Institute University Tour 2013 by Institute of Trading and Portfolio Management

University Tour 2013 www.instutrade.com/education/ Anton Kreil â&#x20AC;&#x201C; Managing Partner

Contents… 1. “Navigating the Landscape" How the Trading and Portfolio Management Industry is set-up 2. "Truth Delivered" The real functions and realities of Traders and Portfolio Managers 3. "Compensation Nation" Expected Performance and Compensation Metrics 4. “The Next 10 Years" Your 10 year career progression in Trading and Portfolio Management 5. “Opportunity Cost Formalised" The choices you are faced with and the choices you must now make 6. "Follow the Road to Success" How to stand out from the crowd in your applications and interviews

1. “Navigating the Landscape" How the Trading and Portfolio Management Industry is set-up… 

In order to be an accomplished Trader or Portfolio Manager, you must first understand what it means to be a Trader or Portfolio Manager.



You can not understand that until you have first understood the parameters of the industry you will operate in.



We will be focussing on the major players of asset markets, how they operate and where traders and portfolio managers fit in.

The vast majority of Professional Traders / Portfolio Managers work at the following corporate entitiesâ&#x20AC;Ś i)

Investment Banks

ii)

Hedge Funds

You must also follow up and do your own work on the following;Pension Funds (Long Only), Private Equity (Non Publicly Traded Assets), Inter Dealer Brokers (Institutional Brokers) & Retail Brokers, Retail Banks.

i) Investment Banks…

 Clients range from mid to large sized blue chip companies, pension funds, hedge funds, family offices, private equity companies, High Net Worth individuals (sophisticated Investors), Retail Banks.  They also have financial interests in many of these investment areas too.  Every area of an investment bank aims to make profit for the bank. As you can see there is literally no part of the investment process that they don’t have a hand in.

Investment Banks

“F.I.C.C.” (Fixed Income (Debt / Bonds), Currencies, Commodities).

Equities

Corporate Finance. Advisory

PWM Private Wealth Management

Asset Management

“Alternative”

“Secondary Market”

Chinese Wall

Trading of Debt and Equities Securities

“Primary Market” Issuance of Debt and Equities Securities, Mergers and Acquisitions.

Advising and investing on behalf of HNW individuals.

Agency Business

Proprietary Business

Agency Business

Commission based trading of Equities, Debt, Currencies &Commodities on behalf of Pension Funds, Hedge Funds and Corporates.

Trading with or investing the banks money (balance sheet) in Equities, Debt, Currencies, Commodities, Seeking Capital Appreciation.

Commission based business. Advising, M&A and capital raising (Equities and Debt) on behalf of Corporates.

Commission based business advising and investing on behalf of HNW individuals. Transactions completed internally.

“Traditional” Managing and Investing in Pension Funds

Agency Business

Commission and performance fee based business. Investing clients pension money.

Investment in Private Equity Funds, Infrastructure Funds, Fund of Funds and Hedge Funds

Proprietary Business

Seed investment seeking capital appreciation.

Question 1 – What does a Professional Trader at an Investment Bank actually do?

Market Makers – 90% of a traders time at an Investment Bank is spent on generating business with clients (Hedge Funds & Pension Funds) and Making Markets in Assets (Stocks, Currencies, Commodities, Bonds) to those clients. Prop’ Trading – 10% of a traders time at an Investment Bank is spent using the banks balance sheet (funds on account) trying to make money for the bank by Prop’ (Proprietary) Trading. The definition of Proprietary Trading is all Trading that the Trader does that is “Proprietary” to executing client business.

Market Makers – Market Making is the bread and butter business of the Investment Bank Trader. Market Making splits up into two categories;Market Making Category 1 = Agency Business (Not on Risk to the client) Market Making Category 2 = Risk Business (On Risk to the client) A commission is charged on all Market Making Business – Typically 5 basis points or 0.05% Agency Business typically makes up about 80% of all Market Making business. Example – Buy $10,000,000 worth of Apple stock at $500.00 per share = 20,000 AAPL Commission to the bank = $10,000,000 X 0.0005 = $5,000 1% = 100 basis points (bps) Remember – This situation is risk free to the bank. These days everything that is agency business is put into a computer algorithm that trades according to the clients instructions.

