Work vs. PhD

[EchoLiu]

UPDATED:

Ok so my advisor gave me a solution that maximizes the flexibility. I will take the offer for the moment, but start preparing for PhD from now on. I'll take more PhD courses, start doing researches/projects and try to push myself to do my best. If couple months later I find myself totally capable of dealing with the heavy load and also enjoy researching then I'll just tell Morgan Stanley that I won't go. Hopefully they'll understand, but I don't really care if they will. Otherwise I'll take the job and see how things go later. XD
___________________________

Hi guys, sorry if the thread is a bit abrupt. Anyway here's my situation (Please correct me if I am wrong):

I'm a Master student in ICME at Stanford, and after my recent intern in Morgan Stanley I got a return offer. I worked on strategies and modeling of market making of the e-trading group. The work itself was fine -- I enjoyed the modeling and analyzing part but other stuff, like coding, debugging and maintaining, was such a chore. My final goal is to get into a top hedge fund like Two Sigma or D E Shaw, but one or two years' work in market making in MS would be a good start point: I consider the experience in sell side would be valuable if I finally switch to buy side.

On the other side, I feel like my academic background is not solid enough, which may become a ceiling that limits my future career development. I had dual Bachelor's degrees in Math and Finance, and I will get Master in Mathematical and Computational Finance next March(the courses I take are listed here: https://icme.stanford.edu/academic-programs/ms/financial-analytics). I have taken one or two courses in each of stochastic, PDE, convex optimization and parallel computing, but not as solid as students majoring in these areas. I feel like I need one or two more years to fully digest and understand these disciplines.

To be honest, I just want to learn more and deeper in the above disciplines, and so far I have little interest in any academic research that won't directly contribute to my future career which hopefully will be HFT or things similar in hedge funds. Two more years' study would be idea, but four years' PhD seems too much. An alternative I thought about was teaching myself while I work, but I'm not sure if I can deal with both at the same time.

The PhD programs I'm considering include ORFE at Princeton and ICME at Stanford, both will take a lot of efforts to apply if I decide to try (I'm still exploring other programs, please remind me of anything similar). In the worst case that I don't get any offer of my idea programs, things will be awkward because of immigrating issue caused by the ending of my F1 status.

The last factor is more individual: I feel like the work in IB would be boring most of time. I want challenge, do cool stuff, and for this academia satisfies me more.

So here come the questions:
1. Do hedge funds NECESSITATE math/stats/cs knowledge to PhD's level? It's well-known they mostly hire PhDs in these discplines, but I don't know if it's merely a matter of diploma title.
2. Is the discount value of (gain minus the cost of PhD) greater than that of four more years' working experience in an IB?

I appreciate any of your advice.
Thank you!

 

[TehRaio]

Others will be able to tell you if getting a PhD is a strict necessity.
I am unsure if there exists a solution that is a good compromise in your case.
what do you want to do? it's hard to see even though your post is lengthy.
Do you want to take more courses? if yes, how about delaying graduation?
do you want to do research? then a Msc Thesis (delays graduation but shorter than a PhD) or a full PhD (longer) will do the trick.

 

[Bid Shader]

Others will be able to tell you if getting a PhD is a strict necessity.
I am unsure if there exists a solution that is a good compromise in your case.
what do you want to do? it's hard to see even though your post is lengthy.
Do you want to take more courses? if yes, how about delaying graduation?
do you want to do research? then a Msc Thesis (delays graduation but shorter than a PhD) or a full PhD (longer) will do the trick.

I think this is good advice. In general, I think it's tough to describe the (hedge fund) industry in terms of "must haves" that apply universally in terms of degrees (of course, we can all agree that more knowledge/skill is generally better). The hedge fund industry is quite heterogeneous - some shops have a bias toward hiring people of a certain background, while others have a different bias. Earning a PhD may help you with a subset of all hedge funds, and harm you with others (admittedly the subset where it would harm you would probably be pretty small).

In general, though, I think a PhD is a big commitment, and you should be aware that there's at least some risk you'll come out the other side "not much better off" than where you would be with a strong masters, at least in terms of employment prospects. Do you want to spend 4-5 years of your 20's in a PhD program? If so, great, if not, then as TehRaio said, there may be more efficient ways to build the skills you want.

Anyway, one last point, I think that no matter what level you are at, there will always be something you have to do that is "such a chore".

