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Featured The Value of a PhD and MFE Degree

Discussion in 'Career Advice' started by Peter Wagner, 4/29/14.

  1. Liam

    Liam Member

    In my undergrad by 2nd year you would be able to read any text in mathematics. Trust me, when people describe someone as "good at maths" usually the person in question does not have this skill. Majority in my masters didn't, most did risk jobs and wouldn't have the ability to do quant. Funnily the best thesis I saw was from someone self read enough that, even though classmates from his physics undergrad program were struggling with reading basic notation, he had no problems.

    Given that you will have to look at quant research papers to do your work as a quant this is invaluable, and there are other skills aswell e.g. understanding of market structure. As I was once crassly told, quant finance isn't "just calculating".

    The whole PhD thing comes down to generalisms - it is a generalisation to say that the Harvard undergrad you described (while a good pick) is rare and that there are enough PhD grads that will have read enough to understand finance (some Imperial PhDs require it). But for recruiters and employers this generalism is close enough (Dominic Connor on Willmot.com is a good point of reference on this topic as he's ex quant and now recruits) that they often run by it. Solution? If you really are that good, but not have the "traditional" quant background, do something a little better than just ringing up employers on spec to get around this. Who knows what this is - focussed thesis brought out into CV, or even internships or even a BA grad publishing papers that will look good on the CV?
  2. Phil

    Phil Member

    Yup, so at least we agree on the distinction here. I see it as four tiers.

    Tier 1:
    Those with skill up to calc 3, differential equations, linear algebra who claim to be 'good at math' but honestly can't get by reading any research. They can only solve equations.

    Tier 2 (very strong undergraduate aka me):
    Very strong undergraduate degree with the typical quant classes make up - machine learning, stochastic calculus, real analysis, maybe thesis. I can guarantee you that assuming this kid aces all his classes, spending two weeks and then understanding a research from finance journals (J. of Finance, J. of Financial Economics) is definitely possible.

    Tier 2.5 (unrelated PhD):
    The unrelated PhD's whom employers value based on their thinking skills and intellectually curiosity than on their specific knowledge. Sure, these guys can read journals to understand the markets. But they aren't experienced with those theories. They can know markets. But they don't know what works or what doesn't. Goes back to the Molecular Biology PhD vs Harvard Econs undergraduate argument.

    Tier 3 (relevant PhD aka Math, Finance):
    The masters! These are the guys that can read the math and finance journals. They know the theoretical stuff which the tier 2 guys don't, ie an analytical solution to returns via arbitraging two banks assuming the two different pricing models being used. These guys work on something deep in the model, ie alter the volatility, redefine a search algorithm, (Maybe bad examples because clearly I'm not here) Tier 2 guys just understand and implement.

    For me, I see it as 1 < 2 = 2.5 < 3
    #22 Phil, 8/16/14
    Last edited: 8/16/14
  3. Liam

    Liam Member

    Examples probably are simplistic but this is precisely the stuff non-mathematical people don't understand. It's not like selling houses where you can return to it anytime, albeit just get into the swing of things. Still I seriously cannot understand how 95% of the population would reject what is stated on this thread as if they're somehow employment experts after doing 1 or 2 Mickey mouse jobs. I mean few will have experience of maths degrees never mind being a quant.

    I've returned to mathematical work after 6 years of working in finance without it - it was still fresh, but I could see a difference between that and my stopgap job where I was redoing market research calls, which took 1 week to get back into the swing of things. Although to be fair I'm finding reading through MapReduce and machine learning papers very easy as probably 4 out of the 5 years I did in college involved it.
  4. Daniel Duffy

    Daniel Duffy C++ author, trainer
      C++ Level 1

  5. Levi McClenny

    Levi McClenny New Member

    Dare I ask what people consider of someone with a PhD in a technical field (such as EE) AND a MSCF? I feel that it qualifies as "Tier 3" described above but alas could make you look like you're trying too hard and make you "overqualified." Curious what the community thinks of this, or if someone has run into this type of individual personally what they thought of him/her.
  6. Daniel Duffy

    Daniel Duffy C++ author, trainer
      C++ Level 1

    These are the guys that can read the math and finance journal

    Depends on what you mean by "can read".
  7. mhy

    mhy Active Member

    They tend to be career switchers / people who finished their PhD and realized they don't want to go into academia. An extra year or 1.5 years after 5-7 years of a PhD isn't too bad bang for the buck.

    I think they are welcomed by employers, since they have a highly technical research training along with formal mathematical finance training, so they can get up to speed more quickly.
  8. TehRaio

    TehRaio Active Member

    off-topic anecdotal: I took a course last semester and there was a physics PhD student in there, the dude couldn't wait to "get done" with his PhD so he could go work at a bank or a hedge fund.

    I felt a bit confused because I still don't get why you'd spend 5 years of your life researching something that you have no interest in (obviously)? I'm sure there are PhDs in mathematical finance out there more suited for these goals? isn't that better?
  9. Levi McClenny

    Levi McClenny New Member

    I feel like if you do a PhD in "mathematical finance" you learn the same things as everyone thats already gunning for a quant job. If you do a PhD in Physics or EE or whatever, you can take theories not already found in computational finance and apply them there to see if you can turn it into money. Machine learning and other theoretical concepts weren't created to be used in finance, they have just found a home there because other people were interested in them and realized they could be used to make decent returns. At the end of the day, if you understand the same concepts as everyone else in the room, how are you gonna make any money? Thats just my rationale.
  10. bigbadwolf

    bigbadwolf Well-Known Member

    A lot of the time (most of the time?), the research adviser holds the Ph.D. student's hand and guides him step by step towards an acceptable dissertation. There's a lot of drudgery involved but not necessarily that much "research." The exceptions would be the best students with the best research advisers.
  11. mhy

    mhy Active Member

    Maybe he started his PhD starry-eyed and full of hope and five years of PhD life turned him cynical & $$$-hungry.
    anonymouse and alain like this.
  12. Bogc

    Bogc New Member

    Interesting article and points raised. But how about an individual with an undergraduate degree in Economics and mathematics but has a passion for Quant. Does this individual stand a chance?
  13. TehRaio

    TehRaio Active Member

    a chance to do what?