novice
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Hi:
I'm a newbie who only recently began to consider a career in quantative finance, so please forgive me if the following question is dumb.
I am a recent PhD graduate in theoretical condensed matter physics who will soon start a post-doc. Though my post-doc will be in a different lab than my PhD, my post-doc will involve colloborating with my old PhD advisor. Currently, I'm thinking about leaving academia and working in finance, but if I make the switch now, I am certain both my PhD and post-doctoral advisors will be very unhappy since both are counting on me staying and working on projects of theirs. Therefore, I doubt if either will write me a letter of reference.
However, I have heard that investment banks don't ask for letters of reference, at least from recent graduates. Is this true?
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Bachelier
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| Transparent Doppelgänger |
| Total Posts: 665 |
| Joined: Dec 2005 |
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You will be subjected to a rigorous screening by hard core quants on your quant chops.
That will provide objective empirical evidence of whatever your former prof says you were trained in.
HR may need a "character" reference. Pick a high school teacher or friend in business. |
"Those who can make you believe absurdities can make you commit atrocities." Voltaire |
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novice
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| Total Posts: 12 |
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So let me just make sure I understand you.
You are saying that I am correct in thinking I will not need letters of recommendation from my PhD and post-doctoral advisors.
I am afraid to even ask them for letters. The mere suggestion that I am considering leaving for another job will infuriate them.
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Cheng
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Just to reiterate Bachelier's point:
Your future quant colleagues won't be interested too much in any reference letters. Instead you will be locked in a room for several hours and asked thousands of questions about quant fin including brain teasers of all sorts. If you survive you made significant progress.
HTH. |
"Faster than a bullet / Terrifying scream / Enraged and full of anger /
He's half man and half machine" |
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novice
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I'm glad to hear that about the reference letters. My PhD and post-doctoral advisors would probably do everything they can to prevent me from leaving academia now. It would take them a year or two to train someone else to work on their projects.
I have a few more questions.
The interviews sound intimidating.
I have a strong academic background: a BSc in physics from MIT and a PhD in physics from Cornell, both top tier physics departments.
Also, I have programmed extensively in C++, Perl, Matlab, and Java and have experience using computational and statistical methods to analyze large data sets with many random and systematic errors.
But I don't know much about finance. I am trying to learn as much as I can by reading Hull during my spare time, but it is slow going. The book is 600 pages long!
Is there hope for me getting an entry level position as a quantative analyst?
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Graeme
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Just to reiterate the points made already. Letters of reference are worth half the worth of the paper that they are written on, unless they are printed double sided, in which case they aren't worth anything. OTOH calls to reliable ex-colleagues are very useful; which doesn't apply to you - they're not going to ask someone that they don't know, and especially somebody outside of finance. (And you don't recommend who they call - they work it out themselves, or don't - and possibly get shafted.)
With your programming skills being a quant programmer could be a good step to becoming what you want. The programming space has been overcrowded for many years, so typically one has tried to use that as a route to quant work, but that space is become crowded too. So, nowadays, you need to be good to distinguish yourself. (There have been some threads in the last month along these lines - nowadays it is much harder to get in.) |
Graeme West |
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Cheng
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The interviews sound intimidating.
I personally do not have that much interview experience but my general impression was that they try to find out what you don't know, determining the boundaries of your knowledge. I couldn't answer half of their questions, minimum, had a damn bad day and still it seemed like they got a good impression.
What I am really missing today are good quant programmers, ie people with decent programming skills (better than mine which are average) and enough quantitative background to understand what they are actually doing. Most people I know are either good quants or good programmers but the intersection of both seems to be very small. I think this is also the point Graeme mentioned. |
"Faster than a bullet / Terrifying scream / Enraged and full of anger /
He's half man and half machine" |
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Bachelier
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| Transparent Doppelgänger |
| Total Posts: 665 |
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You have a fine background, worry zero (0) about that.
You don't need rec letters from academics, worry zero (0) about that.
You will have a tough interview. If you went from MIT to Cornell, I'd worry just about brushing up on the stuff you did your comprehensives for. stats on signal processing, arch, garch, etc.
The interview is to establish the bounderies of your knowledge, and see if you would fit into their conversation stream. No one is superman (except FDAX), so just show what you know, sshow what you can figure out, and don't lie about what you don't know. This is a group of people who solve problems, they want to see that you have the same jargon and knowledge base to have a fruitful conversation with you.
