PhD Physics Student Seeking Quant Advice

[twofish-quant]

Now maybe ( still searching career options) I want to start a career in the finance , investment sector.

First question, why do you want to go into finance? Most likely it's because you heard that people in finance make a lot of money. But how do you know that people in finance will make money in five years?

I've found it's better to be flexible about careers. One thing about finance is that it covers a lot of stuff. Pretty much every industry has something to do with finance.

At mine university I can follow some basic courses like general economics for engineers, computational finance, financial mathematics.

Or just go out on amazon and buy a few books on the topics you are interested in.

 

[Eren10]

First question, why do you want to go into finance? Most likely it's because you heard that people in finance make a lot of money. But how do you know that people in finance will make money in five years?

I've found it's better to be flexible about careers. One thing about finance is that it covers a lot of stuff. Pretty much every industry has something to do with finance.

Actually I like the involvement of the finance/economics to the society.
I do not know if they earn a lot of money compared to the aerospace engineers. Now I am almost finished with mine study and if I really concentrate on mine work it is restful and challinging. But compared to what you get from the society I think it is to hard !

I am considering to change an other field because of money and involvement to the society.
I have still to find out how much I can earn if I change ! Is it worth to change ? because I am thinking it will not be easy too change ! In which part of the finance I will go will depend on the money and the stress (e.g. only trading looks too much stress !, if the earned money is a lot i can try to cope with it).

Or just go out on amazon and buy a few books on the topics you are interested in.

Your advice is much easier , actually I have also no time :) . but I think, I need the courses also for mine C.V.

 

[osmosis]

Oreliphan -- Mutual funds are in general not the place for quants. The pay structure is very different and there are almost no quant based mutual funds for various practical reasons. Your choices are hedge funds and IBs. As for stat arb, I'll be happy to help -- shoot me another email off line.

Story645 -- There is no disadvantage to being a woman in the quant space. Obviously, I can't speak to every individual's behavior but from an institutional standpoint you probably would be helped rather than hurt by this. That said, you may wish to consider whether an almost exclusively male environment would be to your taste. It's for some, not for others.

Twofish-quant is not off-base as far as the cost of living. A decent studio in Manhattan was in the $2K/month range last time I looked, and you will need an apartment in the $3-4K range if you want to be comfortable or live in a hip area. And yes, this is after the real estate crash. There certainly are cheap apartments in NY. Let me know how the commute from Flushing or Inwood works for you on a 60 hr work week :) Seriously, things look very different when you're working long hours. You will need to pay for lots of services and things that you would never consider as a student. In school you have lots of time and little money, quite the opposite of your situation on wall street. And don't forget that you will pay 50%+ taxes in NYC at a surprisingly low income level. How do the people who make $65K get by in NY? They make tough compromises in quality of life.

Ferm -- My experience is that there are lots of very smart people. I used to joke that I've met more physicists on wall street than in grad school. This said, people tend to be focused and busy. As anywhere, you can make friends at work. The people may be smart, of similar interest and personality, yet likely won't have time to "play" too much outside of work. Wall Street cannot be mistaken for academia. You may have to have a thick skin to deal with some of the more colorful personalities, and you may be surprised that these often are quants rather than MBAs...

Eren10 -- Why are you in aerospace engineering? If you want to do finance, switch to a finance PhD program or at least get an MFin. If you like economics get a PhD in that. I suspect that you may not be the only person who would like a high paying low stress job, but alas these are hard to find. Trading IS stressful, but supporting a trading desk is more stressful because you have your own stress plus all the stress which the traders are more than happy to pass along to you :) This said, your best bet is a low-impact research group -- probably fixed income. If you work for a flamboyant personality who interfaces to management and gets you resources without having to directly boost PnL, you may find yourself comfortable. Finding those spots is not easy, and there are significant career risks to being hidden within such a group.

Hope this helps.

Cheers,
Osmosis

 

[story645]

That said, you may wish to consider whether an almost exclusively male environment would be to your taste.

My bachelors is in compE and the only other female in my research lab is one of the advisers, so more than two other girls would be a step up. Thank you (and quant) for allaying my fears.

