@ OP : Pros: you have very specialised experience which could help you get a specialised finance job. Like M&A / PE for Cos that sell the technology you are an expert in, for example. Cons: I don’t want to be rude, man…but you don’t sound like you have much understanding of finance jobs. I suggest you read about them and yes, go on finance forums like this one.
ksc1940 Wrote: ------------------------------------------------------- > 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. And this is what makes top MBAs still relevant.
to the OP; What was your PhD thesis about ?
I too come from an engineering PhD background and have found a passion for investing as well. My interest started in graduate school when I first started reading about value investing. Since then I have learned on my own and luckily have done quite well investing my own money for the past 4yrs. In Dec2009 I enrolled in the CFA program to at least gain some “accredited credibility” should I end up looking for an analyst job down the road. If all goes as planned I will pass L3 this June and finish what I started. How useful the CFA program will prove to be in making the transition is yet to be determined in my case. Unfortunately I can not offer much of a suggestion on how to make the transition from engineering and land an investment analyst job because I have not made that jump myself. But you are definitely not alone. I have another friend who also has a engineering PhD, who has completed all the CFA exams, and is interested in making the jump if the right opportunity comes around. For me, I am content for now just investing my own and some family money particularly because I enjoy the freedom to do the investments and analysis my way. One possibility I have considered is sometime down the road starting my own investment shop. Perhaps in your case if you feel you have the skills already you can start your own little fund with some family/friend seed money and work from there. Getting a track-record is definitely important. Best of luck! If you want to communicate offline my email address is chrisRR25 at gmail.
justin88, Many thanks to you for your valuable insights. I agree with you that I do not need to be defensive about making money & I’ll follow this advice. I’ll also keep in mind to be flexible at the entry level. I also really appreciate your pointing out that I have no idea what the jobs are really like & I came off as being presumptuous or negative. I might have left this impression out of a bit of frustration. I am exploring what would suits my interests in Finance the best. From whatever search I have done so far, my main interest is simply to be in Portolio management/Hedge fund management roles. I thought that the learning about investing based on fundamental analysis might be good entry point (hence CFA)…I also enjoy trading based on technical analysis. However, as you (& others) pointed out that I should leverage my previous PhD knowledge and look into Quant finance. This is very valuable advice and I have started to look into it. The best piece of information you provided was that “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 have started to explore this, I browsed thru Wilmott’s book on “FAQs in Quant finance” in the last 2 days, while it answered some of the questions, I obviously need to do my due diligence. Since you have experience in the area, I would be very grateful if you can shed some more light on this particular aspect. If you have some time, can I email you, my email is andyzees @ gmail. If you don’t have time to do so, please do reply in this post. mo34: I am so glad that you noticed this thread. Since you have similar background, your advice will be extremely valuable as well. Can you share your email id with me? As noted above my email id is andyzees @ gmail. I know that you followed the CFA route. My phD thesis involved using computational modeling to study hip mechanics…I am familiar with PDEs, finite difference methods, numerical methods. I have already completed basic finance courses such as Financial statements, DCF type modeling (that is used by analyst, probably not by quants, I assume) & found them to be relatively straight forward. Palantir & mar350: Thanks for mentioning about MFE. I am not sure if it is a good idea to spend 100K (e.g in MIT) in 1 year for MFE. Although it can add value, but I am not sure what is better: Learning by yourself by reading books, joining an MFE program, or learning by online programs such as CQF (~18,000 for 6 months). It would be nice if other members can comment on this? ksc1940 & CFABLACKBELT menetioned about getting into a top MBA program like HBS/Wharton/Stanford/Booth/Columbia as the big IM firms and hedge funds will come to campus to recruit. Is that general consensus? Would this be best approah to follow? Any other member has any comments? Viceroy: Thanks for your comment, do you have any particular book suggestion to read about finance jobs? I have read 2-3, which were pretty generic, but still have to come across a good one giving detailed info related to finance jobs for equity researchers, portfolio managers and Quants. I have read several on Technical analysis for tarders. bchadwick: Thanks for your comment…I have started considering quant work. It seems that you are active in the forum and if you have any additional advice, kindly share. ChrisRR25: Thanks for pitching in, I will email you & would like to stay in touch. jmh530 & LPoulin133; Thanks for mentioning about trading record, I will keep that in mind. jmh530: Having written numerous research reports, journal articles etc, I do not have any problem with writing analyst reports. Disclaimer: This particular response post might not be representative of my writing abilities. Thanks to all of you for the feedback. Best regards, AZ
Cost is certainly not 100k a year, more like 50k. Thing is, I don’t really know how valuable CQF is, and I’m not sure how much it will help you in recruiting, whereas many firms recruit straight from those MFE programs. http://finmath.uchicago.edu/new/msfm/home/index.php Here is one, see if it answers your questions.
