Thursday, May 25, 2017

Revenge of the nerds on Wall Street

When Michael Savini came to Wall Street in 2006, banks and brokers had stocked their annual recruiting classes with a preponderance of new hires who shared at least one thing in common: They’d played college sports. ...

Ex-jocks had the right stomach for risk-taking, the theory went, and the ideal temperament to win clients’ trust and business. ...

As an economics major at Columbia University, where he was a four-year starter and co-captain of the wrestling team, Mr. Savini followed two older brothers, also college athletes, into finance. There, he believed, his background gave him an edge. “Athletes are better equipped at knowing you’re not always going to win,” he said. “In sales, you’re going to get a lot of doors slammed in your face. It’s how you bounce back from those losses that define us.”

Yet these days, when he attends mixers for former wrestlers in finance, Mr. Savini, 42 years old, says he hears more gripes than enthusiasm. If college athletes asked him for advice in pursuing a career on the trading floor, he said, his message would be a simple one.

Don’t. ...

Two years ago, after nearly a decade working as an equity salesman, Mr. Savini left for 303 Capital Markets, a boutique investment-banking firm. “The business is changing,” he said. “It’s all going electronic.”

“These guys are on the wrong side of Moore’s Law,” said Rett Wallace, a former investment banker, referring to the axiom on the exponential growth of computing power. ...

The industry started to shift away from athletes in the 1990s as derivatives grew in number and complexity. That necessitated a hiring spree for Ph.D.s who could understand and price them. More recently, the advent of electronic trading and quantitative investing called for many more recruits with math or computer-programming skills.
--Justin Baer, WSJ, on brains over brawn