Becoming a Quant?
Suppose you come from a top-tier BB program and want to break into the HF world. Suppose you were an English major at a top target school but for all that's worth you only have 2 years of BB experience doing simple math in excel. Is it possible to "become a quant" with enough networking? Enter a program which will train you to become one? I suppose this would be to up the intellectual challenge and interestingness of one's future career in finance.
What is possible here?
why do you want to become a quant?
It's not going to happen without going to school first. You basically need to bang out ridiculous GRE or GMAT scores and take a lot of math classes to get into an MFE. You are facing a seriously uphill battle dude.
I have not seen any programs that train you to be a quant.
quantology
Nuclearphynance.com will better be able to answer your questions btw.
I had a somewhat similar question - Is it feasible for an engineer to aim to become a Quant after a top MBA? Most quants seem to be the Math/Physics PhD sort.
I really don't think it's possible after an MBA- unless you are willing to keep it off your resume. If you haven't gone for your MBA yet, you may want to consider a Finance or Econ PhD. We do have a number of quants that studied Econ.
Pick one:
1.) Engineering undergrad -> Quant Analytics @ BB -> MFE-> Quant. 2.) Liberal arts undergrad -> DiffyQs, Calculus-Based Probability, Linear Algebra @ a community college + 800 GRE-> Math MS @ Top-50 state school-> Math PhD at top ten school-> MFE-> Quant.
Titcr.
You don't need a Phd, but you definitely need a econometrics/math/physics/engineering background. You stand a chance if you studied finance/economics with some strong risk management/math courses. But from 2 years BB to quant..even if you have the right qualifications, how are you going to prove that this is really what you want?
I just want something that's going to stimulate the hell out of me. I suppose I don't necessarily have to become a "quant" and quite frankly it will be impossible for me to. So what is left? Can you become "quant-y"? What sorts of roles in the HF/PE/whatever world allow a fair amount of mind stimulation but also a fair amount of comp?
It sounds to me like you want to be working on deals- figuring out synergies between companies and identifying takeover candidates. Why not get an MBA and become an associate? The more senior you get, the less boring and grinding your job becomes.
Regardless, if people enjoyed this stuff, they wouldn't have to pay people to do work. If your job is boring that's ok. As long as you like your coworkers, you are in good shape.
Mostly agree. The thing to note about boredom is that it increases with your experience because you've done what you're doing so many times before. I make decisions that would have seemed incredibly interesting to me five years ago, but that are boring now because of having made them (or similar ones) before.
Lastly, if you stay long enough at the same place, you start discovering mistakes that you yourself made. So now you're both the guy fixing things AND the econ / math / physics PhD who fucked it up in the first place.
The good news is they keep paying you more and more every year as long as you keep being in the top quartile vs your peers...
Quant is a massively broad definition for many many roles. The idea of getting a PhD solely to become a quant is a horrible idea.
What you DO need are "hard skills", namely applied math (probability, stats, numerical methods), programming, and computational finance. You can be successful with only two of these but you should be conversant in all three. Within six months, if you apply yourself, you can start to be quant-y.
Don't get me wrong- not trying to discourage OP, but there's a lot of dues-paying that I'm not seeing here. The MFE programs are going to want to see pricing-related work experience. Particularly risk management, quant analytics, or portfolio research. If OP really wants to take this route, given the amount of work he is going to have to do, I think he needs to go all the way and go for a Math or Econ PhD.
Alternatively, if there is a way for him to gracefully transition to risk management and put in 18 months of work there, that would be enough to make him an MFE candidate. However, risk management might be a bit of a step down from IBD by the standards of this forum, and more importantly I'm just not sure they'd hire him in cold out of IBD without any sort of mathematical background, but it is worth a try. In the meantime, he can work on his math courses at any community college. The MFE programs care much more about some any indication of intellect/selectivity (BB in this case is enough), and then secondarily math coursework and GRE scores.
What about people who do a Math major at a Liberal Arts college. What is their path to becoming a Quant?
Assuming they did all the required Maths courses but little or no CS/Programming courses.
It's a lot easier if you have a few CS courses, going all the way up to data structures and a sophomore or junior level algorithms course. Wall Street desperately needs competent analytics programmers right now. It is worse than the dot-com days. But assuming we cut out that path, here is what we are looking at:
Math Major -> 24 months Portfolio Research or Risk Management (Take a CS course while working) -> MFE -> Financial Engineer and/or Quant.
You don't need a full CS degree to land in analytics, BTW. You just need enough for a minor and to be able to stand in front of a whiteboard and prove you're a competent Java/C#/C++ programmer in some tech-heavy interviews. We've taken math majors who've known how to code in the past. Just as long as the creativity and data structures/algorithms problem solving ability is there and we have some indication that you have a bit of experience in imperative programming, that's enough for us.