Risk Business typically makes up about 20% of all Market Making business. Example – Buy $10,000,000 worth of Apple stock at $500.00 per share = 20,000 AAPL Commission to the bank = $10,000,000 X 0.0005 = $5,000 1% = 100 basis points (bps)

Risk– The Trader is now “short” $10,000,000 worth of AAPL stock at $500.00 and must buy them back in the market to square their position. If they buy them back above $500.00 they will lose money. If they buy them back below $500.00 they will make money. Profit- The Profit or Loss for the Trader in making this price is the total sum of the commission earnt and the money made or lost when closing the position.

Example- The Trader buys back all of the 20,000 AAPL at $500.10 – The Trader loses 10c on 20,000 shares (2 Basis Points) or $2,000. However the bank has earnt $5,000 in commission from the trade. The net profit to the bank by doing this trade is therefore $3,000 Market Maker Metrics: The ability of a Market Maker is measured by the % of commission retained. In this example the traders “Retention Ratio” is 1-($2,000/$5,000)X100 = 60%

Market Making: The Market Making business is therefore split up into Agency and Risk Business. 80% of Market Making business is agency based and is outsourced to a machine. 20% of Market Making business requires traders to accept risk from the client. Therefore if 10% of a Professional Traders time is spent Proprietary trading then 72% of a traders time at an Investment Bank is spent monitoring Algorithms that are processing agency orders from clients i.e. (80% Agency X 90% Time Spent on Market Making) = 72% Therefore 18% of a traders time is spent unwinding positions that clients have given to them after the trader has made a price to that client and the risk has been transferred. In reality, most of the risk business (position unwind) is now put into the same algorithms that the traders use to execute the agency business that is given to them by clients. This is because at any one time the trader will have many positions Long / Short at any one time and based on the historical volatility profile of the asset, the machines can now unwind risk more efficiently than humans.

All of these positions are categorised by the bank as “Negative Selection Portfolio’s” – meaning they do not particularly want the positions and have no view on them. They are simply processing customer business in order to make the total sum of commission earnt and the money made or lost when closing the position.

This means in reality that between 80%-90% of a Professional Traders time at an Investment Bank is not spent actually taking positions and trading positions they want. It is spent Market Making and managing Algorithms

Machines have replaced humans in the Market Making Business !!! The 10% of the traders time that is spent “Proprietary Trading” is spent managing a “Positive Selection Portfolio” i.e. positions that the trader actually wants to have. These Portfolio’s are typically Long / Short Portfolio’s in that the trader will hold many long positions in assets they want to own and many short positions in assets that they believe will fall in price or at least underperform the long positions they have in their portfolio. The purpose of the Proprietary Trading account is for the trader to try and at least make back more than the money lost in Making Markets on risk to clients.

What does this mean for total compensation / Salaries + Bonuses ??? 12 years ago the standard industry commission charged on the secondary markets side of the investment bank in equities execution was 25 basis points / 0.25% / 0.0025 The industry standard today is less than 5 basis points – Therefore all things being equal the business is down 80% In reality both agency and risk (unwind) business is now outsourced to a machine. There is very little skill required in trading at an investment bank these days because execution simply doesn’t require a human! With commission down 80% over the last 12 years, investment banks attempted to increase risk during the 2003-2007 bull market to compensate for structural decline in the industry. Due to structural decline on the commission side of the business and due to regulatory restrictions (Dodd Frank / Volcker 2010), proprietary trading exposure at investment banks is circa down 80% as well. This means pay is down in line with the business.

