Its a steamy summer Friday, I got home very late last night, so this morning’s Friday philosophy will be brief:

I keep reading about graduates trying to get into Wall Street training programs. I suspect most people do not understand what this means. A brief explanatory:

For the new rank and file hires at the major wire houses, this essentially amounts to a major sales training program. Its all about smiling and dialing, networking, becoming a great salesperson. Sure, there is some “product” training, but once we are talking about product the investor is screwed, a field of fees, waiting to be harvested. And so it is with the trainees, many of whom will fail out of the program, after generating reams of leads, prospects and new accounts for the brokers who are ostensibly training them (Wall Street Eats its Young). They are more cannon fodder than a human resource.

What I don’t see much of is a mentoring of the next generation of market professionals to become more than cogs in a giant sales organization. That what it is that they are selling are financial services is nearly irrelevant — other than the specific jargon they must learn to become better sales drones.

This is not the Street I grew up on. Mentoring seemed to be much bigger organizationally than I see today.

Fortunately, it has been replaced by a variety of other sources. Companies have moved much of their best research out from behind firewalls (its now considered “marketing” not sales prduct); Blogs from knowledgeable and experienced pros — hopefully you consider people like me and Josh in that category — as well as communities such as Stocktwits and Minyanville; there are also a countless number of enormously talented and generous people who share their knowledge over Twitter.

Still, I fear something is getting lost in the process. Our modern HFT driven financial industry at times seems bloodless. (I guess algos don’t need mentoring). The floor of the Exchange used to be a finishing school, watering holes were once educational seminars, and major conferences weren’t always media events –rather, they were places where people could learn and expand their knowledge base and skill sets and networks as opposed to being mere backdrops for 3 minute media hits.

This is on my mind in part due to the spate of articles on Wall Street hiring, recruiting, and training. That plus a rescheduled lunch with a friend who used to be the former head of a training program for one of the biggest Wall St iBanks HQ’d in NYC.

My own experiences were very different. I feel like I caught the tail end of a different era. I was mentored by a series of people over the years: First Bill Baker the head trader who trained me as a green newbie (and absorbed all of my initial losses); Guy Ortmann, who introduced me to technical analysis and had me take the TA course with Ralph Acampora; then a long list of people whose advice and counsel and examples helped me learn a great deal: Jeremy Grantham, Robert Shiller, Ned Davis, James Montier, David Kotok, Doug Kass, Art Cashin, Paul Desmond, Don Hays, Bill Black, Ed Easterling, Jim Cramer, Mebane Faber, Herb Greenberg, and on and on the list goes.

From these people I learned how to think about thinking, how to write and argue, how to present myself as a person. Some merely set examples; others literally tutored me.

All of which leads to me to one question: How are you being trained?


Advice to a Young Market Participant (March 5th, 2010)

Category: Apprenticed Investor, Philosophy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

23 Responses to “Sales Training Versus Mentoring/Industry Knowledge”

  1. Robert M says:

    The training I’m receiving in the insurance business is rarely about building a business/book. It is all about pushing product. The type of mentoring you are talking about in the financial industry is gone because the concept of fiduciary responsibility is gone.

  2. stonedwino says:

    BR You’re one of the lucky ones…I can say that just by the list of Wall Street old-timers you work with/for. The average newbie does not have that advantage. No wonder you’re such a wealth of knowledge…

  3. constantnormal says:

    When I an performing my due diligence in assessing a potential stock investment, I make a point of it to examine the senior management, where they came from, how long they have been in those roles …

    There are a lot of companies where the sales droids have taken over the executive levels in the company, and those I exclude from further consideration, as those folks are a cancer inside the company, driven only by their comp plans.

    Finance and engineering types are OK, but the best are those who have worked at many roles within their companies, and have a deep understanding of the company and the industry. Frequently, those people have no particular academic preparation for the job, they have learned it the best way …

  4. constantnormal says:

    I think that some of the tossing the mentoring overboard comes from the preoccupation with managing for the next quarter’s earnings. It is not unique to Wall Street …

    If you have no performance horizon more distant than that, such a time-consuming investment as the proper training of the work force serves no defensible purpose.

