CMU MSCF Interview with Graduate of Carnegie Mellon University masters computational finance

Here is an email interview I had with a recent CMU graduate who just started his new job. I hope it is helpful to some:

1) What do you plan to do with your degree? What all could you do with your degree?

>I graduated this past December. I took a job at Merrill Lynch in Equity Derivatives Strategy. I had interned at Merrill over the summer through a rotational program and was offered full time employment from one of the three rotations that I subsequently accepted.
What could I do with the degree? Main jobs are either at the major investment banks and sometimes buy-side hedge funds. The roles are primarily in (1) Sales & Trading (2) Strategy and/or Research (3) Quantitiave Modeling (programming) (4) Asset Management (5) Risk Management

2) What is your opinion on the upward mobility given this degree (both speed and potential)?

>The degree will definitely open doors and also will give you considerable confidence with the markets and products. Getting in the door is a huge benefit as sometimes that is a struggle in its own. Most often we start as associates which is the second tier after the entry level position "analyst". But, upward mobility after associate is really no longer a function of the degree and is instead more of your performance and opportunities at the job you have. I'd say the major benefit is the confidence the degree will give you, and what it gives others in you.

3) How is the atmosphere in this program? Is it highly competitive, very casual because you know that you will all land very desirable jobs?

>Atmosphere changes from year to year. I'd say it's less competitive than MBA programs because our class size is considerably smaller. However, you'll also see it also depends on the markets themselves. This year's class was definitely more competitive than mine, as the markets have become pretty sour for new hires. But overall, relatively speaking I'd say you'll find a less cut-throat atmosphere to internships and jobs here than MBA programs. And yes, eventually, every qualified person always does find a desirable job, that's been a long running certainty.

4) I am considering going to Florida State's master's program for financial mathematics (my undergrad institution). Do you think it would be worth it for me to pay practically nothing to go here rather than spend potentially $80k or so going to a better school, or is it not worth it you think?

This is a tough question. I'm two sided. My undergrad was Rutgers and I landed a great job after it, so I don't deny the potential of still making something even though you don't go to top tier ivy league, brand name schools. However, I can say a couple things I saw that distinguished Carnegie Mellon from Rutgers. Firstly, and most importantly, the quality of the education and professors that you get at CMU somewhat justifies the increase in expense. The professors develop relationships with the students and you'll always feel that they're doing their all to make sure you're learning. Next, the advantage I'd say of CMU's MSCF (if you go to the New York program) is the ease in networking from being in the city. I cant begin to tell you the stress and headaches you'll save when looking for a job by being in Manhattan. People at other schools have to spend lots of money on numerous trips and hotels that isn't always subsidized by all employers.

Also, another advantage is that by going to a brand name, top tier school which costs more, you also get more accessibility to banks. There are hundreds of MBA students and now dozens of Financial Engineering students that will be competition for the same jobs. And while the banks are open minded to going to smaller schools to recruit, they bend over backwards to entertain and market to the brand name schools. CMU's MSCF has numerous info sessions where the banks come to market themselves to find students.

However, I'm almost certain, if you're an amazing catch, qualified and talented, no matter what school you go to, your skills will come through and it's only a matter of time before a bank would have taken notice and recruited you. But all that is just a little easier by going to the big name schools.

5) What are the hours generally like for jobs that MSFM's get coming out of the program? Could you find work anywhere in the country if you wanted? I think I would like to work either in Manhattan or Charlotte. Do you get national recruiters?

>Hours is a good question. So it depends on roles you take on, but I'd say generally speaking you can expect to work at least 12 hours a day, and at most, maybe 70 hours a week. It's less than investment banking jobs for sure, but with that said, those are still pretty demanding hours.
Work anywhere in the country, not so easily. NYC by far is the major source of employment, and after that, you can find jobs at the major financial hubs in the world (London, Tokyo, Hong Kong, etc), but in the country alone, that gives you Boston, Chicago, San Francisco, but those roles are limited. And in terms of small towns, it's tough, but not impossible. For example, Merrill Lynch has a huge Private Client business with offices setup all over the country. Our degree does prepare us for a role in asset management in an office like that but it's relatively difficult to land the job.
Charlotte actually is an extremely viable place of work, my ex-roommate is taking a job there starting this Tuesday. Bank of America and Wachovia have their headquarters there and if you are interested, I'm sure they'd love to have as they have difficulty getting people to leave Manhattan.
>National recruiters, not really cause most of the companies are headquartered in Manhattan.

