Money

Myth of Wall Street’s ‘Masters of the Universe’ Exposed

In his classic novel 1987 novel “The Bonfire of the Vanities,” author Tom Wolfe called Wall Street traders the “Masters of the Universe.”

On the one hand, the wizards of Wall Street are the bright young newly minted MBAs and PhDs who can crack the code of the sophisticated financial markets through the sheer power of their finely honed intellect.

On the other, they are the experienced veterans whose decades of experience help them to extract billions of dollars in profits from Mr. Market’s mood swings.

Actually, the exact opposite is true.

The average Wall Street trader working in a large institution is among the worst traders on the planet.

That’s because what it takes to be a successful trader at a large bank has little to do with the habits of profitable trading.

And the Wall Street traders who venture outside of the cocoon of a large financial institution find that their much-vaunted trading skills are worthless in the outside world.

What Do Wall Street Traders and McDonald’s Employees Have in Common?

Wall Street’s Masters of the Universe would bristle at the thought of being compared to a teenager who works at McDonald’s.

Yet, Wall Street and McDonald’s share one fundamental quality: both are run by employees who work within the confines of a finely honed system.

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