The Wall Street Series Part III: Ten of the Keys to Success on Wall Street

Let me first say: feel free to disagree and please, please feel free to table constructive suggestions based upon your own unique experiences. I am a data point of one, but at least one whose balding pate and 40-something age is indicative of nearly two decades of experiences on the Street from which to draw. There are so many elements to a successful Wall Street career that it is impossible to list them all, so here is my list Top Ten of the keys to succeeding on the Street (with a bonus #11 thrown in for good measure). They are not listed in any particular order.

Key #1: BE HONEST

With others as well as with yourself. Seems self-evident, right? But wait, isn't Wall Street a cutthroat, kill-or-be-killed type place, where you do what you need to do to win the deal, get the trade done on your desk, crush the competition, etc.? Answer: sure, it can be that kind of place, but honesty can't be the thing that gets chucked out the window. Ever. You know why? People have memories. And if you are shown to be a dishonest person, even one time, it sullies your reputation forever. It is kind of like the Web: once it's up, it's up for eternity. So you know those MySpace pages, college kids? Be very, very careful. And on Wall Street: you know how being economical with the truth can sometimes seem like the right thing, the easy path to take? DON'T DO IT. It is equally as important to be honest with yourself, particularly as it relates to strengths, weaknesses, good points and bad. This is critical for self-development, how and whom you recruit, how you position yourself at bonus time and how to interview for new positions at either your current firm or another firm. Self-awareness is an extremely valuable quality, and one that is witnessed far too little on the Street.

Key #2: BE THE KIND OF PERSON PEOPLE WANT TO WORK WITH

It is impossible to over-emphasize this point. Regardless of whether you aspire to be the schmooziest relationship Investment Banker or the geekiest stat arb trader, you still need to be the kind of person others like and respect. This effects your performance evaluations (managing upward), your day to day work environment (relationships with your peers and subordinates) and your ability to attract and retain the best people (recruiting). Jack Welch pioneered this concept of blending performance with how the performance is achieved in talent assessment, e.g., if you are a top performer but a total sh*thead, this is not an acceptable long-term state. And you know what - he was right then and he is still right today. Unless you are a prop trader locked in a closet with a very strong COO-type dealing with the outside world you need to be concerned with not just how well you play but how you play the game. And in the long run, if you are a good partner, a good teacher and a good boss to go along with being a top performer, you will create a virtuous cycle of attracting and retaining the best people around you. And this is one of the most important keys to sustained success on Wall Street and in life.

Key #3: FIND A MENTOR AT EACH STAGE OF YOUR CAREER

One of the most fortunate aspects of my career was in finding people senior to me and more experienced than me in each of my jobs from whom I could learn - and not just about the technical ins-and-outs of the business, but about the more subtle aspects of functioning and succeeding on Wall Street and how to become the best professional I could be. To this day I remember each and every one of these people and the contribution they made to the professional that eventually emerged:

• Fred Dawson, Latif Sayani and Madhav Misra - Citicorp Global M&A
• Asher Fogel -  Citibank Equity Structuring 
• Rufus Cole, Lynn Feintech and Dipak Rastogi - Citibank Global Derivatives S&T
• Rick Goldsmith and Ralph Reynolds - Deutsche Bank Equity Derivatives  S&T
• Kevin Parker - DB Advisors

Upon reflection, I think the combination of good fortune (in meeting these people) and my desire to learn all I could from these mentors had a substantial and positive effect on my career. And I would encourage you to seek out develop these relationships as well.

