Relevancy of PhD to MathFin / MFE Applications

[hammingbird]

Dear Community,

after searching through some of the old threads in this forum, I observed that the topic "PhD vs. MFE" is a quite common one. However, I did find little information about how a PhD (say in Math, Physics or Engineering) affects your chances when applying to MathFin or MFE-Programs in the US.

Let me examplify my question with my own background. I am a german PhD student of Mathematics, GRE V: 161 Q: 167, Undergrad GPA: 3.75 / 4.00, Masters GPA: 3.95 / 4.00 and intending to finish the PhD in April 2012 (I will be 24 then). I have no relevant (non-research) internships. However, as many other PhDs, I have some research stays at notable institutions (such as Princeton, Steklov Institute) and some publications resulting from that.

If you substract the PhD, I am sure that applications similar to mine would not be particularly competitive. However, this begs the question: What is the added value of a PhD in the eyes of admission commitees at some of the reputed MathFin or MFE programs?

To phrase the question in a more pointed manner: Is the overall value of a PhD in a quantitative discipline to the admissions process of most MathFin / MFE Programs just zero?

Yours Sincerely,

hammingbird

 

[mfegrad]

no, it is most definitely not zero. it shows that you will almost certainly be quite able to handle the material.

what will make you stand out is an interest in the discipline, and that can be shown via things you've done and what you write in your essays.

 

[bigbadwolf]

To phrase the question in a more pointed manner: Is the overall value of a PhD in a quantitative discipline to the admissions process of most MathFin / MFE Programs just zero?

In what area? If it is something like algebraic number theory or algebraic topology it will not be much (though still greater than zero, as it will at least demonstrate tenacity and a modicum of skill at coming up with ideas). Any area of applied math (PDE, numerical analysis, stochastic) and the value shoots up not only because of the subject matter but because it shows familarity with the general kind of thinking -- heuristic, computation-based (rather than proof-based) -- that quant finance requires.

 

[Andy Nguyen]

At the more popular programs, you will compete with many PhDs in physics, math. Many of them are from China who participated in ICM, national contest, etc.
So what is your edge? Can you code at a high level? Did you pick up any book and program some models in C++?
This is something I would look at if I'm trying to pick good candidates out of the hundreds if not thousand of applicants with similar background.

 

[hammingbird]

Thank you for your replies.

@ mfegrad: Would it be admissible to paraphrase your post like this - a PhD is no substitute for actual internships / WE in finance?

@ bigbadwolf: My personal area is combinatorial optimization / complexity theory, which is by no means as "hands-on" as actual applied math.

The tenor on some of the MathFin programs' websites (one probably shouldn't put too much trust in them ) seems to be something like the following:

"[...] many candidates without work experience are accepted [...]" and "although [work experience] is not as strict a requirement as the math skills, we do give this a fair amount of consideration." (UChicago website)

"The majority of our full-time students are in their 20s, have no previous work experience in finance, and do not already have a graduate degree. However, we do have students [...] who have a masters or PhDs in other subjects." (NYU website)

"Prior financial industry experience is not required." (Rutgers MathFin website)

Is it fair to say that the above statements euphemize the increasingly competitive application situation quite a bit? Is it even permissible to say that statements like the above encourage many students to apply who have zero chance of admission in the first place?

 

[bigbadwolf]

@ bigbadwolf: My personal area is combinatorial optimization / complexity theory, which is by no means as "hands-on" as actual applied math.

It will still stand you in good stead.

Is it fair to say that the above statements euphemize the increasingly competitive application situation quite a bit? Is it even permissible to say that statements like the above encourage many students to apply who have zero chance of admission in the first place?

Yes. Those statements are "doublespeak." They're all insisting it's "not required" while (with the exception of Chicago) not saying it would be an advantage nor specifying how much of an advantage it would be.

Incidentally, as pointed out by Andy, one useful thing you could do is hone your coding skills.

 

[Andy Nguyen]

@ mfegrad: Would it be admissible to paraphrase your post like this - a PhD is no substitute for actual internships / WE in finance?

Getting internship/job relevant in finance would be the best thing you can do after your education. There is no PhD or any degree that can replace that.
I have seen applicants with a year or two of relevant experience explain very convincingly why and how further education in MFE will help in their current and future career path. They can say what they are doing, what skill set their employer needs and how they can learn it from the program and what they will bring to the program.
People with zero experience often show their lack of understanding of the industry and are often very vague on their career path. Most will fall into the camp of "quant finance is a perfect combination of math, programming, and finance which I'm really good at and/or very passionate about". This is saying nothing at all. You can see why these type of applicants are often rejected regardless of what their GPA, degree is.

 

[hammingbird]

Thanks guys, for your replies.

I think it is wonderful how this forum paints a very realistic picture of the admission situation, as opposed to many of the actual MathFin / MFE programs' websites.

I have seen applicants with a year or two of relevant experience explain very convincingly why and how further education in MFE will help in their current and future career path. They can say what they are doing, what skill set their employer needs and how they can learn it from the program and what they will bring to the program.

This almost sounds like the description of a typical MBA program. Thinking about it, this is an interesting analogy, as the typical MBA program (if I am not mistaken) used to be accessible for "unexperienced undergrads" until about two decades ago. It seems that MathFin and MFE programs are taking the same course: As competition increases, they are switching their focus; away from preparing students to break into the industry, and towards educating professionals with avg. >= 2 yrs of work experience.

Inevitably, I get the feeling that MFE programs should start stating this stuff on their websites, just like the MBA programs do. Is it really necessary to reap the additional 40.000-60.000 $ in application fees from students without work experience, most of which are really unlikely to be admitted? (After all, MFE programs could make up the 40.000-60.000 $ in question with just one additional admit).

 

[mfegrad]

agree with everything bbw and andy have said.

i wouldn't go into this thinking that you don't have a shot, though.

re: your comment about how there's a shift away from preparing students to enter the industry and towards educating people that are currently employed, this might eventually be the case. the industry as a whole has seen explosive growth (tons of schools offer this degree that have no business doing so). i could easily see the argument that, once the degree has matured fully, it will only make sense to take those who already have some work experience in the industry, as they will be the ones best suited to apply and interview for jobs post-graduation. it gets down to what a number of us try to hammer home repeatedly (often without a ton of success...at least for those who don't listen! ): know why you want to enter the industry (non-superficial reasons only need apply) and be able to explain it coherently.

 

[Andy Nguyen]

Make no mistake, you will likely get admitted into some MFE programs with a PhD in math. The question is would you be better off 2 year from now from such programs? Are you in a better position to gain meaningful employment? Are they going to provide you with enough skill and knowledge to not only get the first job but succeed later on?
These are the questions that will be hard to know just looking at the program's webpages.
Read the reviews of programs by their graduates to see if they are happy with it or not
http://www.quantnet.com/review/

Reach out to their alumni here or via LinkedIn for further questions.

 

[hammingbird]

Thanks mfegrad and Andy, for your helpful replies. I feel very lucky to have your opinion on this matter.

It seems that a lot of people (including myself) worry to much about getting admitted to a program, and worry too little about what happens in - or after - the program. If I interpret your posts correctly, just "getting a degree in MathFin" does not ensure you have the same chances on the job market after graduation that many of your "experienced" classmates will have.

Before reading your posts, I was thinking of applying to some programs starting Fall 2013 just to "see where I could get in". Now, I will probably reconsider this plan.