A typical Investment Banks Equities Division. (U.S. Europe, Asia)

Genuine Cost Center

Supposed Profit Center –

Support Technology, compliance, operations. 3000+

Research Analysts 200

Hedge Fund Sales 30-60

Paid Research Model Dead

Long Only Sales 40-70

Sales Traders 100

Sales to Pensions Dead

Glorified Order Clerks Dead

Traders 100 Genuine Profit Center

Cost Centre to Profit Center ratio = 4/1

Traders are still the glue that hold investment banks together and are the main drivers of the business. They are the number one intelligence hub supporting the Investment Banks infrastructure. If you want to know the answer to something, you go through the trader. They get paid the most, but their pay is down circa 80% overall since 2007.

ii) Hedge Funds Question 2 – What does a Professional Trader at a Hedge Fund actually do? The function of a Professional Trader at a Hedge Fund is to protect the capital of their clients (investors) by making money in both rising and falling markets. Professional Traders at Hedge Funds are known more accurately as Portfolio Managers / PM’s. This is because the Hedge Fund Trader (PM) manages Long / Short Portfolio's in positions that they want to have. Unlike a Professional Trader at an Investment Bank, there is no Market Making activity. Hedge Fund PM’s typically have the same function as a Proprietary Trading function that the Professional Trader at an Investment Bank holds.

The only real difference between the Prop’ function of a Trader at an Investment Bank and the Hedge Fund PM is the nature of the businesses they operate in.

Investment Bank traders utilise capital provided to the bank by public shareholders. Banks are public companies. Although some Hedge Funds are public, the majority of them utilise capital provided to them by their private investors (Clients)

Important Hedge Fund Info;They are called Hedge Funds because they typically have well Hedged (balanced) and diverse Long / Short Portfolio’s A Hedge Fund is just an investment vehicle with an onshore Management Company and an offshore entity that holds client (investor) money on account. The Management Company charges an annual Management Fee (typically 1%-2%) on Assets Under Management (AUM) and an annual Performance Fee on any profits they make to their clients (investors) Investors in the fund will require the Hedge Funds PM to initially invest in the fund and reinvest typically 50% of the performance fee earned in any one year back into the fund. Hedge Funds are more sophisticated in their Investment (Trading) approach than professional Traders at Investment Banks. This is because they only have one function. Their investment and risk management processes must be very refined otherwise no-one will invest in them.

Important Hedge Fund Info;-

2. 3.

Hedge Fund Investors

Hedge Fund

Offshore / Onshore Company

Offshore Company

4. 5.

(Offshore Bank Account)

(Limited Partners)

Investors make investment in the Fund, payment to the Fund’s bank account from an offshore or on-shore company Manager wires money to the Fund’s brokerage account (on-shore) Fund is managed by the Management Company (on-shore) Fund makes investments Fund pays Management Company a management fee (on-shore) Fund pays General Partner a performance allocation (onshore then generally transferred offshore in the form of a dividend) If Investors make withdrawals (redemptions), the Fund will make a distribution to investors (onshore or offshore)

6. Hedge Fund Hedge Fund (LP)

Management Company

(Bank Account)

(Onshore Bank Account)

(LLC)

2. Fees

Hedge Fund (LP) (Brokerage Account)

Allocations Management Movement of money Withdrawal

Investments

$1bln Hedge Fund Example;-

XYZ Fund has $1,000,000,000 of client (Investor) money as Assets Under Management (AUM) Example - Hold 25 positions Long and 25 positions Short in their portfolio Self imposed position limit percentage of 2% of AUM Therefore no single position in the portfolio can be above $20mln notional value 20% return on a portfolio with 15% Annualised Volatility Charging investors a 2% Management Fee and a 20% Performance Fee, thus making $20mln in fees and (0.20 X $200,000,000) = $40mln in Performance. 50% of the Hedge Fund PM’s Performance Fee ($20mln) re-invested in the fund

At beginning of next year the AUM of the fund = ($1bln + $160mln) = $1.16bln $40mln left the fund = ($20mln in Management Fees + $20mln in Performance Fees)