Let me know how the commute from Flushing or Inwood works for you on a 60 hr work week :)

I've been commuting out of my borough (Queens) since high school (and I pulled more than 60hrs at lots of points), so I do know how painful it is. I got an apartment near school just so that I wouldn't have to commute, so I definitely hear you guys and the thought of paying midtown/downtown rents scares me. I broke my vow of never living in Manhattan just so that I wouldn't have a commute my last two years of undergrad, so I definitely hear where you're coming from, but I also have an inkling of how to get by in the city on almost no money. Not wanting to live in the trendy neighborhoods helps a lot, as does having pretty low standards ( I share my tiny studio with a roommate), so the whole "feeling poor" thing just doesn't worry me that much.

How do the people who make $65K get by in NY? They make tough compromises in quality of life.

The all have fake walls and 5 roommates. Living in New York all my life, I do have some idea of how people manage to survive here on pennies.

 

[osmosis]

Story645 - I completely understand; I was of the same sentiment out of school (and still am, though perhaps to a lesser degree). In my experience, very few wall street newcomers have had roommates -- and those did so for non-financial reasons. Once you have the money to avoid commutes and roommates and hassle, that money tends to get spent. For me at least, the "feeling poor" thing got old pretty quickly when I had virtually no free time and had to wear a suit and tie. This isn't meant to deter you, just to warn you that you may find it hard to live quite like a student -- especially when nobody around you does. But everyone is different and if you can manage it, then that's great. It sounds like you know what you're getting into.

 

[Eren10]

Eren10 -- Why are you in aerospace engineering? If you want to do finance, switch to a finance PhD program or at least get an MFin. If you like economics get a PhD in that. I suspect that you may not be the only person who would like a high paying low stress job, but alas these are hard to find. Trading IS stressful, but supporting a trading desk is more stressful because you have your own stress plus all the stress which the traders are more than happy to pass along to you :) This said, your best bet is a low-impact research group -- probably fixed income. If you work for a flamboyant personality who interfaces to management and gets you resources without having to directly boost PnL, you may find yourself comfortable. Finding those spots is not easy, and there are significant career risks to being hidden within such a group.

I choosed Aerospace engineering because I considered to go back to Turkey ( from WestEurope) and thought that it would be easier to find a job. And because of the challenge fo this study and mine interest in the high technical things.
I think if I choose to go further I will earn net start salary of 2100 Euro. But the chance to grow further in a company and earn more money will not be easy. If i can combine both knowledges I think i will have more possibilities.

Well, to find a phd place in the direction of econometrics will be difficult !? I have to follow maybe master courses and this will take an other 2 years. When I start phd than i will be about 28 years. And than 4 year ! Will this all be worth to do it ? If phd is worth to do it, i will consider a phd.
In quant direction do you also need uncertainty quantification ? in mine department there is also possibility to do phd in the uncertainty quantification in the aerodynamics. Maybe this will worth to do it ?!

 

[BenTheMan]

I have been reading this thread with a lot of interest. I'm in the process of preparing for my dissertation defense, graduating (PhD, Theo. Physics) in August, and ready for something new. A friend of mine works for a Large Hedge Fund (LHF) in Chicago, and suggested I look into finance several months ago (I had been thinking McKinsey). I've been refreshing my C++ and reading a few books (Mark Joshi's first book is good, I've found, and he answers questions on his discussion forum himself).

I do have a few questions, if the experts here would indulge me.

First, what I've read that sending your resume to HR people is pretty useless (I've been sending it around for a month now with no response) and that I should be specifically applying to groups/people that I want to work with, unsolicited. My question is, how do you find contacts inside organizations? LinkedIn works SOMEtimes, but most hedge funds don't even have websites, and outside of adding the HR rep as a contact on LinkedIn, I don't know how to get in touch with these people (other than use something like pipl.com and call them at home, which probably isn't cool). I'm not really ashamed to cold-call random HR departments and promote myself (self-promotion has always been something I've been better at than most physicists!), but how do you even know who to call? I also don't mind sending random people from LinkedIn emails, but I can't do this for everyone because I don't want to pay LinkedIn for ``Gold'' (or whatever) status.

And how are these groups structured? My buddy at LHF in Chicago's group seems like a loose collaboration with minimal hierarchy, with one guy in charge (he does algorithmic trading, I think). Are most places arranged like this?