I really doubt that further education is necessary. Going to Harvard Business School would expose you to some recruitment opportunities. However, unless your PhD sucks or you want to do IB or something like that, the time and money costs are not worth it. An MFE is probably not worth it either. People tend to perceive it as a lite version of PhDs. So again, probably not worth it unless your PhD sucks. If I were you, I would just apply to a bunch of jobs that are listed on EfinancialCareers.com or on company websites. If you know some people in finance that you can call up, that’s even better. Try to get in touch with some recruiters too - they will be nice to you if they think you are “placeable”, and they can give you input about what to emphasize in your resume for different job applications. Also, you should keep an open mind about “PhD” jobs in general. You might end up liking something that you had not initially considered. And even if you don’t start with your dream job, it might make sense to get your foot in the door by doing some sort of code monkey modeling stuff for a year or so.
CQF might not be bad. If you are trying to go the quant route, which frankly seems like a better fit for you, the CQF can have you feeling much more confident about what you might be asked to do and how you would go about doing it. The CQF also tries to create a lifelong alumni network, which can potentially help you on the networking side. The program is relatively new and doesn’t have the brand recognition of something like the CFA, but I’ve looked at some of the things that they cover and actually wish that I had done it when I first tried moving to this field. It’s a bit expensive (in fact it looks like it is now 50% more expensive than when I last checked), but you cover a lot of key material in a short amount of time, and it is both cheaper and faster (though probably not quite equivalent) to a Master’s of Financial Engineering. The key issue with CQF is 1) do you have the money to do it, 2) do you feel the need for a university brand behind you, or is it enough to acquire the knowledge itself, plus their network, and 3) do you have the time to put into it. I am a former academic myself (actually, I still teach now and then), and I can tell you that one of the things that is really challenging for people who are trying to do a career transition into asset management or banking is to get a sense of what all the different roles are and what skills are appropriate to what roles. Part of the challenge is that few people in the industry have much of a sense of the roles either… they mostly know how they got to where they are and maybe a few friends that did slightly different paths, but it’s really rather stunning how many people really don’t know much about anything other than the specific little niche that they’re involved in. There isn’t necessarily anything wrong with that, but I’ve always been interested in the top-down big picture stuff before I devote my energies to any specific part, and I think I’m a bit unusual in that respect. What all that means is that you have to realize that the advice you get from a lot of people may not always be relevant to you. Just because your skill set is useless in what they do doesn’t mean it’s useless everywhere else. But it’s also true that it’s UP TO YOU to figure out how your skills apply. I used to think that I just would list my skills and some smart person would figure out “hey, that guy could really be useful to us,” but that is really really rare. People either don’t care, or they’re too lazy, or they just have tunnel vision. So a piece of advice from a fellow career changer is to spend time up front trying to figure out what people can do with skills that you have. You can ask for informational interviews through friends and contacts and maybe industry events, and in those cases, you don’t ask them for jobs, but you do tell them what you can do, why you like the industry, and ask if they can think where someone like you would be most useful. Then ask them for people you can talk to about those kinds of roles. Just remember, that when you are actually trying to get the job, you cannot expect them to figure out what you can do for them. You have to know the list of things that you can offer to help an investment company or bank move forward, and you have to make that case. Do that, and you’ll find that the transition will happen a lot faster than if you don’t. So the CQF might be good for getting you to that point and for inserting you into a network of others that can help. It’s not quite as good as a university program from the prestige aspect, but it’s cheaper and faster, which is valuable in and of itself. I do not have a CQF myself, but I actually do think it will become more valuable as a designation over time. Also remember, though, that a lot of quants got hurt in the crisis, and many quant strategies haven’t performed well since 2007. There seems to be some news that they are doing better in 2011, and that’s probably because the macroeconomic shocks are not quite as large as they were before (though the unwinding of QE2 and any stuff related to the European sovereign debt problems could shove us back into macro-dominated land). What this means for you is that there are probably still a lot of unemployed quant guys for you to compete with. Nevertheless, if you project competence and knowledge, you should be attractive, particularly if you can argue that you are cheap/a bargain. I know that doesn’t sound exciting, but once you have some experience under your belt, your compensation is likely to rise quickly. Second, realize that quantitative portfolio management is only one part of the quant field. It’s probably the most interesting and glamorous, but there are lots of other quants that do risk management and derivatives pricing. What’s good about those fields is that the will pretty much be needed in bull markets and bear markets, and they don’t depend as much on whether quantitative portfolios are doing well/in fashion or whatnot. So if you don’t feel the need to make explicit calls in managing a portfolio, there are probably more positions like those hanging around. Also, for small funds, there is sometimes more overlap between risk management and portfolio management roles, so you might be able to get experience in both at a smaller fund. I know this turned out long, but hope it helps.