2. "Truth Delivered" The real functions and realities of Traders and Portfolio Managers

Question 3 – What does this REALLY mean for University Students wanting to become Professional Traders? WARNING: if you are planning on applying to an investment bank for a graduate position, you may not like what you’re about to see. However it is the truth, and after spending $80,000/£50,000+ on a University Degree + Expenses , you deserve to know the truth. WARNING: The representatives of Investment Banks that attend your University on recruitment drives are delivering you a corporate PR message. They are told what they have to say to you and they do not deliver you the REAL truth about the salaries that they earn and the downsides of working for the Investment Bank. WARNING: In reality the people who are representing the banks on these recruitment drives are stuck in jobs that they cant get out of, live their lives month to month (paycheck to paycheck) and actually probably hate their jobs.

University Students should take several messages from this information;1. Hedge Fund Managers use their own money to trade and accept outside investors money. Traders at Investment Banks do not trade utilising their own capital and spend 80%-90% of their day managing a commission revenue business that is in structural decline and trading out of positions they do not want.

2. The Commission Business at Investment Banks is in structural decline and has been for over a decade. Don’t believe the media hype. The vast majority of SENIOR Professional Traders at IB’s now earn less than $300,000 / £200,000 per year (gross). JUNIOR traders earn significantly less!!! Both simply exist and currently live Month to Month. – We will come back to this! 3. The best traders from IB’s in the last cycle have left; because there are little opportunities to make money and get paid. What is left on the IB side of the industry is the deadweight. The best have gone to Hedge Funds or now do their own thing and trade with their own $$$. 4. “The Race to Zero” over short time horizons is prevalent due to Algorithms. This will absolutely continue to be the case. You must learn to appreciate longer term trading and portfolio management strategies (1-3 Months), and seek out at least a basic education in programming. 5. As an aspiring Professional Trader you must be seeking to build expertise in trading with your own $$$, so you can target joining a Hedge Fund or do your own thing. This is where the opportunities in the trading and portfolio management business exist in todays market. You need to deal with the realities of the market you have inherited and follow the money. That's your job as a trader anyway !!!

3. "Compensation Nation" Expected Performance and Compensation Metrics i) U.S. Investment Banks… Numbers provided “off the record” from 3 Managing Directors at U.S. Investment Banks (Sept’ 2013) Financial Analyst (Contractor) – 10,000 applications globally for each trading position. Basic Salary = $65K (£40K), - No Stock Bonus = $8K-$16K (£5K-£10K) - No Stock You will be a part time contractor for 2-3 years – Less than 20% make the final cut. Associate (Full Time) Basic Salary = $130K (£80K), Bonus = $80K-$160K (£50K-£100K), Stock = 15% with 5 year lock up (Resignation Penalty). You will spend 3-5 years as an Associate. Vice President / Executive Director Basic = $300K (£200K), Bonus = $200K (£125K), Stock = 20% with 5 year lock up (Resignation Penalty). Most spend the rest of their careers as a VP / ED and never make MD. Junior Managing Directors Basic $475K (£300K) Bonus $320K (£200K), Stock = 25% with 5 year lock up (Resignation Penalty). Senior Managing Directors / Partners Basic $800K (£500K) Bonus $1.6mln (£1mln), Stock = 35% with 5 year lock up (Resignation Penalty).

