Syding: Anmärkningsvärt prisfall i olja – kan vara sunt

Gästkrönikör, Omni Ekonomi, Publicerad 07 maj 2019, 10.32 Uppdaterad 07 maj 2019, 14.00

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De senaste veckornas prisfall i olja är anmärkningsvärt och kan vara ett tecken på att världen har tillväxtproblem. Men det finns samtidigt flera faktorer som talar för att det rör sig om en sund rekyl, och inte ett förebådande av en nattsvart ekonomi.

Det skriver Karl-Mikael Syding, investerare och pensionerad hedgefondförvaltare.

Läs mer om mina oljespaningar här på Omni Ekonomi (TIPS: sätt “Syding” eller “Expertrösterna” på bevakning i mobilappen Omni Ekonomi). Framöver kommer fler tankar om bland annat mjukvara och guld, förutom olja.

Roligaste bilden sedan Skandias ÅR 1994 för 25 år sedan

How to get rich in finance

Topic: the principle ways of making money working in the finance industry (as opposed to going it alone as a trader)

Conclusion: the career choices of broker/trader, analyst, portfolio manager, managing director, and partner/owner all have their merits and drawbacks. As do going from one to the other. I’ve done them all, albeit with no real plan, and was handsomely rewarded for it.

This article investigates how to best pursue material riches in high finance.

Early 2010, I attended a gala in London to accept Futuris’ award The European Hedge Fund Of The Decade. I was the managing director, one of three senior partners, and portfolio manager for Futuris, a billion dollar hedge fund. We had won prestigious awards before but this really was the biggest one.

In short, I was very well off. Not only that, I came from nothing, with no network, no pedigree, no friends, parents, acquaintances etc. in the business. In addition I had no previous experience of finance. All I had was grit.

I first worked myself up the ranks on the sell-side as an analyst, and then switched to the buy-side to manage other people’s money, first as an analyst and subequently as a portfolio manager.

I started my career as a lowly broker’s assistant in the spring of 1994 after four years of studies at SSE (Stockholm School of Economics). Two years later I eventually found the time to hand in my econometric thesis (“Does the stock market overreact in its valuation of Swedish pulp and paper stocks?“) and thus got my masters degree (majoring in finance).

By 1996, after a couple of years since my humble beginnings in the industry, I was responsible for researching and recommending IT stocks at Sweden’s largest bank. Only four years later I was poached by the newly incepted IT focused hedge fund Futuris, to become their in-house Software and IT services analyst.

During the beginning of my career, I sometimes thought about the optimal way through the finance industry. One idea I had was to jump back and forth between the buy-side and sell-side every 2-3 years. A few years on the sell-side would make me known among all the important clients and make them want to hire me. And after a while on the buy-side I could leverage my knowledge about the inner workings of clients, as well as my personal contancts, to get more business as a research analyst or key client responsible on the buy side.

For every switch I would negotiate better pay packages, either for staying an extra year on whatever side I was already on, or for bringing my superior knowledge and contacts over to the other side.

In addition, I thought about doing something similar within the sell-side, switching between being an anayst and a broker/research sales.

As sales, I would have time to read research from all different industries and sectors, and be able to both learn more, as well as cherry pick the absolute best ideas for my clients. Then I could come back even stronger as a highly specialized single industry analyst, armed with a more diverse set of convincing assessment and valuation methods. The switches would be made opportunistically, when my employer or some other firm was looking for unorthodox solutions, rather than actively pursuing switching sides.

I had no real plan but for executing whatever orders I got as well as I could. In many ways I performed similarly to how I imagine a first generation artificial general intelligent agent would. I just powered myopically ahead with no regard to my personal health or professional suboptimization issues. I received my goal specifications and I tried to reach them with whatever legal means I had at my disposal, or could get my hands on.

If I had been asked to optimize the number of paper clips I would have melted the world.

