Hi all- This is my first post in the forum. I am a PhD in engineering (completed in 2007) and have little more than 3 years (Jan 2008 - now) of work experience in Engineering. I have come to realize that I am much more interested in Finance area than Engineering. In particular, I want to work in Buy-side firms, starting as Equity Research Analyst leading to a Portfolio Manager’s role. My main interest is to work with a Hedge Fund, but I am also open to start with a Mutual Funds as an equity analyst/associate. I am not really too keen to work as a Quant or an investment Banker, since it seems that Quants are more into pure mathematical modeling, less into fundamentals and do not make investment decisions themselves. I might be wrong though. So far what I have gathered is that CFA is a good route to get your foot in the finance world. I find pursuing the CFA path most valuable since it gives you a huge amount of useful knowledge without burying you in debts of MBA education. Having already spent years into MS, PhD, I am not too keen on pursuing an MBA as I do not see much value in it (apart from networking, career fairs etc). I can pursue part-time MBA in addition to taking CFA exams, if this will help. I have a home mortgage, family to support, am in my early 30s, so I am a little hesitant to quit my day job to pursue an Ivy-league Full-time MBA. But if it boils down to that, I will take that risk as well. What is a good strategy to follow to land up with a Hedge Fund job as soon as possible? Any info/help would be highly appreciated. Thanks, AZ
Hi dude. To be honest, I’m not really sure that your qualifications are a good match for equity research. I doubt that you would find the work to be appealing and depending on the quality of your PhD, you might have some better opportunities. I mean, there is stuff like this out there: http://jobs.efinancialcareers.com/job-4000000000786357.htm/keywordAny=phd%20trader/ I don’t know about you, but I would rather be doing this sort of thing in 3-5 years, instead of reading some balance sheets with a bunch of 24-year-olds while studying for CFA Level 2.
Thing is, if you’re not interested in going the quant route, you’ll be starting at an entry level position in finance…are you sure about that? That and, if you’re just interested in investing, you could just invest your own money.
This was, the most classic example of what happens on this forum ALL the time. It’s like he’s a long timer on here and compiled it after seeing hundreds of them. Anyway, do you really want to do this? you spent 4-5 years getting a PhD in engineering, worked 3 years, and want to go be a junior research associate? I know engineering bonuses are utter garbage, but dang. Your best bet is to target a research job that is looking for a specilization in your field of engineering.
The world needs more smart engineers and doctors staying in their chosen fields. There are millions of people that can read finanical statements and deal with investments, while there are far fewer people that can use engineering skills to develop and design things (depending on what discipline of engineering you are) to benefit our society as a whole. I say stay in engineering, make the world better. Maybe become a professor if you do not like the corporate culture of engineering firms…
Er… “become a professor” is not really as easy as that…
dieselbp67 Wrote: ------------------------------------------------------- > The world needs more smart engineers and doctors > staying in their chosen fields. There are > millions of people that can read finanical > statements and deal with investments, while there > are far fewer people that can use engineering > skills to develop and design things (depending on > what discipline of engineering you are) to benefit > our society as a whole. > > I say stay in engineering, make the world better. > Maybe become a professor if you do not like the > corporate culture of engineering firms… Agreed. I love being in ER, but if I had been more disciplined when I was younger I would’ve gone with the engineering route. Why exactly do you want to go into finance? What interests you so much about it?
ohai - yes, I know what you are saying. I was saying that more of a point to explore research/academia… I have so much respect for the engineers I see on Discovery channel / Nat Geo etc that are so passionate about the projects they are developing…
Can the OP describe his current role? I’m curious to know why so many engineers seems to hate their job? It seems like a dream role to outsiders?
ohai Wrote: ------------------------------------------------------- > Hi dude. To be honest, I’m not really sure that your qualifications are a good match for equity research. I doubt that you would find the work to be appealing and depending on the quality of your PhD, you might have some better opportunities. I mean, there is stuff like this out there: > http://jobs.efinancialcareers.com/job-4000000000786357.htm/keywordAny=phd%20trader/ > I don’t know about you, but I would rather be doing this sort of thing in 3-5 years, instead of reading some balance sheets with a bunch of 24-year-olds while studying for CFA Level 2. Hi Ohai- Thanks for posting this. Yes, you are right, this is an interesting thought, and I am willing to consider the Quant route. But why do you think that all Equity researchers do is to read the Balance sheets…Financial modeling and equity research, I think, involves much more than just reading the Balance sheets. May be read them in the beginning, but not forever, don’t they move to Senior Analyst (2-3 years) and Portfolio management roles (another 3-5 years). I am not talking about a run of the mill guy, but someone who is exceptionally good.
