finance firms more stable in recession than faang?

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Sep 2 23 Comments

more stability at two sigma, jane street, citadel etc than faang in a recession?

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TOP 23 Comments
  • Barclays PLC
    AnusDogger

    Barclays PLC

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    AnusDoggermore
    Market makers will thrive in a recession. They make money when volatility is very high. Some of the places you listed are market makers, so yes, their business will be much more stable than faang. What they pay may not be though, since the price of talent would likely be much cheaper.
    Sep 2 4
    • Bloomberg wnuJ08
      This is false... market makers will make money if volitility is managabily high. When it sky rockets as in value drops drops and drops like in a recession, trade volume is generally lower and so market maker also loses
      Sep 2
    • Citadel Securities / Eng bluetiger
      I agree that the lower volumes can hurt market makers but just look at the recession in 2008 - most financial firms collapsed, market makers had record years for the most part.
      Sep 2
    • Facebook HotChips
      Volume and volatility have a strong positive correlation. High volatility always comes with high trading volume.
      2008 trading volumes were a record.

      Makes sense from first principles. High volatility = more uncertainty = more people changing their minds about asset allocation
      Sep 2
    • Goldman Sachs fake engineer
      VIX is a measure of implied vol, you'd actually want realized volatility to compare with, since cash equities have much higher volume than derivatives.

      Changing asset allocation and thus volume is also a direct function of vol in the sense that if the prices have moved a lot, you should be rebalancing even to maintain the same exposure.
      Sep 2
  • Bloomberg DINE<GO>
    Depends on the nature of recession. Market makers fare well during volatile times. Hedge funds will as well if they are...well hedged.

    FANG will take a cut as business pull back on ad spending and consumers shop less. Expect to see less hiring and headcount reduction by attrition in areas with mediocre or worse performance.

    The most dangerous to be is a pre-revenue startup followed by pre-profit startup. Anything that needs a stream of investor cash to survive.

    Profitable startups will probably stagnate, but at least most people will keep their jobs. Fat margins help.
    Sep 5 8
    • Bloomberg DINE<GO>
      Wasn't here at that time but I heard as much. I'm just saying business reserve the right to shrink via attrition or cutting fat off during downtime. Bloomberg is unusually stable. Every 10 years someone tries to dethrone them and every 10 years it backfires.
      Sep 10
    • Bloomberg DINE<GO>
      Also, it's one positive thing about being private and mostly in the hands of one person. You are not subject to short-termism that Wall St promotes.
      Sep 10
    • Google hutg64jr
      That sounds interesting and great. So theoretically speaking one can work Bloomberg till retirement as long as Bloomberg remains dominant as financial data provider? Also it’s super stable given its private. Definitely great choice for those seeking for stability, say raising a family?
      Sep 10
    • Bloomberg DINE<GO>
      Yeah. There are people who have been here 20, even 30 years. The flipside is that it's easy to get complacent. It's a great place to wind down your career if you are
      < 10 years away from retiring.
      Engineering roles at Google are quite stable no? Especially when compared to Facebook, Uber, etc.

      Even Microsoft is quite stable despite the periodic "sharpening our focus" purges.
      Sep 11
    • Google hutg64jr
      Yes engineering roles are quite stable compared to fb and Uber with better wlb. But still need to be hardworking. Also gg has grown into too big with 100k employees, so it’s no longer an elite place. Bloomberg on the other hand with only 20k ppl, so maybe even better benefit and resources per head?
      Sep 11
  • Capital One Hbfb74
    Minus Netflix, FANG have much stronger balance sheets and access to cheap capital than any of the HFT firms.
    Sep 4 0
  • Goldman Sachs fake engineer
    If you have PnL exposure, one record year is all you need :)
    Sep 2 2
    • Google hutg64jr
      All you need to earn money for market maker during high volatility time?
      Sep 10
    • Goldman Sachs fake engineer
      ? Don't understand what you asked..

      What I meant was if you get a cut of profits that is 7 digits, it's okay to lose your job the next year.
      Sep 10
  • Ten-X RFMR24
    Remember the last recession coincided with the launch of the first ever iPhone. There's something to be said about that given the 10 year rally we've been in ever since!

    That being said though, it's pretty hard to ascertain where the trigger for the next recession comes from. That would dictate which sectors of the economy end up being more impacted!
    Sep 4 0
  • new / Data dreamhunt
    None of them are stable. Money gets wiped off from the markets. Everyone gets affected. Keep good connections with your manager/boss
    Sep 4 0
  • Axioma HYKI11
    Tech will be the first industry to get hit Big if recession happens.
    Sep 4 0
  • Chase / Eng Sha_
    How come faang is more stable?
    Sep 4 0
  • Earnest y2k1999
    Low interest rate environment is essentially free money to firms in the origination business. Rates for borrowers are dropping too but not as much as the cost of funds faced by firms making new loans
    Sep 4 0