 

[ShowMeTheLight]

Another thing you should consider is that getting a PhD is not a set process with fixed hoops to jump through. It may take you 4 years, or it may take you 9. It just depends on your luck, skill and hard work. You have to defend some original research that you published to get a real PhD. You kind of sound like you might be the stereotypical goal oriented, career climbing hoop jumper. So a PhD program could be quite frustrating to you.

 

[EchoLiu]

Others will be able to tell you if getting a PhD is a strict necessity.
I am unsure if there exists a solution that is a good compromise in your case.
what do you want to do? it's hard to see even though your post is lengthy.
Do you want to take more courses? if yes, how about delaying graduation?
do you want to do research? then a Msc Thesis (delays graduation but shorter than a PhD) or a full PhD (longer) will do the trick.

Thank you.
I want to be a top quant in a top hedge fund. That's my final goal for the moment. First thing uncertain is whether this goal requires deeper knowledge than my level. If it does, then I want to learn more stuff before I go to work, and either delaying graduation, or getting a PhD, or teaching myself is a way to achieve the goal; the point is which/what way is the most efficient way to do it. But you're right, there can be more efficient ways to build the skills I want.

 

[pingu]

Get a job (that you have in your hands) and then decide.

 

[IntoDarkness]

many "top quant" only have bachelor degree...

 

[pingu]

I'm a Master student in ICME at Stanford, and after my recent intern in Morgan Stanley I got a return offer. I worked on strategies and modeling of market making of the e-trading group. The work itself was fine -- I enjoyed the modeling and analyzing part but other stuff, like coding, debugging and maintaining, was such a chore. My final goal is to get into a top hedge fund like Two Sigma or D E Shaw, but one or two years' work in market making in MS would be a good start point: I consider the experience in sell side would be valuable if I finally switch to buy side.

that part of the job that was such a chore will be 80%+ of your time at the beginning, you understand that right? Going to a PhD will just delay that pain (and add the pain of the PhD).

Also, do you want to have a family? Your priorities WILL change 5 years from now.

 

[Bid Shader]

that part of the job that was such a chore will be 80%+ of your time at the beginning, you understand that right? Going to a PhD will just delay that pain (and add the pain of the PhD).

Which is not to say that the actual process of completing a PhD won't be such a chore itself...

 

[EchoLiu]

that part of the job that was such a chore will be 80%+ of your time at the beginning, you understand that right? Going to a PhD will just delay that pain (and add the pain of the PhD).

Also, do you want to have a family? Your priorities WILL change 5 years from now.

LOL, not sure if my priority will change in 5 years, sounds too soon for me XD

 

[pingu]

LOL, not sure if my priority will change in 5 years, sounds too soon for me XD

It will. You are young and naive now and full of dreams. Most likely, it will change.

Also, the market might change and the jobs might be different. 5 years is a long ass time in Wall Street.

 

[pingu]

UPDATED:

Ok so my advisor gave me a solution that maximizes the flexibility. I will take the offer for the moment, but start preparing for PhD from now on. I'll take more PhD courses, start doing researches/projects and try to push myself to do my best. If couple months later I find myself totally capable of dealing with the heavy load and also enjoy researching then I'll just tell Morgan Stanley that I won't go. Hopefully they'll understand, but I don't really care if they will. Otherwise I'll take the job and see how things go later. XD

Ha, your advisor tells you exactly what he wants you to do. Do some more research, for him (let's assume is a he) and decide later (be ready because you will do very nice research - he wants you around). If you like the research, he got you on the hook for the next 5 years.

Basically, you have right now two job offers (aka two pills: a blue pill and a red pill). One (the red pill) pays you money but you will be doing 80% work you don't like and 20% you like. The other offer (the blue pill) is not paying you a dime but it's giving you the hope to do good research and give you the opportunity to take classes to learn more (BTW, all theory. You can learn practice at work in Morgan Stanley). I'll bet you will be doing chore work as well (again for free) and research... and your advisor will love you. Then, in around 5 years, you might be back at square one, or worse, off the board.

PS - This is reality, not fairy tales.

 

[ShowMeTheLight]

I think pingu is being a little bit pessimistic. You could start a PhD and just drop out if you don't like it. Nevertheless, I would not recommend doing a PhD just to get a job--that really makes no sense. The only reason to do it is if you are really fascinated with something and want to study it for many years.

