SERVING THE QUANTITATIVE FINANCE COMMUNITY

DevonFangs
Posts: 3004
Joined: November 9th, 2009, 1:49 pm

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: bluetrinQuoteOriginally posted by: DevonFangsQuoteOriginally posted by: spiceI'm a FO quant for 7 years at an IB, but currently not working. Agents have been bombarding me with specs from MV and risk management. With FO jobs thin on the ground, should I relent and take up a job in risk, or hold my ground for jobs that fit my FO experience no matter how long it takes?Hard to go back to FO when you're in MO, so if you want a FO job and are not starving maybe better just wait a bit more. Market risk management might be an option if you're sick of the quant nonsense.What market risk management daily duties consist of practically ?I've no idea, for sure at least give a non-quant signoff on models and set trading limits based on non-quant arguments.

DevonFangs
Posts: 3004
Joined: November 9th, 2009, 1:49 pm

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: capafan2Quote[We do not need IT monkeys or people with a knowledge of 2-3 models (no matter how deep it is).Good IT Monkeys make plenty more than good MV's and RM's based on the "Area of the Curve" not "Spot Price" concept. Also they have more job mobility. Also pontificating is fun and makes you feel important but the main reason why Deep Tech or Deep Math folks do not rise. They do not get it is that most of that they feel so proud of is not relevant to growing companies. When all is said and done FO guys have targets to meet and when you have a carrot on one hand and stick on the other you are forced to make compromises. It is like having pressures to publish and then writing a paper after paper which says "Null Hypthesis is not rejected". You end up looking like a "Honest" Idiot. As always interviews have two purposes. To find out - 1. Can the person do the job 2. Will the person adapt to the culture. It is quite clear based on what your wrote where the FO guys were coming from. They culture requires them to gloss over some finnesse in the model. It is quite likely they have a sense of entitlement (cannot adapt to the culture). But to reject them solely because of their answers without understanding the context of where they come from makes no sense unless you have too many other candidates to choose from. In which case why invite FO guys to interview. Just to pontificate? Pontification is very self-serving and feel good like a sudden dose of "Single Malt" but it is terrible for ones own self.TBH I think in MV we could use also ex FO people, because they are probably more sensitive about the model developer culture and for their superior knowledge of the market. It's just that it's very rare for them to apply for MO positions. On the other hand I'm with ThinkDifferent that the skill set is largely different because of different goals. Many of the FO quants I know are genuinely smart guys who would do very well in model validation as well, but for some others I strongly doubt they would be good validators. You must have seen a million models before your validation can add value, and actually one of the interesting sides of MV is really that you can get to see (and understand and implement and stress) dozens of different models every year.However, like Gamal said it appears that the problem is the positioning of MV teams within a variety of firms, and that apparently people in MV are constantly looked down on by the desk. And now don't say it's not about looking down on people because I think I could gather some remarkable quotes.
Last edited by DevonFangs on April 11th, 2013, 10:00 pm, edited 1 time in total.

capafan2
Posts: 924
Joined: June 20th, 2009, 11:26 am

### Market Risk? Model Validation? Quant Business analyst?

QuoteAnd now don't say it's not about looking down on people because I think I could gather some remarkable quotes.I know the feeling. I left IT in a bank in less than a year because I could not tolerate being looked down on. The world is big and there are plenty of options than to put up with jerks no matter how smart they are.

DevonFangs
Posts: 3004
Joined: November 9th, 2009, 1:49 pm

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: capafan2QuoteAnd now don't say it's not about looking down on people because I think I could gather some remarkable quotes.I know the feeling. I left IT in a bank in less than a year because I could not tolerate being looked down on. The world is big and there are plenty of options than to put up with jerks no matter how smart they are.The best was: "You're actually good, do you ever think of becoming a quant?"

bluetrin
Posts: 292
Joined: September 9th, 2005, 6:41 am

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: capafan2Quote[We do not need IT monkeys or people with a knowledge of 2-3 models (no matter how deep it is).Good IT Monkeys make plenty more than good MV's and RM's based on the "Area of the Curve" not "Spot Price" concept. Also they have more job mobility. Also pontificating is fun and makes you feel important but the main reason why Deep Tech or Deep Math folks do not rise. They do not get it is that most of that they feel so proud of is not relevant to growing companies. When all is said and done FO guys have targets to meet and when you have a carrot on one hand and stick on the other you are forced to make compromises. It is like having pressures to publish and then writing a paper after paper which says "Null Hypthesis is not rejected". You end up looking like a "Honest" Idiot. As always interviews have two purposes. To find out - 1. Can the person do the job 2. Will the person adapt to the culture. It is quite clear based on what your wrote where the FO guys were coming from. They culture requires them to gloss over some finnesse in the model. It is quite likely they have a sense of entitlement (cannot adapt to the culture). But to reject them solely because of their answers without understanding the context of where they come from makes no sense unless you have too many other candidates to choose from. In which case why invite FO guys to interview. Just to pontificate? Pontification is very self-serving and feel good like a sudden dose of "Single Malt" but it is terrible for ones own self.It is very true, I am astonished by the attitude from some people to always think they know better than everybody. Sometimes valid issues raised by FO and MO get overlooked by people overconfident in a complicated model which does not seem to produce understandable and explainable figures.

