Thoughts on Princeton's Master of Finance program

I was looking into Princeton's M.Fin program and was wondering what people's thoughts were on it in terms of opportunities, salaries coming out, and how it compares to an MBA.

If you had to choose between MFin and MBA at a top 10 school which do you think would be better? How does it stack up?

 

I recently applied to both MBA and MFin programs this year and have gotten interviews at a bunch of places, including princeton. The program is amazing; I think it's indisputably the best MFin or MFE program in the world, in terms of caliber of students and job opportunities. It has 100% placement, and if you look at the placement page, the students get jobs in trading at BB desks, prop trading, and buyside. Now, buyside will be tougher to get, and the jobs will be mostly quant research, NOT fundamental equity research or private equity.

Although I don't want to put the cart before the horse since i don't have acceptances yet, as of now, I think I would take princeton mfin over any program except HBS.

 

My impression: MFin (especially Princeton's) opens a lot of doors for quantative finance. MBA is more for consulting, traditional PE, and career switching. Also, a MFins cater to a traditionally younger crowd (some guys have never worked before). MBA is more for the 26-28 year olds who've been working for 4-5 years, and this affects what jobs you're applying for. For example, a solid gig out of Princeton would be working as an analyst at a BB flow-trading desk, whereas an MBA from HBS would work at the same bank as an associate in IB.

They're just different things. You're making a bit of an apples to oranges comparison (to use banker-lingo).

 

Princeton was the only program that I was willing to leave a job in Sales and Trading at a BB for.

It's a great program. If you're interested in being a strat, you'll learn a lot of systematic strategies. You'll learn how to prove that they work; you'll learn to spot and avoid some of their landmines.

It's also a lot of work. My first homework assignment was 14 pages of calculus and stats where we ultimately showed that noise traders generate momentum in the market.

Princeton insists that their Finance MS and PhD students are like every other grad student- they have us live in the dorms and I have a lot of friends working on Engineering and CS PhDs. We pay the same tuition as everyone else, which is about 30-40% less than most MBA programs. So you feel a bit more like a student and less like a customer.

@mbavs Interesting you'd turn down the MFin program for an MBA program (even HBS). I think we've had a few people turn down HBS in the past. A lot of them were thinking about PhDs and wanted to maintain their optionality.

If you're sure exactly what you want, and what you want happens to be consulting or perhaps even conventional IBD, HBS and maybe even Stanford are a better choice than Princeton. But an MBA slams the door on quant, strategist, and structuring roles as well as a PhD. And within finance, the Princeton MFin is basically an MBA.

If you're not sure, Princeton does a better job of maintaining your optionality. And you really do learn something from the program. Coming in, I was desperately going through KhanAcademy.org videos trying to re-learn calculus and stats. I'm glad I did some of that, and now that I'm doing the program, I'm learning how to do empirical models of joint probability distributions, how to prove statistical outperformance of a trading strategy, as well as a number of machine learning techniques. Basically, they're teaching you to either be a really darned good trader or how to do finance research and get something published in a major journal.

HBS maintains your optionality to leave finance. But I think within Finance, the MFin program is a stronger brand. So it all depends on what you want to do.

 
IlliniProgrammer:
Princeton was the only program that I was willing to leave a job in Sales and Trading at a BB for.

It's a great program. If you're interested in being a strat, you'll learn a lot of systematic strategies. You'll learn how to prove that they work; you'll learn to spot and avoid some of their landmines.

It's also a lot of work. My first homework assignment was 14 pages of calculus and stats where we ultimately showed that noise traders generate momentum in the market.

Princeton insists that their Finance MS and PhD students are like every other grad student- they have us live in the dorms and I have a lot of friends working on Engineering and CS PhDs. We pay the same tuition as everyone else, which is about 30-40% less than most MBA programs. So you feel a bit more like a student and less like a customer.

@mbavs Interesting you'd turn down the MFin program for an MBA program (even HBS). I think we've had a few people turn down HBS in the past. A lot of them were thinking about PhDs and wanted to maintain their optionality.

If you're sure exactly what you want, and what you want happens to be consulting or perhaps even conventional IBD, HBS and maybe even Stanford are a better choice than Princeton. But an MBA slams the door on quant, strategist, and structuring roles as well as a PhD. And within finance, the Princeton MFin is basically an MBA.

If you're not sure, Princeton does a better job of maintaining your optionality. And you really do learn something from the program. Coming in, I was desperately going through KhanAcademy.org videos trying to re-learn calculus and stats. I'm glad I did some of that, and now that I'm doing the program, I'm learning how to do empirical models of joint probability distributions, how to prove statistical outperformance of a trading strategy, as well as a number of machine learning techniques. Basically, they're teaching you to either be a really darned good trader or how to do finance research and get something published in a major journal.

HBS maintains your optionality to leave finance. But I think within Finance, the MFin program is a stronger brand. So it all depends on what you want to do.

Sounds really, really awesome. I've just recently started experimenting with bootstrap tests and MC permutation methods- what literature did you guys read with regards to testing the viability of a trading strategy?

 

MBA if you want to work in industry outside of Finance and have no interest in further study.

MFin/MFE if you want to work in finance, or if you might want to go into academia, or you want to work on analytics (finance or not) or you want to get an MBA later.

