I read this thread with interest as someone who once considered prop firms over banks. I understand that there are people out there who want to be self-employed (and you are with a prop firm to a certain extent). But like any other guy out there who quit college ala bill gates, probability of success is very small. Joining a bank simply ensures that your risk is lessened which should, automatically, mean that your returns are reduced. But I fail to see that given how banks pay upwards 5million for senior positions and 10-20 million for head of trading desks. My question basically is whether a prop firm trader can earn that much after let's say 10 years at the firm. Because from what I've seen, the answer is no. Before the flamers catch me on the probability of success portion, I'd like to say that being a top earner in a bank's trading floor is a small prob as well, but it is larger than being a bill gates in trading. Also, nowadays, derivatives trading is a high leverage business and very tied into statistical arbitrage type of operation. I fail to see how you can do that job without even a basic undergrad degree. The only bank that used to buck this believe would be bear stearns (which apparently hired Greenberg's doorman into MBS!), well, look what happened to them. So to all the guys who are insistent on prop firm position being better off for the original poster compared to GS (if he gets it), I think you are giving this young man the worst advice ever!
To the OP, as stated before in the thread but I must reiterate, a year ago I tried to to do what you are speaking of (without the friend) at morgan stanley. I dropped out of a top 5 school my senior year and had a track record of 4 years that was quite good. I was 27 at the time and they did not even think twice, I eventually called them and they want fresh blood, mostly people without pre-conceived notions about how markets work and so on. If you want to work and excel at any Wall Street IBank especially Goldman, I would finish school, I am now 29 and am thinking about finishing at night. But there is alot to be said about working for yourself and calling your own shots.
Those who APPLY for the job, want to work there for reasons. Why would you apply to GS if you had no intention to really working for them. Except to see if you could get in. All else equal, choosing PROP over GS is more than likely asinine. The person who gets accepted to GS, and chooses prop over it is either a genius who can make millions or a complete and total moron who somehow got passed the screening. I am willing to wager its the latter. "Hope that helps" no, your posts are not helpful to me. sorry. This situation is akin to choosing college: Option A: Go to any elite college. Option B: Go to community college. Your rationale, "hey, a small percentage of people are successful and they didn't even finish college! go to community college, some people don't give a shit about where you were educated." My rationale, "going to college reduces your risk of adversity or hardship. Yes, it may hinder your reward had you not finished (i.e. the Bill Gates of the world), but the risk/reward is infinitely better to finish college. For every 1 Bill Gates, you will have 10 Warren Buffetts.
The background check with GS is like a big book. It's beyond absurd. They take about a month or so to do it. Connections will not help unless someone all the way at the top is willing to override their compliance and HR. GS background check is so absurd, that they do lose potential quality professionals they want to hire. Some straight out refuse the positions, because they don't want to deal with the check or do not feel comfortable doing it. Really, they kinda know they won't pass it, for whatever reason. Obviously, for their prime departments like trading, if someone has a shot, they will try it even if they won't pass, but for some parts of GS, they have a problem finding enough candidates because of this issue and quite a few others (mainly dealing with the hell you go through there) Very ironic that Goldman, who has god knows how many skeletons in their closet, would put everyone under such scrutiny.
While I am in agreement with you on most of your point, I think you need to realize that there are people in this world who like & respect themselves on factors other than their net worth. Plenty of very bright college grads & professionals who choose a smaller firm or self-employment over GS/JPM/MS/LEH, because they value good working environments, cool people & freedom above dollars & cents. Goldman is one of the worst working environments on the street. It's no joke. You sacrifice and pay a lot to put Goldman on your resume.
one thing you'll get from GS is connections. you can always trade for them for a year or two then break out on your own possibly much more stronger than currently.
Agree completely. I dont know what most of you are smoking.... recommending a fresh college kid to trade by himself over a job at GS.... OP, finish your degree, do everything you can to get into GS. Save as much of your salary/bonus as you can, gain some experience, learn how corporate america and those investment bank operate, make some friends/connections, then after a few years decide if you want to break out or stay at the 9-5 grind. You will be much better off than turning down the gs job and try to daytrade by yourself fresh out of college at the get go.
It might just be my ignorance, but isn't trading for GS and trading prop for yourself - even with tens of millions of buying power - a totally different game? I think it's a fallacy to assume that success in one automatically translates into success in the other. Whether or not one is trading one's own net worth on the line every day, holding times, risk parameters, access to information -- all these elements are probably vastly different when comparing trading for a large desk and for your own account. I wouldn't even assume that a hotshot trader from GS can sit down and immediately earn big profits on his own, just imagine all the resources he'd be used to that would be out of reach.
this i assume is all BS. But anyway, how many prop traders do you really think a firm like goldman or any other bank has. also, you have no degree. what kind of trading could you do without a degree that cannot be automated by a computer?