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popvivi
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experience vs. new tech skills

March 27th, 2009, 2:04 pm

looking at the high competition level of Quant job market, I wonder what kind of skill set is valued most. In other words, will a quant be valued more as he/she gains more experience from the job, or a new techy hire receives higher respect because he/she possesses newly technology (say, computer programming) skills. Since I've never worked in this field, yet, I am curious to know if the value of a quant adds up during years of practice, like engineers. I did hear my friends working on the academic side of business field saying that normally entry pay is about the highest unless you get consulting work to do or switch schools.
 
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twofish
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experience vs. new tech skills

March 28th, 2009, 2:07 pm

QuoteOriginally posted by: popvivilooking at the high competition level of Quant job market, I wonder what kind of skill set is valued most. In other words, will a quant be valued more as he/she gains more experience from the job, or a new techy hire receives higher respect because he/she possesses newly technology (say, computer programming) skills.Definitely experience. Also, it is usually not the case that a new hire has more technology skills. It's usually the opposite that people with experience have a higher ability to absorb new technology. If you know ten computer languages, then learning an eleventh isn't a big deal.
 
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PlasticSaber
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experience vs. new tech skills

March 28th, 2009, 2:53 pm

QuoteOriginally posted by: popviviI did hear my friends working on the academic side of business field saying that normally entry pay is about the highest unless you get consulting work to do or switch schools.Not in finance (at least not in yesterday/ yesteryear). Most newbies (junior quant, junior trader, anyone getting through graduate training program of some sort....) have an okay but not particularly spectacular compensation package. Probably on par of an engineer with a few years of experience in terms of base with less than 50% in terms of bonus. It would be a different story two to three years down the line when one has proved him/herself (and the business is also doing well)...
 
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popvivi
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experience vs. new tech skills

March 29th, 2009, 2:55 pm

Thanks twofish and PlasticSaber! So this must apply to all front office, middle office, and back office quants? In this forum, I also get most quants, HHs, and even potential quants do not think BO job is that appealing. Is it because of the work being too tedious or pay being too low?? Upon seeing the description like "bo monkeys", I even got the impression that BO quant positions are not even respected as an equal functionality to the counterparts in FO and MO. But at the same time, isn't risk management one of the most important perspective of a financial institute?
 
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twofish
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experience vs. new tech skills

March 29th, 2009, 3:51 pm

QuoteOriginally posted by: popviviSo this must apply to all front office, middle office, and back office quants?One thing that I think gets missed in this forum is how different the reporting structures in a bank are. There are major investment banks out there that don't divide quants into FO/MO/BO quants.QuoteIn this forum, I also get most quants, HHs, and even potential quants do not think BO job is that appealing. Is it because of the work being too tedious or pay being too low??The big problem with dividing things into FO/MO/BO is that then the people in the front office get all of the money and power, which defeats the purpose of having the division in the first place. The reason risk was put in the back office was to insulate it from front office pressure, but if you have a situation in which front office traders have such high status that they can ignore back office risk managers, then you've removed the entire purpose of the structure.To make a change in this structure is something that has to be done at the CEO/managing board level, which means that if you are fresh out of school, you have to take whatever structure they create. However, this structure is so obviously broken that some investment banks have thought about the problem and restructured themselves, and those that haven't are going to be forced to.QuoteUpon seeing the description like "bo monkeys", I even got the impression that BO quant positions are not even respected as an equal functionality to the counterparts in FO and MO. But at the same time, isn't risk management one of the most important perspective of a financial institute?Yes, and putting risk in the back office was a bad, bad idea. There are places out there where risk is considered a front office function, and they have done much less badly than places where risk was considered an obstacle to making money.
 
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Nomade
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experience vs. new tech skills

March 29th, 2009, 4:40 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: popviviSo this must apply to all front office, middle office, and back office quants?One thing that I think gets missed in this forum is how different the reporting structures in a bank are. There are major investment banks out there that don't divide quants into FO/MO/BO quants.QuoteIn this forum, I also get most quants, HHs, and even potential quants do not think BO job is that appealing. Is it because of the work being too tedious or pay being too low??The big problem with dividing things into FO/MO/BO is that then the people in the front office get all of the money and power, which defeats the purpose of having the division in the first place. The reason risk was put in the back office was to insulate it from front office pressure, but if you have a situation in which front office traders have such high status that they can ignore back office risk managers, then you've removed the entire purpose of the structure.To make a change in this structure is something that has to be done at the CEO/managing board level, which means that if you are fresh out of school, you have to take whatever structure they create. However, this structure is so obviously broken that some investment banks have thought about the problem and restructured themselves, and those that haven't are going to be forced to.QuoteUpon seeing the description like "bo monkeys", I even got the impression that BO quant positions are not even respected as an equal functionality to the counterparts in FO and MO. But at the same time, isn't risk management one of the most important perspective of a financial institute?Yes, and putting risk in the back office was a bad, bad idea. There are places out there where risk is considered a front office function, and they have done much less badly than places where risk was considered an obstacle to making money.Risk is never back office, it is middle office. Usually people in risk have bad looks, so we cannot show them to clients. Since there is a clear correlation between looks and intelligence, people in risk are generally dumber, though we tend to hire the smartest of the dumber lot. So, FO have better intelligence and better looks -- make sense to reward them better; after all, we're not communists!
 