spice
Posts: 491
Joined: March 22nd, 2006, 11:53 am

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: capafan2QuotePay is higher under the model that it will attract the more skilled individuals. And it works - witness how QA/MV guys want to move to Dev/FO.And FO pay is not moving lower despite the hordes knocking on doors because the number of qualified people is small despite the best efforts of the degree mills to churn out QF/QE/FE degree holders...If the salary for FO jobs was suddenly lower tomorrow than MO jobs because of demand created by increased regulatory requirements, I am willing to bet that FO's would flock to MO without a thought,But in the current market environment, IBs are diverting so much of their FO resources/budgets into boosting up their MO teams. I would even guess salaries for FO jobs are the same or even lower than MO jobs now, especially when in the past, the difference have been the high FO bonuses, which have been decimated.

capafan2
Posts: 924
Joined: June 20th, 2009, 11:26 am

### Market Risk? Model Validation? Quant Business analyst?

QuoteBut in the current market environment, IBs are diverting so much of their FO resources/budgets into boosting up their MO teams. I would even guess salaries for FO jobs are the same or even lower than MO jobs now, especially when in the past, the difference have been the high FO bonuses, which have been decimated.Doubt this is true. Even if MO has more demand and money is being diverted to MO, MO hires more people than FO so they all get paid less in base compared to FO. Ofcourse I don't know for sure but knowing the perception of MO/FO in banks I don't know how that would not be true. I suppose if you hire more MO or BO or programmers you can get more things done. With FO's peoples perception is that more work cannot get done. It is more "high value" work that needs to be done by "exceptionally bright, talented but arbitrage(sort-of) seeking" people.

AbhiJ
Posts: 748
Joined: August 5th, 2008, 11:29 am

### Market Risk? Model Validation? Quant Business analyst?

Surprised by how no one seem to mention that they love their jobs and everyone is trying to show that they are better just because they earn a significant% higher than the counterpart. What happened to adding value, helping your client, enjoying your duties ? It seems that people both Quants and MV do their jobs just for money and would leave the day they are paid higher elsewhere.

DevonFangs
Posts: 3004
Joined: November 9th, 2009, 1:49 pm

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: AbhiJSurprised by how no one seem to mention that they love their jobs and everyone is trying to show that they are better just because they earn a significant% higher than the counterpart. What happened to adding value, helping your client, enjoying your duties ? It seems that people both Quants and MV do their jobs just for money and would leave the day they are paid higher elsewhere.LOL

capafan2
Posts: 924
Joined: June 20th, 2009, 11:26 am

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: AbhiJSurprised by how no one seem to mention that they love their jobs and everyone is trying to show that they are better just because they earn a significant% higher than the counterpart. What happened to adding value, helping your client, enjoying your duties ? It seems that people both Quants and MV do their jobs just for money and would leave the day they are paid higher elsewhere.This is the main reason why I think people in this industry get so morally bankrupt. Most start off at a young age and in their formative professional years accept that everything and everyone is only a means to an end, pontification and status seeking by looking down on other areas of your own profession is seen as a virtue to aspire for. And where the true practitioners live (London and NYC) they make way less money than people in other industries living outside of those areas. Like a bunch of failed hollywood stars they hang around in their own company scratching each others back and telling themselves how cool they are.

DevonFangs
Posts: 3004
Joined: November 9th, 2009, 1:49 pm

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: capafan2 they make way less money than people in other industries living outside of those areas. Other industries like what? I don't think there's another industry in which people on average make much more money.

QuantCentral
Posts: 45
Joined: January 24th, 2013, 9:16 pm

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: AbhiJSurprised by how no one seem to mention that they love their jobs and everyone is trying to show that they are better just because they earn a significant% higher than the counterpart. What happened to adding value, helping your client, enjoying your duties ? It seems that people both Quants and MV do their jobs just for money and would leave the day they are paid higher elsewhere.Are you truly surprised? A job is a means to make ends meet. It is all about survival in this world.

ChicagoGuy
Posts: 455
Joined: April 13th, 2007, 1:45 am

### Market Risk? Model Validation? Quant Business analyst?

This thread is making my head explode. This thread reminds be of Wall Street Oasis, where they go endlessly on what firm/position/city is better and who gets paid the most. I need to stop visiting the careers forum.

capafan2
Posts: 924
Joined: June 20th, 2009, 11:26 am

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: DevonFangsQuoteOriginally posted by: capafan2 they make way less money than people in other industries living outside of those areas. Other industries like what? I don't think there's another industry in which people on average make much more money.IT for example. If you are in the right kind of IT in independent consulting charging over-time and showing a little enterprise (not too much) you can make plenty. It does require a life long commitment to jumping on to the next big thing all the time but the industry pays a lot. Plus inside NYC or London $200K is not such a big deal. It is a huge deal elsewhere. The one thing people in finance, NYC and London are totally oblivious of is, there are plenty of ways to make a good living and NYC/London/Mumbai are way to expensive for the incomes they provide on average.One contractor in IT on Wall-Street (i know for over 14 years now) makes close to$150 per hour doing nothing but programming as a contractor for banks. It is underground economy which does not have a coolness factor to it but is very vibrant and folks who are in it are not considered cool but are closet rich (closet because they are invisible to the rest of the financial folks)

capafan2
Posts: 924
Joined: June 20th, 2009, 11:26 am

### Market Risk? Model Validation? Quant Business analyst?

QuoteOriginally posted by: ChicagoGuyThis thread is making my head explode. This thread reminds be of Wall Street Oasis, where they go endlessly on what firm/position/city is better and who gets paid the most. I need to stop visiting the careers forum.I like the honesty on this forum. People here speak openly about what is generally not cool to speak about openly but everyone thinks about privately.