And what are the code words I should be using in my resume that make people pay attention? I don't have a lot of experience looking for jobs (I guess, as most PhDs). What are the rules when it comes to these things? I can't find any examples on-line, and the resume doctors (read: professionals) seem to be clueless as well.

Finally (I'll stop soon), it's easy to get intimidated by job postings. I don't come from a top tier university, but my advisor is a top-tier guy, and most of the people I've met at top-tier universities aren't much (or any) smarter than I am. Does the pedigree really meant that much?

 

[twofish-quant]

First, what I've read that sending your resume to HR people is pretty useless (I've been sending it around for a month now with no response) and that I should be specifically applying to groups/people that I want to work with, unsolicited.

For Ph.D. level jobs sending your resume to HR is indeed totally and completely useless. Ideally you want to send your resume to a good headhunter that will forward it to someone that can use it. www.dice.com[/url] and [url]www.efinancialcareers.com[/URL] have lots of HH's looking for resumes.

[QUOTE]My question is, how do you find contacts inside organizations?[/QUOTE]

It might not hurt to send private messages to people that post on internet forums that seem to know something.

[QUOTE]And how are these groups structured? My buddy at LHF in Chicago's group seems like a loose collaboration with minimal hierarchy, with one guy in charge (he does algorithmic trading, I think). Are most places arranged like this?[/QUOTE]

Trying to figure out what the structure of a group is half the fun of getting something done. Different places can be structured very, very differently which is a good thing since it means you'll find somewhere that you fit.

Also there is a 95% change you will end up living in NYC. I can guess for example that your friend probably works for Citadel since they are one of the few large hedge funds based in Chicago.

[QUOTE]And what are the code words I should be using in my resume that make people pay attention?[/QUOTE]

Ph.D. in physics?

Seriously what you do need to do is to be able to summarize your dissertation so that someone that is another Ph.D. is convinced that you have the technical skills for the job.

[QUOTE]Finally (I'll stop soon), it's easy to get intimidated by job postings. I don't come from a top tier university, but my advisor is a top-tier guy, and most of the people I've met at top-tier universities aren't much (or any) smarter than I am. Does the pedigree really meant that much?[/QUOTE]

For physics Ph.D.'s, it doesn't mean a huge amount in most places. One thing that will help you a lot is that people that come from top-tier big-name physics schools tend not to go into Wall Street, but rather go into academia. If you have a freshly minted MBA from Harvard, working at an IB is likely to be your first choice of careers, but if you have a freshly minted physics Ph.D. from Harvard, it's not, so people from big name physics schools just don't go out for these jobs very often.

 

[BenTheMan]

It might not hurt to send private messages to people that post on internet forums that seem to know something.

Hmmm...your mailbox is at maximum entropy, it looks like :)

 

[oreliphan]

Hi twofish-quant, or Osmosis:

Could you tell me a bit about a working as a broker or trader at a hedge fund in forex or gold trading?

I've recently been looking into these career paths, as opposed to a quant.

 

[shoehorn]

For Ph.D. level jobs sending your resume to HR is indeed totally and completely useless.

There is, however, at least one important caveat to this. An increasingly large number of funds are focusing solely on algo/high-freq trading. If you have a PhD in physics - which is great, although not hugely uncommon these days - and if you have solid programming experience in Matlab/C++ - which is less common - and if you understand and can apply machine learning techniques to problems in finance - which is a rare skill for a physics PhD to have - you'll have very little difficulty in getting interviews by directly submitting your resume to this type of fund.

In fact, I'd be interested in talking to anyone who ticks all of these boxes, especially if they're in possession of a newly minted PhD.

 

[gdwebb85]

I have ~1-1.5 years left to finish my physics PhD. When should I start sending out resumes? Also, where does one go to find open positions?

 

[twofish-quant]

I have ~1-1.5 years left to finish my physics PhD. When should I start sending out resumes? Also, where does one go to find open positions?

Start with the www.phds.org, www.efinancialcareers.com, www.wilmott.com, www.dice.com. One way of narrowing things down is to look for jobs in NYC. Also try to get in touch with alumni.

