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PhD without the guts
- Thread starter ADX_trader
- Start date
Quote from buzzy2:
If you go to an investment bank most economics/finance phd's are either in "research" or sales. Few of them actually trade. They generally have good sales skills thanks to their training, they can invent a reason to virtually anything while sounding convincing, keeping a straight face and kissing your a#$, all at the same time. Not anyone can pull that off believe me.
Quantitative phd's on the other hand generally lack people skills and couldn't sell a superbowl ticket for a couple of bucks on ebay. So they are basically programmers and number crunchers.
Very very few phds end up as *successful* traders or hedge fund managers even among those who try. I've seen lots of phds even college professors, in mutual/hedge funds doing nothing but embellishing the fund's brochure presumably to make it respectable and therefore, more marketable. The fund doesn't actually trade following the phds research (they know they would go broke if they did it).
Some of those phds do just "big picture" research, not directly usable for trading, but gives the traders/managers confidence in the "general" composition of the portfolio.
Dude, why are you so anti-finance PhD? Since when are finance/economics PhDs not quantitative???? I have a cognate in stat and have taken pretty much all the core phd level quant classes math and stat phds take. It's that why with most finance phds. MBA's are sales people. Finance/econ PhD? I don't think so.
But, I've also seen many phd's working in funds actually producing valuable and profitable trading strategies, but they are unable to trade themselves, some of them because they have no guts, but others because they don't have enough money, did they spend it all in graduate school?. But anyway, you need a LOT of money to trade OTC fixed income, for example.
Profitable, long-lived, self-reliant, non-wage earners, phd traders are very very few.
No guts? BS. It takes guts to forgo so much you can do and painstakingly pursue the degree. Someone said those who go to grad school take the path of least resistance. I'd say just the opposite. Those who don't, simply go for some quick easy money without even thinking that they could double of triple the starting salary by getting a grad degree. It's exceedingly unlikely you can have that many pay raises in 4 years.
Also, you contradict yourself. If finance PhDs are such good salesmen, what prevents them from raising funds? Yes, they may not have the money to trade, but I'd bet those who quit after baccalaurate degrees have even less. And having a PhD is the best credential you can have when raising funds. At least that's my experience. Heck, even the fact that my wife is finishing up her PhD in nuclear physics comes in handy.
In short, I don't see you point.
I'm not trying to make a point I'm only speaking from my experience and observations. Re your questions:
1. yes there are finance/econ phds salespeople in investment banks, all they do is call, push paper and entertain clients, there is nothing wrong about that, it's a job right?.
2. phd's straight out of school can raise money but not enough to trade certain markets. I doubt that a schmuck phd with a 100K "hedge fund" can trade mortgage backed securities and/or credit derivatives. With your 100K you can barely buy a couple of Ecuador sovereign bonds (or just one I think) if you want to go into emerging markets. No one is going to give you 1 billion just because you have a phd no matter how good a salesman you are.
3. economics/finance phds simply can't handle the most technical stuff and don't program as well as quantitative phds i speak from experience.
Seems, as always, you have trouble accepting reality.
1. yes there are finance/econ phds salespeople in investment banks, all they do is call, push paper and entertain clients, there is nothing wrong about that, it's a job right?.
2. phd's straight out of school can raise money but not enough to trade certain markets. I doubt that a schmuck phd with a 100K "hedge fund" can trade mortgage backed securities and/or credit derivatives. With your 100K you can barely buy a couple of Ecuador sovereign bonds (or just one I think) if you want to go into emerging markets. No one is going to give you 1 billion just because you have a phd no matter how good a salesman you are.
3. economics/finance phds simply can't handle the most technical stuff and don't program as well as quantitative phds i speak from experience.
Seems, as always, you have trouble accepting reality.
Quote from buzzy2:
I'm not trying to make a point I'm only speaking from my experience and observations. Re your questions:
1. yes there are finance/econ phds salespeople in investment banks, all they do is call, push paper and entertain clients, there is nothing wrong about that, it's a job right?.
2. phd's straight out of school can raise money but not enough to trade certain markets. I doubt that a schmuck phd with a 100K "hedge fund" can trade mortgage backed securities and/or credit derivatives. With your 100K you can barely buy a couple of Ecuador sovereign bonds (or just one I think) if you want to go into emerging markets. No one is going to give you 1 billion just because you have a phd no matter how good a salesman you are.
3. economics/finance phds simply can't handle the most technical stuff and don't program as well as quantitative phds i speak from experience.
Seems, as always, you have trouble accepting reality.
1. - if they are salesmen, I don't know what they are thinking b/c they could be earning a lot more doing a lot less in academia and being a salesman with a phd is a total waste.
2. - I am gonna assume the "schmuck phd" remark wasn't targeted at me. Yes, I did start out with around 100K close to a year ago. The fund is about 100 times larger now. For a kid from a third world country village, I'd say it ain't that bad. So your sarcasm is misguided. Yes, if someone were to start a fund based on some research in the areas you mention, scale would be a major problem, but there are plenty of opportunities for such ventures where less capital would be more than adequate.
3. Utter BS. Yes, finance PhD might not get enough training in programming, but they are smart to learn it on their own if need be. The probably won't be top notch C programmers but would be able to do whatever needs to be done in some language, be it C or not. And, they will be very skilled in 3 or 4 econometric packages on top of that. Plus familiarity with the conceptual side and with the major databases etc.
So, no, I don't have trouble accepting reality. It just appears we are living in different dimensions of it, b/c I believe a finance PhD is the best degree there is and I DO speak from experience. You get the best of all worlds, enough technical training, the conceptual side of it to see things in terms of a big picture, research skills and a bunch of other additional benefits. I still have trouble figuring out why you are so bitter.
