The end of a glittering career ….

by Daniel on August 16, 2014

And so, as readers of my Twitter account might be aware, I’ve had a life event recently. As of today (I’m posting this from the WiFi at Geneva airport) and for the next year, I am doing less of the stockbroking, and more of the travelling round the world with my family.

It is often traditional for articles by downshifting investment bankers to do a big deal about how they have got tired of the iniquity of the industry, want to seek meaning in their lives and so on. Don’t go looking for that here. I’m not at all bitter about the industry (probably because I wasn’t sacked), and if I had thought it was an intrinsically immoral or destructive business I was in, I wouldn’t have done it for sixteen years. We bought and sold shares – if you wanted some shares we’d sell you some, and if you had some shares you didn’t want any more we’d make you an offer for them.

My job was what is called a “sell side equity analyst”. Which is to say, “a writer of a very specialist news service, covering somewhere between three and twelve companies, provided by a stock brokerage firm for the benefit of its clients”. Every day I used to be responsible for knowing anything that was going on in the world which might be relevant to the advisability or otherwise of an investment in banking sector stocks, and then either write it down for distribution to our full list of clients, or call up a couple of dozen of the most important ones if I knew they’d be specifically interested in it. Once a quarter, clients would file a “broker review”detailing how useful they had found our brokerage firm and if they had liked my research that quarter they would say so.

It was also my job to make sure that my own firm’s trading desk was as well-informed as we possibly manage, because as a brokerage firm, we provided firm quotes for clients to deal against. If you’ve just agreed a price for a block of shares, and then some negative news comes out before you’ve had a chance to move them on, you can lose a lot of money. And one reason why a client might be looking for a firm price om a block of shares is that he or she has a strong suspicion that something nasty might be about to happen to them. So it was always in the interests of my employers to ensure that we were better informed than the clients – basically an impossible task since there were dozens of them and some of them were bloody sharp cookies, but we tried.

That’s the nature of the business of being an analyst – protect your market-maker as much as you can, and try to produce material that will reflect well on your firm’s reputation as good people to deal with. From dot com bubble to high-frequency and beyond, it really didn’t change all that much as long as it was there. Lots of people thought that we didn’t add any value – an opinion to which they were entitled, although personally if I had been regulating the industry I’d have made more of an effort to find out what I was talking about. While I was there, average commission levels fell from 0.2% to around 0.008%, so I don’t think people can really claim to have been ripped off too badly by the agency brokers at least. From day one to day 5500, people constantly foretold the end of equity research – it was going to be done in by quant funds, index trackers, buy-side hiring their own analysts, hedge funds poaching all the talent, the Global Settlement regulations on capital markets business and finally by high frequency trading (ie, quant funds, again). But equity research is still here, although many of the people who forecast its demise are no longer. In the final analysis, I always took comfort from the fact that my own part of the industry, along with M&A advisory, had the distinction of being the only part where anyone had ever set up a new business using their own money – there are no boutique CDO traders, no startup derivatives structurers and no offices with two men and a dog originating subprime securitisations. But there are loads of small research firms and stockbrokers, and I was happy to work at a few of the best.

Some of my recommendations were great and some were awful, but on average I don’t think I can have been too bad because people kept giving me jobs and bonuses. Towards the end of my career, I was part of a research organisation that was voted best in Europe in two years’ industry surveys and that’s pretty much the level where I topped out; sports fans would probably recognise me as a John Toshack figure – a solid contributor to some great teams, the kind of guy who would always be promoted to Director (because of good specialist knowledge) but never to Managing Director (too weird, too disorganised). I’m happy with the results.

But it’s not such a great job that you’d keep doing it if you didn’t have to – none of them are, hence the name “job”. So I’ve taken my various bonuses, plus the profits from the London housing market and so on, and used them to move on to a new big adventure. Watch this space, but as far as investment banking is concerned, I am imagining a tinny loudspeaker ringing out above the screaming crowds with a calm voice saying “Davies has left the building”.



Myles 08.16.14 at 5:35 pm

Godspeed! We’ll see how/where my own career (it hasn’t started yet) goes, but good to see someone has made a good run of good old fashioned stockbroking/whatever. Now to the next big thing!


Peter K. 08.16.14 at 5:57 pm

Well played. Amid all of the negative news this was a pleasure to read like your other missives from over the years. Hopefully you will continue regularly. I’ve found the John Toshacks are the ones who make the “job,” whatever it is, bearable.


Eszter 08.16.14 at 6:50 pm

Please keep us posted! I’d love to hear about your journeys.


nnyhav 08.16.14 at 7:26 pm

Congrats. And glad you’ve dropped the blog-protection. And looking forward to seeing more of your byline elsewhere.