 

[Daniel Duffy]

I think pingu is being a little bit pessimistic. You could start a PhD and just drop out if you don't like it. Nevertheless, I would not recommend doing a PhD just to get a job--that really makes no sense. The only reason to do it is if you are really fascinated with something and want to study it for many years.

Dropping out of a PhD is one of the worst things in life.

 

[Bid Shader]

Dropping out of a PhD is one of the worst things in life.

Which is why, and I assume this is your point, you should be really, really sure you want that PhD before you do it, as opposed to viewing it as a means to an end...

 

[Daniel Duffy]

Which is why, and I assume this is your point, you should be really, really sure you want that PhD before you do it, as opposed to viewing it as a means to an end...

yep.
I have met so many people who almost got the PhD, in a sense it becomes the biggest regret of their life.

Doing a PhD is hard.

 

[EchoLiu]

Ha, your advisor tells you exactly what he wants you to do. Do some more research, for him (let's assume is a he) and decide later (be ready because you will do very nice research - he wants you around). If you like the research, he got you on the hook for the next 5 years.

Basically, you have right now two job offers (aka two pills: a blue pill and a red pill). One (the read pill) pays you money but you will be doing 80% work you don't like and 20% you like. The other offer (the blue pill) is not paying you a dime but it's giving you the hope to do good research and give you the opportunity to take classes to learn more (BTW, all theory. You can learn practice at work in Morgan Stanley). I'll bet you will be doing chore work as well (again for free) and research... and your advisor will love you. Then, in around 5 years, you might be back at square one, or worse, off the board.

PS - This is reality, not fairy tales.

I had a thought during my intern at MS: "how could they even possibly make money while in fact they're implementing such naive strategies?" Later I talked to another two interns, both of whom were among the smartest guys I've met(PhDs in Math/Physics), and they agreed on my thought.

I'm kinda frustrated by the fact that even the modeling group in MS is not that fascinating as I expected -- actually this is another reason why I wanna stay in school for another couple years -- to challenge myself and test my highest potential. I'm fully aware that I won't stay in academia anyway, but maybe a PhD will give me more time to explore more things and raise the potential of my LIFE, not just career.

It's hard to explain but maybe you're right that I'm young and full of dreams, and I'm afraid I would regret 20 years later that I didn't grab the opportunity to get a PhD in my best years.

 

[IntoDarkness]

sounds like op is turned off because what ms doing is not sophisticated enough... couple guys in the modeling team of my place actually travel to philly twice every week to study their part-time phds... phd is not something if u dont do it now u wont do it later

 

[C S]

I had a thought during my intern at MS: "how could they even possibly make money while in fact they're implementing such naive strategies?" Later I talked to another two interns, both of whom were among the smartest guys I've met(PhDs in Math/Physics), and they agreed on my thought.

They're not as smart as you think. There are a bunch of guys that were only "book smart", i.e. good at "in theory" and bad at "in practice", and Wall Street is littered with their corpses.

"implementing such naive strategies?" Implementation is the key. I was talking to a guy who obviously looked down on a friend of his, who was working on "strategy optimization". He looked down on him because he was like, "this is just implementation, not the key idea bla blah". I asked him if he was aware a bad "optimization" could destroy any alpha and create huge losses.

Jim Simons himself says Medallion Fund doesn't use anything fancy. He could be lying, of course, but I see no reason why he would. Complicated models tend to fail badly at the most crucial times.

 

[npael]

Hello everyone! I am a student in Msc Risk Management and Financial Engineering of Imperial College London. I also have a Bsc in Finance. After the first term in London, I realized that the application process for investment banks is not so easy as I thought before the Master. I didn't get even an interview even though I applied to over 30 firms(mostly banks). And this is true for many other guys from my master. I am interested in derivatives pricing as I love stochastic calculus, pde, etc. Now I start thinking about a phd in a relative topic but I am not sure about it. I mean that I cannot imagine myself as a professor, I am not interested in an academic career. I just want to do what I love and if I cannot find it in a job, then the phd is the alternative option. My question is: does it worth to spend 4 years in a phd while I want just to work as a derivatives pricing quant? Is the phd really useful for this job? Is it better to find an irrelevant job probably in a small firm and then try to make the transition to the derivatives?
Just to note that I like very much the idea of the research in a phd but I am not interested in an academic career.