Grad School or Career? Advice for Undegrad Physics Major

[MATLABdude]

I'm going to posit a bit of a philosophical question that may or may not take this thread off-topic (more so than it has already). Maybe it's the alcohol speaking, and maybe it's the recent viewing of Limitless, but...

If you guys are so smart (and I say 'you' since I'm in a terminal Master's degree in engineering, and struggling enough with that) and so often end up in finance anyway, why don't you all start up a hedge fund or two and start financing research, à la the John D. and Catherine T. MacArthur foundation? I guess the difficulty would be in convincing people to give up their dreams and aspirations (so to speak) and raise money for those of others and raising enough money and keep it going long enough to reap the rewards (without turning into, say, a cult or going wayward like the Templars).

EDIT: Mentat sounds neat, but it doesn't quite have the same oomph as the Bene Gesserit...

 

[twofish-quant]

If you guys are so smart (and I say 'you' since I'm in a terminal Master's degree in engineering, and struggling enough with that) and so often end up in finance anyway, why don't you all start up a hedge fund or two and start financing research, à la the John D. and Catherine T. MacArthur foundation?

Because starting and running a hedge fund requires "football jock" skills rather than "physics geek" skills. To start and run a hedge fund you need to:

1) know some very rich people
2) convince them to let them manage their money
3) succeed in making money for those rich people

Most physics Ph.D.'s get stuck at 1). Rich people are hard to find. #2 requires a lot of football jock/smooth talking skills.

As far as #3 goes. One thing that is interesting about finance is that physics Ph.D.'s don't get most of the money. As with a lot of industries, the big bucks go to people in sales and trading, and physicists get the left-overs. However, because you have so much money running around, the left overs are pretty huge. In your typical firm, the managers make six maybe seven figure salaries, and the physics Ph.D. merely make six figures. Boo-hoo.

Finally remember that in finance, you are just moving numbers around. There is some wealth benefit in moving numbers around (i.e. efficient allocation of capital and all that other stuff), but if you start paying salaries above the wealth that is generated, then you have something that isn't going to last for very long.

I guess the difficulty would be in convincing people to give up their dreams and aspirations (so to speak) and raise money for those of others and raising enough money and keep it going long enough to reap the rewards (without turning into, say, a cult or going wayward like the Templars).

Something like that. The thing about most physics Ph.D.'s is that they would prefer to make a lower (even a much lower) salary going geeky things than to make a much higher salary doing non-geeky things.

Also it makes things overly complicated. If I did have insanely rich friends (which I don't) and if I was unusually gifted at convincing people to give me money (which I'm not) then I wouldn't be asking said rich person to give me money to start a hedge fund. I'd be asking said rich friends to give me money so that I could study astrophysics.

Trouble with that is that I'd have to be insanely good at sales, because said rich person is having dinner with a Nobel prize winner in physics who is trying to sweet talk said rich person into giving him money for his pet project. If that rich person has $5 million in spare cash, and it becomes a choice between giving it to me or that Nobel prize winner, I think I'm going to lose. I mean if the rich person gives $5 million to that Nobel prize winner to build a telescope, he can brag to his rich friends that he has dinners and plays golf with Nobel prize winners.

Finally there are institutions that specialize in wining and dining rich people and convincing them to give them money to study weird and esoteric things. They are called "universities". :-) :-) :-) and pretty much every major university has an internal hedge fund. Harvard has tens of billions of dollars in funds which they use to pay scientists. Now if you are a Ph.D. that wants some of that money, you can apply to get it. It's called "applying for a post-doc."

 

[AVReidy]

Be an engineer if it would make you happier. Maybe you could teach physics and study engineering for a while?