There are pros and cons to both. I think an MFin/MFE does a better job of maintaining optionality because you can always go back and get an MBA later.

I think I'd still drop everything for a Finance PhD from Chicago, though.

 

Illini, thanks for this awesome breakdown. I think I would take Princeton MFin over every other program EXCEPT HBS. For mba, i applied to hbs, wharton, booth, columbia, and for mfin i applied to princeton, nyu, mit, lbs, and lse. I'm interested in both BB trading and macro research/strategy. Academically I'm pretty sure I will enjoy the MFin coursework more than an MBA, but I applied to top b-schools because of the value of the networks and the fungibility of the degree in case I change my mind about what I want to do.

Are you currently interviewing for internships? What type of firms are you interviewing with?

 
Best Response
Academically I'm pretty sure I will enjoy the MFin coursework more than an MBA, but I applied to top b-schools because of the value of the networks and the fungibility of the degree in case I change my mind about what I want to do.
Sure. The disadvantage of the MBA is that you're committed to spending the rest of your career in industry. But the advantage is that you're not committed to finance. For me, I had my undergrad in CS, so if things ever got horrible, there was always the Google put. I also wasn't sure I wanted to stay in industry.
Are you currently interviewing for internships? What type of firms are you interviewing with?
I have DE Shaw and Citadel coming up next week, not to mention a few other Chicago prop shops. Looking to get into a Strategist kind of role.

It's a small program so there's some networking that needs to be done- but it's a strong network.

General advice: If you want to be a Strategist, don't do an MBA. If you want to work outside of finance, don't do an MFin.

 
IlliniProgrammer:
Academically I'm pretty sure I will enjoy the MFin coursework more than an MBA, but I applied to top b-schools because of the value of the networks and the fungibility of the degree in case I change my mind about what I want to do.
Sure. The disadvantage of the MBA is that you're committed to spending the rest of your career in industry. But the advantage is that you're not committed to finance. For me, I had my undergrad in CS, so if things ever got horrible, there was always the Google put. I also wasn't sure I wanted to stay in industry.
Are you currently interviewing for internships? What type of firms are you interviewing with?
I have DE Shaw and Citadel coming up next week, not to mention a few other Chicago prop shops. Looking to get into a Strategist kind of role.

It's a small program so there's some networking that needs to be done- but it's a strong network.

General advice: If you want to be a Strategist, don't do an MBA. If you want to work outside of finance, don't do an MFin.

Congrats! Those are awesome firms.

A few questions if you don't mind.

  1. Did you get those interviews through OCR? How good is princeton mfin career services with respect to getting students interviews at top firms?
  2. When you say "strategist," is that a glorified term for programmers/quants who mostly spend their time writing algos? If I want to become say a strategist at a macro hedge fund or a long-only asset management firm, would you say that a top MBA is better than MFin?
 
2. When you say "strategist," is that a glorified term for programmers/quants who mostly spend their time writing algos? If I want to become say a strategist at a macro hedge fund or a long-only asset management firm, would you say that a top MBA is better than MFin?
It's a term for people who suggest and vet systematic trading strategies. Harrison Hong or Kenneth French, if they were working in industry, would probably be called Strats, for instance.

So the idea with systematic trading is that we're trying to turn the art of short-term trading on public information into more of a science. We're trying to find strategies that statistically beat the market and have good Sharpe ratios, and aren't that tough to execute on.

Think about it. You can either compete by trying to shave microseconds off trades, or you can just find a strategy that people aren't climbing over each other to get into but still produces great returns (because nobody else has found it yet.)

So given my personality (ENTP), my background (Big Data, Analytics, Algorithms, Financial Programming, Stats), a Strats role seems like a really good fit. I get to do financial research, but instead of trying to get it published in some journal, I get to watch it make money instead.

1. Did you get those interviews through OCR? How good is princeton mfin career services with respect to getting students interviews at top firms?
Yup, OCR.

Career Services is ok. Obviously there is a lot of competition for interviews from a lot of smart people here. Citadel wanted to interview me; Credit Suisse wasn't interested? Ok, whatever works.

 
KalmanFilteredCoffee:
@IlliniProgrammer

Regarding the problem on noise traders you mentioned, did you derive the result using utility functions? In which case, did you use something akin to the Kyle model?

No, we started off using the Summers model but talked about them in the context of several different models. The Kyle model wasn't one of them.
 
Sounds really, really awesome. I've just recently started experimenting with bootstrap tests and MC permutation methods- what literature did you guys read with regards to testing the viability of a trading strategy?
There's not a whole lot of literature on this- at least in the form of textbooks. That's why the program is so valuable. I think you can get a sense of how academics try to prove excess predictability by looking at some of the behavioral finance papers.

Unfortunately, strategies decay after people discuss them too much- there's a lot of amazing stuff out there, and I'm only familiar with a few of the models. But you can definitely find stuff in the financial journals- and both of us will do better if you focus strategies you choose rather than ones that ten MFin students looked at.

Monte Carlo has more meanings and contexts than there are people who understand it, but the Monte Carlo stuff in the context of Machine Learning is better documented. For instance, MCMC is covered in Russell and Norvig. It's not the most well-written textbook I've seen, but it's comprehensive, and it's probably better than some math textbooks you've had.

 

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