What's the difference between trader and portfolio manager?

[Smoker]

Hi DedicatedTrader,

Quote from DedicatedTrader:

I graduated from an Ivy-League School in 2004, Cum Laude, Played Varsity football for the school and received the award for highest GPA in the entire athletic department with a 3.72 in Economics.

I received mutiple job offers out of school and choose Goldman Sachs. I worked on the Distressed Debt Desk for a couple of years until a family emergency forced my resignation. I left NYC and moved to Dallas.
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I have enjoyed two years of +65% and +%35 gains trading energy and precious metal futures as well as equity options. I have a solid track record and proprietary trading methodology but I am now trying to expand my experience to a larger capital base. I am not trying to raise money to start my own fund but I am looking to go back to a large fund as a trader or PM. I have hired a professional resume service, am working with several buy-side MD level mentors but have managed little success in obtaining job interviews.

I am not sure if its my location, Dallas, so folks outside of the immediate area do not take me seriously, if its the stigma attached to trading your own capital base, or something else entirely but I am frustrated.
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I really want to become a trader at a hedge-fund and I am willing to relocate anywhere in the world at this point, and accept lower titled positions, possibly even an entry level trading opportunity at the right fund(I was a senior VP when I left my last employer). I am just not sure how to show employers my flexibility and proven professional experience.

Thank you kindly in advance for anyone who offers advice on my situation.

I think I gave my best answer on how to get into the business in several posts earlier in the thread and nothing you have said regarding your situation drastically changes my earlier opinion.

However you do have a couple things that make you different from someone starting completely from scratch like the "quix034" situation.

Goldman Sacks experience can be a real positive or a subtle negative when looking to become a professional trader.

If you did score an interview on the sell side the very first thing they would ask you is if you are such a success why haven’t Goldman Sacks coaxed you back to their firm after your family situation was sorted out?

In an interview at a hedge fund the first thing they would ask is if you have such extensive trading experience and strong track record why haven’t Goldman Sacks allocated to you?

If the guy is the bee’s knees the very first thing that happens with they decide to go out on their own is Goldman Sacks becomes their first allocation and usually tries to buy in as an equity partner. If that doesn’t happen then it is a black flag.

If I left my current job and started my own hedge fund the very first thing I would be asked is how much has my current employer allocated with me and have they tried to take an equity stake in my new hedge fund etc.

Talent that walks away for whatever reason does not get forgotten. If the former employer allocates then any asset allocator knows that 80% of his due diligence just got taken care of in a heart beat.

In today’s day and age with communication being what it is it is almost impossible for a savant of trading to go unnoticed. If you have a killer track record then go make a pitch to your FCM institutional desk and see if they agree you have what it takes and subsequently will shop you around to the hedge funds as a rising star.

Or you can do something like I did and try to get into a position to pitch directly to the owner/principle at a hedge fund. Do not waste your time trying to worm in through the trading desk or other traders working at a hedge fund. They are not a key to the kingdom but instead competition so stay away from them and go for the top guy.

Or go back to Goldman Sacks and pitch to they directly and since you made them a ton of cash they will be happy to take your call.

Anyway no matter what you do stay away from the so called retail prop firms (sometimes called pro firms on the elitetrader board) where you trade your own money and borrow from the prop firm to leverage. It is just my rather bias opinion but the prop firms to me just sound like a “heads I win and tails you lose” trap for retail amateurs trying to become professional guys.

It may just be my personal trading history clouding my judgment but none of those retail prop firm deals sound to me like a good idea.

Anyway the above options are the best advice I can come up with off the top of my head but don’t forget it is just my opinion.

Best of luck,

Cheers Smoker

 

[newwurldmn]

Quote from Smoker:

Hi DedicatedTrader,

Best of luck,

Cheers Smoker

I think that the negative that you are suggesting doesn't apply to this guy. Yes. Goldman will allocate to guys who are leaving to do things, but I get the sense this person was not a senior person at the bank. He probably left as an associate or maybe a VP. Goldman won't allocate to someone like that.

However, I am surprized that with his credentials he isn't able to find employment in Dallas. There's lots of hedgefunds, wealth advisors and probably even a bunch of energy trading desks. Though I don't know how much of the last is in Houston.

