Is MFE a good way to go into Wall Street

HongHong

I read many career advices,but some problem confuse me.I hope someone could help me.
Thanks in advance.
1)I am Chinese,many friends around me believe that get MFE in US degree will help them to go into Wall Street.Is it right?How many people around you have MFE degree?
2)Most of the discussion focus on C++,statistics and machine learning ,few talk about PDE,SDE and functional analysis ,is it useless in Wall Street for quant?
3)In some famous company such as Google and MS, they have a strong research group,and often write,publish paper in journal as graduates do,how about in Wall Street,how many people around you write and publish papers in journal?

twofish-quant

Very few. MFE's do get hired for mid-office and risk management work, but most people have EE degrees. Personally, I think MFE degrees are a bad idea, since if you get a degree in something else, you can do something other than finance.

Also, I'm worried that US schools are "overselling" degrees to Chinese students. You have a lot of Chinese students with tons of money, and a lot of US universities that need cash.

What's useful changes from month to month or year to year. At this very moment, statistics and machine learning are useful because people are interested in high frequency algorithmic trading. What will be useful six months from now, I couldn't tell you.

Curiously one reason that statistics and machine learning are hot is that this is one of the few areas of quantitative finance that isn't totally useless in China. The Chinese economy works very, very differently from Western economies and most of what you end up learning in a Western MFE degree just will not work in China. Algorithmic trading is one of the very few things that is useful in China.

Very few. There is lots of stuff that is publishable, but no reason to publish. The really, really cool stuff that you've discovered, you sort of want to keep secret. After a few months, everyone will figure out your secrets at which point there is no point in publishing.

HongHong

You are right.Chinese indeed have much cash.My friends around me have MFE offer from a very famous university such as University of Chicago and Columbia University,is it still useless for them ?
I am very curious that why are you so familiar with China?I hear that many Chinese people are working in Wall street,is it right?
I believe that the Chinese economic system will be almost the same as Western economic system one day.The difference between them now results form a political issue not economic issue.

chill_factor

I have no personal experience with quantitative finance (my area of study is materials physics). I am also Chinese. My friends have gotten MFE degrees however, and paid 50,000+ USD and a year of stress for them. None of them have gone to Wall Street.

Most of the paid master programs at famous universities are used to trick Chinese into giving up lots of money for a relatively worthless piece of paper. It is better than no degree but you can get the same benefit for cheaper elsewhere.

I also don't think the Chinese economic system will become like the Western economic system ever, unless everything crashes and then both become tribal systems.

twofish-quant

It could be.

One big problem with degrees is "bait and switch." You are promised a degree from school X, but in fact it comes from department Y of school X rather than department Z, and department Y doesn't have the necessary social networks. (This happens in China too. There are lots of people that think they are enrolling in school X, but the diploma says department Y of school X, which then makes it less valuable.)

The other thing is that there are a lot of no-name schools that have excellent career services and a lot of big-name schools whose career services are not that good.

1) I'm Chinese.
2) There are a lot of Chinese people working in Wall Street. One organization that you should get involved with is the Chinese Financial Association.
3) Most Chinese people working on Wall Street are trying to get back to China since the economy is growing more quickly.

I don't think so. The reason that I think the Chinese economic system will stay different is that every country does things differently. The US economic system is quite different from from the English system, and those are different from the French or German systems. For example, in France and Germany, the large corporations are owned by the banks, whereas in the US banks can't legally own non-financial companies. Curiously much of Chinese banking law is copied from the United States, although like Japan, it's likely that it's going to evolve into something quite different. (After World War II, the US forced Japan to copy the American economic system. After about a decade or two, it changed into something very different. There was massive copying of the United States in the 1990's, but that stopped in 2007, and today the model economy that China is copying is Singapore.)

You can't separate politics and economics. For example, China uses reserve ratios to control the economy rather than interest rates, because changing interest rates requires the approval of the State Council whereas the PBC can change reserve ratios by itself. The Mainland Chinese stock markets are "policy markets." Because the government controls such large shares, they can set the level of the market.

A lot of quantitative finance involves statistical modelling of political events.

twofish-quant

Part of it is that when it comes to technical positions, banks would prefer someone with a masters in EE or computer science or better yet someone that has worked for Microsoft for a few years. There are some less technical positions that MFE's get hired for but those basically involve typing numbers into spreadsheets. That's not a bad job, but there aren't too many new places.

If you must get an MFE, it's better to get it in Hong Kong or Singapore.

Also, I do think that it's a very good thing to get some exposure to the United States, there are cheaper ways of doing that.

That's the impression I get too. US universities are desperate for money. One thing that you should ask yourself before spending several tens of thousands of dollars for a diploma is if it's such a good deal, then how come they have to get foreign students.