6) Regarding recruiting, do they gravitate toward the top performers in the program, or since the class is so small, is it more based on demeanor and charisma? What weight is given to the big factors?

>I'd say the biggest weight in landing interviews is the caliber of your resume mixed with how skillfully you network with the recruiters. Resume should have relevant skills and work experience, and even if you haven't worked or done work in finance, at least show that what you've done in the past makes you relevant for the role you're applying for. Also, making sure your resume is "sane" and logical and free of errors and is readable is important. You'd be so surprised at how many people make illogical resumes that are unclear. Those get rejected right away, basically an employer thinks if this guy can't take the one piece of paper that he has to explain himself to me seriously, which he has months to prepare, then how can he tell me anything clearly when he's working for me. So making sure the resume is immaculate is important.
Then networking is right up there as well. Wall Street is about relationships, and if you made a positive connection with someone, they wont forget it.

7) How does one's summer internship correlate with the future job? Does it increase chances at placement there, higher salary, or do most not necessarily even work for the same company? Is the goal a shoe-in at that company or just to get some experience?

Summer internship correlation with future job is pretty high. I'd say more often than not, people take their internship's full time offer if they had one.
Internships most often do lead to full time offers, in my year about 2/3 of interns got full time offers. That stat can change of course depending on many things but you get an idea from my year. Salary is pretty standardized as most of the banks are aware of what is being offered. I'd say the stats of what you see on the website are pretty much what everyone gets.
I'd say the goal is definitely experience and not to land a full time from your internship. Every company has quota even after their interns that they will recruit for full time in the fall to see if they can find a good match. And regardless of where you work, if you know there's something you want to do more, and you're good, and you look, they'll be jobs available still in the fall.

8) Given that all of these programs are so young, and of the relative scarcity, how much disparity do you think there is between the liberal arts, state and ivy education?

> I think I addressed this question up above when talking about paying the 80K. Oh one thing I forgot to say about that, if you make it well, a lot of companies sign-on bonuses really help taking a big chunk of that 80K back.

And on another note, I'd say that one thing CMU has is a footprint with the banks. Our career services has developed great relationships by placing people over the last 15 years. CMU's program is the oldest so that gives it a leg up there. Sometimes the banks are very closed doors to schools they haven't placed from before. But it's a comfort level they have when they say "oh, this person was good for us from that school, so lets give them another chance for more".

9) I am going to meet on Monday with the two professors who make the admissions decisions for FSU's MSFM program to see if they will admit me into their doctorate program. Any general tips? I met with one of the two Friday morning, and he seemed about as excited to have another qualified domestic applicant as I was excited to have a chance to apply to the program.

> Doctorate program is definitely a good idea if you're cut out for it. I think a doctorate in this degree has more credibility than the the masters. While many many masters do find great jobs and do well for themselves, if you have the will, the ability, the time, and whatever else it requires, I think the PHD can only help.
Yes, domestic is huge, you'll see in the demographics that internationals often make up half to more than half of the students. But that aside, I'd say it's more exciting if they find a qualified, motivated, and capable candidate. If you're cut out, then definitely show them your interest and show them you've done your homework and you know what you're signing up for. Genuine interest and motivation are the most valuable assets you can have for any future Endeavour. Good luck.
I spoke with this CMU graduate again recently and thought that his statements were worth posting in addition to this interview. The email inquired about the logistics of landing a job out of the gate. Here was his response:

The entirely largest factor in landing a solid summer internship and full-time role at any firm, be it a major bank or smaller firm, is networking. And it may not seem like it, but it's probably as demanding as the future course work in the Master's itself.

Your number one priority should be putting together a rock-solid resume. There are numerous outlets online that can help you prepare for the "Wall street" job. If you want links to resources, let me know, but give me some time to gather them.

