SERVING THE QUANTITATIVE FINANCE COMMUNITY

 
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icstudent
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Posts: 10
Joined: December 22nd, 2006, 7:31 am

Career in Finance still worth it?

January 18th, 2014, 3:59 pm

Hello,I will be finishing my PhD in Stochastic Analysis in the next few months, and originally had the idea of going into the financial industry afterwards.But... since I started my PhD, most of the people I know in finance have become more and more negative and recommending me to go into a different direction than finance, saying there is hardly any innovation anymore, the days of the big bonuses are over etc, while at the same time the housing cost in London is skyrocketing. With many of them, the message is more or less "The party's over." Although (I mostly know people at banks) they said that things are not that bad a hege funds.Are they exaggerating the situation or is a career in finance indeed becoming a lost cause?
 
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liam
Posts: 175
Joined: November 16th, 2004, 11:51 am

Career in Finance still worth it?

January 22nd, 2014, 12:12 am

Lost cause is a bit harsh but it is very tough for people with stochastic backgrounds. Difficult to say what will actually happen in future - on one hand markets will return to former glories, on the other hand fancy new derivatives are harder to find and the fake world of derivatives could collapse even more. Ultimately the gloom your friends have experienced isn't the issue as some of that may pass but the fast moving pace of finance will always be there. Many of the things people complain about in finance aren't unique - e.g. my next door neighbour used to work way longer hours as a chef than even some GS guys. However a few things are noticeable - a lot of people in finance spend months and months out of work (in some cases this happened even during the good times) while friends in other industries looked at me in amazement that it took me more than 3 months to get a job in 2012, even in IT or property management most of them take 1-2 months max to get a new job. Also I have rarely seen people "give finance a try" like the way an estate agent friend of mine has done numerous things, there is an element of this issue in other technical careers but finance has a lack of industry mobility like no other.I'm not exactly an expert on what mathematicians do as a whole, but it is not as flexible as I naively thought when I was in uni. Yes the range of mathematical careers is broad, but I have found that that's of use when you're an undergrad. Now you've committed to stochastic analysis and to get a job outside finance you'll have to find something stochastic related.Dcfc is better suited to comment on that, but the main thing will be to direct your search, cv and general approach logically to make it easy for employers to hire you e.g. A friend of mine did a PhD in physics on carbon nanotubes and the way he sold himself was by simply explaining how the processes he used to analyse their reaction to electromagnetic fields could be used to analyse market microstructure.
 
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liam
Posts: 175
Joined: November 16th, 2004, 11:51 am

Career in Finance still worth it?

January 22nd, 2014, 12:12 am

Lost cause is a bit harsh but it is very tough for people with stochastic backgrounds. Difficult to say what will actually happen in future - on one hand markets will return to former glories, on the other hand fancy new derivatives are harder to find and the fake world of derivatives could collapse even more. Ultimately the gloom your friends have experienced isn't the issue as some of that may pass but the fast moving pace of finance will always be there. Many of the things people complain about in finance aren't unique - e.g. my next door neighbour used to work way longer hours as a chef than even some GS guys. However a few things are noticeable - a lot of people in finance spend months and months out of work (in some cases this happened even during the good times) while friends in other industries looked at me in amazement that it took me more than 3 months to get a job in 2012, even in IT or property management most of them take 1-2 months max to get a new job. Also I have rarely seen people "give finance a try" like the way an estate agent friend of mine has done numerous things, there is an element of this issue in other technical careers but finance has a lack of industry mobility like no other.I'm not exactly an expert on what mathematicians do as a whole, but it is not as flexible as I naively thought when I was in uni. Yes the range of mathematical careers is broad, but I have found that that's of use when you're an undergrad. Now you've committed to stochastic analysis and to get a job outside finance you'll have to find something stochastic related.Dcfc is better suited to comment on that, but the main thing will be to direct your search, cv and general approach logically to make it easy for employers to hire you e.g. A friend of mine did a PhD in physics on carbon nanotubes and the way he sold himself was by simply explaining how the processes he used to analyse their reaction to electromagnetic fields could be used to analyse market microstructure.
 
