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jksaid
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September 7th, 2005, 10:43 am

Hey Guys,Yet another lost soul seeking your guidance.I am currently a PhD student, I have completed the coursework a while ago, passed my orals, etc...Research has not proved to be as interesting for me as I would have hoped. I would like to do something more practical, like structuring or trading.My backround is in Stochastic Analysis and Mathematical Finance. If I choose not to complete the PhD, what opportunities are open to me?Thanks.J.
 
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DominicConnor
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September 7th, 2005, 7:52 pm

There are many opportunities at banks for your skill set, the trick is not to take the wrong one.However it would be really quite catastrophic if you gave up your PhD. We'll happily represent you when you finish, but copping out would be a signal that would kick a fatal hole in our abililty to sell you.Step through why our clients want PhDs.1: It shows you're smart. If you stop, many will assume you're not that good.2: It shows you can finish things. Lots of smart young people can pass exams, come up with ideas. Banks need things done. Being bored is rarely seen as a good reason for stopping.3: You do not need to be fed with a spoon. For the last 20 years you've absorbed a vast amount of stuff, and clearly you understood most of it.But nearly all of it was carefully cut up into chunks, and handed to you be people who feed knowledge professionally.You had books, and tutors.A PhD shows you can work on your own. Maybe you look stuff up, or ask people, but its up to you to find the book, and ask the right people.4: They like hiring PhDs. Short version is that assuming you're at a decent place the entry level salary at PhD is 50-100% higher than undergrad degree.You may think you're bored now. Lower qualified people on average get less skilled jobs, and often they are often a lot more boring. ...and it lasts for 30-40 years, not 3-4.I've talked to a few people in your position, and the problem seems to be choice of your research topic.So change it.Your supervisor doesn't want to to quit, he presumably has professional pride, and even if he doesn't such things count against him.He certainly doesn't want a member of his team who is pissed off an unproductive.At the very least you need to talk to him frankly as one adult to another.Work out beforehand what you don't like. However going in with a whine isn't goint to help.Think of things he might be able to change. Think hard.Find other people near you and see if they have ideas, or are doing things they enjoy.
 
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jksaid
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September 8th, 2005, 3:24 am

DCFC,All your points are valid, I have explored many of them - I appreciate your candor in the whole matter and I do apolgise for whining, I should phrase things more carefully in future.I would however like to ask some questions.1. Why is a MA in Math Fin better than ABD in Math Fin, since after all it's a rougher selection process for the PhD.2. Most of the time for one's oral qualifiers, at least at the school I am at, you do have to self-study eveything anyway, I would hardly say that's spoonfed.3. Is a PhD in Number Theory and a night reading of Hull more applicable to a non-research position at a bank/ hedge fund than an ABD in stochastics and finance?4. Would switching into a top MBA make a difference?Thanks,J.
 
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DominicConnor
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September 8th, 2005, 8:36 am

Sorry, I didn't mean to say you were whining, I meant to say that the talk with your supervisor needs to be a constructive exploration of options, not just a list of all the things you don't like.1. Why is a MA in Math Fin better than ABD in Math Fin, since after all it's a rougher selection process for the PhD.One thing you need to be prepared for is that the perception of what is "tougher" is quite subjective, and the people making decisions about you often have poor information.In any case it's not just a case of how hard it is to get in, though of course that helps. You are being selected in a PhD for other characteristics. These are not a great match for working in a bank, but often are the only data a HH or manager has. At the risk of being called elitist, I divide the world into actors and extras. Extras are sometimes smarter, but there is less "depth" to them.2. Most of the time for one's oral qualifiers, at least at the school I am at, you do have to self-study eveything anyway, I would hardly say that's spoonfed.Nor would I. Again of course at this time I don't know your school and even if I did your application for a job is dependant upon me or some other pimp or manager knowing the structure of your course. That's a big dependancy to have. If I'm wrong and underestimate you, I lose a small chance of making a little money, but you lose the chance for a good job.Your task is to make yourself look good to me.That makes me sound arrogant, and well yes I am. But even if I were ever so humble, I'd still be making about the same decisions, on the same knowledge.3. Is a PhD in Number Theory and a night reading of Hull more applicable to a non-research position at a bank/ hedge fund than an ABD in stochastics and finance?Yeah, sometimes. It varies of course. However the pure quant hirers we know will take the PhD. Is harder to sell pure maths people though, they need to be better to get the same chance.We're more flexible than most, and unless the client says "must be PhD in Physics or applied maths" will consider people with other stuff. You will come to know thart most HH's and HR departments use keyword filters, sometimes quite blindly. The last pure maths guy we saw go into a bank had got rather sad about being rejected for the "pure" bit even though he was good.4. Would switching into a top MBA make a difference?Yes, though not for us. HR departments like MBAs from top schools, we are OK about them.
Last edited by DominicConnor on September 7th, 2005, 10:00 pm, edited 1 time in total.
 
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linuxuser99
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September 8th, 2005, 8:57 am

>> 4. Would switching into a top MBA make a difference?>> Yes, though not for us. HR departments like MBAs from top schools, we are OK about them.Next to impossible to get onto a decent MBa without significant work experience. Time spent doing a PhD will not count for this. the admissions comittees for the various schools will look on not finishing a PhD as badly (maybe worse) than corporate recruiters.
 
