MSF or MBA

[fcho]

Hello,

Just to quickly give you background information I am currently an undergraduate majoring in Finance and Investments. Unfortunately, I was not able to attain an internship for the pivotal junior year due to the fact that I wasn't persistent enough/not sure that I really wanted to do finance. (mostly due to immaturity in terms of career orientation on my part and also because I do not go to a target school). I had an inclination towards trading, but now I know that that is what I want to do. However, I believe that I am at crossroads now, because I will have to apply to graduate schools or look for a job. I definitely don't want to be stuck at a job that I sincerely hate after school so I feel as if I should keep my options open during senior year. Nevertheless, I am not sure whether I should apply for an MSF or garner work experience then go for the CFA or MBA? Please keep in mind that I have had limited work experience (just 2 mediocre internships) and that I know that I would definitely like to attain a front office job in trading. Thank you very much for your input!!!

 

[Andy Nguyen]

You can't say for certain that you hate a job until you work in one. And you may not hate it after only a few years.
The decision to go to grad school involves many factors
Can you/parents afford it time-wise, money-wise?
Would grad school get you closer to the job you want?
On that note, why do you think MSF would get you a FO trading job? What skillsets you learn in MSF would better prepare you than many other MFE grad or otherwise technical savvy candidates?

 

[fcho]

Thanks for your response!

That is true that I won't know whether I like a job or not till I begin working in it. However, like I said I have a strong inclination towards the financial markets and have interned at a boutique investment bank (which I unfortunately hated). Therefore, I feel as if I would (at this point) be suited for a trading or market oriented job. Unfortunately, I don't attend a target school, so getting noticed for a stellar job will be difficult if not impossible.

In terms of time, I believe that I am still young enough (21) to pursue higher education. I should also note that I did not have to pay for my undergraduate education, so one year of school would definitely be affordable for myself and my parents.

I have looked into MFE programs, but I am a math minor and have only taken B.C. Calculus, Statistics, and basic probability. I have also barely dabbled with C++ and VBA programming. I am heading into my senior year and will be taking courses in ODE, Math Modeling, and programming, but even then I do not think that my background is sufficient for an MFE. I also don't feel as if a "heavy" quantitative workload would be of interest. An MSF would be comprehensive and I feel would provide a network. Nevertheless, I have looked into career results and "success" stories of MSF programs and have not been impressed. I feel as I am at odds as to what I should do, but higher education and the network that comes along with it may be the solution to getting a trading job.

Any additional input would be greatly appreciated!

 

[Andy Nguyen]

If you plan to go the MSF route, try to go to the "target school" so you have a better chance of networking yourself into a trading job.
Sadly, the nature of trading job is very quantitative. I should know because I work at one. The skillsets required is different from what you learn in MSF.
What do you have in mind when you think of your ideal trading job? Talking clients into doing deals? Meeting clients over lunch?

 

[fcho]

Would all trading jobs entail either strong quantitative skill sets on one end of the spectrum or talking clients into deals on the other hand, or could there be a trader who does not necessarily have strong quantitative skillsets, but above average quantitative skillsets who wants to specialize in say commodities? I know that an MSF would not provide the quantitative skillsets necessary, but I doubt that I have (at this point) the skillsets required to get into a strong MFE program. Furthermore, I know that I want to trade and possibly be in a managerial role (which an MBA would be more suited for), but at this point the network/job opportunities that I have and my school has to offer is the main issue and I know that I just want to gain experience in trading to really decide what I want to do. Thanks!

 

[fcho]

Also, not to be argumentative, but there are traders or money managers who have succeeded without a heavy quantitative backgroud. John Arnold, Steve Cohen, Bruce Kovner, Michael Marcus, and Richard Rainwater (in his later years) to name a few. Bruce Kovner, who is one of my favorites, came from a background in political science. This holistic view of the economy/world politics along with sound risk management is what leads to key decisions for him. Michael Marcus is a chartist. So my question is, if this is what I would rather do than modeling or structuring, what sort of background would I need/how would I be able to get my foot into the door, aside from initiative and showing interest? This I know is what I really want to do for the time being, but I would also like to test the waters before it is my conviction that I really enjoy this job. Comments? Thanks!!

 

[Andy Nguyen]

And Bill Gates not even completed his undergrad degree.
All the names you mentioned are outliers, best used for inspirational purposes. Real life is a hard cold reality. You either have something employers want or you don't.
What about just getting your foot in the door, regardless of the position and move your way toward the position of your dream?

 

[doug reich]

Not all funds are quantitative, and not all money managers are actually doing the work. Some of them are more like salesmen who get the money in the door and hire the smart people to generate the returns.