Engineering has much more payoff than finance if you are entrepreneurial, otherwise it’s better to switch in finance, there are many many engineers in engineering too for day to day work. That’s the respite in finance, even if you aren’t entrepreneurial, you still have a good chance of making good money without any significant achievements in your career. So, yes, if you are smart and you have A grade eductaion, finance is much easier and quicker route to riches. Engineering only pays to the entrepreneur, and that means a lot of sweating and a lot of wait too, and in a realistic scenario, it’ll be you kids not you, who’ll live the much desired affluent young age on your riches. BUT, the point is, there’s nothing more entrepreneurial than engineeing, so weigh your options, because after doing hardcore engineering, and you confessing your love for engineering, take it for granted that… Finance is going to suck your balls dry, be prepared to swear about the world and your job for couple of years before you’ll finally make peace with finance job… given you are coming from engineering R&D! Best of luck in your search.
andyzee Wrote: ------------------------------------------------------- > justin88, Many thanks to you for your valuable > insights. > I agree with you that I do not need to be > defensive about making money & I’ll follow this > advice. I’ll also keep in mind to be flexible at > the entry level. I also really appreciate your > pointing out that I have no idea what the jobs are > really like & I came off as being presumptuous or > negative. I might have left this impression out of > a bit of frustration. I am exploring what would > suits my interests in Finance the best. From > whatever search I have done so far, my main > interest is simply to be in Portolio > management/Hedge fund management roles. > I thought > that the learning about investing based on > fundamental analysis might be good entry point > (hence CFA)…I also enjoy trading based on > technical analysis. However, as you (& others) > pointed out that I should leverage my previous PhD > knowledge and look into Quant finance. This is > very valuable advice and I have started to look > into it. The best piece of information you > provided was that “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 have > started to explore this, I browsed thru Wilmott’s > book on “FAQs in Quant finance” in the last 2 > days, while it answered some of the questions, I > obviously need to do my due diligence. Since you > have experience in the area, I would be very > grateful if you can shed some more light on this > particular aspect. If you have some time, can I > email you, my email is andyzees @ gmail. If you > don’t have time to do so, please do reply in this > post. What is your question exactly? Also, there’s no reason not to share with the rest of the forum afaict.
ohai Wrote: ------------------------------------------------------- > I really doubt that further education is > necessary. Going to Harvard Business School would > expose you to some recruitment opportunities. > However, unless your PhD sucks or you want to do > IB or something like that, the time and money > costs are not worth it. An MFE is probably not > worth it either. People tend to perceive it as a > lite version of PhDs. So again, probably not worth > it unless your PhD sucks. > > If I were you, I would just apply to a bunch of > jobs that are listed on EfinancialCareers.com or > on company websites. If you know some people in > finance that you can call up, that’s even better. > Try to get in touch with some recruiters too - > they will be nice to you if they think you are > “placeable”, and they can give you input about > what to emphasize in your resume for different job > applications. > > Also, you should keep an open mind about “PhD” > jobs in general. You might end up liking something > that you had not initially considered. And even if > you don’t start with your dream job, it might make > sense to get your foot in the door by doing some > sort of code monkey modeling stuff for a year or > so. I strongly disagree with your first paragraph. Recruitment and networking opportunities coming out of a top b-school, especially HBS, are MASSIVE. The OP would have easy access to banks, consulting, hedge funds, private equity, investment management, and much more. Of course, this does not mean that he will get those jobs, but my point is that a top MBA is by far the best way to make a career transition. Applying to jobs on websites usually don’t lead to much, and headhunters can be hit or miss. I strongly urge the OP to take the GMAT and apply to b-schools next year.
I’m not saying that business schools don’t lead to recruitment opportunities. It’s just that the two years of not working + opportunity cost does not make an appealing package to someone who is in his 30s and has kids and a mortgage. If the economic cost of switching to finance is $500k+, then maybe it’s not worth switching at all. PhD + MBA is a rare combination in finance; I would be surprised if you knew more than one or two people (if any) who hold both of these credentials. A more pragmatic approach would be to focus on jobs that don’t require MBAs. Quant desks that employ PhDs do not recruit from business schools. Like any strategy, this is not guaranteed to work. However, it might make more sense than throwing down hundreds of thousands of dollars on another strategy that also might not work. I applaud Andyzee for trying to figure out the course of actions that best fits his non-work obligations and his position in life. Trying to “break into finance” without considering cost would be a stupid thing to do.