I work in a different field, so I’m probably not the person to talk to about the specifics of equity research. However, I think you should at least consider your existing strengths when choosing jobs in finance. You’ve spent years building valuable quantitative skills. Wouldn’t it be a waste if you did not decide to “sell” these skills now? Besides being paid significantly more than you would in equity research, you would probably have better hours, more freedom, and more respect from people in your company.
Keep in mind that quant is a big field. You don’t have to spend all your time pricing derivatives and estimating garch models. You could work on stat arb, fundamental factor models, optimization, or trade execution algorithms. Depending on your field of engineering and your interests you might be suited to one more than another. You might want to learn more about it. You would be fighting an uphill battle to get hired as an equity analyst (except where it may have related to your current field), but it might be easier to get a foot in the door as a quant with a phd and no finance experience (and likely a better salary).
Thanks to everyone for posting. Please allow me to give my perspective on things. Engineering is great field, I like it, enjoy it, having lived it day to day, I have come to realize that it does not fit in my long term plans. My long-term plans involve earning a decent amount of money, my target being 1 million$ per year in next 5-10 years. Now I am sure a lot of you would start thinking one of these two: a) this is not possible…or b) Why the hell do you need all that money for? The answer to 2nd question is is twofold…1) I am sick of being in debt 2) I want to raise money for humanitarian cause, donations, charities etc. and I’d like to contribute at least a million$ (Present value) /year after next 8-10 years. And to skeptics thinking a) above, I say anything is possible. Anyway, coming back to engineering; PhD Engineers start earning about 60-90K/annum plus 0-10K of bonus. The bonuses really suck as greengrape pointed out. I am sure you can find few exceptions. The salarlys grow at a meager 1-4% on an average, which covers you nothing but for inflation. So, how do I make a million staying in engineering? Many of you might not have an answer to that, but I do and the answer is by “inventing something & being an enterprenuer”. That is one of the very few ways an engineer stands a chance. I have explored this option & I think I can make it by following this path, but now it boils down to what I find more interesting to pursue and what is quicker route. In the case of coming up with something new, I need to come up with fresh ideas, raise capital and go the start-ups route. This is a viable option, but might be a slow process and moreover I find Finace very interesting as you will see later. By the way, I am sure many of you love engineers and doctors who really add value to the society. I am sure Wall street and companies use the inventions and capabilities of engineers, making billions while underpaying them (I very strongly believe so). I see all the time, managment in engineering companies exploiting talent of engineers while underpaying them. Managers, who know nothing but excel sheets and can do sweet talk get all the credit and reasonable bonuses. So, I find it funny when dieselbp67 says, “The world needs more smart engineers and doctors staying in their chosen fields. There are millions of people that can read finanical statements and deal with investments, while there are far fewer people that can use engineering skills to develop and design things (depending on what discipline of engineering you are) to benefit our society as a whole. I say stay in engineering, make the world better. Maybe become a professor if you do not like the corporate culture of engineering firms…” I do respect your opinion, and I do believe that engineers are adding value to the society, but does wall street really care about that? How do I achieve my personal goals mentioned above. Now I have very respectable research and a good PhD from top 10 schools in my field, but as far as academia is concerned, to me a profs job sucks even more. Many of the engineering profs are doing projects that have no practical significance. A typically engineering university prof makes probably about 100-150K after 10 years of service.They typically never get rich. Many of them keep changing their research areas partially based on their interest, but mostly based on where funding is. Anyway, this brings me to Finance. Why finance, because I find it extremely interesting. Last year, I traded 21 million$ worth of stocks (profit in terms of money=0, in terms of experience=invaluable). I found it very satisfying. The hedge funds is 2 Trillion indsutry, ETFs 1.1 Trillion and Mutual funds ~12 Trillion. I might be off a little bit here though. The wall street is quite a circus with people dumping stocks just on the basis of quarterly EPS. Good investors, traders and money managers have immense opportunities to make money for themselves and for their clients. I find it extremely challenging & interesting area, which attracts the best brains & it can make money. I find financial markets a natural fit for me. Why didn't I realize it a long time ago, well its a long story and I leave it for some other time. But better late than never, right? Eventually I'd like to an accomplished investor, investing my money as well as my clients money as a portfolio manager. So, my question was pretty simple, what is the best route to follow this path? I did not get a convincing answer yet, except that a Quant might be a better route for me and looking at the Balance sheets with 24 yr olds might not be very satisfying. Anyway someone in this forum in a separate thread mentioned "Also, most quant positions these days are glorified programming positions. Forget the ideal of quant finance, you will most likely be an entry level code monkey, but with a phd, with a marginally larger salary compared to someone with an MS." What do you think about that Ohai? Someone also mentioned, "The drawback of risk management is that if you thrive on the thrill of making good investment decisions, you only get to look over the shoulder of those who do." mo34 mentioned in one of the other threads, "I have a Ph.D in Aerospace engineering and strong programming skills. I got my current position at a market neutral hedge fund after completing Level 1. The material is very simple and mostly based on arithmetic rules, it should not take you more than 2 or 3 month to prepare, but it will make your job search much easier. Overall, I think you'll find it much easier than you think to switch to finance, and good luck." greengrape generilzed "This was, the most classic example of what happens on this forum ALL the time. It's like he's a long timer on here and compiled it after seeing hundreds of them.", No I did not compile "it" after seeing hundreds of them. By the way, there might be a very good reason if there are hundreds of "them". Palantir, you mentioned, "Thing is, if you're not interested in going the quant route, you'll be starting at an entry level position in finance...are you sure about that? That and, if you're just interested in investing, you could just invest your own money." I don;t mind taking an entry level position, but I am sure if I keep staying in engineering, I will never have enough of my money to invest. 401ks are pennies, right? I consider 10k-100K pennies. Any they let you invest only in mutual funds, that others manage. Any further thoughts would be appreciated. Thanks AZ
…all I got out of that was you traded $21MM worth of shares last year and broke even - that’s a good place to start imo. Expand on what you’re doing and see if there are any jobs that offer similar work, no?
