- The stock market just experienced its fastest correction in 50 years. But that might not be so bad for the big wigs on Wall Street.
- An 18-year finance industry veteran explains how financials fire employees when markets crash.
- And they get sent off with plush severance packages, and paid garden leave (vacations) to exotic locales.
The stock market just had its worst week in history. According to Birinyi Associates, it’s the fastest correction in 50 years. But it could get even worse next week.
Fears about the coronavirus pandemic sparked the panic, but many analysts have warned about lofty valuations and worrisome corporate multiples for weeks as prices soared.
But don’t feel too bad for Wall Street. According to one 18-year finance professional, now’s the time that Wall Streeters get fired. And they love that. Termination goes hand in hand with sweet severance packages and nice paid vacations.
“You Want to Get Fired” on Wall Street
Laurent Bernut is the CEO at Alpha Secure Capital. He spent years investing in the stock market. Burnut is an ex-Fidelity short seller, ex-hedge funds analyst, ex-CPA, and algo trader. He’s also a top writer in the Markets & Finance category on question-and-answer website Quora.
In 2018 when someone asked:
What does it feel like to be fired from Wall Street?
[Wall Streeters] cannot claim to have worked in finance unless you have been fired at least twice. You do not want to resign. You want to get fired.
The finance industry insider says it’s ironic that financials spend much of their time judging how well other companies are managed.
Because they “are by far the worst managed companies.”
He goes on to describe how Wall Street goes on a hiring spree when the stock market’s booming, with “guaranteed bonuses and outrageous packages.”
Then they “fire everyone around the bottom.”
The Upside of Stock Market Crashes
The cyclical nature of turnover on Wall Street is so ingrained, he says it’s common knowledge that you invest your severance package in the stock market.
Because the stock market will be on sale when most Wall Streeters are fired.
In addition to severance, employees get a nice paid vacation in the form of garden leave:
In general, you want to get fired as companies will offer a severance package. This is assorted with a gardening leave where you go drinking beers on a beach somewhere in Thailand.
As soon as the bonuses hit the bank, it’s “migration season” on Wall Street. Financiers start searching for their next gig, and “shop for a modest +5-10% raise.”
With the stock market crashing, some people are going to party like it’s 2008.