There are things in the Chinese economy that have been there for a *long* time. The government monopolies on salt and iron have been around since the Han dynasty, and scholars two thousand years ago were wrestling with essentially the same issues that people are arguing about today.

http://en.wikipedia.org/wiki/Discour..._Salt_and_Iron

HongHong

thanks a lot for for your patience, I get too much knowledge form you.But I also have two questions.
1) Why are so many Chinese working in Wall Street, good at math and programming or like money?I think US even the people allover the world like money,why are just so many Chinese working in Wall Street.
2) I learn math in China and will apply math PHD in US.I am interested in math and know that it is difficult to find a job.However, I am not able to apply top rank university in US,can only get offer from about 100th (according to US news rank),so it is hard for me to get faculty position from better university after graduation,maybe I have to apply for job in industry,so my question is how many math PHD around you?If I graduate from 100th rank university is it easy to find high-paid job on Wall Street?

twofish-quant

Same reason that there are lots of Indians, French, Nigerians, Russians, and Brazillians there? It pays well and having international experience is a benefit and not a handicap.

Also there just are a lots of Chinese people in the world.

One reason it's hard to get a job in an investment bank with an MBA is that everyone who has an MBA wants to work in an investment bank. One of the reasons it's relatively easy to get a job in an investment bank with a math or physics Ph.D. is that it's a second/third/fourth/fifth choice for people with Ph.D.'s.

Lots. The important thing is to large programming and focus on applied math rather than theoretical.

As of right now, it isn't hard. Now what the world will be like in seven years when you graduate, I can't say.

However, a Math Ph.D. from a no name school beats an MFE from anywhere.

RoshanBBQ

What is an example of the degree from department Y instead of Z?

Mépris

Because their MFEs are tailored for the way that finance is done there? If so, it's interesting to see an example of "finance" being different in different places and "math/science" not changing when you fly elsewhere.

Such as? Also, what do you mean by "exposure"? (if you're loose with that definition, then watching American TV shows or reading/posting on PF counts!)

twofish-quant

One thing that you'll find with a lot of MFE degrees is that they are actually given by the engineering departments rather than by the business schools. This can be a problem if engineering students aren't allowed to access the networks and resources of the business school.

I don't want to name names, because this is something that can change quickly (i.e. in a matter of months) and you can do your own research.

Something that I know about people that run the MFE programs is that they mean well, and they are trying to do what's good for the student, but they aren't going to tell you (and maybe shouldn't be expected to tell you) the flaws in their degree program.

One other thing that you should notice is that a lot of MFE programs are "rebranding" themselves as joint MBA programs, or computational science degrees, or applied math degrees. The reason for this is that people finding it difficult to get jobs with "pure" MFE degrees, although I don't think they'll mention this in the marketing literature.

One other trap is "placebo degree." You have a degree program that claims that their students get jobs on Wall Street. However, you'll often find that the people that get jobs would have gotten jobs anyway without the degree.

So some of the questions I'd ask are:

1) Can I talk with some alumni? This is important because a) you get an opinion from someone that doesn't have a direct financial interest in your decision and b) one of the more important things that you get from a school are alumni networks. Knowing person X that has a job at firm Y is *really* usefule.

2) What department is giving the course, and what do the other departments in the school think of the program? If you find out that the B-school hates a program that the engineering department is giving, this is bad.

3) What were the credentials of the people being accepted into the program? If you find that most people that get admitted have physics Ph.D.'s, this is a *bad* thing, because it means that the placement states are biased.

One other thing is that my information on MFE programs is second hand, because I don't know anyone personally in my group that has only a US-based MFE. We just don't hire MFE's, and that might in itself be an alarm bell.

One final thing for people coming from a Chinese background. Think of the people that are trying to get you to do the degree as a salesman rather than a teacher.

twofish-quant

No. HK and Singapore MFE's are getting jobs because Hong Kong and Singapore is hiring and US/Europe isn't. There is a priority list in hiring people and MFE's are in the middle of the list which means that whether you get a job or not depends a lot on the economic climate. The one big thing that you get from an MFE program are people that know people in the system, and if you in NYC, it's tough to interview for a job in Singapore, and since Singapore and Hong Kong companies can find people from local schools, they aren't going to go through the effort to recruit from far way.

MFE curricula are invariably out of date. Again this isn't the fault of the people that run the schools, but it's just that markets change very quickly, so in the year it takes to write a textbook, you'll find that the world has changed and the textbook is obsolete. And it's hard to plan. If Greece leaves the Euro, we'll need one set of math to handle the situation. If it doesn't, then we'll need a different set of maths to handle the situation.

However, they do get you doing math which is useful even if they math they get you to do is irrelevant. You could ask that if MFE curricula is so easily out of date, then why can you get the same thing by doing the mathematics of black holes or quantum field theory, since the math is harder and equally relevant.

Indeed......

There are things that you have to learn by just "being there." If you don't see something with your own eyes, you relying on some one else's eyes which will provide a different view of things.

Also, one thing that I encourage Chinese people from China to do is to visit Canal Street and Flushing. The reason for that is that most American's assume that China looks like Chinatown when for the most part the urban parts look more like downtown Houston, but knowing how Americans view China and Chinese is useful information.

twofish-quant

One other thing. Different countries do finance differently, but all of it is part of one planetary, global financial system, and it's impossible to isolate one part of the system from another.

Figuring out complex systems is one thing physicists are trained to do.