Wow, numi and I have competition for the long post championships now. If money is your object, the fastest path is to do quant work in derivatives pricing or algorithmic trading, probably. If you want to do equity research, you can try that, but be prepared to use very little of your previous training and compete with people who can work longer hours than you because they are younger. It may lead to money some day, but you’ll be feeling remarkably frustrated and thinking “there’s got to be a better way to do this, but I can’t quite figure out what it is.”
check out a part-time mfe and see if that’s possible. if its not, or you hate it, i don’t see it happening this late in the game.
If I were you, I would keep an audited trading record. This way you can email your trading record (when you start making more money) to help land a job or use it as a talking point in an interview. If trading is what you want to do anyway… An entry level equity analyst job would not likely be a step up from where you are, but if you could program high frequency trading bots you could make double or triple what you are now. My advice on the donation thing is to follow the example of Buffett. The beauty of compounding is that it is easier to let the 1mn grow to 20mn than to start over. Also, one thing that you may not be considering is how much writing an analyst typically does. Phd engineers do not have the perception of being the most gifted of writers…
hi andy, as someone who has had a familiar trajectory to what you’re looking for, let me offer you my $0.02. first of all, it seems like your background is fairly strong; this will help you tremendously. it’s also good that you seem ambitious and confident. second, when you justify why you’re interested in finance (and you’ll be asked to do so), you don’t need to be defensive about looking to make significantly more money. anybody who says that they’re not interested in the compensatory nature of finance is lying to you. nonetheless, it’s probably best to focus on your interest in the markets and the challenge, while subtly indicating that the extra money is a plus. also, you don’t want to come across as a tool, so perhaps cut out the bit about becoming a philanthropic bigshot. third, just like academia, very few people work on exactly what they want to work on in finance. just as you’ve realized with engineering, the reality is not as glamourous as it appears to be. while it’s good that you’ve done some homework and have an interest in fundamental investing, it’s important to be flexible at the entry level because: (a) interesting opportunities are few and far between, and (b) no offense but you have no idea what the jobs are really like. you don’t want to come off as being presumptuous or negative. (hint: you are.) fourth, quant vs non-quant is not a binary distinction. there is a healthy spectrum of roles that have varying degrees of quantitativeness. if your goal is to make a lot of money, it seems odd that’d want to throw away one of your strongest selling points.
I think you should consider applying to a Masters in Fin Math, or MFE, at places like Chicago, Columbia, NYU etc. Or Masters in Finance at places like MIT or Princeton. They are one year programs, and you will probably be a strong candidate. (Some students there have PhD’s as well FYI).
The OP should really try to get into a top MBA program. If you’re currently not in equity research or investment management, it’s virtually impossible to break into the field without an MBA from a top school. A CFA alone will not allow you to make the transition. I think the OP underestimates how powerful on-campus recruiting and networking are. Think about it. For someone without experience in the field, your most important job is to get your foot in the door. Good luck landing interviews from firms like fidelity/wellington/MFS/Dodge and Cox/SAC Capital, etc., at your current position. No matter how good your investing record is, and even if you pass all 3 levels of the CFA, those firms won’t look at you. However, if you manage to go to a top school like HBS/Wharton/Stanford/Booth/Columbia, the big IM firms and hedge funds will come to campus to recruit, and you will have the opportunity to interact with them at company presentations and interviews. That access alone to top firms is worth well more than the opportunity cost of business school, especially for someone who is trying to make a big career transition.