However, whatever ideas I originally had about optimizing my knowledge, skills, professional network, compensation packages etc. were lost within my first few months as an underpaid, underslept, overworked premature ruin of a boy man, 22 years of age.

Here’s the strategic do-over of an optimal finance career, for your benefit:

Broker, sales, trader

Your main responsibility as a broker is to get clients to spend money (commission) on your firm.

You can achieve that goal by supplying them with good investment ideas, backed by fundamental and technical research, as well as gossip and assessments of which analyst is currently enjoying a good streak.

Another proven strategy is to essentially be a travel guide for clients visiting companies, conferences, restaurants, bars, clubs and strip joints.

A happy client understands that all firms are basically equally good, and could thus just as well allocate his spending to the firm that supplies good enough investment advice but excellent conscierge services. All this is very entertainingly documented in the book City Boy by Geraint Anderson, with whom I share my birth year, analyst background, as well as author aspirations, not to mention entering the finance industry without any knowledge of it. He’s also the one I turned to for advice, for deciding when to retire.

There are different tiers within the brokers, sales and traders guild. Some simply take orders and execute them by a click of the mouse, via a (Bloomberg) chat, or a phone call. Others are proprietary traders who get to play around with company money, with the objective of either making a profit or boosting the firm’s apparent market share (at a specified maximum loss). Yes, they get paid to lose money.

Yet others are the bridge between analysts and clients, they are the wheels of the broker firm, where the rubber meets the road.

Analysts identify and present ten good reasons for buying a stock on early morning meetings. Sales representatives (called “brokers”, “research sales”, “key account managers” etc.) try to remember three of the most important arguments, and hope that the clients they call latch on to one or two of these, and promptly place an order, which in turn lands the broker firm a commission. The best brokers receive year end bonuses based on how much such business they catalyze.

To land a position as research sales, to start accumulating large annual bonuses, you need to understand both people and numbers, not to mention work at a large and important firm to which clients automatically allocate most of their business. Jumping back and forth between roles as respectively a broker and an analyst is one effective route that I recommend.

There’s a snag though. The last few years new directives have been put in place which significantly limit the amount of commission clients can pay for brokerage and research services.

Not only that, there are good reasons to believe the brokerage industry is close to a peak and ready for a pullback. Combining these two developments make for a long and winding road for any broker or analyst, except a very select few.

Beginnning in 2019, 2020, I would strongly advice against a career as any kind of broker, if making money is your objective rather than having fun. That includes proprietary traders, whose positions are likely to be all but cut altogether going forward, due to the balance sheet cost of risk.


Analysts on the sell-side work side by side with brokers. They read reports, visit companies, talk to industry experts, create enormous DCF excel models, and write research reports with recommendations to buy or sell a stock. If they are highly ranked* and well-known they get booked by clients (asset managers) and get to present their ideas.

* A high ranking can be attained in many different ways, but being right more than most is not a reliable way on its own. Being sociable is much more important.

Some clients take this process seriously: they listen, ask questions, make notes, compare the work with their own research and financial models, make a few adjustments and sometimes invest accordingly.

Others just go through the motions to get a free lunch, dinner, drinks or show.

A good analyst is in demand from as diverse places as corporate merger & acquisition departments, sell-side research firms (brokerage houses), and not least asset managers, i.e., the clients, the “buy-side” as an in-house resource and speaking partner.

A good analyst finds and creates new information, is innovative with numbers and charts, and gets ranked in annual surveys of public companies, their own broker departments, and most importantly asset managers (the clients). Being noticed by important clients is doubly useful – first in bonus discussions, second to get hired by them.

A good analyst can easily jump between roles on the buy-side, sell-side, corporate side, and possibly even as his own one-man research and investment firm. Not too rarely, good analysts start their own hedge funds, or simply manage their own money. It doesn’t always end well though – it’s a whole different game making buy and sell calls for others, compared to having your own money on the line.

