The Coming Glut of Financial Engineers

quantsmodelsbottles

Active Member
For schools, Cornell and UCB seem to be pivoting hard towards DS. CMU replaced a chunk of the StoCal program w/ Data Science, and allows overloading.

A few folks from CMU have gone to DS roles at the usual suspects that I know of.
in that case, my interest in these programs goes up a bit. but i’d probably still go for a pure STEM field instead
 

David.Wan

Member
C++ Student
Interesting read and funny how this article is relevant to this day. To any current and future readers of this post I'd like to share my 2 cents on this topic. A quick background about myself, I actually graduated from Baruch College with a BA in Economics and attempted to go down the MFE route that my school offered because A) it's dirt cheap approximately $25k if I recall correctly for an instate student such as myself, B) It's in the heart of midtown so it's in a prime area for networking with NYC's financial hub, all of the Bulge Bracket banks are a 20 block subway ride away, as opposed to Columbia's campus all the way up north in the 100s. C) Ranked 2nd in the US based on QuantNet itself, so it's an over all good program. I ended up taking Calc 1 and 2 after graduation to meet the prereqs for the program but stopped after 2 because I began working full time in Investment Banking/Corporate Finance and decided to work in M&A instead of S&T. I've left my position back in August because I became disenheartened with the work and am now back in school getting a BS degree in Mechanical Engineering with plans to continue on to graduate studies to specialize in a field of ME.

My observations based on my experience are so:
1. WALL STREET IS DRYING UP AND NO LONGER AS LUCRATIVE. Wall Street is no longer a lucrative career path, due to the advancements of technology and regulations choking out the banks. Pre-2008 Bankers, Lawyers, and Consultants were making incredible sums of cash, however after the crash it all ended and regulations have changed the bonus structure for bankers. Basically a bonus a Bank now gives is more in Stock than Cash, used in an effort to keep Managing Directors and Vice Presidents around for longer and to reduce the amount of rouge deals that were immoral and illegal. Also keep in mind, sure you may make 100-120k a year... but after taxes and it drops down to somewhere around 70-78k. You'll also probably be living in the city (assuming you'll be in NY) which idk if you've checked apartment rent prices but they're pretty expensive for a shoebox "one bedroom." Which will further decrease your savings. I've often seen so many young professionals in finance who can model DCFs and LBOs of complex corporations with ease, lack a basic understanding of personal finance.
2. LIMITATIONS. Quantitative Finance is a limiting field, and if you chose to get an MFE you will essentially be pigeon holed into the Finance world, so should you ever want to leave finance for say Artificial Intelligence research, best of luck as a MS/PhD Comp Sci candidate has higher chances of getting into that particular field.
3. DO NOT DO FINANCE FOR THE MONEY. I don't care what movies or books you've seen or read, Finance is not a party of a career. It's actually a field that involves long hours, mind numbing work, and at the higher levels, a lot of relationship management. (This is my bias coming out since I have experience in M&A which after all is still a relationship driven field and while tech has definitely impacted Corporate Finance, it will never be able to get rid of the core of M&A which is keeping constant communications going on between multiple parties for a live deal.) The people who truly succeed in this field are those who could care less about the money they make and care more about playing "the game." These are the guys and gals who will purposely reject an offer which could triple their all in comp simply because if they currently run their desk at their firm and the offer is for them to be a subordinate they'll reject it without a moments notice. These are people who want to win and don't care for a paycheck. My first director was like this and was a machine, reading 15 hours a day everyday on market news and updates.
4. INTERESTS AND PASSIONS. If you truly like quantitative analysis, computer programming, engineering or any other STEM discipline, I recommend studying those fields and getting graduate degrees in those. Especially for computer science. The reason being is because these degrees are actually much more versatile and I believe can last you a lot longer for your career than a MFE can. i.e. a Computer Scientist or Mathematician can go work in other interesting/demanding fields because the doors are open for people with those skill sets compared to "Quants."
5. INTERNATIONAL STUDENTS. American Universities are using you as a quick buck. So be incredibly weary and on guard for low tier universities promising you riches. I almost fell into this trap myself when I wanted to be an attorney, thankfully I was too dam cheap and stubborn and couldn't understand how $300,000 of law school tuition debt justifies you getting a job that will pay you only $60,000 a year if you don't get into a T14 school.
this link applies for Chinese students but still the overall message holds for all international students to let you know about how the programs really work.

If anyone else would like to add on to my points for anything that I missed please do. I also welcome criticism as I do understand my position as a "Banker" and not a Trader/Developer/Quant/Mathematician doesn't make me an expert authority on this but more some just some kid who's giving an opinion no one ever asked for in the first place.
Hehe :) That is absolutely true even for Quants. But you know... the grass is always greener on the side. who knows what's better? there are too many ppl full of shit nowadays. it is hard to find out the truth :P
 

Ken Abbott

Managing Director
Interesting read and funny how this article is relevant to this day. To any current and future readers of this post I'd like to share my 2 cents on this topic. A quick background about myself, I actually graduated from Baruch College with a BA in Economics and attempted to go down the MFE route that my school offered because A) it's dirt cheap approximately $25k if I recall correctly for an instate student such as myself, B) It's in the heart of midtown so it's in a prime area for networking with NYC's financial hub, all of the Bulge Bracket banks are a 20 block subway ride away, as opposed to Columbia's campus all the way up north in the 100s. C) Ranked 2nd in the US based on QuantNet itself, so it's an over all good program. I ended up taking Calc 1 and 2 after graduation to meet the prereqs for the program but stopped after 2 because I began working full time in Investment Banking/Corporate Finance and decided to work in M&A instead of S&T. I've left my position back in August because I became disenheartened with the work and am now back in school getting a BS degree in Mechanical Engineering with plans to continue on to graduate studies to specialize in a field of ME.