Next after a solid resume, you should begin learning more about the various roles that you're eventually studying for and what it is they do, how they are distinguished. Speak to as many people as you can in industry about what they do and start to garner you own thoughts about how this industry works and how you can see yourself fitting the best. Use alumni networks and sites like the CMU contact site to just pick people's brains. It sounds pushy and annoying maybe, but it is a good way to get knowledge. Note, try to send those kind of mails more to junior level people and always stay very professional in them. Also, to gain industry knowledge, consider reading popular best sellers about Wall Street, I can give you a list of some (Liar's Poker, When Genius Failed, etc).

Third, after your resume and industry research, try to come up with your own cover letter explaining what you want to do and why you'd be good at it. With the resume and cover letter, begin visiting all the major banks career sites and preparing for their internship submissions. Since the banks will not becoming to your school, you will have to work through the websites of the companies. If possible, try to get names of HR contacts and email them directly, instead of submitting through generic college recruitment pages. After going to major banks websites, google for other career resources that post jobs and gather lists of contacts to send your resume and cover letter to.

You should begin this process around September 15th as banks begin internship recruitment about that time. Ask the banks if they'll be at FSU for any reason and try to schedule time to meet them one-on-one if you can. If not, ask about the "Week on Wall St" program that the banks do and ask if you can be a part of it. "Week on Wall St" is a week where all the banks invite students from MBA programs and now Masters in Financial Engineering programs to come to the banks for info sessions to meet employees and get more knowledge of the firms.

I hope you can see from all I said how important the networking aspect is. If you give it a solid effort, with serious hard work, and get your name in the eyes of recruiters and managers, and you show you've done your homework by having a solid resume, excellent industry knowledge, and of course most important do well in your school work, then things should fall into place nicely for you.
the answer in blue was dead on.

Internships - get them!

You can get some experience that employers want, see how your education is applied, as well as network.

You'll see after a few years in the field, that people move around and making good contacts pays off over time.
A great interview. Thanks a lot MLBrandow.

I am a bit curious as to how a fresher like me (who will be entering the study immediately after the undergrad degree ) can apply these suggestions. For e.g. starting the networking process at sept 15 would be very difficult - we would only be a couple of weeks into the program and building a strong resume showing relevant skills might not be possible as we would hardly have completed any relevant study so early. We would only be able to indicate undergrad study and achievements,(which might not have anything to do with quantitative finance, at best we can indicate our interest in the field and our motivation to pursue it.)

This process of course would be easier if you've had relevant work ex from before. But there are many in the same boat as me who are looking to get hired into entry level analyst positions rather than the associate positions which is at the next tier. Do you have any specific suggestions for us, any thing we should do differently?

Resumes are generally submitted for internships around Jan so we would have around one semesters time. Do you have any ideas as to what we can do to boost our resume profile during just a semesters time. An idea I thought of is to give the CFA level 1 in december. Also we could to try to do exceptionally well in our first sem study. It might not be much but its something. What are your thoughts?
No more replies!!
Cmon everyone, you must be having some thoughts about this ? There are many who would be pursuing an FE straight after their undergrad and what I've asked about is very relevant to them as well.
I think your concerns are valid because I was in the same boat in the not so distant past. Preparing for internship, interviews shortly you start a program definitely put people with no relevant experience at a difficult situation. There is only so much C++, stochastic, Hull exercises you can put on your resume under Course, Experience section but beyond that, little else.

The most important things you can do to help yourself standout from the crowd is not something you take in your first semester but things you do outside of it. The hiring managers at work once mentioned to me that the interns they interviewed have no idea of the practical things people do to make money. Knowing Black Scholes is nice but if it does not translate into making money, then it's not practical.

Here are few things I found critical
Talk to people in the field. Anyone. Learn a bit from here and there. See what they do, use. Show genuine interest.
Read industrial magazine (WSJ, Bloomberg,FT)
Learn how a bank operates and where you may fit in your future group.

If I interview some with similar background like yours, I would be impressed if that candidate can tell me
Which are the big players doing the same kind of stuff we do?
Which kind of data we use? Who are the big providers of those data?
What kind of tools we use?
How the field is doing currently? What is the trend going forward?

Obviously, these are not something you learn taking C++, Stochastic. This is something you learn reading trade magazine everyday, talk to alumni and go to conference.
Thanks to M L Brandow for the excellent questions that he asked for which I must admit that the response of the CMU Graduate was very insightful and mature.