Key #4: HIRE PEOPLE SMARTER AND BETTER THAN YOU

What is success on Wall Street? Making money and winning, the right way. How do you do this? By being really good and having a great team. Ok, and how do you do this? By hiring rock stars who, yes, may even be better than you. Is this threatening? Does this make you concerned about your ability to contribute and not be over-shadowed? If it does stay off the Street, because these insecurities will eventually catch up with you. There is no stronger sign in a manager than the ability to attract, manage and retain rock star performers, and to hire people that have skills and attributes that plug gaps in the manager's own repertoire. This is a sign of self-confidence, of laser focus on the goal, of the desire to grow and get better, and of the willingness to put team ahead of self. Because at the end of the day if the team wins the manager wins. And this is a manager who will be slated for increasingly big and challenging roles because they know how to build and manage high-performance teams. And this is what Wall Street is all about.

Key #5: BE A GOOD LISTENER

One thing I've noticed over the years: really smart people often like to hear themselves talk, and are frequently piss-poor listeners. And this is too bad, because it really puts them at a strategic disadvantage. The neat thing about working on Wall Street is that you are often surrounded by high-IQ people who are more experienced than you are, and from whom you can learn a lot of stuff. So by checking your ego at the door and saying "Yeah, I'm smart, but I can get a hell of a lot smarter by shutting up and and listening to these smart people who know stuff I don't," you can substantially enhance your knowledge base and, believe it or not, appear likeable in the process. Huh? That's right. People who like to talk a lot really appreciate people who will listen to them talk. So not only are you sucking the juice out of these people and augmenting your database, but you are building positive and valuable relationships in the process. But even though this is sickeningly logical, it is the rare Wall Street brainiac that can shut the f*ck up, admit to themselves that they have something to learn and take advantage of these golden opportunities. It's just not a fixture of the Wall Streeter's DNA. So if you can suppress these urges to look smart and to instead BE smart, you will have a leg up on all the other high-IQ clowns out there.

Key #6: DON'T BE AFRAID TO GO FOR IT

Think of Wall Street in the same light as those old recruiting ads: The Army: It's Not Just a Job - It's an Adventure. A successful career on Wall Street is an adventure, and it is one about which you need to take control. But how? Won't I just be a cog in the big machine, gradually ascending the ladder and making progressively bigger paychecks? Well, it doesn't really work that way. If you want to do BIG things, you've got to have vision, and you've got to communicate that vision to the right people in the right way. And you can't be afraid to do it. Basically, you need to bring the skills of entrepreneurship to Wall Street. Senior Management of Wall Street firms love to have people generate ideas that they can back and that will make them money. Design a new and lucrative product addressing an important client base. Create a new trading algorithm. Develop a plan for cracking a new market. Incubate a team that leverages existing strengths to better serve a deep-pocketed client set. This makes Senior Management's job so much easier. My advice to you: be one of those people who goes for it. Be an entrepreneur on Wall Street. It is the path to gathering great riches and doing great things. 

Key #7: ALWAYS BE MOVING FORWARD

As an old gray-hair (or an old no-hair in my case), I frequently get calls from people asking for advice and counsel concerning their career. The first question I ask in order to assess their current situation is: "Are you still growing and moving forward in your current job?" If the answer is no, THINGS HAVE TO CHANGE. And fast. The phrase I utter at this point in the conversation is "If you're not moving forward, you are moving backward." And it's true. Stagnation on the Street is death. You're not learning. You're not growing. You're probably not happy. You've lost passion. And this undoubtedly shows. And, eventually, this will impact compensation, performance reviews, and the ability to move into new and exciting areas with better opportunities. So if you find yourself in a position where you are trudging into work, going through the motions and constantly thinking about the weekend, STOP. Think. Ask yourself why. And put a plan in motion to get your career on track. Maybe it is the content of the work. Maybe it is your boss. Maybe it is the firm. Figure out what it is and what want to do. Reach out to a mentor. Speak to friends at other firms. Solicit input from people whom you respect and who know you. This self-assessment process is critical and will have a signifcant impact on your career. And if you don't do this it will also have a significant impact on your career - a negative one. Guaranteed.