I'd start e-mailing them out now. I think I ended up sending a 100 or so resumes on my last job search. What you are looking for right now are people that are willing to call you back, and if you have a list of a dozen people that are willing to talk to you, that's a good start when you end up with your degree. Also, it gives you a year to tweak your resume.

 

[twofish-quant]

which is a rare skill for a physics PhD to have - you'll have very little difficulty in getting interviews by directly submitting your resume to this type of fund.

Yup. But then you end up in the Kafka world in which it's not clear where to set your resume. Algo hedge funds are notorious for their secrecy which means that they will hide where to set your resume to, and in a lot of situations they will try to hide their existence (i.e. they won't even have a web site).

One funny (in a dark humor sort of way) is that financial companies are often closed-lipped for legal reasons. Making an unauthorized public offerring can get you in serious trouble, and so if you publicly post that you need people to work on trading Elbonian yak options, you may get a nasty call from the SEC asking why you are publicizing the fact that you are trading yak options.

Despite what you see in the movies, people in finance live in total fear of the regulators, and getting a polite call from the SEC is something that people would rather not deal with.

In fact, I'd be interested in talking to anyone who ticks all of these boxes, especially if they're in possession of a newly minted PhD.

Something that physics Ph.D.'s should do is to talk to anyone that even hints that they can use their resume.

 

[xepma]

I found this guide extremely useful (even though I haven't planned on switching):

http://www.markjoshi.com/downloads/advice.pdf

 

[ann3]

First let me say thank so much for this discussion. I read the whole thread and most of my questions were answered. I have some new ones though:

1. I will graduate next year with a PhD in Quantum Chemistry and MS in ECE. I know my way around numerical methods, simulations, etc. My C++ is rudimentary at best but I've done some insane things in FORTRAN (may have been "saner" if I used C... but legacy code... you know how it is). I am wondering if QC will be off-putting or unfamiliar in the quant circles? It's really basically a physics degree given by the chem dept - we do quantum theory, electronic structure, non-linear eq solvers, application is to physical chemistry and spectroscopy though. We even "live" in the physics building (instead of chem). What is the best way to explain this to the prospective employers?

2. I have a real hard time deciding what to do post graduation. My defense is rapidly approaching and so is the state of panic about the future. Having a repetitive or a boring job terrifies me more than anything. What kind of quant position type reward research-oriented people the most? Will I be given time to try out new things? even if some of these result in dead ends?

3. Not really a question but a reason. I'm a NYC native and having lived in all corners of US (HI including), I'd like to return to my favorite city - this is what gave me an idea to explore finance as a career. I considered it once as an option at CMU, I was there around the time when that major was coming together, but ultimately chose to stick with the College of Science. I like doing numerical models - so I assume I will like doing whatever quants do. And NY is a big + for me - all family and friends still there.

Finally, not to be too forward, but I visit NY every summer so if one of you guys (or gals) would let me buy them a cup of coffee and talk to me about their job/life/any interesting (non-secret) problems they've worked on, I would be infinitely grateful.

you can email me at melnichu at qtp ufl edu

Thanks!

 

[Robert1986]

I am beginning grad school for math in the fall. Finance has always interested me (I began college life as an econ/finance major until I took calc and liked it too much) and I am considering the possibility of perhaps getting into this field after I graduate. Now, I know lots of physics Ph.D.s go into quant stuff, but are there also math guys? And would I have a good chance of getting such a position? If this is something that I am planning to do, what kinds of classes should I take? Of course, the first year is going to be the basic foundation stuff, but I'll have to actually start choosing classes the second year.

 

[twofish-quant]

1. I will graduate next year with a PhD in Quantum Chemistry and MS in ECE. I know my way around numerical methods, simulations, etc. My C++ is rudimentary at best but I've done some insane things in FORTRAN (may have been "saner" if I used C... but legacy code... you know how it is). I am wondering if QC will be off-putting or unfamiliar in the quant circles?

People will care about your math and computer skills. What particular type of Ph.D. you get is less important, although there is a bias toward computational and applied physics and math.

What is the best way to explain this to the prospective employers?