While his trading performance is good, I doubt it would be what will impress someone. His other experience should offer him more opportunities to plug into a franchise.

 

[braman09]

What's puzzling is that, why would one look for a job outside if one is a successful trader of personal wealth.

 

[DedicatedTrader]

Thank you for your feedback. When I left GS, I was an Associate up for VP consideration. I was on a fast track of sorts as most my 04' class were still analysts. I did not leave on bad terms, in fact, quite the opposite. The major thing to consider is wall street is a game of musical chairs the vast majority of my contacts have moved on from GS, retired, doing something completely different or they are direct competition to me as they see it.
The Texas network is a tough nut to crack. Even with my background, I have been told I was second in several key job openings after the interviews ended and the dust settled. At first, I thought bad luck, I will get the next one. Then, I noticed a trend, all the candidates were Texas or Oklahoma grads. And, they usually had less experience or unrelated experience, like energy to distressed debt. Frustrating. If you look on Bloombergy job openings in Texas, several large hedge funds, like Q investments for example, are posting positions that will only consider Texas folks, not even a regional candidate could get a look. Weird and bad business practice to me.
As for my success trading my personal wealth, I have enjoyed it, made good money by any standard but I want to make great money and be challenged with a larger capital base. Plus, I want to start a family and have secure health benefits that are affordable. Long story on the healthcare, complicated. Whether it is a trade scenario or a life scenario, pros and cons must be weighed and the scale tips toward this path for me right now.
I do not understand why my previous experience and education is not helping me more. I would have loved to have kicked at FSU after sea bass( was a real option out of HS) but I chose the Ivy-League education again for the weighted odds. I very much understand the traders I am reaching out to are my competition and are definitely not helping. I have gone into a few big guys, including a CEO of a major energy company in Houston with a 20 billion market cap, got a positive response and was eventually led to a trader to speak with as an informal interview. He started the conversation off negative before I even spoke a word. I am creative and I am always wiling to to think outside the box so if you have any tactics that are outside of the box or you deem as helpful I would gladly listen. If you would rather message me these solutions I would understand as they take time and effort and you most likely do not want to share them to the world.
I leave by saying, I am flexible on location but my Dallas residence is hurting me in the eyes of HR in cities like London, NYC, San Fran, because all require relocation assistance but what I have not been able to convey is I don't need it but how do I say that in a cover letter without seeming desparate? Thanks again for all of your insights. I will gladly share my path to success trading my own capital if that is helpful to anyone.

 

[Smoker]

Quote from newwurldmn:

I think that the negative that you are suggesting doesn't apply to this guy. Yes. Goldman will allocate to guys who are leaving to do things, but I get the sense this person was not a senior person at the bank. He probably left as an associate or maybe a VP. Goldman won't allocate to someone like that.

Yes, very true. I just make the assumption he was a shooter at Goldman Sacks so that is how I framed my answer.

The problem with being a junior is that a junior is more or less seen as just a junior no matter what the place (within reason).

It really doesn’t carry that much prestige to be an ex-junior at Goldman Sacks or any Investment Bank or Hedge Fund. Everyone wants the shooter and not a junior no matter what the team.

The general view of leaving a great firm as a junior is similar to leaving a university before graduation. It is simply not materially important whether the university is top notch or standard but whether you left with your piece of paper.

It is not always fair but just the way the world works.

Quote from newwurldmn:

While his trading performance is good, I doubt it would be what will impress someone.

Very true. Nice start but the competition is fierce.

Quote from braman09:

What's puzzling is that, why would one look for a job outside if one is a successful trader of personal wealth.

I personally see lots of reasons to go big time.

Ego & competitive nature drives the desire to take a shot at the big leagues.

Looking to get seriously rich such as moving up from millionaire to multimillionaire.

Curiosity about what it takes to play at that level etc etc etc.

Quote from DedicatedTrader:

The major thing to consider is wall street is a game of musical chairs the vast majority of my contacts have moved on from GS, retired, doing something completely different or they are direct competition to me as they see it.

You still should be able to use these guys that have spread to wind and they should be an even more effective network than they would have been if they all stayed at Goldman.

