Whatever you say. If you ever worked for those large banks....
Why Those Credit Suisse Executives Seem So Junior
- Thread starter RedSun
- Start date
True but effective networking and learning how to close is quite useful in a lot of jobs. Except for the programming quants, Networking is key for information and preferential deal flow. Some of the best investments & trades came from who I knew and effective networking.
Being super competitive is not what wins you the $$ at the end of the day. Jesse Livermore was super competitive. Look where he ended up at the end of the day? It's being competitive while making the right call that wins at the end. But since the market is 50/50 so it errs to be on the side of caution and not put everything you have and even with what you borrowed in one basket or in a few baskets, hence risk management. Risk management goes hand in hand with competitiveness. Just because you control your risk doesn't mean you are not competitive. You want to land a punch where it hurts the most. When you see your punches won't amount to much, you don't land them. Anderson Silva doesn't punch all the time in the Octagon, he ducks majority of the time but when he really punches or kicks, he knocks out the opponent. That's what you want to do in Wall Street to succeed.
Sure that's the bare minimum of risk management. Not all eggs in 1 basket. but it has diminishing returns after awhile. Once you have common-sense risk management, the competitiveness, networking and ability to close are much more useful.
Those that move on from Risk jobs or use it as a stepping stone to bigger and better things possess risk management skills but they got other skill sets that elevate above.
Risk management will ALWAYS need to be there no matter how competitive, how savvy you are at networking and how superior your ability to close is. That's where you don't seem to realize. Risk management is not something that you just somehow "get" and then can just throw away once you "move on" to other skills that you consider that "elevate above" risk management. There is no "elevating above". Risk management should be at the same level as competitiveness, networking and ability to close. People who do not value risk management as much as other skills end up paying the price for it. Credit Suisse is a current example and there are numerous others. Many ended up worse than Credit Suisse.
They didn't have common sense. I'm not saying risk management isn't needed but a rockstar in their field will move on the better things for higher pay, more fulfillment etc. It's a department where if you have the smarts and skills then you'll b better rewarded elsewhere. Who knows what happened at Credit Suisee but obviously the best and brightest weren't in the risk department.
People will act in their own self-interest. If they can get 2x compensation elsewhere then no need to languishe in the Risk department.
Exactly as what I was saying before:
No they are just a bunch of mavericks. They have totally no risk management seeing what kind of person that they had in the post of Chief Risk Management and Compliance. They just didn't give a s***. To them, risk management is putting as many eggs as they can in one basket and think because they have so many eggs in the basket that the basket mush be so strong that it will never break.
Market intelligence or not, lending somebody 600 - 800% of their net capital is suicide.
And I agree that keeping the best and the brightest in risk management is an issue when careers in investment trading is so much more lucrative especially when remuneration is tied with performance and that just gives even more incentive to forgo sound risk management practices.
There are certain tests that are conducted to make sure that you deserve the position.