(and well BTDT, tho mostly FICC-side broker-dealer analytical support, it’s good to be out of it, as more banks are discovering)


Russell L. Carter 08.16.14 at 7:43 pm

“And glad you’ve dropped the blog-protection”

Yeah. I figured something was cooking when a big slug of D^2 digest gushed through feedly a few days back.

Sounds awesome D^2.


Tom Hurka 08.16.14 at 9:22 pm

Nice account of your past, and best of luck in your future.


Doctor Memory 08.16.14 at 9:41 pm

Aha! Like others, I was happily perplexed that your blog’s lights had suddenly gone back on. Congratulations on your successful escape from your current career, and best of luck in the next one.


Bill Benzon 08.16.14 at 11:16 pm

Congratulations and have a blast in your travels.


Ronan(rf) 08.16.14 at 11:40 pm

Outrageous. A jobs for life , not 16 Christmases


deliasmith 08.17.14 at 12:19 am

I hope that, unlike John Toshack, you remembered to take the clothes hanger out of your shirt before you put it on.


harry b 08.17.14 at 12:44 am

Congratulations, Daniel, on doing the job well, understanding its worth, neither inflating not deflating it, and being guided by your own priorities. If we see just one extra post from you as a result, I’ll be happy.

Are we all allowed to compare ourselves with sportspeople? I’ve never thought of it that way, but if I had to — well, my heroes are Geoff Arnold (I watched every ball he bowled in test cricket for two summers, and spent 5 hours a day one summer mimicking him which is how I taught myself to bowl) and Geoff Miller, but I tend to think I am like Mike Hendrick, less talented, but no-one ever drops catches off my bowling, and all the LBW decisions go my way.


Steve Williams 08.17.14 at 1:08 am

Having gandered at your Twitter feed, Dan, it looks like you’re going to some amazing places, so enjoy! Word of warning, though – some of us who leave Britain never quite find the need to go back. Anyway, safe travels, and hope we see more of your writing as a result.


JW Mason 08.17.14 at 2:20 am

Congratulations! good for you.


mrkmyr 08.17.14 at 5:01 am

I hope DD continues to share his insights on the new subject matter he encounters.


Nabakov 08.17.14 at 8:24 am

Sounds like just the right thing for you and your family now. Good luck and have fun. Hope you’ll find more time to write and post.


bjk 08.17.14 at 3:31 pm

Great, good luck. Hope we see more of you at the digest or here.


Barry 08.17.14 at 4:49 pm

Have a great trip!


P O'Neill 08.17.14 at 6:05 pm

There’s a travelogue that could be done in which DD gives us a parody Tom Friedman version of each place he visits. Or a more serious one with un-Friedman like reflections on each place. Tentative title: The World is Squared.


politicalfootball 08.17.14 at 8:06 pm

Congrats and good luck!


Frances Coppola (@Frances_Coppola) 08.18.14 at 1:28 am

Congratulations on making your escape a year sooner than I did (I spent 17 years working on the plumbing in assorted banks). I hope you enjoy your travels. And do lots more writing.


Barry Freed 08.18.14 at 5:04 pm

Best of luck and enjoy your adventures!


godoggo 08.19.14 at 4:39 am

And now, an update on me. I’m either going to successfully get my fucking body fixed or I’ll kill myself in the near future. If the latter, I’m not quite sure which way I’m going to do it, but I’ve got a couple of books on the subject, and I’m narrowing the options. If the former, I will be able to say, HAHAHAHAHAHA, you were WRONG WRONG WRONG all those years when you were obsessively following me around the internet ridiculing my physical problems with your 10,000 fucking pseudonymns. Which I see you’re STILL doing, you fucking psychotic.

So hopefully it will be the former.


godoggo 08.19.14 at 5:52 am

Feel free to disemvowel. Probably best for everybody I imagine. Up to you.


Ciaran 08.19.14 at 10:27 am

Say what …..????


Phil 08.19.14 at 8:40 pm

Freelance journalism, eh? (I may be replying to Twitter here rather than to the actual post. Never mind.)

At a friend’s wedding, soon after leaving college, I listened politely as an acquaintance told me he was thinking about going into journalism, quietly thinking to myself Yeah? I don’t remember you writing regularly for Stop Press for almost a whole year – and considering that I’ve sent my c.v. and cuttings to all the main places and had no replies, well, jolly good luck with that…

That was the last time I saw Anatol Lieven.


godoggo 08.20.14 at 5:05 pm

still doing it…

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