Key #8: WORK IN AND FOSTER GOOD CULTURE

If you've read this blog at all you know how important I feel culture is. And you know why? Because it is. Working in sh*tty cultures sucks, and these cultures are not sustainable over long periods of time. And life is too short to find yourself in a culture that is dysfunctional, unsupportive, stifles innovation or any of the other deadly sins. Find a firm, a team whose culture you respect and that fits with you own world view. And when you get to the point where you are building and running teams, focus on building a great culture. This will help with recruitment, management and retention, and will help create the foundation for the building and operation of a high-performance team. It is just so important.

Key #9: COMPORT YOURSELF WITH INTEGRITY

Integrity is kind of like pornography - you know it when you see it. It is more than honesty. It is being a good person and yes, an honest one, but it also has something to do with being trustworthy, thoughtful, and whole (as the word is derived from integer, meaning "whole"). Someone with integrity has the whole goodness package. They are someone for whom the "karma boomerang" concept is a guiding force, e.g., if you do the right thing, good things will happen. And you know what, they do. Someone needs help, help them if possible. It means going to bat for your team at bonus time. It means helping mentor people and assisting with career management. It means being a good coach to your team. It means helping other groups get deals done if it is within your power to do so. This doesn't mean being a sucker and letting people burden you with requests. It just means being a good and commercial person. And this is reputation that is durable and builds over time. And again, helps with recruiting, managing and retaining that team that is so key to being a star on the Street.

Key #10: BE PASSIONATE ABOUT YOUR WORK AND HAVE FUN

Bottom line: you work your a** off on Wall Street. If you aren't passionate about what you are doing it will show, and you will be unhappy. Who the hell wants to work 90 hours a week and feel like crap about it? Can you say misery? People going through the motions - even if they are super smart - are easy to spot and are really unattractive. Managers want people who want to get after it with all their heart, not some half-hearted analyst who does the work but doesn't offer up their own ideas, suggestions, or go the extra mile. Even though you will inevitably work with some a**holes on the Street (as you would in every other vocation as well), you have to enjoy what you are doing. This point is not only about succeeding on Wall Street but about being a happy person. Believe it or not, Wall Street is wicked fun if you find the area that is right for you. M&A, Derivatives, Trading - I gotta tell you, it was a blast. Not that there weren't hard times, times when I wanted to put my fist through a wall (or through someone's face) - of course there were. But at the core I enjoyed each of my jobs and worked hard to be with people and on teams that were "work hard/play hard." And I NEVER questioned my decision to be on Wall Street. And you know what - it showed. I do believe that my passion, my intensity and my love of the game was a key component of my success. And when it was time for me to move on, I did. If you let your passion be your weathervane, you will invariably make smart career decisions on Wall Street.

Bonus Key #11: BE HYPER-ANALYTICAL

You might be saying "duh?" No, I'm serious. There are lots of Investment Bankers that aren't hyper-analytical - and it is a problem. Why? Because they are scared of people in Sales & Trading, and of the products and services they offer. This is just pathetic. This makes them sickly protective of their relationships, acting as dopey gatekeepers and putting roadblocks in the way of better serving the client and helping the firm make money. You'd be surprised how many bankers are out there that fit this mold. Being a banker and being hyper-analytical is a huge asset, because while you will never have the knowledge of a derivatives pro or a convertible bond trader, you will know enough to know the power and value of more complex products and strategies that, at the end of the day, will help you better serve the client and make you more money. And bankers that have this level of comfort and confidence with Sales & Trading get a lot of respect from those in S&T, and this is really, really important, especially when a client wants the firm to step up and take risk which S&T ordinarily wouldn't take except in the face of a super strong relationship led by such a banker. And this happens in real life. So for G-d sakes, if you are planning on being a banker, get the skills and confidence necessary to interact as a peer with those in S&T. Because if you don't, you'll always be the bitch.

I hope you have found this interesting and potentially useful. I never really thought about this stuff in such a concrete manner, but writing it down brought back a rush of memories that made for a really, really great evening. So thanks for being the catalyst for the post - I had an awesome time.