    That’s completely wrong, of course …

  5. Chad says:

    I think mentoring is disappearing in a lot of industries. I know I didn’t find it in auditing and that was a while ago. We, as a society, have focused on short-term instead of long-term for too long. Lots of bad leaders/management out there.

  6. PeterR says:

    “Cogs in a giant sales organization,” you say?

    Yes sir, just the way I like ‘em!

    2013 — A Space Odyssey

  7. krice2001 says:

    I believe training or mentoring has become less common because it’s expensive and most companies/organizations realize that they don’t have to. Under current conditions, they can often find people with experiece so why incur the expense?

    I’m a manager in a research and development environment and we do some training/mentoring when we hire new engineers and scientists straight from school. At times we’ve paid people to go to graduate school while working to build their skills (I’ve paid a couple of people’s tuition). I myself earned my graduate degree that way. But in general we’ve cut back because it’s expensive and not hard to find experienced people – for us it’s been relatively simple math. Additionally I work in a field impacted by sequester and government budget fluctuations so the costs involved in training and mentoring are seen as outweighing the advantages. As a result, we’re starting to lose some valuable expertise and that knowledge is not being fully transferred due to lack of focus on mentoring. I believe for us there will be a price to pay.

  8. Robert M says:

    This article points out the critical difference between training and mentoring.
    Wall Street Turns to ‘Boot Camps’ to Bring New Workers Up to Speed

  9. gibbswtr says:

    I was very lucky, I entered the business right out of an Army hospital. I had no training prior to entering hte business but was lucky enough to have a office makes a group of folks who belonged to what was called hte “Sand Box Generation” . These were men who are served in WWII and returned to enter the investment business in 1946 to 1953. They carried with them the traits and teachings of those who had suffered the Depression and the war and were of different class of people. Often not highly educated they were gentlemen, civil at all times and to a fault, generous with their time and experience, and very learned in the actual ways of the world.

    My first firm duPont Walston did a great job of teaching us what they called mechanical efficiency or the art of the back end of the business not just the sales side, we actually learned the difference between precedence and priority of orders on the NYSE.

    Later in my career that sort of training disappeared and all anyone cared about was more gross commission. I have often said that in the transaction driven environment of a brokerage office you could sleep with managers wife, daughters and sons, use drugs, lose people money constantly as long as you did enough gross commission.

    The industry at the brokerage level has never been about making money for clients for the firms it is about accumulating client assets so brokers were trained to be well compensated bank clerks if a few soared to be good managers of assets that was a tail event. When the focus moved to gross commissions and accumulation of assets the business changed and not for the better.

  10. mbrmd says:

    Thought provoking. This old guy fears you are on to something with far broader application. A few word substitutes here and there and it would likely be an accurate capture of so many (most?) of our large institutions that seem to have become clueless (among other words) extraction operations rather than competent and productive (in multiple senses of the word) enterprises. I wish I knew better how this came about, why it is not more widely articulated today on a macro level, at least without political shrillness, and how it could be steered toward a better ending.

  11. Pantmaker says:

    Great topic. Technology is taking the middlemen out of virtually every consumer transaction on the planet. Think Tesla. “Training” is one casualty of this trend. I think the pendulum has probably swung too far away from human development and the entire model needs a tweek.

  12. awealthofcommonsense says:

    I was lucky enough to start out at a small investment shop where the head of the company went out of his way to tutor and mentor the younger employees about the ways of the markets.

    But I hear many friends that went into the brokerage/financial advisor business and they tell me they have learned how to make sales and become asset gatherers but have no idea how investing really works. They acknowledge that they are merely product pushers and have no real analytical skills.

    It’s too bad that so many people get their financial advice from these sources because they don’t know any better.