Financial Analyst (Contractor) – 10,000 applications globally for each trading position. Basic Salary = $65K (£40K), - No Stock Bonus = $8K-$16K (£5K-£10K) - No Stock You will be a part time contractor for 2-3 years – Less than 20% make the final cut. Not able to Live in Central London… debt after 2-3 years or sponsored by parents Associate (Full Time) Basic Salary = $130K (£80K), Bonus = $80K-$160K (£50K-£100K), Stock = 15% with 5 year lock up (Resignation Penalty). You will spend 3-5 years as an Associate. Just about able to live in Central London on a Month to Month basis…debts may still exist Vice President / Executive Director Basic = $300K (£200K), Bonus = $200K (£125K), Stock = 20% with 5 year lock up (Resignation Penalty). Most spend the rest of their careers as a VP / ED and never make MD. Able to live a decent existence in Central London on cash flow basis saving only when bonus is paid Junior Managing Directors Basic $475K (£300K) Bonus $320K (£200K), Stock = 25% with 5 year lock up (Resignation Penalty). Able to Live in Central London… Senior Managing Directors / Partners Basic $800K (£500K) Bonus $1.6mln (£1mln), Stock = 35% with 5 year lock up (Resignation Penalty). Able to Live in Central London…

After 5-7 years you may be “lucky” enough to become a VP or ED Vice President / Executive Director – U.S. Investment Bank Basic = $300K (£200K), Bonus = £200K (£125K), Stock = 20% with 5 year lock up (Resignation Penalty). Most spend the rest of their careers as a VP / ED and never make MD.

All numbers are Gross (Before Tax) Per Year After Tax numbers using higher tax brackets (Government + Local) U.S. & U.K (Government + National Insurance contributions)

Basic = $300K (£200K) Becomes $160K (£100K) or $13,300 (£8,300) per month. Bonus = $200K (£125K), Stock = 20% with 5 year lock up (Resignation Penalty) Becomes $80K (£50K), You may never receive your stock if you resign, if you don’t hit pre-defined performance metrics (deferred stock) or it goes down in value (zero).

Hourly salaries as a trader at a U.S. Investment Bank after Tax… (assume 60 hour work week and 3 weeks vacation time per year)

Financial Analyst (Contractor) Take Home Pay = {($53,200 or £33,250 / 49 weeks) / 60 Hours} = $18 / £11 per hour Associate (Full Time) Take Home Pay = {($124,000 or £77,500 / 49 weeks) / 60 Hours = $42 / £26 per hour Vice President / Executive Director Take Home Pay = {($240,000 or £150,000 / 49 weeks) / 60 Hours = $81 / £51 per hour Junior Managing Directors Take Home Pay = {($720,000 or £450,000 / 49 weeks) / 60 Hours = $244 / £153 per hour Senior Managing Directors / Partners Take Home Pay = {($920,000 or £575,000 / 49 weeks) / 60 Hours = $312 / £195 per hour

$18 / ÂŁ11 per hour This is what 10,000 people per trading position available will be applying for next year !!!

Arguably, you might as well be on a beach. The result will be the same. You will go to the cash machine every month and you will have a zero or negative balance.

ii) European Investment Banks… The situation is even worse for European Investment Banks… http://www.emolument.com/career_advice/ubs_bonuses

$1bln Hedge Fund Example;-

At beginning of next year the AUM of the fund = ($1bln + $160mln) = $1,160,000,000 $40mln left the fund = ($20mln in Management Fees + $20mln in Performance Fees)

iii) Hedge Funds Junior Portfolio Analyst (Contractor) Basic Salary = $160K (£100K), No Bonus, No Stock in HF Structure. Always have opportunity to invest in the strategy itself. You will be a part time contractor for 1-2 years Junior Portfolio Manager Basic = $300K (£200K), Bonus = $400K (£250K)+ You may be offered a small amount of stock in the HF Structure. Reinvestment of 25% of your Bonus into the strategy is usually a pre-requisite. Lock-Up subject to individual funds own terms. You will spend 3-5 years as a Junior Portfolio Manager. Senior Portfolio Manager / Managing Director Basic $800K (£500K), Bonus $3.5mln (£2.2mln), You will be offered stock in the HF structure. The % from your bonus can vary hugely dependent on the fund, its performance and the business strategy of the principal(s). Reinvestment of 50% of your Bonus into the strategy is usually a pre-requisite. Lock-Up subject to individual funds own terms. Principal(s) – Whatever they want…with AUM, The Sky is Not the Limit!