Comments

[Jing]

Roger -- Loved this post! Thanks so much for sharing your insight from all your experience on the Street.

There's a course at Wharton called "Negotiations" where you do learn principles behind negotiating and are graded on how well you perform against others through "mock" negotiations. Though I unfortunately won't be able to take this very popular course, many of my friends have, and those who do well say that the bottom line is to be honest. Goes to show that being an as*hole is never a good long-term sustainable strategy since you will eventually lose people's trust ;p

[Bill a.k.a. NO DooDahs]

Re: EC's comment about how to tell if they're lucky or good, instead of reviewing performance, one should review the money runner's methodology, his ability to stick to it, and risk controls, before even looking at their performance.

If you find someone who has a methodology grounded in research, a history of performing the system with minimal overrides, and an execution tht keeps in mind the FUBAR factor, PLUS results, you've got "good."

If all you have are results without the other things, you've got "lucky."

[Roger]

Bill, I thought reducing sarcastic comments was one of your New Year's resolutions. Oops, forgot, that was one of mine. Sorry.

[Bill aka NO DooDahs!]

Personally, I think *position sizing*, not humility, prevents blowups. Maybe it's harder for the arrogant to position size? I do know that JJ Cramer admits to several errors that, if not for luck, would have made him a "who's that?" in the footnotes of hedgefundom. So far I've been able to preerve both my personal arrogance and my ability to know what I don't know ... LOL!

Forgive the error re: entry versus *eventual* head of trading. I am, and hopefully forever WILL REMAIN, ignorant of what gets one ahead at a Street firm.

[EC]

This friction point is discussed pretty well in Taleb's Fooled By Randomness. Those who take excessive risk and are not blown up will, by definition, deliver results.

Throw in imperfect information associated with the agency problem, a phD (or a few hundred backing you up), a solid pedigree and a convincing 'story', and who can really tell beforehand who the hucksters are and who are the cocky but rational risk takers? The monkey that tosses the coin face up 10 times in a row and can tell a good story will always look like hot sh*t.

Thinking about it from the POV of information theory, by the time the average person can really know that a manager fitting the above characterization is on one side or the other in a statistical sense, that manager will probably be closed for investment or blown up. To determine this sort of thing beforehand is just real tough, yet that's "the game".

Just opinions.

[Jason Wood]

Roger, great post [the entire series is shaping up well].

As to the notion of arrogance, unfortunately I don't believe there's a strong correlation between a lack arrogance and Street success.

There are far too many people with an abundance of cockiness that are massive success stories because, at the end of the day, they deliver results.

That said, I'm a firm believer that to be successful in both life AND business, you need to surround yourself with people who stay on the right side of the confidence/cockiness line.

J

[EC]

Yaser,
I actually wasn't referring to you. I'm sorry if it came off that way.

I disagree that all of them blow up as well. In fact, some of them are probably monstrous successes. One can say that after enough iterations they'll all blow up spectacularly. Perhaps that's true. But this is a probabilistic world we live in, and it only makes sense that in the long run, people who fit that characterization have very bimodal futures. In a bad way.

Regarding Goldman as a whole in all generality-- I'm not sure. Perhaps that's true, I don't know enough people from GS. I do tend to think though that there is an arrogance about Goldman shared by GS employees that is less strong at other i-banks. Given the number of highly successful people that are alumni of the i-bank perhaps that arrogance is justified.

[Yaser Anwar]

EC-

I think you're wayyy wrong if you're referring to me as being cocky/arrogant.

There is quite a difference between being ambitious and being cocky. When I referred to being "head of trading" I never said "oh I want to be head of trading 'cause I'm so f**king good" far from it!

Do I have monstrous ambitions? HELL YEAH! Not sure if you've read any of Ari Kiev or Brett Steenbarger's books, but first step in achieving is believing (that should be envisioned in your head, ofc).

