Urgent decision - opinions appreciated

Basically, have to decide pretty soon between these two graduate programs:

1) Master in Financial Engineering - UC Berkeley, Haas School of Business

2) Master in Computational Finance - Carnegie Mellon, Tepper School of Business

Background: European engineering undergrad, relevant BB internships, no FT experience

Goal: fixed income trading/structuring/research (NYC would be ideal, though LDN/HK awesome too)

Haas+
- internationally prestigious buz school (pretty much everyone everywhere knows it)
- more well-rounded curriculum (Finance/Econ/Math/Stat/CS)

Haas-
- no summer internship, only off-cycle internship (Oct - Jan)
- less on campus recruiting for S&T (though career office usually places well)

Tepper+
- integrated summer internship
- on campus recruiting for S&T by DB/Citi/BNP/UBS

Tepper-
- no international prestige (at the 3 banks I interned with in Europe, virturally not a single person has ever heard of CMU; literally everyone knew Berkeley)
- very programming intensive (4 courses on C++), so less well-rounded than Berkeley (and I don't want to become a pure quant developer)

Berkeley placements: https://mfe.berkeley.edu/careers/placement2014.ht…

CMU placements: http://tepper.cmu.edu/recruiters-and-companies/re…

Any educated opinions would be deeply appreciated, especially if you work in S&T.
Many thanks and best.

 

Thank you so much Revsly. Since you're trading FX derivatives at a BB yourself (which is also an area of interest for me), I guess your comment is based on the fact that your floor has hired CMU grads in the past. But how difficult would you say is getting a trading/research job in FI/FX coming from the Berkeley program? (that is, without being recruited through the summer program) Have you seen Haas MFE grads getting hired by your floor as well?

Thanks and best!

 
SpaceMarine:

Thank you so much Revsly. Since you're trading FX derivatives at a BB yourself (which is also an area of interest for me), I guess your comment is based on the fact that your floor has hired CMU grads in the past. But how difficult would you say is getting a trading/research job in FI/FX coming from the Berkeley program? (that is, without being recruited through the summer program) Have you seen Haas MFE grads getting hired by your floor as well?

Thanks and best!

There aren't any Haas grads in FX at my bank.

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 
Best Response

If you want to work in NYC, Tepper gets placements. Our fund typically takes 1-2 CMU MFEs per year (tho we are not in NYC)

I am literally flying back from recruiting at Berkeley as I type this, and met a lot of really smart and experienced MFEs there. I really like finding top-notch students at state schools and this is clearly a good place to find them. But it seems like they don't get as much recruiting- Berkeley isn't easy to get to from other parts of the country. That's good news for us because we get to talk to guys with 3-4 years of previous FO, sometimes even buyside experience.

I am not Andy Nguyen of QuantNet.com- he'd be the best guy to talk to- but from my limited, biased field of view, CMU has a moderate advantage over Berkeley. That might not be enough to overcome with a tuition break, especially if you combine it with nice weather.

If you want to work on the West Coast, my answer might be different. (It might be "go with Berkeley" or it might be "I have no clue and shouldn't give advice on this.") Even as it stands I have only worked at two firms and am a massive victim of selection bias, so hopefully this is just one data point out of 5-10 that you are collecting.

You can't go wrong with either school, but in the circles I've run in east of the Mississippi, I'd lean just a little towards CMU.

(However, Linda, the head of the Berkeley program, kicks butt. She is one of the most... aggressive program heads I know. :D )

 

Thank you so much for your insightful reply IP.

Nice to hear that your firm makes the effort to travel to Berkeley, speaks for the reputation of the program.

Linda kicks ass: One girl in the current graduating batch studied one year financial engineering, only to realize that she wants to become a data scientist at Twitter - Linda got her the job.

Tuition and weather don't matter to me (as you probably understand). That said, the net cost for me for both programs is virtually the same.

I've tried to consult Andy Nguyen on Quantnet but he's answer is always the same: 1) trying to get a trading job through an MFE is naive (don't see how that comment helps with my decision); 2) he votes for CMU because of better 'transparency' of program information (total BS in my opinion - Princeton has no transparency and has the best MFIN in the universe).

