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 Finance industry and China |
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Finance industry and China -- 游客 - (5740 Byte) 2003-7-15 周二, 10:04 (2196 reads) |
残荷
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加入时间: 2004/02/24
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作者：残荷 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
Again, just some personal perspectives.
Major investment banks are all classified by S&P as financial services concerns. But Citigroup is quite different from Goldman, in terms of their scopes, focuses, or expertise.
At Merrill Lynch or Goldman's web sites (ml.com & gs.com), they further break down to mutiple divisions. I prefer a much simpler view by breaking men and women in the financial industry into only 2 groups, one provides services (including advisors to high-net-worth clients, brokers gernerating commissions, bankers working on corporate finance, and so forth) and the other group actually pulls the trigger by trading on behalf of the firm (or hedge funds, etc).
I also tend to agree with KungFuWang that financial or any other services are not that scalable. What techbull aims at is probably to keep extending frontiers while leaving competitors in the dust, rather than get stuck in a company which is very hard to scale up (see KungFuWang's first post).
As for whether end-product is the only way to go, here's my take. James Watt built the steam engine, but it took a JP Morgan to own the railroads. Neither of them would do well with their roles exchanged. As a matter of fact, matching venture capital with the right start-ups is, in its own right, a financial service. I'm not saying techbull is today's Morgan on the rise based on his brief yet brilliant experience, it's just that different careers may suit different people. It grieves someone when he ends up in the wrong trade.
A firm's service, in the financial industry, is coupled with cleints' assets entrusted in the firm. It's the skill to manage clients' assets/capital that is potentially scalable (which only grows with experience as nyc points out).
For example, a mutual fund is a hybrid, managers put on naked positions, also they collect fees from investors (somewhat like points in mortgage business). Most mutual funds adopts a systematic approach that KungFuWang has effectively described for large corporations.
A hedge fund is different from a mutual fund (different SEC rules apply), nor does it refer to the firm's proprietary trading desks. Mathematical finance is necessary to build models for some hedge funds, but it's up to those who run the funds to interpret these models. (See techbull's $900 POINT story.) A quote from Warren Buffett also applies here, "A basketball coach doesn't check to see if a propect is six-foot one or six-foot two; he looks for seven footers."
What finance comes down to is to face risks as they unfold, which is often summarized as "high risk, high return." On the other hand, to manage risk, no matter how high, is not to gamble. A side benefit after being exposed to the financial world is that you will find other professions and even life itself are like movies being played in slow motion.
Let me try to give an example, bearing in mind that I know nothing about calculating mortgage points. The following is why I appreciate the remarkable instinct of techbull in getting ready to move on to other business.
Given the 10-year T Bond yields at historic low (since 1958), there's little room left for long bond yields to continue to dive. The wave of mortgage refinancing will eventually taper off. I am not recommending techbull to get into or out of any business, since he will know better than anyone else the minute deals start to slow down.
We live in an age of overloaded information. Some thoughts have followers who write daily financial reports, and some originators of these thoughts are Nobel laureates. I'm not a Graham & Dodder, but I think what Buffett says still applies, "Look at raw data, not analysts' analysis. Trust your own eyes."
The last few words lead us back to what nyc has stated, i.e. one's "experience."
作者：残荷 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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 Finance industry and China -- techbull - (5740 Byte) 2003-7-15 周二, 10:04 (2196 reads) - ◁金融断想▷ Let me try to follow up with KungFuWang's comments on financial services.... -- 残荷 - (3865 Byte) 2003-7-15 周二, 23:54 (1594 reads)
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