The Wolves of Wall Street: 2020

Let’s talk about the wolves of Wall Street — the 2020 version, not the blingy 1980’s version that was.

1. I usually try to stick to data and other people’s data based research, but today I’ll stretch to personal observation. I think most of what’s wrong with the financial sector today is that 28-year-olds who have little life experience are carrying out the analysis and decision making that drives most buy/ sell decisions at the big firms.

Would you rather have a 28 year old surgeon operating on you or a 58 year old surgeon who has seen it all? Would you choose to follow an academic who has published 200 papers or one who has published 2? Unfortunately Wall Street is a place where you have to work impressively hard for promotions and being good at research or “investing” is not what gets you promoted at most firms. Going up the ladder in the financial sector tends to depend on bringing in clients, keeping clients happy, developing new products and implementing “strategy”. None of these mean you have to hone your investing research skills.

Most Wall Street recruits enter the industry after college at 22. After 3 years of hard labour they go off to 2 years of Business School. They return to working and are quickly put in charge of lots of research and analysis that drives the firms investment decisions, the good ones making Vice President at 28.

2. The 80’s wolf of Wall Street culture is nearly dead, killed off by emaciated spending accounts and tightening regulation. A modern financial firm in New York or London looks more like a documentary called Travels Across Asia than the debauched culture of old. The move to quant techniques and the computerisation of investing means that new recruits are selected for technical backgrounds. The newest wolves of Wall Street are more more likely to be WhatsApp-ing their proud wives about whether it’s chloe and chapatis for dinner, rather than reserving bottles of Bollinger at the newest nightclub.

Have you heard the story about the Indian Olympic gold medalist who returned to his home town after winning a gold?

He enters his home, gold medal in hand, shouting “Ma, Ma, I’ve brought back an Olympic gold medal”. He finds his mother sobbing uncontrollably with her head down on the dining table.

As he approaches she looks up with anger and tears in her eyes. “How can I even show my face in the neighbourhood? You have come last in your class in the Maths exam!”

This story would definitely be fiction as India has won only one gold medal since the 1980s. We Indians however are champion wolves at taking over financial sector jobs.

Thanks,

Mallika

Mallika Paulraj is the creator of The Superinvestar Framework which teaches investors how to make confident investment decisions. You can download your own copy of Ten Timeless Principles From The World’s Greatest Investors here. Her book How The Best Invest, which outlines the method, is available on Amazon.

Sign up to her weekly Four Minute Investing note via her website.

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Mallika Paulraj

Mallika Paulraj

Creator of The Superinvestar Framework | Author of How the Best Invest — Make Confident Decisions Like the Investing Superstars