Junior Portfolio Analyst (Contractor) Basic Salary = $160K (£100K), No Bonus, No Stock in HF Structure. Always have opportunity to invest in the strategy itself. You will be a part time contractor for 1-2 years Just about able to live in Central London on a Month to Month basis…debts may still exist Junior Portfolio Manager Basic = $300K (£200K), Bonus = $400K (£250K)+ You may be offered a small amount of stock in the HF Structure. Reinvestment of 25% of your Bonus into the strategy is usually a pre-requisite. Lock-Up subject to individual funds own terms. You will spend 3-5 years as a Junior Portfolio Manager. Able to live a decent existence in Central London on cash flow basis saving only when bonus is paid Senior Portfolio Manager / Managing Director Basic $800K (£500K), Bonus $3.5mln (£2.2mln), You will be offered stock in the HF structure. The % from your bonus can vary hugely dependent on the fund, its performance and the business strategy of the principal(s). Reinvestment of 50% of your Bonus into the strategy is usually a pre-requisite. Lock-Up subject to individual funds own terms. Able to Live in Central London… Principal(s) – Whatever they want…with AUM, The Sky is Not the Limit! Able to Live in Central London…

Compensation Metrics for Professional Traders (Investment Banks & Hedge Funds) – Conclusions; If you go from university to an Investment Bank these days, you will end up working six to eight years before you start receiving bonus’ that are a net $80K (£50K) into your bank account each year. This is due to significant structural decline in the industry, regulation and an increase in supply of labour.  This is even if you make the cut to first become a part time contractor (Financial Analyst) and then make the cut to get promoted to Associate, then to VP / ED.  You will basically spend eight years working minimum 60 hour weeks, kissing your bosses Ass , in order to get promoted so you make it to the next pay grade. You will be living month to month, with little or no savings or assets to speak of. Even after this period, you will be trapped due to lock ups on your company stock.  Your “Training” and “Trading Education” at an Investment Bank will be substandard and well below your expectations. This is because all that is left in the industry is the deadweight.  Hedge Funds offer much more career upside and much more flexibility for those that want to become a Professional Trader / Portfolio Manager.  The talented Professional Traders that left Investment Banks in the last cycle have signalled that you would be better off simply trading your own money, rather than going to an Investment Bank.

Please take these messages very seriously !!! No-one in their right mind would ever give up the best years of their life for nothing. Donâ&#x20AC;&#x2122;t be the fool that does !!!

You need to be more diligent than ever before in mapping your career progression, your expected compensation levels and measuring the opportunity cost of your potential career choices

4. “The Next 10 Years" Your 10 year career progression in Trading and Portfolio Management  Now lets look at the REAL numbers….  What matters is what ends up in your pocket after inflation i.e. how much wealthier you get over a 10 year period in REAL terms

Institute_University_Tour_10_Year_Sheets

Instant Download – CLICK HERE  Download the spreadsheet, play around with the numbers and enter your own expectations / make some changes if necessary  You can also follow the instructions as an assumptions guide

4. â&#x20AC;&#x153;The Next 10 Years" Your 10 year career progression in Trading and Portfolio Management i) Investment Banks

It is more likely that you will save more from Year 6 If you get to MD by Year 10, you probably still wont be able to buy a studio Apartment in Central London for cash

4. “The Next 10 Years" Your 10 year career progression in Trading and Portfolio Management ii) Hedge Funds

It is more likely that you will save more from Year 6 Assume bonuses are paid onshore and Tax is paid (This doesn’t have to be the case) Assume re-invested portion of Bonus' doesn’t make any Annual Return - (more than likely you will as we assume HF continues operating)

Trading for yourself ?

 Four things can be achieved by doing this;i) Make Money ii) You Interview the Bank / Hedge Fund

iii) Use the Investment Bank to learn the infrastructure of the business. Do this before they use you! Move to a Hedge Fund after 2 Years, before becoming an “Associate / Full Time Position” iv) If you don’t want to go to a Hedge Fund, you can become regulated yourself, set up your own managed account and grow into a Hedge Fund structure.