Quote from DedicatedTrader:

The Texas network is a tough nut to crack. Even with my background, I have been told I was second in several key job openings after the interviews ended and the dust settled. At first, I thought bad luck, I will get the next one. Then, I noticed a trend, all the candidates were Texas or Oklahoma grads. And, they usually had less experience or unrelated experience, like energy to distressed debt. Frustrating. If you look on Bloombergy job openings in Texas, several large hedge funds, like Q investments for example, are posting positions that will only consider Texas folks, not even a regional candidate could get a look. Weird and bad business practice to me.

Don’t know anything about this Texas phenomena, haven’t heard about it and don’t understand the logic behind it.

I have a mate that runs a small CTA in Houston and when hiring he is more concerned about the guy’s ability to add value verses what collage football team they support or whatever.

Quote from DedicatedTrader:

As for my success trading my personal wealth, I have enjoyed it, made good money by any standard but I want to make great money and be challenged with a larger capital base.

Nail on the head with 99% of the time this is primary reason stated for jumping to the big leagues of other people’s money.

Quote from DedicatedTrader:

I very much understand the traders I am reaching out to are my competition and are definitely not helping. I have gone into a few big guys, including a CEO of a major energy company in Houston with a 20 billion market cap, got a positive response and was eventually led to a trader to speak with as an informal interview.

Sounds like there was no real job and they are just doing a bainsuck poll to see if a few cool prop ideas drop out of it. This used to drive me crazy when interviewing in London years ago while I was still working for CRT. As soon as a shop knew I was working at CRT they wanted to interview for the brain suck but never wanted to hire due to no interest in moi as internal competition.

This illustrates one of the biggest reasons to avoid trying to get into the clubhouses by talking to the traders on desk but only deal with the top dog. In this case I would guess the top dog happened to be in on the brain suck play.

Tough break.

Quote from DedicatedTrader:

I leave by saying, I am flexible on location but my Dallas residence is hurting me in the eyes of HR in cities like London, NYC, San Fran, because all require relocation assistance but what I have not been able to convey is I don't need it but how do I say that in a cover letter without seeming desparate?

I personally think you are obsessing about the wrong things.

I don’t understand this focus on geography and it is not my personal experience in the hedge fund industry.

If you have the numbers it really doesn’t matter if you are from Mars. Or at least it doesn’t appear to matter outside of Texas.

And no one cares one iota about relocation expenses in the hedge fund world. The potential in the numbers are so high that either side worrying about relocation expenses is the definition of being smart with the fills but dumb as rocks with the dirhams.

All the best!

Cheers Smoker

 

[newwurldmn]

Quote from DedicatedTrader:

Thank you for your feedback. When I left GS, I was an Associate up for VP consideration. I was on a fast track of sorts as most my 04' class were still analysts. I did not leave on bad terms, in fact, quite the opposite. The major thing to consider is wall street is a game of musical chairs the vast majority of my contacts have moved on from GS, retired, doing something completely different or they are direct competition to me as they see it.
The Texas network is a tough nut to crack. Even with my background, I have been told I was second in several key job openings after the interviews ended and the dust settled. At first, I thought bad luck, I will get the next one. Then, I noticed a trend, all the candidates were Texas or Oklahoma grads. And, they usually had less experience or unrelated experience, like energy to distressed debt. Frustrating. If you look on Bloombergy job openings in Texas, several large hedge funds, like Q investments for example, are posting positions that will only consider Texas folks, not even a regional candidate could get a look. Weird and bad business practice to me.
As for my success trading my personal wealth, I have enjoyed it, made good money by any standard but I want to make great money and be challenged with a larger capital base. Plus, I want to start a family and have secure health benefits that are affordable. Long story on the healthcare, complicated. Whether it is a trade scenario or a life scenario, pros and cons must be weighed and the scale tips toward this path for me right now.
I do not understand why my previous experience and education is not helping me more. I would have loved to have kicked at FSU after sea bass( was a real option out of HS) but I chose the Ivy-League education again for the weighted odds. I very much understand the traders I am reaching out to are my competition and are definitely not helping. I have gone into a few big guys, including a CEO of a major energy company in Houston with a 20 billion market cap, got a positive response and was eventually led to a trader to speak with as an informal interview. He started the conversation off negative before I even spoke a word. I am creative and I am always wiling to to think outside the box so if you have any tactics that are outside of the box or you deem as helpful I would gladly listen. If you would rather message me these solutions I would understand as they take time and effort and you most likely do not want to share them to the world.
I leave by saying, I am flexible on location but my Dallas residence is hurting me in the eyes of HR in cities like London, NYC, San Fran, because all require relocation assistance but what I have not been able to convey is I don't need it but how do I say that in a cover letter without seeming desparate? Thanks again for all of your insights. I will gladly share my path to success trading my own capital if that is helpful to anyone.