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KackToodles
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experience vs. new tech skills

March 30th, 2009, 5:30 am

QuoteOriginally posted by: twofishThe reason risk was put in the back office was to insulate it from front office pressure, The reason for separating out the FO from BO quants is the same reason for separating the players locker room from the referee's locker room. Or why the professors offices are separated from the grad students offices. Frankly, the real players don't wanna dress next to the referees or share their player's buffet table.
Last edited by KackToodles on March 29th, 2009, 10:00 pm, edited 1 time in total.
 
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KackToodles
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experience vs. new tech skills

March 30th, 2009, 5:34 am

QuoteOriginally posted by: Nomadepeople in risk are generally dumber, You have hit on an interesting topic. What is the pecking orderof intelligence? 1) prop traders 2) trading desk quants 3) developers 4) trade ops 5) risk managers 6) accountants 7) IT 8) doorknob
 
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AbhiJ
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experience vs. new tech skills

March 30th, 2009, 9:49 am

QuoteOriginally posted by: NomadeSince there is a clear correlation between looks and intelligence, people in risk are generally dumber, though we tend to hire the smartest of the dumber lot. So, FO have better intelligence and better looks -- make sense to reward them better; after all, we're not communists!Why do PhDs in Math/Finance geeks are in FO. They are better off hiring models (the walking one) . People are wasting their time in pursuing MBA,MFE,CFA, PhDs.They should hit the Gym and hire a fashion expert for themselves.
Last edited by AbhiJ on March 29th, 2009, 10:00 pm, edited 1 time in total.
 
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twofish
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experience vs. new tech skills

March 30th, 2009, 11:46 am

QuoteOriginally posted by: KackToodles The reason for separating out the FO from BO quants is the same reason for separating the players locker room from the referee's locker room. Or why the professors offices are separated from the grad students offices. Frankly, the real players don't wanna dress next to the referees or share their player's buffet table. Well then let's have Darwin sort this out. Look at the investment banks which have very strong separations between FO and BO quants and those that don't, and let's see who managed to survive.
 
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ananihdv
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experience vs. new tech skills

March 30th, 2009, 12:36 pm

QuoteOriginally posted by: AbhiJQuoteOriginally posted by: NomadeSince there is a clear correlation between looks and intelligence, people in risk are generally dumber, though we tend to hire the smartest of the dumber lot. So, FO have better intelligence and better looks -- make sense to reward them better; after all, we're not communists!Why do PhDs in Math/Finance geeks are in FO. They are better off hiring models (the walking one) . People are wasting their time in pursuing MBA,MFE,CFA, PhDs.They should hit the Gym and hire a fashion expert for themselves.Abhij, They need not hit any gym. Imagine This Comedian from a regional Indian film industry makes about $10,000 per day without any MFE or MBA or PhD.
 
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KackToodles
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experience vs. new tech skills

March 30th, 2009, 3:44 pm

QuoteOriginally posted by: twofishWell then let's have Darwin sort this out. Look at the investment banks which have very strong separations between FO and BO quants and those that don't, and let's see who managed to survive. GS, JPM, BGI, BNY, SSGA, MS, NR seem to be surviving quite well.
Last edited by KackToodles on March 29th, 2009, 10:00 pm, edited 1 time in total.
 
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popvivi
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experience vs. new tech skills

March 30th, 2009, 4:21 pm

QuoteOriginally posted by: KackToodlesQuoteOriginally posted by: Nomadepeople in risk are generally dumber, You have hit on an interesting topic. What is the pecking orderof intelligence? 1) prop traders 2) trading desk quants 3) developers 4) trade ops 5) risk managers 6) accountants 7) IT 8) doorknobSo ITs are dumber than accountants than risk analysts?? aren't ITs those who help to get the fancy models running (such as coding and debugging)??
 
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twofish
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experience vs. new tech skills

March 30th, 2009, 4:52 pm

QuoteOriginally posted by: KackToodlesQuoteOriginally posted by: twofishWell then let's have Darwin sort this out. Look at the investment banks which have very strong separations between FO and BO quants and those that don't, and let's see who managed to survive. GS, JPM, BGI, BNY, SSGA, MS, NR seem to be surviving quite well. My point exactly, and how some of these investment banks actually organize their quants may be very, very different from the popular belief. The head of GS wrote an article on risk in the Financial Times, in which he mentioned the importance of risk management, so it's safe to assume that quants at GS dealing with risk aren't stuffed into a basement and forgotten. It's a reasonable supposition that some of the other banks on the list have thought about their structures and changed them to make risk important.Splitting up FO/BO in a way so that the front office gets all of the money and the people and in which risk management is ignored is just a stupid way of running an investment bank. It just makes no business sense at all, and the only reason it happens is political, and it's a reasonable belief that senior management in banks that do think about how things *should* work rather than just do the easy thing and adopt whatever structures exist, have either radically changed their structures from the "stereotype" or are thinking about how to do so.
 
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KackToodles
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experience vs. new tech skills

March 31st, 2009, 3:41 am

QuoteOriginally posted by: twofishThe head of GS wrote an article on risk in the Financial Times, in which he mentioned the importance of risk management, so it's safe to assume that quants at GS dealing with risk aren't stuffed into a basement and forgotten. You are gullible if you think that senior management of IBs or public companies ever publish anything except for marketing or promotion purposes!Quote senior management in banks that do think about how things *should* work rather than just do the easy thing and adopt whatever structures exist, have either radically changed their structures from the "stereotype" or are thinking about how to do so. For their point of view, how should things work? Maximize profits. They have no choice because either they maximize profits or their shareholders and board will have them fired. Just like the GM CEO got fired.
Last edited by KackToodles on March 30th, 2009, 10:00 pm, edited 1 time in total.
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