5. â&#x20AC;&#x153;Opportunity Cost Formalised" The choices you are faced with and the choices you must now make

Opportunity Cost;A benefit, profit or value of something that must be given up to acquire or achieve something elseâ&#x20AC;Ś.

Choice 1a = Go to an Investment Bank and stay there for 10 years… vs Hedge Fund Opportunity Cost = ~£5mln($8mln) + Giving up right to trade yourself + Lock Ups

Choice 1b = Go to an Investment Bank and stay there for 10 years… vs Trading Yourself Opportunity Cost = ~£5mln($8mln)-£25mln($40mln)+ Give up right to trade yourself+Lock Ups Choice 2a = Go to an Investment Bank, stay there for 2 years, then go to a Hedge Fund Opportunity Cost = ~£0 + Giving up right to trade yourself (No Track Record) … Choice 2b = Go to an Investment Bank, stay there for 2 years, then Trade for Yourself Opportunity Cost = ~£0+ Giving up right to trade yourself (No Track Record) Choice 3a = Trade for yourself then go to a Hedge Fund Opportunity Cost = ~£340K($545K) + (Security/Cash Flow) Choice 3b = Trade for Yourself forever… Opportunity Cost = ~£340K($545K) + (Security/Cash Flow) + Need to generate an income

…..If we are being totally objective here and simply looking at the opportunity cost, what would we be prepared to give up now? (£5mln-£25mln) or {£340K +(Security/Cash Flow) + generate an income elsewhere}? …..The answer to this question is somewhat personal, but if you are ambitious the answers are obvious;-

What’s Viable;Choice 3a = Trade yourself then go to a Hedge Fund Choice 3b = Trade yourself forever and earn an IB traders income doing something else

Choice 2a = Go to an Investment Bank, stay there for 2 years, then go to a Hedge Fund What’s NOT Viable;Choice 1a = Go to an Investment Bank and stay there for 10 years… vs Hedge Fund Choice 1b = Go to an Investment Bank and stay there for 10 years… vs Trading Yourself Choice 2b = Go to an Investment Bank, stay there for 2 years, then Trade for Yourself You will simply be better off doing something else….

5. “Opportunity Cost Formalised" The choices you are faced with and the choices you must now make i) Make Money Trading and Portfolio Management is one way to make money and it’s a great vehicle, however there are many ways. Working for an IB is all about opportunity cost. Follow the $$$ - You can do something else. ii) You Interview the Bank / Hedge Fund If you can make a Financial Analysts (contractors) annual salary in your personal trading account at a young age, then you will be interviewing the company. Why would you go to work for them? – Again Opportunity Cost. iii) Use the Investment Bank to learn the business, then move to a Hedge Fund. If you really want to go to an IB, then go there to learn the infrastructure of the business and teach yourself. Get out after a few years and don’t be seduced by the honey trap. The industry is not what it used to be. There is no money in it any more - Go to a Hedge Fund or set up on your own as quickly as possible. iv) If you don’t want to go to a Hedge Fund, become regulated yourself and set up on your own. With a good two year track record you can get yourself regulated and stand a very good chance of convincing people with $$$ to invest in you. Its just about getting the track record and having the network.

6. "Follow the Road to Success" How to stand out from the crowd in your applications and interviews  This academic year, over 500,000 applications from U.K. and Mainland European University Students will be made to Investment Banks, Hedge Funds and Asset Management companies.  You need to by-pass the HR box tickers, and get straight to the trading desk or to get the attention of the Hedge Fund Manager or you risk your Resume being dumped in the bin.  The best way to stand out is to learn how the best traders and portfolio managers in the world approach the markets and implement this with real money.  If you do this for 1-2 years, the box tickers in HR will not understand the words on your Resume and they will have to hand it to the trading desk / get the HF managers attention.  By the time you get to interview, you will be interviewing the company (IB/HF) and you will be speaking the language of your interviewer. You will be considered a peer not a candidate. You will be offered employment because you are a low risk hire and you are a proven money maker / profit centre.  At this stage you will have choices. You may now be better off not even bothering and going by yourself. You will have a robust career hedge because you are a money maker!