Quote from buzzy2:
If you go to an investment bank most economics/finance phd's are either in "research" or sales. Few of them actually trade. They generally have good sales skills thanks to their training, they can invent a reason to virtually anything while sounding convincing, keeping a straight face and kissing your a#$, all at the same time. Not anyone can pull that off believe me.
Quantitative phd's on the other hand generally lack people skills and couldn't sell a superbowl ticket for a couple of bucks on ebay.
{snip...}
Profitable, long-lived, self-reliant, non-wage earners, phd traders are very very few.
Dude, what's your beef? I was ph.d-track econ as an undergrad, and I burnt out when I couldn't hack the math any longer (difEq is about as far as I can go). I got my undergrad degree, and still might go for a ph.d. (either finance or econ) at a mid-tier school later in life.
I have yet to meet anyone with a 'qualitative' econ ph.D. It's _all_ quant stuff.
Regardless, your comments show that you've never had the pleasure of hanging out with a bunch of Ph.D. candidates. Don't deride the mental Brobdinagians just because you live in Lilliput.
If you trade and make money, that's great. In fact, that's awesome! You're one of the few (90% fail, right?). You made it! Congratulations!
So what if a Ph.D. gets there, or doesn't? Some guys are just more turned on by a fat salary, nice bonuses, and being the big swinging quant dongs of billion-dollar cdo swaps. Nice work if you can get it-- Lemme see: 1. $$$ 2. The coolest toys (i.e software that few of us will ever see in action, much less purchase) 3. Getting paid to do research. 4. Not having to put in time on the tenure track.
Can you at least see how this might be attractive to the Ph.D. set? Can you see how it makes money? Can you see how it adds value? (Will you finally see the value when a derivative of someones recent dissertation makes it into RealTick 10 years from now?) Why do you care so much?
There are lots of Ph.D.'s that have become great traders.. Some are on this board. A lot of them work on Fed desks and then go to the IB's.. A whole freaking lot of them (at least on the retail side) are *gasp* psychologists.
If you have a ph.d., and a job offer for $250k + bonuses, trading for oneself is a sub-optimal solution.
What's with you people why do you react so emotionally?
Actually, in investment banks salespeople generally make more money than research, so why do you people say i'm bitter when i describe reality as it is? and actually being a salesperson beats (by a far margin) being a college professor in monetary terms, and once you spend a while in REALITY you don't care much for academic research anyway. A salesperson can make far more than the 250K in research somebody mentioned as his dream job. But I can understand after being in grad school and earning a phd, anything over 100K looks good, i've been there, it takes a little while to adjust back to reality.
Somebody said also that econ/finance phds are quantitatively strong. Sorry if your professors impressed you and made you think otherwise but the sad truth is I would employ an EE/physics/CS phd any day of the week over an econ phd for quantitative work.
Good intentions alone are not gonna hack it. And it's not just me many other funds have similar preferences. If you don't like the truth sorry. As I said here sometime ago there is a whole lot more going out there than the simple stuff they teach you at school.
I don't know why but I've seen physics phds having trouble programming in c++, it's a very humbling experience for them i guess. More humbling maybe when they lose their arse when they first try trading, the vast majority of phds quits at that point and look for a "stable" job, or swear not leaving their number crunching position.
Finally I know that there are successful phds traders and fund managers, I've met a few, but they are the exception that confirms the rule, they are quite different, intellectually and psychologically, to 99% of phds. To start with, they already know that 99% phds are too flawed for trading, like the rest of the population, so they laugh both when somebody tries to impress you and sell himself with his phd, and when they hear jokes about dumb trader phds.
I don't know why do people get angry when I point out the truth that the majority of phds in industry have just subordinate positions, sales/consulting/number crunching type jobs, but that's not totally bad, you can make it to CEO right?.
Actually, in investment banks salespeople generally make more money than research, so why do you people say i'm bitter when i describe reality as it is? and actually being a salesperson beats (by a far margin) being a college professor in monetary terms, and once you spend a while in REALITY you don't care much for academic research anyway. A salesperson can make far more than the 250K in research somebody mentioned as his dream job. But I can understand after being in grad school and earning a phd, anything over 100K looks good, i've been there, it takes a little while to adjust back to reality.
Somebody said also that econ/finance phds are quantitatively strong. Sorry if your professors impressed you and made you think otherwise but the sad truth is I would employ an EE/physics/CS phd any day of the week over an econ phd for quantitative work.
Good intentions alone are not gonna hack it. And it's not just me many other funds have similar preferences. If you don't like the truth sorry. As I said here sometime ago there is a whole lot more going out there than the simple stuff they teach you at school.
I don't know why but I've seen physics phds having trouble programming in c++, it's a very humbling experience for them i guess. More humbling maybe when they lose their arse when they first try trading, the vast majority of phds quits at that point and look for a "stable" job, or swear not leaving their number crunching position.
Finally I know that there are successful phds traders and fund managers, I've met a few, but they are the exception that confirms the rule, they are quite different, intellectually and psychologically, to 99% of phds. To start with, they already know that 99% phds are too flawed for trading, like the rest of the population, so they laugh both when somebody tries to impress you and sell himself with his phd, and when they hear jokes about dumb trader phds.
I don't know why do people get angry when I point out the truth that the majority of phds in industry have just subordinate positions, sales/consulting/number crunching type jobs, but that's not totally bad, you can make it to CEO right?.
only if your trading sucksQuote from laziz314159:
If you have a ph.d., and a job offer for $250k + bonuses, trading for oneself is a sub-optimal solution.
buzzy give it a rest. you are starting to sound silly.