I'd worry less about the finance. Read Hull if you want, but if you know the heat equation you've got 40% the battle, the rest si stochastic process, semi-stochastic, etc.
You'll do fine. Worry less, practice being quietly conffident more. back it up with intelligent forthrightrness, get half the brian teasers, and you are done. |
"Those who can make you believe absurdities can make you commit atrocities." Voltaire |
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DW
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Novice, would you be interested in a move to London? If so there could potentially be a research slot for you in the firm I work for.
Bachelier's advice is good advice, ignore at your own peril. |
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MMopt
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| Certified Headhunter |
| Total Posts: 60 |
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Good advice by all above.
I have a similar situation right now. He is worried his advisors will cut his head off if he left, and didn’t know who to use. If you get through the entire process, and references are your last hurdle, a close cat or dog should do fine considering the ringer they’ll put you through at entry level. Point being, don’t worry about them…
This should cause Doug to curse at me and a bit of a thread-jack: if you want to try a few U.S. shops, give me a ring. I may know one of your colleagues from MIT if you graduated in 01.
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novice
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No, I can't move to London, but thanks for asking DW.
My girlfriend is starting a position in New York, so I will be looking for positions mostly in New York.
I stumbled on this forum last night. I must say it is very informative. The posters here seem to be insiders who don't mince words. They tell it like it is. I'm going to spend the next few days reading all the posts and learning as much as I can.
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IAmEric
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| Phorgy PhynanceBanned |
| Total Posts: 2961 |
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Hi novice,
If you dedicate yourself, I'm sure you'll make it. Just don't underestimate the commitment it will take on your part. One of the biggest hurdles you'll have to overcome is the question, "Is this guy for real?" Most employers receive tons of PhD resumes very similar to yours from guys just testing the waters and have made no real commitment to learning phynance. Being smart isn't good enough. You need to demonstrate that your interest in working in phynance is sincere and that you're willing to put the required effort into learning what you need to know.
Joining NP is probably the smartest thing you could have done. Like I've said in other threads, the chances that the hiring managers at the places you would like to work are regular phorum members here is higher than you might think. The world of quantitative phynance is not so big.
Regarding your advisor. The truth is, he will be disappointed, but you cannot let that determine the course of the rest of your life. I know I wanted to go into phynance long before I completed my thesis, but didn't take any related courses for similar reasons. I didn't want to upset my advisor. Because I didn't take any courses, I had a very difficult time breaking in. Part of that had to do with timing, but part of that remains true today. Competition is pretty fierce, but you seem pretty suited to this area. As long as you dedicate yourself, you have a good chance.
Welcome to NP! 
Eric |
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Graeme
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| and, most importantly, who is number one? You or your supervisor(s)? And those condensed matter atom thingies will manage without you, too. |
Graeme West |
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gentinex
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| One comment I want to add to what everyone else has said, is that if you get far enough in an interviewing process, you will be subject to background checks, in which it is possible that your advisors may be contacted. I've occasionally heard of this occurring before a group makes a final decision on an offer (in which case you might have a little reason to be concerned about pissing off your advisors and them bad-mouthing you---although this seems kind of petty), although more typically I think it happens after you've accepted an offer (in which case you have much less reason to worry about your advisors). |
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At my firm, we can't make an offer until we've checked references, since if the offer happens to be accepted on the spot, we can't withdraw it later. I'm pretty sure we always do background checks, but we'll take circumstances into account when deciding who to contact and how to interpret their responses.
The purpose of a background check is almost never to get extra information about you, but simply to ensure that you did not misrepresent your background. If everything on your resume was accurate, and everything you said at the interviews was true, then the background check is probably a formality. |
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novice
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I definitely think I could enjoy quantitative finance. I am aware that much of the day to day work probably involves menial tasks that require little thought, but so does most work in academia. During my doctoral work, I spent most of my time trying to get my C++ code to compile.
As I contemplate a career in finance, something I need to think long and hard about are the work hours. From what I have read here and elsewhere on the web, it seems most jobs in finance require 80-100 hrs of work a week. I would be able to spend virtually no time with my girlfriend or family. I think I would only be prepared to make such a sacrafice if the compensation was truly phenomenal - I mean if there is a good possibility of earning a million dollars in 5 years and then switching to a less demanding job. While such metoric success is not uncommon to see in a movie like the Bolier Room, does this actually happen in practice, or is it a myth perputated by Hollywood? How many good investment bankers become millionaires in 5 years, and how easy is it to switch to a less demanding job?