A good analyst should most often stay a good analyst, in the care of as prestigious as possible a sell-side or buy-side firm, rather than go it alone. However, a good sell-side analyst can quite easily make the transition to becoming a good buy-side analyst or an excellent sell-side research sales, and back again, given a quantum of people skills.

Continuing down the list of being employed in the finance industry, both brokers and analysts can make for good managers (unfortunately, often bad ones too).

As a manager you get a higher than average compensation, but still much lower than than the top brokers and analysts. Your reward is less client interaction, less work, shorter days, but being screamed at by the spoiled boy-men brats you’re trying to manage. Bonus times are the worst. That’s when they all will try to intimidate you into submission, also known as getting paid more than they’re worth.

Some of your opponents (coworkers) are straight out of Compton hooligans, while other wave their pedigree around. Some cry about their families or new yacht, others scream and pound the table.

You’ll go home feeling like shit, like you messed up, like you’re being unfair, regretting and second-guessing your decisions and promises, fearing the best will leave and the worst will sue. Any stint as a manager will soon make you want to go back to working 16-hour shifts in the corp department, revising and improving power point slides for shifty IPOs, rather than suffering another round of bonus war (negotiations).

Sadly, just two years as a manager is enough to make you lose your edge as an analyst just as much as your will to live.

Portfolio manager

Congratulations, you’ve made it. Somehow you’ve proved your worth in the industry well enough to be trusted to manage other people’s money. Given it’s enough of it (at least 100m$ per manager), and the fee structure has a variable component, you’re set to make some serious money.

You shouldn’t even have to work too hard for it.

Actually, you shouldn’t work hard, period. As a portfolio manager you should strive for making few strategic decisions, while staying as rested and prepared as possible in between.

Make sure others do as much of your work as possible. Your task is to be calm and composed, taking stop-losses where needed, boosting positions where the risk reward calls for it, and communicate to clients what you’re doing, why, and how it’s going. you should not work long hours, micro manage positions or personnel

This is where you want to be, if you’re content being employed.

The way to becoming a PM is via being a good and respected analyst, or an excellent and well connected research sales.

They’re sheep!

The really great news is that as a PM, there’s a very good chance you could become a partner/owner of a fund or a hedge fund. But the ins and outs of that, including the reward anatomy, is a story for another day.

Next up: How a hedge fund works; revenues, costs, profits, total after tax compensation, and more.

Men det brinner ju ännu bättre med bensin!

Riksbanken kanske gör rätt trots allt – den är i alla fall förutsägbar
Som jag skrev i den senaste uppdateringen om svensk ekonomi den 7 februari i år så tar det nog emot hos Riksbanken att införa positiv styrränta. Mycket riktigt backade ledamöterna häromveckan från (de hypotetiska) planerna på att höja räntan, för att istället fokusera på att göra matinköp och utlandsresor dyrare för vanliga svenskar.

Vad ligger då bakom Riksbankens agerande? Hur står det egentligen till med den svenska ekonomin efter 10 år med extremt stimulativ penningpolitik, börser som rusat till nya all time highs, och synkroniserad global högkonjunktur?

Är negativ ränta och tillgångsköp det enda rimliga alternativet givet läget för ekonomin?

Vi tittar i tur och ordning på den senaste statistiken över arbetsmarknaden, ekonomins tillväxt och inflationen, men redan från början kan jag avslöja att det aldrig varit bättre. Om Sverige någonsin tänt på alla cylindrar så är det nu…

…Däremot är det fullständigt oförståeligt varför Riksbanken medvetet väljer att föra en överhettningspolitik,endast som enbart kan förklaras av politisk påverkan, eller en snarast hedgefondinspirerad permapessimism inför framtiden.

Med ovanligt hög tillväxt och helt normal inflation i ryggen är det snarast omöjligt att försvara något annat än en styrränta på omkring 4%. När då Riksbanken väljer en negativ ränta, samt tillgångsköp ovanpå det, innebär det en fantastisk (om än kortsiktig) gåva till alla som har möjlighet att ta risk…

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