Prof Cityboy, in your professional opinion, where’s the market headed?
Jesus! Even when I was a broker and some earnest graduate trainee asked me that my primary instinct was to leap across the desk, get the muppet in a headlock and scream “Mate, I think you’re confusing me with someone who gives a shit!”
I have a deep abiding suspicion of all forecasts (what percentage of ‘experts’ called the 1987 or 2008 crashes? Three, perhaps four percent?) and there are none that are more pointless than those related to where the FTSE 100 or S&P 500 are headed. The problem is that there are too many unpredictable variables to give any kind of decent forecast. I could answer your question if you could tell me exactly where interest rates, the oil price and China’s GDP are headed and whether North Korea will fire some rockets at Seoul or ISIS will invade Turkey… or whether Rooney will ever return to his previous form.
Having said that, the one thing you’re never allowed to have when working in the City is no view at all… so let me say now for the record that the Dow will hit 17,500 on 5th July 2016.
I am going to take out a client who I’ve heard is a bit ‘naughty’ for the first time. How should I play it?
A tough one. There is no doubt that quaffing high-grade bubbly in the VIP room at Secrets while watching adventurously tattooed women disrobing has a tendency to seal the deal. Indeed, I have a ‘friend’ who based his entire career on doing just this while feeding his clients gargantuan portions of nose candy. This had the useful effect of rapidly establishing a degree of mutual trust few other shared ‘hobbies’ (with the possible exception of dogging) could have engendered. And, of course, this ‘approach’ also helped differentiate me, I mean him, from those tedious automatons at other less interesting banks. However, if you make the wrong move with the wrong client your reputation in the goldfish bowl that is the Square Mile could end up being sullied forever. Your disgusted client might lodge a complaint with your compliance department (as occurred once when a dodgy colleague took a born-again-Christian to Stringfellows), and those politically-correct squares could even lose you your job.
The trick is to always let your clients make the first move towards the less salubrious forms of entertainment and only ever act when you’re absolutely sure he’s after what you think he is, or you could end up with egg on your face.
Prof Cityboy, I’m a banker. Why do they pay me so much? I just don’t get it.
There are four main justifications for bankers’ high pay: firstly, that City jobs are risky. However, I’m not sure if I buy this because if a banker screws up, some wealthy shareholders might lose a few quid, while if a £20k-a-year soldier makes a mistake, his head might explode.
Secondly, bankers deserve their dosh because they work damn hard and are bloody clever. A nice try but during my whole career I never felt that I was surrounded by amazingly smart people or that my friends who worked as relatively low-paid consultants or lawyers were thicker or worked fewer hours.
Thirdly, banking is an inherently stressful job. Unfortunately, I know secondary school teachers whose jobs seem infinitely more nerve-wracking yet they earn in a year what some ex-colleagues would easily spend on a long, boozy lunch at Petrus.
Finally, bankers claim they bring in more money for their firms than nearly every other employee. The problem with this argument is that the investment banking arms of all four banks I worked at routinely made a piss-poor return on capital. I think the best policy is to not question why you get paid so much – just take the money and run before people get wise.
Do you have any questions for Professor Cityboy? Email them to letters@squaremile.com. Follow Cityboy on Twitter at @cityboylondon or visit cityboy.biz.