Most of the managers in quant circles are technical people, so you'd explain it the same way you would to another physics Ph.D. In order to get to the managers, you have to get through the gatekeepers, and the trick there is to put some keywords so that they match your resume with what they've been told to look for.

My defense is rapidly approaching and so is the state of panic about the future. Having a repetitive or a boring job terrifies me more than anything.

I've never been bored. I've been frustrated, angry, terrified, ecstatic, exhausted. Everything but bored. Boredom is not a problem. The problem is when things are exciting in the wrong ways.

What kind of quant position type reward research-oriented people the most? Will I be given time to try out new things? even if some of these result in dead ends?

This is more a function of the people that you work with.

I'm a NYC native and having lived in all corners of US (HI including), I'd like to return to my favorite city - this is what gave me an idea to explore finance as a career.

That's very good. The issue here is that practically all finance jobs for physics Ph.D.'s in the United States are in the NYC-area. This is a big problem if you don't want to move to NYC. NYC has a lot of good things. However, you probably know already that you'll be paying a 45+% marginal tax rate.

 

[BrunoIdeas]

Hi, we've been talking of salaries as 90k , 135k, etc. But is that NET salary or does one have to subtract taxes, etc. ? In such case, how much does one have to subtract? About what percentage?

Thanks everyone.

 

[Locrian]

People typically discuss salary on a pre-tax basis. For 6 figure incomes, you can typically expect to lose 30%-50% of your income to taxes. However, that will depend heavily on several factors, the most important being whether you're married and what their income is, if any.

 

[AccAcc]

I'm hoping to make the transition when I graduate in five months, and I hope to live in the Chicago area. Is there hope to make that work without having a direct connection at a local finance company? I'm trying to get in touch with headhunters now, but it seems ambiguous whether or not they are interested in people that are new to the field. I'm progressing with the all of the "required" and recommended readings for making the transition, but the general stories that I hear make it seem like you won't get a job unless you have a direct connection to somebody that is in the industry.

 

[Locrian]

You should try to use the next 5 months to make those connections. I don't think they're strictly required, but some contacts in the industry can only help you.

 

[AccAcc]

You should try to use the next 5 months to make those connections. I don't think they're strictly required, but some contacts in the industry can only help you.

Do you think it is worth it to ever apply directly to a firm without connections, or should I spend my time only going through connections or headhunters? Do they hire this "early" relative to when I can start? Mark Joshi's book suggests otherwise, but I'm facing a bit of a timeline mismatch; I have a good connection to a well-paying postdoc job that interviews more than the two-months in advance that Joshi says firms hire within.

There's also exact uncertainty about when I will graduate. If I don't hit early December, then campus is closed for a month, essentially, and I'm stuck in the Spring semester with questionable funding and an advisor that has a hard time saying when is enough to submit a paper.

The entire logistics of getting a non-postdoc job right at graduation are a mess, and something I never see people discuss good answers to. Most end up postdocs for a few months or a year, or have a temp teaching job, or have financial support for a loved one to smooth over a month or three.

 

[Locrian]

Do you think it is worth it to ever apply directly to a firm without connections,

Well sure - very low investment, but rather unlikely to get a response. What's the downside? You're not wrapping your resume around a brick and throwing it through the window, right?

It sounds as if you're not in Chicago now; if you were, the best bet would be to call a few people there and ask for informational interviews - take them to lunch. Even if you're not, you could just call a few people and see if they'll talk to you. They're likely very busy, so keep the initial contact very brief and to the point.

There's a reason the whole contacts thing works so well. People like talking about themselves. People like "discovering" new talent. They prefer hiring someone they already have a relationship with. Many people like helping other people just. . to help them. In your earlier post you made it sound as if contacts were something you were born with. The fact that you're five months ahead of schedule is great partially because it may allow you to network some.

Best of luck, and please keep us updated on what works and what doesn't work for you.

 

[AccAcc]

Well sure - very low investment, but rather unlikely to get a response. What's the downside? You're not wrapping your resume around a brick and throwing it through the window, right?

It sounds as if you're not in Chicago now; if you were, the best bet would be to call a few people there and ask for informational interviews - take them to lunch. Even if you're not, you could just call a few people and see if they'll talk to you. They're likely very busy, so keep the initial contact very brief and to the point.