Risk management/portfolio research/quant trading will be significantly more competitive relative to the opportunities, but I've heard of bigger feats getting pulled off coming out of local schools. In all honesty, though, a math major who's good at programming and can relate well with quants and traders would leave a lot of analytics hiring managers drooling right now.
^^^^ I really do think it's gotten more competitive than that these days. You need to have a real strength- at least a few years of experience or education- in an area like stats, algorithms, data structures, calculus/diffyqs, or something else. There needs to be a really solid foundation somewhere to derive quantitative insight from stuff. It doesn't take a PhD, but I think it's a lot more work than just six months for someone with a liberal arts background to start becoming "quanty". Math MS or some time in risk management and a great deal of community college courses at a minimum.
Everyone with a PhD who's a quant will tell you that it was a waste of five years. But the fact is that PhDs get a lot more freedom to choose their own projects and always have the academia put-option. I don't think it's worth it, but if you want to be a quant so badly that you are willing to reverse several years of IBD work, go into risk management, go get an MFE, and then slog it out backtesting models for some PhD for a few years, you might as well just do a Math MS, and a Math or Econ PhD. The cost/reward picture looks a lot better there, IMHO.
Just remember that your career, at best, is held in by a conservative force- and that's if you keep going in the same direction. You lose a lot of time and work to entropy by doing a huge switch; I'm just trying to minimize the loss by suggesting a PhD- ideally in something you would find fun to research like Econ or Finance, but not without a few math courses first.
It's definitely doable and we're rooting for you to succeed at it, but there's just a set of building blocks that need to be there and that you need to have practice/experience applying on a regular basis over a few years- linear algebra, Calc III, Numerical Methods, algorithms, probability, data structures, etc. You need to be really comfortable with this stuff. And then you need to be able to look at a set of rates vol charts on different currencies and derive some insight from it- the mathematics needs to be abstracted to the point that you automatically do it while you look at something to be truly competitive. I'm not 100% sure everyone is capable of that, and I'm pretty darned sure that it takes more than six months to get to that level of competence.
Quants have nice jobs; bankers have nice jobs. Few 24-year-olds have really nice jobs, though.
The opportunity cost of a PhD is ENORMOUS, and any decent PhD program is way more competitive than a decent quant job. I have no idea why you're suggesting that. He already has a good pedigree, and could ruin that (e.g. community college, wtf??). If he does learn what he needs to learn, he'll be given a shot and do fine.
You're also belittling backtesting models for a PhD, yet there's more quant-value in six months of doing that than an entire PhD. (And, you have to put in your dues on any desk.)
Without a PhD though, he does have to be a little careful about firm culture. He doesn't want to be at a firm where a lack of a PhD will eliminate him from PM/trading/research opportunities.
Pedigree really isn't important here. What's important is credibility. A history degree from Harvard doesn't give you credibility in the quant world. An MFE gives you something; a Math or Econ PhD- and a few research papers published in the JoF or a great deal of experience backtesting models- is really what it takes to be able to start doing your own research and strategy formulation.
Ehh, it's more like a few years of backtesting models. It really sucks the creativity out of you in a way that research for an Econ paper doesn't quite in the same way. U. Chicago PhD + a few papers published in the JoF + a strategy that you've got ready for investors, and the money will chase you, rather than you chasing it. (CC LTCM.)PhDs do get afforded a lot of leeway when they get to the desk. Those five years of study and the gray hair- especially if they've done a bit of work in industry somewhere- put them well ahead of the TAs and the junior traders in the pecking order in a way that an MFE doesn't.
I know the value of paying your dues in industry. But it's laughable to think that a banker with a history degree can be ready to look at a model and explain what's going on with six months of prep work. Two years minimum studying math, including a graduate degree at a target school or engineering/math school, plus a year or two of paying dues in industry. And if you have to do that kind of a career reset, an Econ PhD minimizes the entropy in this particular case.
Full disclosure, I'm a quant trader/PM. I agree that credibility is the most important, but pedigree and credibility are tightly related. If I see a History major from Harvard with banking experience and claims he has quant skills, I'll be interested enough to talk to her/him, and this person, if good, would probably add more value than the nth Physics/Math PhD that can barely write a 1000-line program.
You're comparing an entry-level 27 yo PhD to 22 yo TA/JT? Unfair, and wouldn't you much rather be the latter? (I would.)
It depends on the complexity of the model. Not all quant work is rocket science.
It seems like you are almost pathologically risk averse. There's a difference between minimizing risk and maximizing risk-reward. To each his own.
yo this is gonna piss some people off and sound dumb, but explain to me what a "quant" is? I am under the impression that a quant is some kind of math god hedge person.
Yes. We are math gods.
No, not all quants work at alpha generation. Quants work:
1) to build pricing models for derivatives 2) to build risk models for all products 3) to validate the work of other quants
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