Off topic I know but welcome back btw. Did you drop out of Uni? Oh Really? Richard Wisemans well known experiment would suggest otherwise...
It is an experiment that has been re-run by others with the same findings. To over simplify the conclusion, investors fall into a "group think" mentality as they probably gather their investment information from the same or similar sources.
I think you are on very dangerous ground suggesting that a sample of 3 differing categories can define the performane of the Uk investment banking industry or put another way its a typical thesis that means absolutely cock all when exposed to reality!
So you want my own personal definition ? from a single person that does not have the insight in the inner workings and have only slightly studied the theme from a distance ? I do not know what your background is but giving your own opinion on things as technical as this without proper research on the subject is in academic communities considered plain stupid. I really don't have the time to do the same amount of research a professor must do to be able to publish an article, just to give a definition to someone on the internet. Quoting someone you believe are right or have a better understanding of the subject is often both far more accurate and better supported. Just for the sake of argument I will now give you two more "quotes" in pure parrot fashion. http://www.nytimes.com/2009/12/24/business/24trading.html?pagewanted=all http://www.economicpredictions.org/who-is-to-blame-for-the-financial-crisis.htm I'd rather be a parrot quoting the truth than and idiot shouting nonsense.
Woah fella! I'll ignore the quote about an idiot shouting nonsense - as Im sure you were talking on an empty head! Is all very well quoting stuff - but do you understand it? I was trying to point out the difference between contract severance and a bonus not debate the whole collapse of the financial system
On its own it is not very representative but if you combine that with the similar studies which have had the same result, the huge losses of "rogue" traders, the fall of some of the biggest financial institutions in the world and the near collapse of the worlds financial system it makes a pretty compelling argument that, on the whole, bankers are not that clever or gifted. The argument we have put forward is if you all decided to bugger off to NY tomorrow to chase the higher wages the majority would be quickly replaced with equally capable people who would be prepared to work for less.
Rogue traders are the result of poor systems - remember that most problems occur when the market turns against trends - you can argue that some people are gifted / experienced enough to see it happening Eg Soros but then he wouldnt be working for a bank. The short answer is theres a difference between equally capable and experienced staff and the positions that some banks work in mean that they will only have the best of the best working those positions - hence the high salaries and bonuses. the flip side is a mistake means the bullet
In my experience most people fail to distinguish between the CEO-level pay packages (i.e. the Fred Goodwins of this world) and the compensation given to people lower down the chain. The sad thing is that the former tends to overshadow the fact that there are a lot of very honest, hard-working people in the City. M&A at an investment bank can be a pretty hellish job - think 110-120 hour weeks under high stress, knowing that a big screwup could quite easily cost you your bonus, let alone your job. If you pro rate the salary of a junior investment banker you will probably find it doesn't come to much more per hour than someone doing a standard 9-5 graduate position with much better job security and the time to actually have a life outside of work. From that perspective a bonus (which is based very strictly on performance) doesn't seem too unfair to me.
True. Like most people, when talking about public sector workers, fail to distinguish between civil servants in Whitehall and nurses trying to run an understaffed ward.
