Hi guys - currently a sophomore at a non-target declared in finance and economics (double major). I'm looking short term to break into IB (did an internship last summer as a freshman w/ a boutique in M&A), but long term looking into hedge funds (ideally L/S but they seem to be a dying trend).
I was lucky enough to get lunch w/ a Tiger Cub today who really talked about the dying art of L/S and while that space is really shrinking, he mentioned that the shift to quant strategies is merely a trend and they can only really do so well (their performance is capped so to speak where fundamental funds can really strive in certain situations). I'm currently struggling trying to figure out how to "allocate" my education: I feel like I should study all 4; economics, finance, accounting, and then statistics or mathematics. Which 2 should I major in and which 2 should I minor in? Should I just drop a certain study? Do minor's even matter?
Thanks guys for any input!
Where do your skills lie? Where are your interests? If you hate math, there's no point in majoring in it. So study where your interests and strengths lie.
That said, economics is pretty intuitive - you can pick it up from a textbook or Khan Academy at the intermediate level. The more advanced topics have limited practical application in finance.
Finance is a skill best acquired through practice. Trading, reading Seeking Alpha, Twitter, Zerohedge, WSO, Mergers & Inquisitions, and popular finance books (Flash Boys, Intelligent Investor, etc.) can help you acquire these skills.
Therefore, if you can cut it, accounting and mathematics are probably your best avenues. As you learn more about the world through internships and conversations, you'll naturally focus your interests.
Tl;dnr: Accounting and math, minor in finance, forget econ.
The good news for you is that you still have several years left before you enter the hedge fund world full-time (assuming you do 2 years of banking out of school), which gives some time for the industry shake-out to happen. Fundamentally-driven investing strategies will eventually come back in favor (for proof that styles are cyclical, look at value investing in the years leading up to the dot-com bubble).
I would recommend majoring in finance and accounting, as those will give you the best foundation for banking and hedge funds. Accounting is particularly useful, as it will make your life as an IBD or HF analyst much easier. Economics and Stat/Math are useful to know, but less directly relevant to stock-picking.
So forget about something like comp. sci? It seems as though there's quite the demand for those jobs regardless of whether the strategies of hedge funds and their success is cyclical. Devil's advocate: by the time I'm ready to ideally move over to HF, what if the current popularity of quant-driven strategies is the same then as it is now?
Curious to hear why you don't consider ER and AM higher on your intended entry level job. AM is much more related to HF than IB and is arguably one of the best jobs on the street. If it were me I'd just do finance or accounting and try to get CFA level 1 done.
The recommendation I made was specific to a career as fundamentally-driven analyst in a hedge fund, but certainly comp sci and stat/math would be most relevant if you're looking mainly at quant funds. I agree that comp sci gives you optionality in other fields and is therefore more attractive if you're not 100% set on finance longer term.
If stock pickers and L/S managers continue to be under the same pressure 4 years from now, I think it will be very difficult for you to get a good job at a fundamentally-driven HF. Not only will there be fewer spots, but you will also have experienced analysts competing for those same spots.
It doesn't hurt to take the GMAT in your senior year of college. Consider business school your put option if machines permanently destroy the industry.
Business school like MBA or some other path?
Right. I haven't decided whether to get one yet myself, but I think of it as hitting the reset button on my career path.
I'm leaning towards going double major: finance and statistics and double minor: computer science and accounting. This seem valid for both quant funds down the road and banking recruiting next fall?
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