If the compensation is more realistically $150,000-200,000 a year which after taxes amounts to about $100,000 a year, I think I would rather do something that requires less work hours. My ideal job would involve using my programming and quantitative skills in some business or finanical setting, a salary between $80,000-100,000 dollars a year, a work week of 60-70 hrs, and one day off on the weekend. I suppose many convential programmers have this, but I would like to also to use my physics and mathematics skills. Is there any job out there like this, or am I just dreaming? |
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IAmEric
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| Phorgy PhynanceBanned |
| Total Posts: 2961 |
| Joined: Oct 2004 |
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I don't think most phynance people work 80-100 hrs/wk. After all, the markets aren't even open that long. I've mentioned before that "I" work long hours, but I am probably an exception. I know very few people who work extended hours and quality of life is generally considered to be very important. My problem is that I'm new enough that I still think it is possible to understand the phynancial universe and I've got this lame desire to be a super hero  |
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mj
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in my experience, references occur after the offer and they are to check that you aren't dodgy rather than whether you are bright.
Personally, i think there are better books than Hull. I am currently compiling a list (besides the obvious two, of course!)
You might want to read my advice sheet on www.markjoshi.com
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chiral3
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"I have a strong academic background: a BSc in physics from MIT and a PhD in physics from Cornell, both top tier physics departments.Also, I have programmed extensively in C++, Perl, Matlab, and Java and have experience using computational and statistical methods to analyze large data sets with many random and systematic errors.But I don't know much about finance. I am trying to learn as much as I can by reading Hull during my spare time, but it is slow going. The book is 600 pages long!"
I am sick of seeing this lately. Why the phuck do I see so many resumes from people coming from physics that can't say why they are coming to finance other than that they want more money, or are sick of the academy's laziness, or they didn't get tenure, or they didn't want the postdoc at UofUtah. I switched from physics because I got obsessed with finance. Now-a-days all I see is "three PhDs from top tier school. Could have worked on string theory with that guy. Reading Hull. Hire me. I heard I can make 250k. I don't want to work too much."
No offense Novice, but I see many resumes (esp from Cornell and MIT), and I stopped flying the people around that can't say why they are coming to finance. If I were you, instead of cramming Hull into your head (it isn't too hard to ask questions that are not in Hull), I'd be meditating on why you think you should be able to stop thnking about physics one day, after years, and quadruple your salary thinking about finance the next.
My $0.02 |
What do you mean by **drag** the range"? If you just mean expand the column width, that doesn't work. NUM! |
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Johnny
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Absolutely. |
heartbreakingly simple |
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Bachelier
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| Transparent Doppelgänger |
| Total Posts: 665 |
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"I mean if there is a good possibility of earning a million dollars in 5 years and then switching to a less demanding job."
let's seperate these:
"I mean if there is a good possibility of earning a million dollars in 5 years"
Yes, but.......see chiral3's post.
"and then switching to a less demanding job."
If you find the right job in finance, and are on the right track, you won't want to. There are a couple people here who did what I call "low stakes retirement." (James, tonyc...couple others). They hated it, and are back in real jobs managing real money. Phynance is that interesting.
If you don't think it is interesting, no amount of money will be enough.
I hate to say it, but the utility curve (let's call it a surface) of phyance is in an n-dimensional space. Sure we all want more money because that is both part of the game (how you keep score) and part needs (dhhhuuu), and other dimensions (optimizing consumption, providing subsidies for other utility curves, etc.).
But there is vector of phynance for most folks here that maps to "I would do this for free because it is so phucking interesting."
A lot of us are trying to push our individual data point towards that efficient frontier, sometimes away from higher (real $) compensation.
To make this more concrete I'll give you an example. A member of this phorum runs 2 billion Euros AUM. She has a respectable Sharpe and information ratio, and is very well paid. But most of the job is dull and formulaic, because that is the mandate and constraints. Most phorum members consider this ho-hum. Another phorum member is brilliant and self-taught, and still another runs a small hedge fund of 2 mil AUM, but has a jaw dropping sustainable Shaarpe and information ratio that is scalable. Most phorum members are in sheer awe and admiration of these two, as well they should. The world is in awe of Miss 2 billion.