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liam
Posts: 175
Joined: November 16th, 2004, 11:51 am

Career in Finance still worth it?

January 22nd, 2014, 12:12 am

Lost cause is a bit harsh but it is very tough for people with stochastic backgrounds. Difficult to say what will actually happen in future - on one hand markets will return to former glories, on the other hand fancy new derivatives are harder to find and the fake world of derivatives could collapse even more. Ultimately the gloom your friends have experienced isn't the issue as some of that may pass but the fast moving pace of finance will always be there. Many of the things people complain about in finance aren't unique - e.g. my next door neighbour used to work way longer hours as a chef than even some GS guys. However a few things are noticeable - a lot of people in finance spend months and months out of work (in some cases this happened even during the good times) while friends in other industries looked at me in amazement that it took me more than 3 months to get a job in 2012, even in IT or property management most of them take 1-2 months max to get a new job. Also I have rarely seen people "give finance a try" like the way an estate agent friend of mine has done numerous things, there is an element of this issue in other technical careers but finance has a lack of industry mobility like no other.I'm not exactly an expert on what mathematicians do as a whole, but it is not as flexible as I naively thought when I was in uni. Yes the range of mathematical careers is broad, but I have found that that's of use when you're an undergrad. Now you've committed to stochastic analysis and to get a job outside finance you'll have to find something stochastic related.Dcfc is better suited to comment on that, but the main thing will be to direct your search, cv and general approach logically to make it easy for employers to hire you e.g. A friend of mine did a PhD in physics on carbon nanotubes and the way he sold himself was by simply explaining how the processes he used to analyse their reaction to electromagnetic fields could be used to analyse market microstructure.
 
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liam
Posts: 175
Joined: November 16th, 2004, 11:51 am

Career in Finance still worth it?

January 22nd, 2014, 12:12 am

Lost cause is a bit harsh but it is very tough for people with stochastic backgrounds. Difficult to say what will actually happen in future - on one hand markets will return to former glories, on the other hand fancy new derivatives are harder to find and the fake world of derivatives could collapse even more. Ultimately the gloom your friends have experienced isn't the issue as some of that may pass but the fast moving pace of finance will always be there. Many of the things people complain about in finance aren't unique - e.g. my next door neighbour used to work way longer hours as a chef than even some GS guys. However a few things are noticeable - a lot of people in finance spend months and months out of work (in some cases this happened even during the good times) while friends in other industries looked at me in amazement that it took me more than 3 months to get a job in 2012, even in IT or property management most of them take 1-2 months max to get a new job. Also I have rarely seen people "give finance a try" like the way an estate agent friend of mine has done numerous things, there is an element of this issue in other technical careers but finance has a lack of industry mobility like no other.I'm not exactly an expert on what mathematicians do as a whole, but it is not as flexible as I naively thought when I was in uni. Yes the range of mathematical careers is broad, but I have found that that's of use when you're an undergrad. Now you've committed to stochastic analysis and to get a job outside finance you'll have to find something stochastic related.Dcfc is better suited to comment on that, but the main thing will be to direct your search, cv and general approach logically to make it easy for employers to hire you e.g. A friend of mine did a PhD in physics on carbon nanotubes and the way he sold himself was by simply explaining how the processes he used to analyse their reaction to electromagnetic fields could be used to analyse market microstructure.
 
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liam
Posts: 175
Joined: November 16th, 2004, 11:51 am

Career in Finance still worth it?

January 22nd, 2014, 12:24 am

Escapes me how that got posted 4 times...
 
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neuroguy
Posts: 408
Joined: February 22nd, 2011, 4:07 pm

Career in Finance still worth it?