My observations based on my experience are so:
1. WALL STREET IS DRYING UP AND NO LONGER AS LUCRATIVE. Wall Street is no longer a lucrative career path, due to the advancements of technology and regulations choking out the banks. Pre-2008 Bankers, Lawyers, and Consultants were making incredible sums of cash, however after the crash it all ended and regulations have changed the bonus structure for bankers. Basically a bonus a Bank now gives is more in Stock than Cash, used in an effort to keep Managing Directors and Vice Presidents around for longer and to reduce the amount of rouge deals that were immoral and illegal. Also keep in mind, sure you may make 100-120k a year... but after taxes and it drops down to somewhere around 70-78k. You'll also probably be living in the city (assuming you'll be in NY) which idk if you've checked apartment rent prices but they're pretty expensive for a shoebox "one bedroom." Which will further decrease your savings. I've often seen so many young professionals in finance who can model DCFs and LBOs of complex corporations with ease, lack a basic understanding of personal finance.
2. LIMITATIONS. Quantitative Finance is a limiting field, and if you chose to get an MFE you will essentially be pigeon holed into the Finance world, so should you ever want to leave finance for say Artificial Intelligence research, best of luck as a MS/PhD Comp Sci candidate has higher chances of getting into that particular field.
3. DO NOT DO FINANCE FOR THE MONEY. I don't care what movies or books you've seen or read, Finance is not a party of a career. It's actually a field that involves long hours, mind numbing work, and at the higher levels, a lot of relationship management. (This is my bias coming out since I have experience in M&A which after all is still a relationship driven field and while tech has definitely impacted Corporate Finance, it will never be able to get rid of the core of M&A which is keeping constant communications going on between multiple parties for a live deal.) The people who truly succeed in this field are those who could care less about the money they make and care more about playing "the game." These are the guys and gals who will purposely reject an offer which could triple their all in comp simply because if they currently run their desk at their firm and the offer is for them to be a subordinate they'll reject it without a moments notice. These are people who want to win and don't care for a paycheck. My first director was like this and was a machine, reading 15 hours a day everyday on market news and updates.
4. INTERESTS AND PASSIONS. If you truly like quantitative analysis, computer programming, engineering or any other STEM discipline, I recommend studying those fields and getting graduate degrees in those. Especially for computer science. The reason being is because these degrees are actually much more versatile and I believe can last you a lot longer for your career than a MFE can. i.e. a Computer Scientist or Mathematician can go work in other interesting/demanding fields because the doors are open for people with those skill sets compared to "Quants."
5. INTERNATIONAL STUDENTS. American Universities are using you as a quick buck. So be incredibly weary and on guard for low tier universities promising you riches. I almost fell into this trap myself when I wanted to be an attorney, thankfully I was too dam cheap and stubborn and couldn't understand how $300,000 of law school tuition debt justifies you getting a job that will pay you only $60,000 a year if you don't get into a T14 school.
this link applies for Chinese students but still the overall message holds for all international students to let you know about how the programs really work.

If anyone else would like to add on to my points for anything that I missed please do. I also welcome criticism as I do understand my position as a "Banker" and not a Trader/Developer/Quant/Mathematician doesn't make me an expert authority on this but more some just some kid who's giving an opinion no one ever asked for in the first place.
Thanks for your reply here.
Yeah. I think you nailed it. I agree with everything you said. I recently retired to teach (at Baruch and several other places). I had a great career, but it took its toll in terms of stress and work/life balance. I loved what I did and I did well, but I fear some people think it's a gateway to easy riches, which it certainly is not.

If only I could have monetized that foresight...
 

Grieze

New Member
Thanks for your reply here.
Yeah. I think you nailed it. I agree with everything you said. I recently retired to teach (at Baruch and several other places). I had a great career, but it took its toll in terms of stress and work/life balance. I loved what I did and I did well, but I fear some people think it's a gateway to easy riches, which it certainly is not.

If only I could have monetized that foresight...
Absolutely. Thanks for the reply. Btw I watched your lecture at MIT. Man you're hilarious! Would love to have more professors like you who can bring humor into the advanced level STEM concepts. Also I think more people should watch your lectures because it gives a true picture/window as to what an MFE program is really like and what a career as a quant will really be like which is math and statistics. If people find themselves bored listening to your lecture about just the very basics and surface of quantitative finance well that should be a red flag that the career path is not for them.

And if only we could monetize hindsight...
 

Grieze

New Member
Hehe :) That is absolutely true even for Quants. But you know... the grass is always greener on the side. who knows what's better? there are too many ppl full of shit nowadays. it is hard to find out the truth :P
Very true. Whats better for you is what you determine to be better for you, which unfortunately requires taking some risk in trying new things out and possible getting burned, but also fortunately helps you learn and grow!
 

Daniel Duffy

C++ author, trainer
Why are they doing this? My guess:

A Law of Software 'Gravity' is that maintainability (costs) takes the upper hand as a software product evolves and mature.s It can be an asset or a liability.

 
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IntoDarkness

Well-Known Member
goldman currently has relatively hard time recruiting quant talent partly due to their decades old secdb and slang garbage
 

Daniel Duffy

C++ author, trainer
In the history of computing the ISO/ANSI languages (such as Fortran, Cobol, C) are the ones that survive.
Add C++ to the list.
 
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