The ultimate trade-off here as I view it is the following (and as you've also partly elaborated in your post):

CMU gives me the immediate advantage for S&T placement through OCR and summer internship, hands down.

But (and this is a really big "but"): The reputation, brand and network of a world-renowned business school like Berkeley Haas, is something I feel just should not be underestimated. My deep gut feeling tells me that this would be a HUGE long-term advantage, which I would give up by choosing CMU (an university that very few people - even in the banking industry - have even heard of outside the US). IP you might understand this since you went to Princeton, you probably know the difference between going to Princeton and going to Baruch, although the curriculum and technical knowledge can be exactly the same. There is a reason why so many kids would take on multi-hundred-thousand dollar loans to attend Harvard, instead of attending the community college around the corner with a full ride, again learning essentially the same material.

Now, one can easily make the argument saying that "what does prestige bring you if you struggle to find a job to begin with?" And I think that might be true to a certain extend, since banks do recruit for S&T through summer analyst programs, and Berkeley doesn't have that. On the other hand, a LinkedIn search and a look at the placement records of Berkeley do not suggest that their graduates have trouble finding FO jobs on a trading floor.

I'd love to run a derivatives book in FX/Rates/Credit one day, and CMU might be able to put me into that seat in a more straight forward fashion than Berkely - e.g. a CMU graduate might start as an S&T analyst and start as a junior trader immediately; most Berkeley graduates tend to end up as desk quants and strategists first, but many Linkedin profiles suggest that it is possible to transition from a desk quant to a trader within 1-2 years.

To sum it up:

If I can be given a book to run within 1-3 years upon graduation as a Berkeley graduate, I have won, because I will have achieved both: 1) becoming a trader and 2) being part of a world-renowned business school network.

In contrast, if I end up as a trader as a CMU graduate, it's still awesome; however, one never knows where one might end up 10-15 years from now; if I happen to have to go to Europe or Asia one day, or if I have to change job for what ever reason - I believe being a Berkeley Haas alum would be a HUGE advantage, an advantage that CMU simply cannot provide.

One can make all kinds of arguments saying that I'm a prestige whore or I'm irrational, but in this world, I would venture to say: prestige does matter.

 

I honestly think there are as many total undergrad + grad CMU alumns on Wall Street as Berkeley alumns. Obviously there are more Haas alumns working on startups on the West Coast, but I would argue this isn't too relevant unless you want to do tech at some point (which is a possibility with an MFE or MSCF)

You have obviously done your homework on this, so my suspicion is that you're not going to have too many regrets about this decision.

I know people who've made VP and SVP at banks with a Tsinghua undergrad and CMU on their résumé. Networks are nice but they are less important than hard work and confidence- maybe decide which school will make you more confident on Wall Street and give you the tools you need to succeed.

I think, as you realize, the differences between the two schools are down to nuance. Haas gives you a network outside of programming/engineering, although many of those people will be at startups rather than in finance. My personal view is that CMU students seem to be less afraid of hard work- might be an east coast/west coast thing. CMU gets a few more placements but I suspect it's driven by geography and things normalize in the long run. On the other hand, the Linda effect is very material (just don't be surprised to get a call from her in 2-3 years with "YOU ARE GOING TO HIRE THIS PERSON OR YOU WILL TAKE HAAS OFF YOUR RÉSUMÉ").

Prestige matters a bit but I'd argue it only matters to the extent it can be converted into cash or a career. Smart money knows it doesn't matter, but smart money also knows dumb money doesn't know better, and smart money usually still wants some dumb money investors. I honestly think CMU has slightly more prestige than Berkeley on the east coast in quant circles, but it's clearly very debatable.

Assuming an MFE is the right decision for you, I don't think you can go wrong choosing one school or the other. Which house from Harry Potter is better- Hufflepuff (CMU) or Ravenclaw (Berkeley)? Just make sure that the $100K you spend on tuition gets your foot in the door so you can earn that money back.

 

Thanks IP, really appreciated, it really helps me alot.

No doubt that CMU graduates are capable to move up the ranks.

Never thought about the other part of the "Linda effect" (lol)

I actually spoke to an international student organization the other day and they confirmed the same thing, that within a highly specialized circle of people (e.g. CS or CompFin), CMU might in fact beat Berkeley. But the smart/dumb money argument - as you said - should never be underestimated.

