Do the humanities have value in today's banking world?
I recently got to sit down with a partner at a major MM IB firm (think Baird, HLHZ) who was a history major in college and we worked our way to the question of what value humanities degrees hold in the marketplace today. He thought they're highly underrated, because unlike most quantitative degrees (engineering and CS aside), the humanities teach problem-solving and understanding of entire systems of argument while many econ/math majors come out and have to learn how individual pieces and parts work together to form the whole. This is good at the analyst level, but advancement beyond that requires a level of understanding that most analysts don't have at the start.
He also pointed out that many of his fellow partners don't necessarily agree and usually just want to hire the econ/math/CS majors because they can learn to model the fastest, and thus hit the ground running before the humanities kids can.
So what's your take--do the humanities have a place in investment banking, or have they been fully superseded by more quantitative fields? And if not, what should a humanities major do to make themselves more appealing?
Bullshit. Do you honestly think an English major has better problem solving skills than someone majoring in EE?
That being said, if you are a completely unrelated major and you nail the technicals better than a lot of the econ/business kids that shows that you're extremely motivated.
English majors are extremely intelligent. I definitely agree humanities majors a lot of times go underrated.
Talk about painting with a broad brush....
Just to piggyback off this, Political Science kids are some of the brightest and well rounded students especially if you have a good undergrad PoliSci program. People think that Political Science is a lot of theorizing, but most top-20 UG programs are quant heavy requiring multiple labs. It doesn't hurt that you have kids who have fantastic reading comprehension, communication skills, and an idea of what is going on in the world.
Undergrads of PS programs go on to law school, or continue in academia unfortunately and our exposure is limited.
*Finance. Econ is a humanity degree.
I'm getting MS'd on for some reason I'm not privy to. There's an ongoing debate on this and I majored in it. I think it is a humanity.
If you view economics as a moral and political philosophy (as Adam Smith did), then yeah, you could make the case that it is a humanities degree. Most people consider it a social science, especially now that economics has become far more quantitative and modeling intensive.
There was a really good thread on this a while ago, but I unfortunately cannot find it. The partner is 100% correct. I think the outside the box type thinking taught in the liberal arts is very valuable for a career in IB. If I were screening resumes, I would choose the history or English major over the finance or STEM major for IB 100% of the time all else being equal.
I was an accounting and finance major BTW.
What "outside the box type' thinking are you referring to? I can see how a philosophy major might possess that, but how are you going to rationalize a history or English major possessing it? And then beyond that, why wouldn't an engineer or math major possess that? I'll concede that a biology major would probably not learn to think outside of the box since it's a major where good memorization skills will serve you better than thinking skills would.
I gain some solace in knowing that your statement is more of a testament to how intellectually non-challenging IB is, and that, like most things in life, it's a skill or set of knowledge that can be gained over time.
It seems many posters in here have mistaken this as an attack on STEM majors- it's not. I never stated that a STEM major cannot think critically- it's just that their critical thinking is different. STEM fields deal with absolutes, while liberal arts majors deal with many relativities. Liberal arts also frequently allow students to reach their own conclusions, whereas STEM fields frequently have one right and many wrong answers. This all lends to a type of thinking that makes for a successful investment banker.
The important thing to remember is that IB never has been a quantitative field. IB has always been an art, not a science.
To me there's nothing worse than a engineering/science/finance/econ major who thinks he (or she) is the shit for doing a "hard skill" major. Those types of people tend to be the least interesting, least intellectually curious and most unprepared for the real world.
Philosophy major in IBD here -- I think the real value is that you're a well rounded person and are just generally intellectually curious. If you just spent your college career taking a ton of finance classes you probably know a lot about finance, but you're probably such a simpleton. Being well rounded academically has paid off when talking to clients.