Sounds pretty stupid experiment to me... I don't know the details or the facts of this research experiment, but if I was the professional investor I would never even make a 5k investment and hide it for a year, and see how it is doing after that. If you invest like that, you are doing it wrong... Maybe the stocks what the professional analyst picked were stocks she/he was pretty sure that they'll go high in near future by following trends for example or other system they've developed. Baybe those stocks went +25% high (combined) in few months before going down, but I asume this is not taken in consideration in this experiment that most of professional investors would sell at least half of the stocks at this point to make profit (Ofc' depends on everyone's own fundamentals how they work), but you get the point. It's impossible to tell how the market is doing year from now, and as I said, no-one invests like that (I hope). I do little bit stock trading myself, it's more like a hobby for me, and I don't plan to make my living out of it in near future at least. I do mostly long-term trading, I tried day-trading but I found out pretty quickly that it's not for me and I actually stopped it way before the limit I had set for myself on the losses. Learned that I rather hold stock for longer than day (I didn't have the skill to find stocks that peak during the day), so I go for several days, weeks, months with the stock... Maybe even years, but when you hold stock for years, you're doing it only because you trust the company that it will do well and grow, or you are just stupid and you don't even know what the company does but you like the name, or what they do. And long-term trading is overally much "easier" as you can build well balanced portfolio for yourself, but this doesn't mean that you cant go down and fast, if you don't keep your eye on the portfolio and you don't keep selling and buying stocks actively enough, you'll not get profit and you'll just hold the money there, looking at it when it peaks to +50% profit, and then coming down to maybe +5% profit or start making losses as the markets change and you are not following it, and you are like "darn it, I knew I should have sold those then!". Of course it's hard to sell even part of the stocks when doing well, if your portfolio's value is only few grand as the profits will be very small and not "satisfying", this is why I'm not too active with my portfolio and I just hold and wait for limits I've set for the stocks that I believe they can reach by time or cut the losses and take the small profits before it goes too low, not very professional, but it's good that I'm not professional then, but still minimizing the risk of losing money. So what I'm trying to say with this example, even if the pro-analyst knew good stocks for building a portfolio at the time, she/he couldn't know how the market is in a year, and I asume that in this experiment they didn't have possibility to manage that 5k portfolio they put up during the year? Going off-topic, but just wanted to point out that professional investors might not be doing only big losses even if somekind of experiment tells us so. And yes the bankster-bonuses might sound silly, but people who manage other peoples money do very stressful job and they can't even stop working when they come from work as they must keep watching the markets if they want to succeed. This is something that IT-engineer doesn't need to do when she/he gets home.
That is incorrect; you're discounting all the database and server admins who have to work weekends and late nights when pushing new code or upgrading servers. That kind of work tends to happen after core working hours so as not to disrupt all the office staff from accessing Facebook legitimate office applications during the day. And let's not forget the on-call IT administrators who might get a call in the middle of the night because they have to perform some emergency maintenance on the server that is running all that critical financial management software.
Or all the hospital medical staff, paramedics, police, firemen, utilities employees, hotel staff etc. who work all hours because life doesn't stop when we go to bed to resume when we wake up.
Well that is what admins agree to do on the contract, and they get paid for all the emergency and off-hours work they need to do, and usually they are paid pretty well for this kind of work, I asume, they don't do that for free. Umm... You got way out of the point? I know people work around the clock, that's why we have people who like working at nights, or at least agree to do nights by the contract, and people who doesn't mind coming to work if there is emergency. They all still get paid by the contract depending on the situation. They can be 100% sure that they get the money they deserve from their work. But traders/investors/banksters doesn't get paid by the contract for the hours she/he is following the markets at home and planning the next moves for the next day. That's why they get bonuses if they perform well (and this is mentioned in the contract usually that there is possibility for those bonuses, but it doesn't say that you propably have to keep working when you get home "for free"). There is no guarantee that you'll succeed based on your research you do at home, but sure the odds to succeed are higher if you do so. -Others get paid for the extra work they agree to do, but it's not written to stone for everyone.
No they don't, I don't get paid for my time during the evenings or weekends that I spend thinking about work and coming up with solutions.
Let me introduce you to the real world. Officially I get paid from 9 to 5, 5 days a week (37.5 hours). Unofficially I work 45 hours a week, cause there's like a massive waiting list of patients. In that time I see twice the number I am contracted for, and do 50% more sessions. I do this by working my ass off. Any reading up, study and professional development to stay up to date and qualified largely comes out of my own time and pocket. I've got it easy; doctors and nurses do more unpaid hours. Clinics always overrun by 4 hours (hospitals being unable to afford hiring more consultants, they cram unrealistically high numbers of patients in a clinic. They all still get seen, and get the time they need --even when it's time to break the Big Bad News to them). When chemotherapy outpatients are still waiting at the end of the day (due to demand, understaffing and unforeseen medical emergencies, say, a parient having an adverse reaction and collapsing, needing CPR, distressed witnesses needing containing etc.) nurses do not get the option to go home because their shift is over. They finish the job. They do not get paid for that. The fact of life is that most professionals have to invest a lot of unpaid personal time into their work. It's part of the course. In the NHS for one, many professionals do all this because they care about the job, the patients, the NHS; not for a financial bonus. If they all worked on that basis, the NHS could not afford to exist.