How Can We Help?

You need to take 3 steps to success in Trading and Portfolio Management;Step 1 = FOUNDATION – Obtain a REAL Professional Trader Education Step 2 = IMPLEMENTATION – Implement what you have learnt with REAL money Step 3 = PROFESSION – Continue to use your own $$$ & obtain outside investment either yourself or at a Hedge Fund

The Institute solves all three areas;Step 1 = FOUNDATION – Professional Trading Masterclass (PTM) Video Series Step 2 = IMPLEMENTATION – Self implementation and/or optional mentoring, Remote Trading Desk, Track Record Management, Third Party verification (Audited Track Records) Safe and Regulated environment (FCA, MIFID, NFA) Step 3 = PROFESSION – Managed Accounts on POA with the Institute / Hedge Fund placement

Step 1 = FOUNDATION â&#x20AC;&#x201C; It All Starts Here !!! Obtain a REAL Professional Trader Education

www.instutrade.com/education/

Additional Resources… Professional Trading Masterclass (PTM) Video Series Information Professional Trading Masterclass Series with Anton Kreil - Why Buy This Course? http://www.youtube.com/watch?v=As517tSpajk Professional Trading Masterclass Video Series with Anton Kreil - What Do You Get On The Course? http://www.youtube.com/watch?v=kNQXn2pxBb8 Professional Trading Masterclass Series with Anton Kreil - Who Is The Course For? http://www.youtube.com/watch?v=FjMKLow0kY8

Free samples of the Professional Trading Masterclass (PTM) Video Series Ex Goldman Sachs Trader Delivers Truth to Amateur Traders - Part 1 https://www.youtube.com/watch?v=cytdsNK3zMQ Ex Goldman Sachs Trader Delivers Truth to Amateur Traders - Part 2 https://www.youtube.com/watch?v=xllA122l4_o Ex Goldman Sachs Trader Delivers Truth to Amateur Traders - Part 3 https://www.youtube.com/watch?v=DYCnxq_WEpI Ex Goldman Sachs Trader Delivers Truth to Amateur Traders - Part 4 https://www.youtube.com/watch?v=xtCtGmDgSss Ex Goldman Sachs Trader Delivers Truth to Amateur Traders - Part 5 https://www.youtube.com/watch?v=EFXLA66zO4s Ex Goldman Sachs Trader Delivers Truth to Amateur Traders - Part 6 https://www.youtube.com/watch?v=O9k3Q1S7XgY Ex Goldman Sachs Trader Delivers Truth to Amateur Traders - Part 7 https://www.youtube.com/watch?v=eAF4bWTOZ7k

Interview with Institute of Trading and Portfolio Management’s Anton Kreil Ex Goldman Sachs Trader Tells Truth about Trading - Part 1 http://www.youtube.com/watch?v=9h3lByx59ns Ex Goldman Sachs Trader Tells Truth about Trading - Part 2 http://www.youtube.com/watch?v=LoIJZEbOLuc Ex Goldman Sachs Trader Tells Truth about Trading - Part 3 http://www.youtube.com/watch?v=zn-uhqRlLzE Ex Goldman Sachs Trader Tells Truth about Trading - Part 4 http://www.youtube.com/watch?v=flhma66uw0k Ex Goldman Sachs Trader Tells Truth about Trading - Part 5 http://www.youtube.com/watch?v=pf5S1nHhlQ4 Ex Goldman Sachs Trader Tells Truth about Trading - Part 6 http://www.youtube.com/watch?v=Fpp-DqnhTzQ