Basically agree, but it is true that a number of finance Ph.Ds got an MBA first. That’s a special category, though.
Hi Ohai…I also kind of agree that further “formal” education (like MFE/MBA) is most likely not necessary…I was actually hoping that it won’t be necessary. I like your idea of just going ahead and applying for a bunch of PhD jobs and going from there. Also, thanks a bunch for your encouragement Ohai!! bhadwick: Thank you so much for a detailed reply…You post has certainly helped. I agree with your point of view on CQF. I found your comment that “few people in the finance industry have very little sense of different roles” very interesting…This is something that I had not thought about…It is probably true in almost every industry…I know this is true to some extent in engineering as well. Since I am trying to change career paths, I’d rather know more than less. I think having a top-down big picture would go a one way. I think your advice is very valuable & I will myself try to figure out how can others use my skills in the industry and/or how can I use my skills myself in this industry. Honestly, in recent years I figured “necessity is the mother of invention”. I’ll also start looking into risk management and derivatives pricing as well. Your post certainly would be very valuable and my feeling is I’ll end up coming back to reading your post more than once in future. Hi Bernanke: Its hard for me to compare if Engineering is more entrepreneurial than finance. My guess is that as long as your are venturing out & exploring something “new”, it is entrepreneurial. justin88: My specific question is can you give an example (or more) of roles that would have an overlap of quant & non-quant functions. Where would you recommend to look for to find more info regarding it? Any book recommendations? I express my gratitude to all the members who have contributed to this thread. Your assistance will go long ways in helping me figure out some of this stuff. I am not sure if I’d directly be able to return the favor to you guys (& gals), but I promise to do it for someone else, afterall, goodness goes in circles, right?
andyzee Wrote: ------------------------------------------------------- > justin88: My specific question is can you give an > example (or more) of roles that would have an > overlap of quant & non-quant functions. Where > would you recommend to look for to find more info > regarding it? Any book recommendations? ??? Most front office roles have an overlap of q and non-q functions. There are few non-quant jobs where a person with stronger quantitative skills (all other things being equal) wouldn’t enable them to do their job better. For instance, trading roles are becoming increasingly quantitative and automated.
Thank you Justin.
Andyzees, I was reading this thread of yours and i can relate to your situation as I am on the same boat as you (engineering background-oil,gas petrochemicals). very good advice and comments from everyone. I was just wondering what you situation is like now. Have you made a decision already?
Well, to keep a long story short: That compounding and building on your strength thing is great, use it. Just do the quant or trading route experience wise, combine with CFA and FRM to learn the basics. You actually can use quantitative models on fundamental data. Think psychometrics?! But alas, this is the route I choose, being in a similar position (PhD in comp sci, FRM designation and just completed my CFA exams). A couple of light-hearted reasons: a) The relative value of your work determines your compensation. Very few engineers know about finance. The combined skill set is worth more than its parts. The pure junior PM roles I do get offers for are 70-60% below the engineering roles related to quant or trading business functions. The compounding effect does make the difference even more important. b) Quant and trading adds a lot of transferable skills, either for your own business or a different role afterwards. If you suddenly discover you want back to engineering, no problem. Want to start independent practice, who could stop you selling your ideas for 1m a piece (except the buyers of cause…)? c) You want to find something where the numbers work in your favor. In research all you can do is to use your capacity once (e.g., you cover 7 firms, a report goes at 80 USD per copy and you sell to 200 people per year…). In trading it should be easier to multiply your intellectual abilities, sometimes just by literally flipping a switch (e.g., a stat arb model that earns say .01% above market ever 5 trading days times 100m principal…). After a PhD an MBA adds no additional intellectual capacity. And you can get the network elsewhere (e.g., entering a random bar and ask a random person for the name, I sometimes do this as a warm-up before meeting new clients). Some funny HR people still look for the School, or grades, I could not care less, most jobs are referrals anyhow. HR is for associate or analyst roles at the start of your career. As others have mentioned before. Trust in your skills. It is good to be an engineer, you can be proud of this. Use the CFA, FRM or whatever program as a way to gain the basic knowledge other people paid a fortune for at school. These programs may actually not get you a position in finance alone (trust me, I have tried). Experience often matters more. And your experience is in engineering. If you are ready, have a look here: http://www.quantfinancejobs.com/jobs/statistical-arbitrage.asp