Believe me when I tell you I know what you're talking about. Humility is key to succeeding, nobody likes a cocky prick and they all blow up, as you eluded in your comment. I don't think we've ever had a pvt. conversation, but I think Roger will vouch for me that I'm not a cocky prick. (I've not achieved quarter as much as this blog's readers have, so what do I have to be cocky about? NOTHING, nilch, nada)

With regards to GS. Yes, they have a very humble culture and don't like cowboys. Its we not me, most firms say that, but GS is one of the few that actually acts on preserving its culture that way (no matter how many record years/bonuses they have).

[Roger]

EC, great point concerning arrogance. I tried to address your point in keys 2, 5, 8 and 9, since if you possess these characteristics you simply CANNOT be arrogant. But you are 100% correct - arrogance is a truly shitty quality from which one should run away, very, very fast. Thanks for commenting.

[EC]

Yaser, are you referring to yourself?

For whatever it's worth, I might also add "Don't be overly arrogant". I understand that this profession requires a certain level of self-confidence to take on a healthy amount of risk if it's favorable to do so, but taking this to the logical extreme (brash, cocky arrogance) is extremely dangerous... yet surprisingly prevalent. And of course the overly arrogant usually cannot point themselves out as such. I don't know about you guys, but I have tended to steer well clear of these individuals, for hiring decisions and otherwise.

While we have a natural tendency to figuratively put a blindfold on, shoot a gun at a barn, take the blindfold off and draw a bulls eye around the bullet hole as if it was something other than random chance, I had a funny example of this from personal experience.

A couple years back I visited Amaranth's headquarters and met with Charlie Winkler, lisp and all, and Nick Maounis. I'm not sure what other people have said, but one could smell the arrogance in the air. Less so with Charlie, more so with Nick and with the energy group as a whole. It was as if the other divisions didn't matter. The mentality at that time, from speaking with Nick, was that it was the energy group which carried that firm and made the whole firm what it was. This level of arrogance was far less prevalent at other similar firms I've spoken with, for example Goldman's Principal Strategies group. It's the extremely arrogant who tend to blow up spectacularly, and that is more negative than any potential upside in the brainpower of those individuals.

Could be wrong, just a thought.

[Yaser Anwar]

Bill-

You're right about the hiring part, but not entry level, more of a senior level.

I've heard the banks/funds usually like to see a MBA degree if you want to become like "Head of Trading" or some designation like that.

I guess maybe thats why Roger got his MBA.

[Bill aka NO DooDahs!]

Yaser,

What makes you think either of those is important for a trader? Or do you mean, "which is more likely to get an entry-level trader HIRED; ..."

[Kris Tuttle]

With a background as a research analyst and DoR I would add two from that part of the Street.

R1 - BE RESOURCEFUL. So many analysts put out product that falls short on compelling conclusions. Often the reason is that they are not really going beyond the obvious. Instead of saying "this is all the information available" ask "what additional information would create a strong conclusion?" then "how can I get this information?" Again this sounds simple but really how much time is spent doing this versus talking to managements and investors, going to industry conferences, doing channel checks, and looking at releases and filings. Everyone does that so you do to but to come up with something better you have to dig it out of the ground.

R2 - BE INTERESTING. Most of the writing on Wall Street is fit for the bottom of bird cages. All good writing engages the reader. Which means it is creative, interesting, well-written and even entertaining. Just because we deal with numbers doesn't mean our content has to look like the phone book with charts and tables. Of course the regulatory burden now on analysts at broker/dealers makes it hard to publish interesting content. Doesn't mean you shouldn't still do what you can be to cut through the din and be widely read. If you are not good at this take courses at night, read great books and other examples of superb financial writing like Grants Interest Rate Observer (www.grantspub.com).

[Yaser Anwar]

Excellent post, yet again, Sir.

I wanted to ask you- what is more important for a trader; a MBA or CFA (maybe both)?

Thanks!