JLN’s two-day MarketsWiki Education World of Opportunity concluded on Wednesday as another 12 industry veterans took the stage to help industry interns prepare for a potential career in the financial field – or any field, really. There was some advice applicable to any profession, such as “know what your goals are,” “find something you’re passionate about and submerge yourself,” and “never stop learning,” as well as some information specific to trading options and futures.
Appropriate to an event held in Chicago, there was a lot of Chicago boosterism, as well as some Chicago history. John McPartland, a market executive with the quant firm Hidden Road Partners and a recent retiree from the Chicago Fed, started the day off speaking about the 1987 crash and how Chicago’s markets were the only major ones that stayed open, and thus were blamed for the crash. General Motors’ pension plan had sold S&P Futures all day that day, and Gordon Binns, the pension fund leader, later told a court, “We saved pensioners $330 million that day.” Eventually people realized that what he said was true and Chicago’s open markets buffered the crash rather than caused it.
Mary Savoie, executive director of the Options Industry Council and first vice president, investor education, for OCC, talked about the history of the OCC and her own career history – she has been with the OCC for more than 30 years, and she said it has been very fulfilling. “We want responsible investors,” she said, “It is good for financial markets if individuals are successful and continue to invest.” Education can lower barriers to options investing and boost people’s confidence, she said. OIC provides unbiased education covering both the benefits and risks and giving no specific advice. She also suggested visiting SEC.gov for a list of other reputable education sites and FINRA.org for its Brokercheck service.
Rob Hocking, senior vice president, head of derivatives strategy at Cboe, talked about being a pit trader for the first half of his career. He was in the S&P pit when the markets reopened a week after the terrorist attacks on September 11, 2001; he said at first the floor was dead and eerily quiet, in a way he had never seen it before, and then suddenly sprang to life when the markets started up again. The markets still need people, he said – face to face negotiation – and market makers fill a very important role with their obligation to maintain bid and offer prices. He also explained the VIX index and the various derivatives contracts on it, which can be used for hedging risk.
Robert Khoury, the CEO of Agile Rainmakers, had some great interviewing and career tips for graduating students, which he learned over a 21-year career in the financial industry after having started out as “the worst interviewee ever.” His biggest obstacle, he said, was having two “limiting thoughts”: 1. He didn’t feel he had accomplished enough early on and was afraid of being found out; and 2. He thought the interviewing process was unfair, because the interviewer had all the power. It took him two years to give up these limiting thoughts. His suggestions for students included to view interviewing from an “empowerment perspective”; to write down 5 accomplishments you are proud of, five books you have read recently, and what you like to do in your free time, as well as your top three strengths and how you have used them in the past; and to get outside validation from tests such as the SAT and ACT and contests such as the CME’s FX trading competition. And always follow up an interview with a written thank you note. “Nobody wants more emails,” he said.
Alli Brennan, the chief of staff of CQG, said “always find ways to add value.” CQG, a Chicago fintech provider, is focused on adding value for its customers, she said, for example in helping farmers figure out how to hedge price risk. Advice she offered: keep a positive attitude and avoid the “it’s not my job” mentality; identify and take on projects that add value – she gave the example of Adena Friedman, whose career rocketed after she took on an early project that no one else wanted to touch. Do what you say you will do, don’t fear mistakes and build a network of peers, Brennan said.
Jeff Carter, manager of West Loop Ventures, talked about the Chicago startup scene and being a venture capitalist. Born and raised in Chicago, he was a floor trader and then on the CME board. He said the seed and series A stages are where the big money is made, and that Chicago is rife with successful startup companies such as Halo Investing, Braintree (acquired by Paypal), Avant, and Open Finance. Chicago also offers seed funding, talented people, Fortune 500 companies, and great universities. More CFOs come out of the University of Illinois than any other U.S. university, and Chicago is ranked No. 1 in return on investment for venture capitalists, he said. (Of course, there are some down sides too: Chicago is a closed network, there is a fear of failure in the Midwest, and corporate customers here are more risk averse. You can’t win ’em all.)
Jason Manumaleuna, whose name is even harder to pronounce than you thought, is the CEO of the RCG division of Marex Spectron. He overcame a lot of false starts to get to where he is now, including not pursuing a recruiter from Brown University after high school, getting rejected from the University of Chicago and then getting put on academic probation for partying too much. He advised students to focus on soft skills such as public speaking and business writing in addition to academics, and to “be the most impactful person in the room” rather than the smartest. Also very important: Hire the right people and then stay out of their way.
David Doig, president of Chicago Neighborhood Initiatives, has a different kind of background, having started out working in community organizing on Chicago’s West Side and becoming planning commissioner and then head of the Park District. But he, too, is working to make Chicago an equitable and welcoming place for investment. Chicago is a seabed for innovation, he said, but we need investment in the South and West Sides, and we need to address student debt and income disparity, which have caused African-American home ownership to fall to an all-time low.
Donnie Roberts, the CEO of The Small Exchange, which plans to launch at the end of this year, did “every job in the industry” and in the process learned how everything works. His topic was “Don’t Short Yourself,” and he said the students in attendance were in the right place at the right time and there has “never been so much change in decades.” Ever-changing technology and increasingly disruptive innovations mean that with the right idea you can “knock it out of the park.” He advised never undervaluing yourself, and figuring out what you’ve got, as well as being around people with like-minded minds and spirits. “College teaches you the basics, but how you succeed is inside of you,” he said. He, too, advocated honing your soft skills. He said he finds it ridiculous that colleges ask 18-year-olds to declare a major, i.e. to decide what to do with the rest of their lives at that young age, and said the odds are that 70 percent of them would not have a career in their major.
Mike Nowak, the COO of ABN Amro Clearing Corp, urged the audience to “expect the unexpected.” Echoing Roberts, he said he never expected to become the COO of a clearing bank and that he didn’t even know what a clearing bank was in college. He entered the workforce during the dotcom era when the job market was strong, but September 11 changed his career path. He ended up being offered a job trading on the grain floor by a buddy of his, and like so many, he was enthralled by the packed, screaming chaos of the pits. He had a degree in bioengineering and was working for O’Connor and Co. at $7.50 an hour. But he read books and learned all about derivatives. He said never stop learning – “When I stop learning in a given job I know it’s time to get a new job.” And when you start at a new job, ask questions. “Ask ‘why am I doing this?’ Because getting the answer might enable you to make it more efficient.” He advised writing down your goals and not just having them in your head, because the process of physically writing something down instills it in your memory.
Patty Schuler, vice president of sales at the Boston Options Exchange, started on the Cboe floor in 1986 as a phone clerk and had to have a thick skin. But she worked her way up, working for First Options and later becoming a floor manager for O’Connor & Co, and finishing her college degree in night school. She said having to support an out-of-work husband and kids kept her from taking risks at one time in her career, but she was helped greatly by becoming a member and then president of STAC (which has just created a discounted student membership). She advocated having a strong network and putting yourself out there.
Hillary Till, co-founder and principal of Premia Capital Management, wrapped the day up talking about being inspired by her father, who took a lesson from Death of a Salesman – that he didn’t want to be in a profession where your personal likeability is crucial. She realized early on that Arthur Anderson was a “culture shock” for her and said it was important to “know your personality.” She advised getting as much education as you can and “try to do something interesting and different.” In finding the right job, location and paycheck are important, but so is making sure you are always learning. She eventually became financially comfortable enough to apply to trade interest rates and read up on interest rate swaps, which then ballooned into a hugely popular product. She said, “Sometimes it is best to stand on a hill that turns into a mountain.”