Finance/Math major here that just got into IBD - I think that the traditional liberal arts argument teaches you how to think is a croc of shit. It's propaganda that older generations have been spouting for a long time. Majoring in a certain field of study isn't going to make your problem solving abilities intrinsically stronger than they already are. That being said remember why you're going to university: to network, put a brand on your resume, and maybe learn the basic theory behind your field. First if you don't get the same network that the kids in your undergraduate business school do you're at a serious disadvantage, which a lot of liberal arts kids get screwed on. Second, learning about humanities doesn't translate into quantitative skills no matter what way you put it. I've met some brilliant liberal arts guys that wanted to break into finance, but there is just such a steep learning curve that they just couldn't cut it when it's all said and done. If you like liberal arts but want to go into finance, make it your minor because having a degree in finance is paramount to breaking in.
IDK why you're getting MS thrown at you. For all those people who feel their pride has been hurt by your comments I ask y'all this: you think an MD or VP gives two shits about your humanities background and your ability to think philosophically?
No they want someone who can get shit done without being a burden and also someone who has a thick skin and understand their role in the hierarchy of things. If they needed you for your ability to think critically about industry X or the merits of a pending M&A transaction you wouldn't be an Analyst.
I think that humanities degrees are WORTHLESS and TRASH. You cannot DISRUPT the industry without utilizing the FREEMIUM model.
STEM degrees are only valuable on the quantitative aspects of IBD/PE, the way those degree programs are structured today. That means, yeah, the average STEM major fellow will do good at an entry level compared to the average humanities major. STEM majors also benefit from a logically driven thought process that humanities majors may not have. But in recent years, I've seen this gap narrow down a lot (maybe thanks to standardized scores).
But banking and consulting shift focus soon enough. At VP+ levels, it's not about analyzing which numbers to get the desired output - it's about selling and convincing the other party that you're right. These skills, unfortunately, aren't taught by most STEM programs, while some humanities programs actually propel such thought processes by stimulating debate and argument in the classroom. That's when the humanities major excels over the STEM major, assuming all variables remain the same.
Disclaimer:- Engineering major here, who was told by a professor that he wasn't "fit to be an engineer". So now I make more money than him at the pinnacle of his career (and at the start of mine), while actively being involved with the upper management of a number of engineering firms as part of my job. God help those companies right?
The reason I noted the above example is because from my observation, most STEM majors turn out to be arrogant assholes, simply because they think they can handle advanced math that humanities guys can't. Truth is, nobody gives a shit about whether one can solve a tough indefinite integral - but they'll shit on you if you aren't going to be part of the revenue generating arm of a firm (aka Sales).
Sure STEM people can be arrogant, but there's no shortage of arrogant humanities majors. I don't think it really matters what someone majored in. There can be successful STEM and humanities students who aren't driven by the coursework but by their intellectual curiosity. This is what drives long term success not what you studied in university.
Probably gonna get MS for this.
CS Major here. I think kids who are just Big Three (Econ/PoliSci/Pre-Med) majors are generic and boring, especially at targets where they make up ~25-50% of undergrad majors. When I come across these kids, I just think "Another kid with no real passion, chasing $$$/fame." (I'm fine with people having that mindset btw, but spending hours in IB with someone like that is miserable) The most interesting/brilliant people I've worked with have all been none of these majors. They either A) Were interested in things beyond a pre-determined path, or B) Realized that they could get where they wanted to go without taking the road most traveled. Both mindsets are rare, and make for great colleagues. Given all of that, I prefer STEM majors AND Humanities majors. They both just seem to "get it" in ways that traditional strivers don't. I feel like that sets them apart from everyone else.
Most of the STEM people I sat in classrooms with had a bizarre superiority complex over all other students. The STEM people who were true nerds and were studying it because of a deep passion were few and far between. Most of the conversations with my fellow STEM majors seemed to revolve around complaining about problem sets.
After reading this thread I no longer feel insecure about my sports education degree
I don't work in banking but from what I've heard, read, etc it seems that you could major in Women's Studies or 17th Century French Literature at Harvard, UPenn, Yale, etc and make it into banking so long as you learn the technical interview questions.
If you're at a non-target majoring in the humanities or liberal arts you can just fuck right off. This is why I HATE when you hear pundits talk about the importance of a liberal arts education.
Bullshit! It only matters where you get said liberal arts degree or education from. Williams College? Harvard? Awesome!
University of Houston, Akron, FSU? Get the fuck out of here!