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TraderJoe
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September 8th, 2005, 9:29 am

jksaid: I know how you feel. Instead of grinding out a dissertation over the next three to four years not in the least way related to finance, have you considered switching and doing a one year Masters degree in financial mathematics in which you'll learn everything you need to know to become a quant anyway? This seems the smartest option to me. Perhaps the Phd in physics is a hangover from the days of Derman when this was the only way into banks and Masters in FE were not readily available...
 
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jksaid
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September 11th, 2005, 5:39 am

Thanks for the info guys.One last thing.If we choose not to walk down the path to a PhD and ultimate glory as the star researcher in derivatives at Goldman Sachs, what are the options then? I cannot believe that no-one would be prepared to interview me because I am a lowly ABD. In other words if I am prepared not to be the Tom Cruise of finance what can I apply for?Thanks for your indulgence.J.
Last edited by jksaid on September 10th, 2005, 10:00 pm, edited 1 time in total.
 
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DominicConnor
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September 11th, 2005, 6:32 pm

1. If we choose not to walk down the path to a PhD and ultimate glory as the star researcher in derivatives at Goldman Sachs, what are the options then? I cannot believe that no-one would be prepared to interview me because I am a lowly ABD. It's not the lack of interviews that should worry you, it is what job you are being interviewed for.In other words if I am prepared not to be the Tom Cruise of finance what can I apply for?Sure you can apply for quant jobs, but you may have to follow the path of Harrison Ford who for many years earned more money from carpentry building movie sets than acting upon them.2. DCFC, I am not sure what you mean by actors and extras, are you implying that a PhD is an extra and yet an MA in FE is an actor? I would think that to be successful in finance and in life that breadth is far more important.I mean those as personality types rather than how smart or well educated.3. From the traders that I have met, very few have PhDs, the structurers none have PhD's, so why should I want a PhD if I am not entangled in a mathematical affair?The question is how you get from here to there.4. Not that anyone can necessarily answer this but let me ask it anyway: How many managers really believe that the PhD's working for them will enhance their returns and not just their client relations?Most of the managers we talk to don't have clients as such, so if they hire a PhD it is because the a priori chance of them being more useful is higher, and worth the extra pay.Be wary of criticising the market for being irrational. Standard line on markets is that they can remain irrational far longer than you can remain solvent.The rational way to deal with an irrational market is to learn how to exploit other people's incorrect view. Saying to others it is wrong doesn't make you richer ( unless you can write a really good book).Thanks for your indulgence.J.
 
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jksaid
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September 11th, 2005, 9:54 pm

Dominic,I agree with you entirely that if you want to be a serious quant sans PhD in this day and age you should wake up and smell the coffee.I am not looking for a position as a quant/junior quant/assistant quant, i was hoping to get some advice on how one can break into structured finance, structuring or trading without having to have proven the fundamental pricing theorem for illiquid and incompletye markets with transaction costs.Right now and for the forseable future, I think for my career where the position is and what the rest of the team I will be working with is like matters far more than the difference between $50,000 US and $120,000.What are your thoughts?Thanks,J.
 
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TraderJoe
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September 11th, 2005, 10:00 pm

>>Right now and for the forseable future, I think for my career where the position is and what the rest of the team I will be working with is like matters far more than the difference between $50,000 US and $120,000.What, are you crazy ().
 
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jksaid
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September 11th, 2005, 10:30 pm

Trader Joe.I pick the numbers to make a point.There are many 120 K jobs which lead no-where and are not particularly interesting or satisfying.On the other hand there is a lot of room for improvement from 50 (if you have the skills and I guess the luck.)To have an extra 70 K minus uncle sam's share just so I can take cabs and eat at Peter Luger will not offset having a really unsatisfying worklife.I am sorry if I sound irrational, I guess that I am either crazy or an arbitrage opportunity.
 
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TraderJoe
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September 12th, 2005, 11:06 am

>>>On the other hand there is a lot of room for improvement from 50 (if you have the skills and I guess the luck.)Oh dear.
 
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SanFranCA2002
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September 12th, 2005, 3:30 pm

jksaid: Do you really like pounding your head against a brick wall? Think guy. Really use your ABD knowledge and think. The advice you are getting is not just poor, but irresponsible. You need to go elsewhere for advice. (No, I'm not interested in hiring anyone or dispensing additional advice, its just that when I see such shameless jerking around of someone, I feel like saying something)
 
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DominicConnor
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September 12th, 2005, 6:29 pm

It's very rare that you have the choice between a 50K interesting job and 120K dull.It is true, that the path from a 50K may be better than a 120, but you need to recognise how hard to it is to map thes paths when you get offers.You will make your decision upon poor information, sure you can ask the forum for help, but there's too many unknowns, or factors that are hard to weight.A clear shining data point is starting salary.There's a noise term of up to 25% which is worth ignoring, but when a bank says this work is 150% more valuable than another piece of work then your best bet is to believe them.
 
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TraderJoe
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September 12th, 2005, 10:46 pm

QuoteOriginally posted by: SanFranCA2002jksaid: Do you really like pounding your head against a brick wall? Think guy. Really use your ABD knowledge and think. The advice you are getting is not just poor, but irresponsible. You need to go elsewhere for advice. (No, I'm not interested in hiring anyone or dispensing additional advice, its just that when I see such shameless jerking around of someone, I feel like saying something)Yeah, try here.
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