What to do when you were fired?

This is always a problem. In any industry, at any time being fired is not a pleasant thing. However, circumstances in Financial Industry are very extreme. All companies are firing people, so the market is extremely competitive and in fact it is almost impossible to find a replacement job. In addition to this some of you work (worked) in such areas like trading and your skills are almost non-transferable to any other industry. So what can you do?

First, think about your future. Don't assume (of course) that you will not come to finance again, but anyway think about what else you can do. Think about alternatives - where your skills would be applicable and where would you be able to use your potential. I privately expect that there will be a lot more money to be made outside the financial industry in like 5 years to come. I think that really good bets for now would be consulting and law. Some skills especially from the IBD (Investment Banking Division) are really very easily transferable to consultancy (ability to work long hours included :) ), so redundant Investment Bankers should have no problem with finding a new job in consultancy. I also think that talented assets managers would be able to find a job in mainline companies in treasury departments, which now have difficult time managing the liquidity and require talented asset managers/traders. Another tendency I expect to see in following years is the rise of the job market for professionals in emerging markets. I think there would be soon no large discrepancy between opportunities in let’s say China and UK for the professionals. In fact it may be wise to come back to you country of origin, as it may positively affect your career.
Second, consider entrepreneurship. Don't assume that the only possibility is a job in someone else’s company. In fact you may be able to create a business on your own – just look around on what is good in place you live and try to copy this to the region or country you are originally coming from. Think about creating a restaurant, internet shop or anything else you understand.
Third, keep on looking for a job. Even in this market people are hired. It is best to have a good head hunter (for all readers of my blog – if you have good CV I can forward it to my friendly and solid headhunter for consideration – use the email: phdstudent2007@gmail.com) and to be in touch with him regularly. Maybe at some point he will have an offer that would be interesting for you.
Fourth, enjoy your free time. Study languages, exercise, meet friends etc.
Fifth, boost your profile. You should spend a big part of your free time on improving your profile – remember that the world is not standing in one place just because of the financial crisis. People are gaining new prestigious qualifications everyday and you should not lag.
For the list of most relevant business qualifications please visit http://examhub.org.

Good luck in your endeavors!
PS: If you want to ask me specific question please post message on http://forum.examhub.org.

Results of tenth survey

Why qualifications will be crucial for new financial world?

I know that all of you know what is happening in the financial markets. There is almost no financial company that is unaffected by the current turmoil. People are fired in almost every institution on every level in corporate hierarchy.
Many people wonder how the financial world will look like after the situation stabilizes in the longer term. What kind of people will earn good money and what type of services will be provided by financial institutions?
I think that financial industry will still be an important sector in the economy in the future. Stock markets and bond markets will still be there. There will be people managing the risk and allocation of other peoples money. However, the wild-wild west of last decade is over. It will no more be possible that people will earn millions just because they were lucky and some risky bets turned out to be profitable. I think that financial industry will resemble more and more the law industry. What would count most would be reputation, knowledge and hard-work. Those who count on quick-profit in a short term will be forced to look for different profession.
I think that the changes that are about to reshape the financial industry will favour people with solid skills and strong educational background. I suppose that CFA or other technical certificate like (PRM or FRM or CAIA) will be prerequisite for any front office position in any financial organization.
Certificates and good education will be a proof of you knowledge and will improve vastly your reputation. The will be no place in financial industry, where 0-education and no technical knowledge will be enough to get millions!
My prediction is that the financial industry will start hiring around summer 2009... But only those well educated and reliable will be employed.

PS: If you have any questions, or you want to talk, please join discussion at forums.examhub.org...

Merry Christmas!

Nineth Survey

The winners and the loosers

Financial Crisis is not equally bad for all financial institutions. There are some banks, who will be better-off after the crisis is finished. Some organizations will end up as new leaders in specific market segments.
The banks that will really benefit in my opinion are: JPMorgan, Credit Suisse, Santander and to some extend Deutsche Bank (although it is very highly leveraged at the moment).

JPMorgan wins a lot of business from Hedge Funds because it considered to be a very well capitalized organization and because it was able to aquire very sucessful Bear Stearns Prime Brokerage Franchise. JPMorgan took a lot of business from beleagured ex-investment banks like Morgan Stanley, Goldman and Merrill Lynch, but also because it is very well capitalized it will be able to attract best talents as other banks are not recruiting at all. If markets recover JPMorgan is the place you should be in.

Credit Suisse finally won its small war with UBS. For many years people have considered Credit Suisse to be a weaker and less clever brother of UBS. However, this lack of sophistication of Credit Suisse resulted in smaller loses in Subprime market. Clever and greedy UBS invested just to much into complex credit derivatives. Today, Credit Suisse is able to steal the business of UBS and it will soon become a leading Banking group in Swiss.