  13. faulkner says:

    Thanks for posting this. With the research on how to successfully achieve expertise widely available (10,000 hours of deliberate practice, increasing complex mental models, metacognition, the importance of mentorship, etc.), it does raise the question what these firms are planning to do in the next decade when they will need the next generation of seasoned talent. Or is this another case of IBYB?

  14. dow says:

    My particular industry has changed in the last five years. The “interns” are now must-hires who are the sons and daughters of upper management. They have little to no interest in actually working or learning the industry. They have a sense of entitlement and look down on anyone who is not upper management. They have no respect for institutional or experiential knowledge. They reflect their parents.

    I doubt my industry is alone.

  15. Katya G says:

    I love it how in some “how to” career manuals they always say “find yourself a mentor” as if one can just approach someone (we are talking about a trading floor), interrupt him and ask him to be a mentor. I remember back in the day when I was a fresh recruit at big but now defunct bond shop, I was “cracking mtg tapes” for a Big Name Guy on the floor. After working for days (and nights) I sent him a file and walked over to make sure everything is ok and to sort of introduce myself. “Hi, I’m so-and-so, I sent you that file that you wanted” – I say. He looked at me, acknowledged my presence with WTF expression on his face and without saying anything turned back to his screen. To this day, when I see his name in the press this is what I remember.

  16. Gnov says:

    I guess this is not just the financial industry given the comments above. I started on an equity trading desk and as an assistant would get slapped around allot, but with good reason and leaning quite a bit during the process. It taught me what customers (large institutions) wanted and how to handle them. Not to make a quick buck on their trade, but to facilitate a relationship and help them in and out of large positions. And with that I gained insights as to what and why they were making certain equity based investment decisions. That said, as I improved mentors would push and be proud of their apprentice, not be jealous that they were doing well and moving on. I once had a boss tell me he would be pissed if I were still on his desk in 12 months. I’ve wondered if its the competitive landscape or just a change in culture. Either way the trend towards short term benefits with little regard for the long term continues…time to start bucking the trend

  17. [...] On the death of mentorship on Wall Street.  (Big Picture) [...]

  18. Joe says:


    Given that your mentoring as a newbie and training was excellent, was it also uncommon? Apart from the pure promoters and those with a natural pre-existing audience that they couldn’t lose on a bet, the successful voices are just that, successful. How many people started at a similar time and place and were offered a lot less?

    How am I being trained? As an Individual investor, the hard way. Self taught on the street (dot com). I’d had the desire to learn investing since the early 80′s, but with the local bookstore, monthly magazines and weekly news papers and no connection to anyone in the industry, it was tough. One hundred dollars a trade and yesterdays quotes in the back of the sport section and monthly statements by mail didn’t help. But discount brokers, then online brokers, and The brought me into contact with the wheels and gears of what was actually going on.

    Would a mentor have helped. Yup. I had a handful.

  19. yuvalw says:

    I am being trained by the market, its the best “mentor” but the most expensive one as well…

  20. end game says:

    I agree completely. You might remember the old-school lbroker in the film Wall Street who tried to mentor Bud Fox but failed and gave him the pep talk about looking into the abyss as Fox walked towards his office full of federal agents waiting there to arrest him. Oliver Stone sensed the changing of the guard then.

    I witnessessed the baton passing. Worked at a very prestigious collegial boutique in the mid ’90s and watched the profession deteriorate into a land grab as the new MBAs came in without class, goodwill, or empathy.

    Nowadays, in the UHNW division if my big firm I see some water-cooler collegiality and idea sharing, but not so much in the other offices. I’ve hired a young broker from a wirehouse and pay him $100k to learn global market allocation, charge institutional fees, and eschew structured products. But I have to mentor myself. That’s why I’m here. I first heard about one of the luminaries you list in your post and had lunch with him… you have to mentor yourself. Thanks for a great site.

  21. analeka41 says:

    Sales Training Versus Mentoring/Industry Knowledge I got a lot of knowledge about this topic in your blog really great information, very nice!!!