The Buy-Side vs. The Sell-Side: The Worst Way to Categorize Finance Firms?

“Yo, you’ll make bank when you move to the buy-side! Screw this stupid investment banking job.”

“Yeah, I heard everyone at hedge funds makes at least $1 million and gets a castle as their signing bonus.”

“So when’s your interview?”

Ah, yes: that classic debate about the buy-side vs. the sell-side. Although the conversation above is fictional, similar exchanges are taking place in cubicles across the world as you read this.

You hear about the buy-side vs. sell-side distinction everywhere, whether you search online, browse through you message boards, or even (gasp) talk to people in real life.

The only problem is that “buy-side vs. sell-side” is the worst way to categorize financial services firms.

Hedge Funds vs. Institutional Asset Management: Is a Billion Dollars Really Cooler Than a Million Dollars?

This is a guest post from John Q. Buyside, a portfolio manager at a long-only asset management firm. He started Life on the Buy Side to teach you what it’s like working in asset management, hedge funds, and more. Since he wants to keep his job (for now) he must write anonymously.

Aspiring analysts often tell me that they want to work at a hedge fund one day. The most obvious reason is money.

Starting the next Facebook is way too risky if you want to make a billion dollars, so hedge funds seem like the next best alternative.

And since they’re limited to accredited investors – people with a net worth of at least $1 million or more than $200K of income – you’ve also got that air of exclusivity.

But beyond these points, few people understand the differences between hedge funds and traditional money management – how their investment strategies differ, what it takes to get in, what you do on the job, and what you do afterward.

So let’s dive right in and see whether a billion dollars really is cooler than a million dollars.

What’s the Big Deal About Emerging Markets?

“I notice you’ve done a lot of interviews with readers in emerging markets and other developing countries, but what’s so special about them?

I get the basics from what you’ve written, but why are they important? What’s the big deal about emerging markets?“

You raise a good point: there have been lots of interviews about different groups and regions, but never any mention of why specifically they are important.

So, why do emerging markets get so much attention?

Should you change your recruiting strategy or your mythical career path to take advantage of them?

And will they take over the world within the next 50 years?