I don't need to say much about Santander. This bank is buying falling financial institutions for bargain. I expect Santander to become one of top 5 banks in the world in terms of financial firepower in a year or two.

Deutsche Bank is similar case to JPMorgan, but it's financial standing is much worse.

It is important that you stick with the winners of course :D

Banking in the dark...

Banking industry is still under the water and it seems that near future will not be better. While reading the Financial Report of UBS from Q2 2008, I came across an apparently gloomy forecast of the chairman and CEO of the company:

Outlook: In the second half of the year we do not expect any improvement in current adverse economic and financial market trends. We will continue our program to reduce personnel levels, costs and risk concentrations.

12 August 2008
UBS
Chairman Peter Kurer
Chief Executive Officer Marcel Rohner

It seems that new lay-offs are on the way (a number of my friends in this bank was laid off already... :( ).
It is really very bad time to be on the job market. If you are able to embark on any academic programme in order not to have blank period in your CV its very good time to do it.

In coming months, quarters and years many people will have to adjust their aspirations and ambitions to survive on the job market.

Let the power be with you!

Results of 8th Survery

The world outside investment banking.

This is a blog about careers in investment banking, but nowadays, when investment banking is in crisis, you need to be aware that there is plethora of lucrative opportunities also outside finance industry. Not surprisingly, some of these opportunities are more life-friendly than any job in investment banking could be.

Investment banking is very special industry. People are lured to it by above average salaries and opportunities for quick career progression. For majority of students Investment Banking is the most desired career - it is prestigious and it seems to be lucrative.

However, for many of these people career in other industries (like in FMCG, Marketing etc.) would be a much better option. First, because of much lower competition you will be able to progress much faster. Surely the salary of a managing director in Lehman Brothers may be twice as large as the salary of managing director working for example in Mediacom. However, for a clever guy the chances of becoming a managing director in Mediacom are at least ten times higher than chances of becoming a managing director in Lehman Brothers, and so the expected income from working in Mediacom (which is here given just as an example) would be higher than expected income in Lehman Brothers... (Intuition: It is easier to make a career and become MD if you are the best among averages then to do it when you are average among the bests) . Second, you will be able to live normal life, not the life of IBank nerd who is sitting in work for 15 hours daily.

My subjective list of industries that may provide lucrative opportunities are:
- IT - (Microsoft, Oracle, IBM, etc)
- Energy - (Shell, BP, Exxon, etc)
- FMG - (P&G, Mars, Unilever, L'Oreal, etc)
- Marketing/Reseach/Media (Mediacom, IPSOS, BBC, etc)

and many, many others.

Although it seems that IBanking is the only interesting career, this must not be true. It's possible there are other careers that you find more interesting, and that would provide you with higher income on average. Your life - your choice.

Is the era of Quant Finance over?

After recent losses suffered by Quantitative Hedge funds (like: Goldman Sachs Global Alpha and many others) some people wonder, if the era of quantitative finance is over. The quantitative funds are not considered to be money making perpetuum mobile any more. Number of people finally realized that it is impossible to make 20% profit every year without bearing any significant risk. This will now directly translate into the money inflow into quantitative funds in the years to come. This inflow will of course be much lower than what was observed before the credit crunch, so there would be definitely much less career opportunities in the quantitative finance field. I expect that demand for quants will be very low for at least 2 or 3 years. However, at the same time the supply of quants is very strong. In recent years almost every university started its financial maths or financial engineering program. The number of people, who will be graduating from quantitative programs goes now into tens of thousands every year, so you can imagine that it will be very hard to find a decent jobs in QF (and of course salaries will go down as well).

So, what can you do to improve your chances for employment if you are studying at a one of numerous MFE programs? First, work on your soft skills. In the current job market, not only you need to be able to solve Black-Scholes model, but you need to know what is happening in the macroeconomics for example. Second, work on your programming skills. In current market, IT skills is the asset that can find you a job. There are much more places in the banks for Quantitative Developers than just for Quants. Third, be open to other opportunities. Your quantitative skills will be useful not only in the investment banking. You can find that the work for the startups or other smaller companies may be very interesting (and even more rewarding that the work for investment banks).

As usual if you have comments or you would like to express your opinion, I invite you to the "Careers in Business Forum at forum.examhub.org".

Which parts of the market are still alive?

If you are brave you may still fight for the job even in this very bad environment. What you need to know at this stage is which parts of the markets are not dead. Surprisingly there are some areas which are still hiring and these are:

- Risk management (FRM type of jobs)
- Distressed debt (MBA) *
- Equity underwriting (MBA)
- Emerging markets IBD (MBA)

Unfortunately the competition for these few spots is very intense. There is a number of people, who were fired recently, and they want to find their way back to investment banking.

* - If you know French or German or Polish and you would like to work for a small and presigous Distressed Debt fund - please let me know (with CV): phdstudent2007@gmail.com