Ask yourself why. Come up with some good answers, and you've found a home. |
"Those who can make you believe absurdities can make you commit atrocities." Voltaire |
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IAmEric
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| Phorgy PhynanceBanned |
| Total Posts: 2961 |
| Joined: Oct 2004 |
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Feel the oozing wisdom. I love this place 
Yes, only do it if you love it. Spend some time and decide for yourself whether you love it. I started out from a very similar point in configuration space as you are. I didn't really know what phynance was but had a wife who put up with me for six years of spartan life in grad school and was pushing me to find something more lucrative. Of course, phynance is a logical place to go for someone with the physics background who suddenly cares about money. I spent a few months of intense self study and, to my deep surprise, fell totally in love with it. I discovered relationships between mathematical phynance and my own research in numerical algorithms and that was the end of it. I knew I HAD to work in phynance. It's been almost 2 years now and there is not one menial mundane thing I've done that I haven't absolutely loved. From building risk models to now pricing models. I'm just soaking it all up like a sponge and loving every minute of it.
Take some time. Do some research. Hang out at NP. Ask questions. Decide for yourself whether you love it. I never imagined I would leave science and the real point is that I haven't.
Cheers
Eric |
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omd
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80-100 hours per week is definitely overkill (That is why I-Banking is a nightmare - they do those hours and more). My busiest week was 80 hrs. I work about 55 hrs now (in the office) and people are quite happy with that and things get done. I read some on the weekends too though if you count that. There is a lot of mundane work that needs to get done. Also speed programming can be annoying, mundane, and can make you say, "I hate programming!" However, when you have this new tool that you created you say, "Hey that was pretty cool!" Also, the more you start to make, the more you want to work! A day off will feel like you are missing out! So, time off should be at the quietest times....I would like to be off right now because it is pretty boring at work with the holidays, but I can catch up with some programming projects to find new strategies. You will be able to be with freidns and family. Do not worry about that. I think you should be flexibile about where you want to live. Take your girlfriend to London, for example - it woud be a good experience. It is a small risk, but you should appreciate risk in this game!
You will like finance probably. You had a good post that showed some humility and skills at the same time, which is also good. Listen to Chiral and think more about why you want to go into finance. It is fun here for sure, but it is not for everybody. |
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novice
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>No offense Novice, but I see many resumes (esp from Cornell and MIT), and I stopped >flying the people around that can't say why they are coming to finance. If I were you, >instead of cramming Hull into your head (it isn't too hard to ask questions that are not in >Hull), I'd be meditating on why you think you should be able to stop thnking about physics >one day, after years, and quadruple your salary thinking about finance the next.
Believe me Chiral3, I do not want to go into finance simply for the money. I have and am still thinking about whether I would enjoy working on problems in quantitative finance. More and more, I am convinced that I would. I love doing my current research, and I see many parallels between it and finanical analysis. My research involves using computational and statistical techniques to analyze large complex data sets with many random and systematic errors. I apply lots of techniques from such fields as machine learning, Bayesian analysis, statistical physics, etc. I can envision doing much of the same with finanical data.
So yes, I think I will love doing finanical analysis. But one important consideration for me is the number of work hours. It is important to me that I can spend time with my girlfriend and family. I do not want to spend my life working 100 hrs/week. I would gladly take a substantial pay cut, so I could do the same thing and only work 60-70 hrs/week - which by some people's standards is still a lot. It is not an issue of me not being passionate about finance. It is an issue of balance - of spending time with my loved ones, being there to see my children grow up, etc.
So, are there jobs in finance that require less hours, like say between 60-70 hrs a week? If so, what are they?
>I think you should be flexibile about where you want to live. Take your girlfriend to >London, for example - it woud be a good experience. It is a small risk, but you should >appreciate risk in this game!
Unfortunately, my girlfriend has a job in New York, and she does not want to leave it. To me, this is not such a problem. It is my understanding that New York is a great place for finance. Recently, I have read articles in the Economist saying that Wallstreet is in somewhat of a slump, but I believe New York is still the largest finanical market, right? I mean there are probably more opportunties in New York than anywhere else, although London and Hong Kong are catching up.
Am I right on this? Or is London much better for some reason?
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London has probably got slightly more exotic products, but there are still lots of jobs in NY.
I think the 100+ hour jobs are mostly in investment banking. 60-65 hours is probably more typical for front office quant jobs. One's productivity drops after 12/13 hours anyway. although there are occasionals where the longer hours need to be done, and these aren't always predictable.
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