- January 14, 2022
- Posted by: Bastion team
- Category: World News
A FEW YEARS ago a stranger sidled up to me at a conference. I had been introduced as an equity salesman with over 30 years of experience. “Success or failure?” he asked impishly. I laughed. When I started in stockbroking, anyone older than 50 carried an air of defeat. If they hadn’t made enough money to retire early, they were seen as losers. Well, I’m still here and I’m not the only one. There is a lot more grey hair on the sales desks these days.
That is not the only change. Trading revenue is slimmer, because of regulation and new technology. The way sell-side analysts and salespeople are paid has changed. But the biggest difference is in the kinds of conversation I have and who I have them with. Twenty years ago, I hardly spoke to the fast-money crowd. Now most of my day is taken up with them. Share prices are set at the margin. And the marginal buyer and seller is a hedge-fund manager.
Hedge funds are behind much of the recent market drama. The minutes of the Federal Reserve’s rate-setting meeting last week were a trigger. The immediate prospect of tighter monetary policy spurred hedge funds to sell expensive “growth” shares, notably those of technology companies, the profits of which are expected to last long into the future. Those distant earnings must now be discounted at a higher rate. So tech shares fell. At the same…