PhD in Physics, is CFA any good

Okay guys, here goes: I am a PhD in physics (experimental) with summa cum laude and have average experience, expertise in programming and lot of interest in mathematics. I am R&D engineer in a small semicon company. I am trying to seek out opportunities in finance with specific field of quantitative analyst. My question here is that would doing a CFA (level 1) for the time being help enhance my chances of a job. I mean or the whole CFA thing is just an elusive mirage which looks pretty good from a distance. The idea I have right now is like this: With a PhD in physics and experience in semiconductors, would it be helpful if I get a CFA (level 1) only and then apply for a Quant position. Or is this thinking too simplistic and the real picture is very messy. Talking about jobs here in the US. Thanks for any inputs. AJ

Emanuel Derman, one of the first quants at Goldman Sachs, well respected in the industry, and now teaching at Columbia University, points out that a good quant needs three things: good math skills, decent programming ability, and some knowledge of finance. Your physics background probably demonstrates the first two; the CFA will help establish the third. Your main issue may be that quant funds had a bad year last year, so you may be competing with some unemployed quants with more experience, so just be aware of that. However, risk management is increasing in importance, requires a lot of the same skills, and is good for those who are broadly intellectually curious. 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. Derman was an ex Physicist, btw. He may actually have worked briefly with my dad at SLAC. Your chances are pretty good, I’d say, and CFA is worth doing, so that you get into the financial mindset.

It’s not a very clever path and it will work about as well as most non-clever solutions (which means it might work but there are better solutions). So yes I agree with the “thinking too simplistic and the real picture is very messy”. Emmanuel Derman has something like your background (director of quant research at Goldman and one of the world’s most gifted). I jumped from math professor to finance before I knew much about finance by picking up some niche and writing on it. That’s probably more constructive than taking CFA and hoping that helps. It’s also a ton of work for something that has uncertain benefit (it will be less work for you than many, but I’ll bet my bottom dollar you can’t tell me the difference between issuing convertible bonds and bonds with attached warrants on a company’s interest expense and lots of CFA I candidates can). When it comes to applying for jobs you want to adjust a little and figure out how to impress finance professionals and not other physicists and academics (your post tells me that you don’t know how to do that yet).

^ pretty funny that bchadwick and I both overlapped on Derman. Maybe you should send your resume to him. He seems very laid back to me, deeply insightful, and working for Goldman Quant Research would be great.

why does anyone want to break into finance ? I don’t think finance is for anyone. And it’s not all about math. Yes, transition is possible and CFA will definately add value. But why would you struggle to advance in an industry completely new to you ? Will spend a lot of time and effort just to get on your knees. Besides, nothing can substitute a good finance degree and employers want relevant skills, skills directly related to your field.

www.wilmott.com may have some answers too.

2x2equals4 Wrote: ------------------------------------------------------- > why does anyone want to break into finance ? did you mean ‘everyone’? :wink: I > don’t think finance is for anyone. And it’s not > all about math. Yes, transition is possible and > CFA will definately add value. But why would you > struggle to advance in an industry completely new > to you ? Will spend a lot of time and effort just > to get on your knees. Besides, nothing can > substitute a good finance degree and employers > want relevant skills, skills directly related to > your field.

I agree with Joey that writing something on some mathematical area of finance is one of the best ways to get someone’s attention. However, I think that if you don’t know what the big issues are in finance, the CFA curriculum is very helpful for getting started. I was a professor too (political economy) and i found the whole question of learning the vocabulary and basic concepts pretty challenging without having the curriculum to walk you through it. The recommendation to write something independent is really good too.

Of course I think it goes without saying that I also found the CFA process very valuable and worthwhile.

CareerChange Wrote: ------------------------------------------------------- > 2x2equals4 Wrote: > -------------------------------------------------- > ----- > > why does anyone want to break into finance ? > > did you mean ‘everyone’? :wink: > > I > > don’t think finance is for anyone. And it’s not > > all about math. Yes, transition is possible and > > CFA will definately add value. But why would > you > > struggle to advance in an industry completely > new > > to you ? Will spend a lot of time and effort > just > > to get on your knees. Besides, nothing can > > substitute a good finance degree and employers > > want relevant skills, skills directly related > to > > your field. sure “everyone” but…non-native here. excuse my english :wink:

2x2equals4 Wrote: ------------------------------------------------------- > why does anyone want to break into finance ? I > don’t think finance is for anyone. And it’s not > all about math. Yes, transition is possible and > CFA will definately add value. But why would you > struggle to advance in an industry completely new > to you ? Will spend a lot of time and effort just > to get on your knees. Besides, nothing can > substitute a good finance degree and employers > want relevant skills, skills directly related to > your field. … There’s no money in Physics…

Thanks guys for the inputs. I guess it has given me some insight into the mindset of what people in finance think. Anyways bchadwick and joey, thanks for the insightful inputs. I guess writing papers does help. On the otherhand, CFA will give me some sort of structured pathway to go about it. Okay 2x2equals4, thanks mate for your skepticism and I guess that was the whole point of asking the question. abacus, it is a pretty nice website you pointed to. Thanks a ton guys. More inputs will be appreciated.

I would recommend a financial engineering program for you, not the CFA. The CFA won’t hurt, it just might not be as helpful. And I think you’ll like the FE program more.

In the book ‘How I Became a Quant’ had some people with physics PhDs. Its a pretty interesting read.

I heard a PhD in chemistry from MIT first started his job as modeling guy at lehamn brother and then became a very successful trader. After he finished his PhD in chemistry he got into Stanford’s finance Phd program but he quited after he got an offer from lehman bro. Maybe PhD in finance is a good option.

kant Wrote: ------------------------------------------------------- > I would recommend a financial engineering program > for you, not the CFA. The CFA won’t hurt, it just > might not be as helpful. And I think you’ll like > the FE program more. You would be an outstanding candidate for a Master’s in quantitative finance or financial engineering. the MSQF at Carnegie Mellon and the MSF program at Princeton have great reputations and placement records for quant dudes.

Just send you’re resume to Renaissance Tech and see what happens. They are well known for hiring science Phd-types with no background in Finance…

I was in a similar situation 2 years ago. 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. Try to work on your programming skills while you’re preparing for Level 1, I had to take tough programming tests during the interview process (check out Brainbench.com ). I guess employers expect you to be able to program your ideas and test them. Overall, I think you’ll find it much easier than you think to switch to finance, and good luck.

In my opinion, there is nothing better than an MBA from a top 25 for you. Strong quant skills coupled with more general finance knowledge will open many doors. CFA will only strengthen your career development and its good to have it as well. The only problem is that its resource consuming. With an MBA you won’t need it.

2x2 I actually considered the MBA route, but I just could not imagine going back to school after the Ph.D. I later realized that I made the right decision. My wife started her MBA at UCLA last year and her classes are nothing more than BS on top of some more BS. Just a lot of talk and team projects, case studies, presentations, … and very little substance. I am not sure that by the time she graduates next year, she will actually be able to translate a balance sheet or price a swap or do anything useful. In my opinion, for someone with a Ph.D in Physics, an MBA would be a total waste of time and money. As far as resources, the CFA will cost about $5000 all included, while the MBA will cost at least $70000 + time wasted in the classroom.