January 22nd, 2014, 8:27 pm

QuoteOriginally posted by: icstudentHello,I will be finishing my PhD in Stochastic Analysis in the next few months, and originally had the idea of going into the financial industry afterwards.But... since I started my PhD, most of the people I know in finance have become more and more negative and recommending me to go into a different direction than finance, saying there is hardly any innovation anymore, the days of the big bonuses are over etc, while at the same time the housing cost in London is skyrocketing. With many of them, the message is more or less "The party's over." Although (I mostly know people at banks) they said that things are not that bad a hege funds.Are they exaggerating the situation or is a career in finance indeed becoming a lost cause?days of grad/PhD --> Bank --> million$$ bonus probably are over, yes. I say that because compared to the historical data, the size, profitability and general level of pay in banks during the credit boom was exceedingly high.So if by 'partys over' they mean that you cant become a millionaire anymore by going through a sausage machine straight after you learnt to shave, then 'yes' I think that particular party is over. Call it mean reversion. I dont work in a bank. But to me right now they do kind of look like places where the really drunk people turn up at 5am looking for girls... That said there are interesting and profitable areas of business in most banks, so its not all that straight forward. Electronic trading looks quite interesting for example, but those units dont hire ANYTHING like the volume of people that the derivatives business used to. But returning to history: While fads have come and gone and different groups of people have boomed and bust, it has always been possible to make a large amount of money doing pretty exciting things in finance. And I think that this remains the case. The tricky bit is finding the right place at the right time. I dont see a lack of innovation in my own particular field for example. I think the trick, as liam has mentioned, is to be flexible and nimble and able to make yourself relevant to the right people when they need it.
 
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Gamal
Posts: 2362
Joined: February 26th, 2004, 8:41 am

Career in Finance still worth it?

January 23rd, 2014, 7:38 am

QuoteOriginally posted by: neuroguydays of grad/PhD --> Bank --> million$$ bonus probably are over, yes. I say that because compared to the historical data, the size, profitability and general level of pay in banks during the credit boom was exceedingly high.So if by 'partys over' they mean that you cant become a millionaire anymore by going through a sausage machine straight after you learnt to shave, then 'yes' I think that particular party is over. And that's good. Money you don't deserve corrupts. There are still interesting problems in finance and the pay is still decent. The Street will attract less PSDs - poor, smart and a deep desire to get (quickly) rich. PSDs are guilty of the crisis, indeed they would skrew anything they touch.
Last edited by Gamal on January 22nd, 2014, 11:00 pm, edited 1 time in total.
 
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bearish
Posts: 5688
Joined: February 3rd, 2011, 2:19 pm

Career in Finance still worth it?

January 23rd, 2014, 11:45 am

QuoteOriginally posted by: GamalQuoteOriginally posted by: neuroguydays of grad/PhD --> Bank --> million$$ bonus probably are over, yes. I say that because compared to the historical data, the size, profitability and general level of pay in banks during the credit boom was exceedingly high.So if by 'partys over' they mean that you cant become a millionaire anymore by going through a sausage machine straight after you learnt to shave, then 'yes' I think that particular party is over. And that's good. Money you don't deserve corrupts. There are still interesting problems in finance and the pay is still decent. The Street will attract less PSDs - poor, smart and a deep desire to get (quickly) rich. PSDs are guilty of the crisis, indeed they would skrew anything they touch.Remember who coined the PSD term?
 
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Gamal
Posts: 2362
Joined: February 26th, 2004, 8:41 am

Career in Finance still worth it?

January 23rd, 2014, 12:02 pm

DermanPSD is short term thinking of long term investments. Bonds/swaps have > 10Y maturity but traders don't care what happens after the next bonus time.
 
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bearish
Posts: 5688
Joined: February 3rd, 2011, 2:19 pm

Career in Finance still worth it?

January 24th, 2014, 2:11 am

It's actually an old Ace Greenberg term, probably predating Derman's 1985 arrival on the Street. He brought it up in several of his famous memos (sometimes quoting Haimchinkel Malintz Anaynikal). Notably though, rather than PhDs he would generally compare PSDs to MBAs, whom he generally held in low esteem...
 
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ArthurDent
Posts: 1166
Joined: July 2nd, 2005, 4:38 pm

Career in Finance still worth it?

January 24th, 2014, 2:52 am

QuoteOriginally posted by: bearishHaimchinkel Malintz AnaynikalI never quite figured out the etymology of this name.The 3rd word sounds like "and a nickel", which would be appropriate since some of the memos are about reusing paper clips...
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