A few observations and comments:

You started in 2004 and when you left, your training class were still analysts - means you left in 2006 or 2007. If that's the case, what were you doing from 2007 to 2012. You only have 2 years of PA trading. It also means you were out of work for 5 years and missed some pretty bullish times for hiring (early 2008, early 2010, early 2011).

Secondly, Texas funds want Texas people probably because a lot of Wall Street people want to be in NY or London. These firms need people in Texas so they generally look for people who have a reason to stay in Texas (family, have built a life, etc). Their big fear is that you leave their firm to go to a firm that gets you back to NYC.

Thirdly, from the way you write, you come off as being extremely cocky or desparate masquerading as cocky. I never worked at Goldman, but the reputation was that this was their culture; but a lot of other firms don't have that culture. So be careful of the vibe you send out.

It's a tough industry right now. Fewer and fewer seats. You have to pitch yourself as a franchise guy. A guy who is part of a team. You don't have the experience to be a PM.

But the nice thing is that you only have to win once. And that once can be very fluky as well. So don't give up.

 

[Smoker]

Quote from newwurldmn:

Secondly, Texas funds want Texas people probably because a lot of Wall Street people want to be in NY or London. These firms need people in Texas so they generally look for people who have a reason to stay in Texas (family, have built a life, etc). Their big fear is that you leave their firm to go to a firm that gets you back to NYC.

Good insight; such an idea never even crossed my mind.

However, I think this reason is more true of support staff and the troops in general verses the shooter but that said it still rings as a very plausible explanation of this phenomena.

Cheers Smoker

 

[newwurldmn]

Quote from Smoker:

Good insight; such an idea never even crossed my mind.

However, I think this reason is more true of support staff and the troops in general verses the shooter but that said it still rings as a very plausible explanation of this phenomena.

Cheers Smoker

Yeah. Talking about sell-side teams, trading desks (which work together), buyside teams (research analyst for a PM, etc). Basically franchise seats.

If you are a self contained "business unit" then most large places don't care where you are. But it's unlikely this person will be such a shooter given his age and lack of experience. Even if he were a phenom he would need more years to prove it.

 

[DedicatedTrader]

I agree I might be focusing too much on geographic proximities. After GS, I took a job at a smaller shop with roughly 500 employees. I ranked in the top 1% of producers there for the last two years I worked there. I was there from mid 06' to mid 2010 and traded my own capital in 11' and 12'. I do agree that my Golden Chip was not cashed effectively when I left GS. And now, I am kind of a piece of paper, even with my past experiencies. Again, I do not regret my decision to leave an incredible salary at my old job and at GS. I am trying to regroup and see what I can do with this body of work i have put together since graduating in 04'. One of my best attributes is interviewing, I just can't even get a foot in the door with the one exception of the 20bn+ company and several small firms that are sideway steps at this point in my career. I am definitely reaching out to the ex-gs players who are now killing at other places. I can only pray that one of them takes special notice to me. Thank you for all the advice and feedback. If I get a job, I will certainly mention it in the future.

 

[chipmunk]

Portfolio manager: Salesman like figure. Relaxed, peoples person. Groomed and well dressed, Speaks well. Gets paid to chew fat and feed egos. Doesn't matter if the market goes up. down, sideways. He doesn't know a stock from a future, no T.A. or system studies from him. Gets paid a good wage whatever happens. Is relaxed and happy with life.

Trader: Can't sleep at night from stress and worry. Has his system had its day, will the market gap up tomorrow? How will I pay my bills. Is constantly re-builiding his ssytem and kids himself the one winning streak wasn't luck. Scrapes bye but "is living the dream."