There's a reason the whole contacts thing works so well. People like talking about themselves. People like "discovering" new talent. They prefer hiring someone they already have a relationship with. Many people like helping other people just. . to help them. In your earlier post you made it sound as if contacts were something you were born with. The fact that you're five months ahead of schedule is great partially because it may allow you to network some.

Best of luck, and please keep us updated on what works and what doesn't work for you.

Thanks for the encouragement!

I'm actually at one of the nearby labs, but live further out, so meeting with people on workdays takes a bit of finagling. Many have suggested aiming for informational meetings, but I don't really know who to aim for, or how to initiate, or under what context or pretense to really push it.

"Five Months Ahead of Schedule" is kind of optimistic, as that's basically "When I'm losing my job"! Things should be sorted it far in advance of that.

 

[AccAcc]

What are the "correct' answers to why I'm interested I'm interested in doing Finance when, and what should I include in my cover letters to make me seem sincere? I'm leaving a field of a physics that actually has a great job market, so I'm not doing this just because Plan A failed.

Also, should I include that I am US Citizen in either my cover letter or my resume? Where/how is the tactful way to say it?

 

[Vanadium 50]

Ah yes, sincerity. If you can fake that...you have it made.

Why are you interested in doing finance? And can't you just say that?

 

[AlephZero]

Also, should I include that I am US Citizen in either my cover letter or my resume? Where/how is the tactful way to say it?

Why do you need to be "tactful" about it?

IMO The obvious place to put your nationality and citizenship is right after your name and address at the top of your CV. If somebody doesn't want to employ a US citizen for some reason, trying to hide the fact won't change the situation!

 

[Locrian]

It can be very hard to explain why you want to work in a new career in the very brief time you have in a cover letter or initial interview. Frankly, I advise against much explanation along those lines.

For the cover letter, touch on three things: 1) That you will be working in the financial sector in the future. 2) Why you want to work for that particular firm. 3) What you'll do for them.

Not necessarily in that order. And be brief. (There's a part of me that thinks you actually state those in the reverse order - 3,2,1 - even if it sounds a bit strange).

Use similar language in the initial interview. Focus on the future as much as possible.

Keep in mind that very few employers really care why you want to change careers. They might be interested, or curious, but they don't care. What they do care about is that you want to work for them, that you bring something to the job, and that you'll stay once you're there.

If they ask more than once about the career change be sure to not say anything negative. Say something positive about finance, state clearly that you will not be working in physics in the future, and focus on what you'll bring to the job.

 

[AccAcc]

Thanks for all the help and responses:

Why do you need to be "tactful" about it?

IMO The obvious place to put your nationality and citizenship is right after your name and address at the top of your CV. If somebody doesn't want to employ a US citizen for some reason, trying to hide the fact won't change the situation!

I'm not entirely sure if it is taboo, as it is to include your clearance status when applying for jobs that require security clearance. For things that Ph.D.s in Physics apply to, citizenship status wouldn't seem out of place, but I'm aiming fairly broad with my job hunt.

Ah yes, sincerity. If you can fake that...you have it made.

Why are you interested in doing finance? And can't you just say that?

I think that is sufficient, but I know that many of the Physics->Finance people kind of bounce out of the interview process when flubbing that question. Many make the transition because of money, or because it is there, but it is something that I'm genuinely interested in.

It can be very hard to explain why you want to work in a new career in the very brief time you have in a cover letter or initial interview. Frankly, I advise against much explanation along those lines.

For the cover letter, touch on three things: 1) That you will be working in the financial sector in the future. 2) Why you want to work for that particular firm. 3) What you'll do for them.

Not necessarily in that order. And be brief. (There's a part of me that thinks you actually state those in the reverse order - 3,2,1 - even if it sounds a bit strange).

Use similar language in the initial interview. Focus on the future as much as possible.

Keep in mind that very few employers really care why you want to change careers. They might be interested, or curious, but they don't care. What they do care about is that you want to work for them, that you bring something to the job, and that you'll stay once you're there.

If they ask more than once about the career change be sure to not say anything negative. Say something positive about finance, state clearly that you will not be working in physics in the future, and focus on what you'll bring to the job.

Sounds like good advice.