of them were paid about 20 million dollars a year in 1999-2000 as they told the biggest lies and stories on Wall Street and brought investment banking business to their firms. Of course, they were scorned when the bubble busted. But who cares when you got that money. Two of them retired and are having fun. Each one of them barely graduated from college, and no degrees in finance but they were Gapodis.
3. If you have some great ideas, don’t just throw them at swine. Michael Bloomberg, now the billionaire Mayor of New York, worked with Salomon Brothers. He had an idea. He tossed it to his boss who felt threatened. Keep in my mind that your bosses are probably lot more stupid than you think they are, but they are very smooth talkers in this business. Then Michael Bloomberg left the firm and made his idea into a dream by creating the largest financial news network - called Bloomberg TV.
4. A traders job is a psychological game. Businesses don’t rise or fall 10-20% in a day or week. But stocks do. Trading is a game- highly manipulated by the Nasty Group. The Group thinks and believes that they are gods; indeed, the entire pension money of the US public is under their control and that makes them act like gods in Capitalism.
Once again, be a team player, very pleasant like a sales-person, and you will be fine.
Thanks for reading, and I hope it helps some.