To answer OPs question: Does your major even matter? Assuming all else being equal, if you have Excel skills and understand what IB Analysts do and you can walk through a DCF and understand the financial statements do you really need anything else?
I don't think so. And no a humanities degree doesn't really set you apart unless you're debating the pros and cons of Utilitarianism.
Plus when would you even use these said "skills" gained from a humanities degree? Are you going to apply Socratic analysis in deciding whether or not to stay till 3 AM finishing a pitch book?
Its probably one of the greatest benefits to attending a top institution. They give you the freedom to study whatever you'd like, and still retain your employability.
English major here. Made it into a BB with my background. I really wanted it though. I was very hungry and persistent. Only once was it a sore spot for a person interviewing me, another girl (she really didn't like me, it was awful in that interview- trying to be pleasant to a mean girl), she said I wasn't as qualified enough to take the job over someone who had a STEM degree. Over time the degree matters less than the work experience. At ten years in, nobody really cares anymore.
At a very simple level:
The closer you get to advisory, where you compete based on the quality of your ideas and relationships, the more soft skills, argumentation, and ability to align yourself with a CEO's desire to build empires, then the greater odds for success. In this situation, if you can survive the drudgery of the first half-dozen years of an IB career (which consist of not fucking up) - and realistically, the next four or five, which consist in making sure the grunts don't fuck up, a Humanities education - which is the worst preparation for the first decade of IB relative to econ/accounting/business/STEm - can shine thereafter. That isn't to say STEM can't do well with CEO-cajoling either - as long as you're the STEM who at some point dreamt of how to apply technology (before you sold your soul to Wall Street). I'd place accounting/finance majors last in terms of their prospects at this stage.
As for the liberal arts guy, surviving at this stage necessarily means you were able to clear the relatively low quantitative bar in IB - let's not forget that there have been practically no recent intellectual innovations in finance ex-derivatives (and most of those didn't exactly turn out well), and IB handles derivatives at a very superficial, baby gugugaga level. IB's terrain, intellectually, remains clustered around the three financial statements sprinkled in with a little bit of CAPM and TVM that people only half-heartedly believe in but find especially convenient due to their malleability. This stuff is very easily digestible for STEM types, less easy for most Humanities types (though the ones who went to Ivies usually can hack it), and excess quantitative ability offers diminishing marginal returns once this bar has been cleared. The harder stuff is actually the accounting and abstruse tax scenarios, which neither STEM or Humanities folks are, a priori, intuitively good at.
Conversely, the closer your bank is to a model where business is won via balance sheet, the more the "don't fuck this up" approach remains in place and the nature of the dialogue with clients remains more corporate finance-focused. Communicating these considerations does require some subtlety, but overall you are there to finance a management team's empire-building, not to help them dream it up and guide them through it. Sure, you may get some advisory mandates here or there on the strength of your negotiating and what not, but frankly this is more about being a safe pair of hands. Not only will a liberal arts education not add much value here ever, but even a STEM education is overkill.
That said, regardless of major, if your alma mater taught how to properly socialize with older, wealthy, status-oriented White men (and this isn't about having champagne with them, because they don't want to have champagne with you - it's about knowing how you and your grunt work can be useful to their own positioning), you will do well in IB at any level.
I've found at my firm and with many bankers that there are two kinds of bankers: ones who value liberal arts and ones who don't. One group feels that you need a "relevant" major - one that's business or finance related that would be the most logical way to prepare yourself for a career in finance. The other feels that a liberal arts degree provides well-roundedness and soft skills that prospective bankers from finance and business backgrounds lack. Paraphrasing what one of my coworkers said, oftentimes business/finance majors come out of school and have some skills that carry over but often lack the writing abilities of someone with a writing-intensive major, and the difference in "applicable" skills between the two people is negligible because so much is learned on the job that the liberal arts major catches up pretty quickly.
All-in-all, I think that's true and would probably prefer a liberal arts major with strong critical thinking and writing skills if they were to demonstrate sound technical abilities and were able to show why they took that path when seeking out IB. But hey, signaling theory, right?