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'One of the things I like about the financial sector, it's meritocratic … the boardrooms are often really multicultural'
At the research analyst's suggestion we're not meeting in some pub or coffee house, but in his office near London's Bank station, at 7.30am. He is in his late 30s, tall and broad-shouldered, with a calm voice and gentle manners. He is wearing smart-casual clothes and had not shaved that morning.
"One of the things I like about the financial sector, it's meritocratic. In some places it's difficult to make it unless you went to the right school, then Oxford or Cambridge. In finance, achievement is often measurable in cold numbers. Young people can rise very, very quickly. The boardrooms of financial institutions are often really multicultural. Compare that with many other sectors in industry and business.
"This is my desk. Three computer screens with news tickers and background graphs and figures, and, of course, market data. If a stock is moving up it's in green, down is red, neutral is white. There's a TV over there with business news, I have chatlines open with clients and contacts, there's the phone, of course, my colleagues sharing stuff – 'did you see Gold at 1670?!' – all through the day. Can you feel the adrenaline?
"On workdays I get up well before 6am. In summer that's OK, but in winter I suffer. I get up and check the news. On my way to work I make sure to ride buses or overground trains so I can go online with my phone. Once in the office I write my note to investors, which is my take on where the world economy is heading. That has to be out by 7.30am. In my notes I try to be short and to the point – clients receive over 300 emails a day, their attention span will never exceed a page. The best you can hope for is for people to read a few paragraphs.
"For the rest of the day I update my note. You might see me as a sports commentator, with the markets being the match. Except my analysis is directed at the coaches and players in the field, rather than the audience in the stadium.
"Ours is a brokerage firm, meaning that when traders and investors want to buy or sell stocks or derivatives they can do that through us. We supply clients with market research and analysis free of charge, then if they act on our ideas and decide to buy or sell, they come to us and we execute the trade. From that we collect a commission, which pays my salary.
"There is an element of chivalry there, yes, as we can't force clients to use our brokerage service. And there's always the risk of other analysts recycling our work and passing it off as their own.
"All of us here have worked at big banks, so we know what it's like there. It can be a pretty lonely life as a trader. You have specialised in one particular area, say the automobile industry, and that's your 'book'. But there may be only one of you with that book. Maybe there's a junior helping you out, but that's it. Our research is like a sounding board for clients, a second opinion. We pass out good ideas but also nuggets of insight that they can use to look good in front of their boss.
"The primary selling point for our firm is that we don't take positions ourselves. Banks provide research about markets and companies, but at the same time banks operate in these markets. For example, a trader at Big Bank X may have taken a position in corn options. After a few weeks, he wants to get out of that position. And then Big Bank X may be tempted to talk up corn options to their clients. Some of the big American banks are known to have promoted investment products they knew were flawed. Worse, they had even taken positions themselves where they stood to benefit if the products they were promoting failed. They were betting against their own advice.
"It wasn't actual misleading, but they were certainly encouraging people to do things that were in the bank's interest rather than their own.
"There is a real breakdown of trust within the financial sector these days. When some banks' names get mentioned, I hear people say: 'What? Are you still talking to that bank at all?'
"My working day ends when the markets close, though of course I have to follow world events insofar as they might impact the markets. My analysis specifically provides the macro view. I am not making statements on individual companies – there are whole teams of researchers for that elsewhere. I am going for the bird's eye view of the entire economy. For instance, I just sent out a note predicting that the Swiss central bank would intervene in the market. What was great was that 15 minutes later, the Swiss central bank did intervene. What was less great was that due to a misunderstanding my note didn't go out. Had it gone out, you might say that I would have 'scored' with my clients, who would have noticed my prediction coming true – provided, of course, that they had read my note in the first place."
Joris Luyendijk
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