MFE after Ph.D. worth it?

[mfrobo]

Hi everybody,

Is an MFE really worth it after doing a Ph.D. in CS (from a top 4 school - MIT/CMU/Berkeley/Stanford)?

I've recently received offers from a few prop shops + hedge funds, who've mostly mentioned to me that they "don't care" about finance and that I could "easily pick up the material in a matter of 2-3 months." After speaking to several MFE program directors, however; they claim that finance is really important, and that I'd likely not be working in the most desirable "trading" areas at these firms.

I'm a little confused, since the type of work that I'd be doing at the prop shops/hedge funds as part of my internship are either (1) long term strategies or (2) HFT. It seems likely that I could do one of these areas as a full-time position as well.

This then begs the question... what doors would the MFE open that my (soon-to-be) Ph.D. cannot? In my case, the MFE would cost $80K + the time I'd lose by doing an MFE. After graduation, I've heard that my target base + bonus would be somewhere near $400K if I do well; which means that I'd lose around this much in opportunity cost if I go with the MFE as well. If I do go with the MFE, would my prospects of landing a high-paying "trading" job be higher? Would the starting salaries offset the lost time?

mfrobo

 

[TraderJoe]

$400K total (base +bonus) would be be in HFT AFTER FIVE YEARS. Whoever told you that you would get that in your first year is misleading you.
I know dozens of Computer Science PhDs from CMU. They are all starting at $160K - $200K in the tech firms. The few who go into Finance sector are starting at $120 K - $140K base + $50K bonus in the first year.
HFT would be a good fit for you. The prop shops are very risky jobs and they have a very high turnover rate.

 

[mfrobo]

$400K total (base +bonus) would be be in HFT AFTER FIVE YEARS. Whoever told you that you would get that in your first year is misleading you.
I know dozens of Computer Science PhDs from CMU. They are all starting at $160K - $200K in the tech firms. The few who go into Finance sector are starting at $120 K - $140K base + $50K bonus in the first year.
HFT would be a good fit for you. The prop shops are very risky jobs and they have a very high turnover rate.

Thanks for taking the time to reply! Would you do an MFE if you were me?

Regarding the comp. numbers; one of the internship offers that I recently received had a $115K prorated base + $30K prorated housing (furnished corporate apartment). It's a little difficult to believe that a full-time position would pay only around $50K more than this. Also, a good friend of mine from undergrad recently received $300K base + bonus from a well-known prop shop in NY; this was just after his first year. Leaving out details, since I don't know if I'm allowed to say actual places.

The figures you're quoting in tech are spot-on. Maybe your contacts went to investment banks, which supposedly don't pay much at the beginning?

Either way though -- it's good to know that $400K is reasonable after 5 years.

 

[Andy Nguyen]

People do MFE as a way to break in quant finance sector if their current credentials are not enough. If you already get an offer out of your PhD, I don't see any good reason to do MFE.
That time is better spent making money and moving up in the world. Everything you need to learn, you will learn in the job as long as you keep learning and don't settle.
There is no guarantee that your firm, your dept, your job is still there after 5 years. You want to optimize your option and with a full-time job under your belt, you are a more desirable candidate for MFE programs should you decide that path in the future.

 

[CasanovaJ]

You're already getting offers from the companies that most MFE students can only dream of, and all the MFE directors care about is selling their programs... Listen to the employers-- it would be a complete waste of money.

 

[alain]

I've recently received offers from a few prop shops + hedge funds, ...

This is the only thing that matters. Go for it and don't waste your time.

 

[mhy]

Thanks for taking the time to reply! Would you do an MFE if you were me?

Regarding the comp. numbers; one of the internship offers that I recently received had a $115K prorated base + $30K prorated housing (furnished corporate apartment). It's a little difficult to believe that a full-time position would pay only around $50K more than this.

Actually the internship pay is the best predictor of your starting salary.