Ravenclaw hands down :-)

Thanks and best.

 

I know people from Berkeley first hand in trading.

I know people from Berkeley's MFE program second hand in trading.

I think Berkeley's MFE program is underrated, especially after my recent visit.

I think all else equal, it's moderately easier to get a job out of CMU.

Berkeley has an excellent international reputation. Just like UIUC, which I have been told by a few people has a better international reputation than Ivy League Cornell, somehow. CMU is in a weird situation where it has a strong national reputation among programmers and engineers and within NYC finance, but I'm not sure it has the international reputation. In NYC, you clearly want Cornell on your resume over UIUC, and I wonder if it's almost better to have CMU on your resume than Berkeley for NYC recruiting. In fairness the distinctions are a bit more nuanced- CMU is in a four-way tie with Berkeley as the country's best CS program.

I will be the first to say that people have different prior views. When I joined this forum in 2010, I proudly went around proclaiming that I went to UIUC, one of the best engineering schools in the country. That UIUC (#5 US News) engineers were smarter than those at Harvard (#30). That UIUC, UMich, UT Austin, UC Berkeley, and Georgia Tech engineers had higher test scores and higher graduate salaries than most of the Ivy League. Running around with these facts and figures drove people nuts- but it also ignored the fact that this was a forum focused on NYC finance.

SpaceMarine it seems like you have pretty much already decided on Berkeley. Just like I have always decided that UIUC Engineers are eons ahead of Harvard engineers, no matter what anyone else tells me. I can respect that. If this were a Dartmouth vs. SUNY New Paltz situation, I'd be giving you a huge speech about us not being here to affirm a foolish decision. But it's not a huge difference. Just as long as you're aware that the rough consensus is that optimal strategy is to probably take CMU over Berkeley if you want to land at a NYC BB, but nobody thinks the other decision is terrible. If you have a good reason for choosing Berkeley over CMU (especially if you plan to work outside the US or at least NYC), that's fine.

Just as long as you're aware I (and perhaps some others) think you're being influenced by your prior views (at least relative to the NYC consensus), I think you'll be OK in the long run with your decision to go to Berkeley. The Linda effect plus the scruffiness that a state school gives you can probably cancel out CMU's reputation as the top MFE program in the country

 

Many thanks for your helpful replies!!!

Basically I have to decide until the end of this week. Although it sounds like I’d prefer Berkeley, I think it will be a rather close call between UCB and CMU.

@Revsly" - What would you say is the best (most common) way to get hired as a junior trader in FX/FI derivatives now a days? Through the standard analyst training program, or by transitioning from some sort of desk quant/strategist role?

IlliniProgrammer - What you said about my "prior view" actually applies here. Growing up in a country and education system where it's general consensus to define a select few US universities as "the best universities in the world" enhances the risk of becoming ignorant towards what actually matters in picking an academic program, especially if one has a specific career goal. And just as you said, the consensus view in NYC can be in fact vastly different than in Europe. I've always been a goal-oriented person, and not a prestige dog (even though I think in does matter in some fashion); so in the end, achieving my career goal will have a significant weight in my decision process.

I recently had a chat with a Princeton alum working in S&T at a BB in NYC, it was funny, he went: "I think Berkeley MFE has a better reputation on the street, better than CMU, but I have no idea how you can get hired on my desk due to the lack of summer internship" (lol)

So clearly, overall reputation does not always translate into more straight forward placement. In this case, perhaps merely due to the structural fact that there is this thing called summer internship, which happens to have served as the primary hiring engine on Wall Street for decades. I guess this is one of the situations where prestige doesn't help much.

(Honestly, the Berkeley program office knows how Wall Street hires, and still decides to implement this whacky off-cycle schedule... just difficult to understand)

 

The vast majority of people get hired from SA so I'd pick the school which has the connections to put you there. If you want to trade, get a SA role and focus on trading rotations simple as that. Let's not make this more complicated than it is.

If you are fishing for me to tell you to go to Berkeley I'm no going to humor you. Recruiting wise CMU is better. If you want to go somewhere else for other reasons by all means.

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

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