 

[Telecaster]

I know this is only a small fraction of the entire picture, but an MSF from a good school will definitely be sufficient for most front office roles in the UK. I am studying in London and every year I see pretty much the entire MSF class of the London School of Economics get jobs in the city. The same goes for Imperial College and Oxbridge. There are no MFE programmes in the UK (at least in the top universities) but employers don't seem to mind. As I said, everybody and their mother has an MSF in London and they all do well.

 

[fcho]

Thanks!

However, I don't think that an MSF is very noteworthy here in the states and an MSF from LSE would be equivalent to one from Princeton, which itself is very quantitative. The other options would be vanderbilt, bc and johns hopkins, but I still don't know the likelihood of getting a front office job, they don't seem to make that info transparent.

 

[Saturnia]

And Bill Gates not even completed his undergrad degree.
All the names you mentioned are outliers, best used for inspirational purposes. Real life is a hard cold reality. You either have something employers want or you don't.
What about just getting your foot in the door, regardless of the position and move your way toward the position of your dream?

I have worked at investment companies(hedge fund too) and like I've said in previous posts I've seen history majors trading. Of course the IVY appeal has to do with it, but the point is that here everyone that I am reading seems obsessed about making money(big money), so the names you hear are the usual, Marcus, PaulTudorJones etc etc. And those guys don't have quant degrees at all, and some of them are not IVY-s either. So I don't believe that there are outliers. If it is the current trend then how do you explain the fact that those people from "the old school" are still trading and are very successful at it even with the current advances in tech ? I don't think they learned to program at the age of 40 and became excellent quants all of a sudden.

The experiment done with the Turtles furthermore emphasizes the idea that doesn't matter how intelligent you are, people do drop out of the field because of the psychology factor and whatever blocks them from becoming successful.

In my opinion, getting a trading job, a prestigious one is about connections and luck, and of course persistence. There are a lot of factors that have to combine for you to land in such prestigious positions.

 

[IlyaKEightSix]

I'm just wondering if quant and fundamental approaches are mutually exclusive, or can you hybridize them to certain extents to put your own twists to things? For instance, what if I wanted to quantitatively analyze alternative energy/zero emission transportation companies?

 

[samiam]

I have worked at investment companies(hedge fund too) and like I've said in previous posts I've seen history majors trading. Of course the IVY appeal has to do with it, but the point is that here everyone that I am reading seems obsessed about making money(big money), so the names you hear are the usual, Marcus, PaulTudorJones etc etc. And those guys don't have quant degrees at all, and some of them are not IVY-s either. So I don't believe that there are outliers. If it is the current trend then how do you explain the fact that those people from "the old school" are still trading and are very successful at it even with the current advances in tech ? I don't think they learned to program at the age of 40 and became excellent quants all of a sudden.

The experiment done with the Turtles furthermore emphasizes the idea that doesn't matter how intelligent you are, people do drop out of the field because of the psychology factor and whatever blocks them from becoming successful.

In my opinion, getting a trading job, a prestigious one is about connections and luck, and of course persistence. There are a lot of factors that have to combine for you to land in such prestigious positions.

Yeah this echoes my thoughts on the importance of psychology, instinct, and cold nerves to be able to trade successfully.

All of the successful guys you hear about in Market Wizards, etc are macro guys who used leveraged directional betting.

You need to be able to take a loss and not get frazzled when you're in the hole. A good trader once told me, intelligence counts for about 40% of trading success while discipline and personality count for the other 60.

If you work for any of these macro funds as an MFE, you'll probably be doing the mechanics job for the driver.

But I think MSFE's are going to be very relevant to the derivative and exotic structured products aspect of the market. You know more ways for bankers to create products that are fixed to a real product like f/x, stocks, bonds, and commodities. Of course the availability of credit is going to be a big issue for these instruments, IE leverage.

 

[Saturnia]

But I think MSFE's are going to be very relevant to the derivative and exotic structured products aspect of the market. You know more ways for bankers to create products that are fixed to a real product like f/x, stocks, bonds, and commodities. Of course the availability of credit is going to be a big issue for these instruments, IE leverage.

On an economic note however the Treasury department just "introduced" something called "covered bonds". Those instruments basically belong to the 1700's, a few centuries ago. You can do CDO and CDO of CDO and CDO to the n-th power, the point is that the amt of leverage in those things becomes insane and a move of few basis points is enough to wipe an entire firm.

At some point there is need for real economic production to sustain growth not abstract of the abstract.

 

[samiam]

Yeah, I figured after a while that Wall Street is a big fraud/ponzi scheme designed to get a limited and select ivy league kind of boys club guys rich and also of course their network of clients, CEO's of big companies.

They don't really produce anything or add to productivity. They just funnel money, act as a middleman trade, or collect interest.


It's sort of scary that the capitalist model creates this magnet of bankers and traders who do the above and the people who have been trained to create something, increase productivity actually make a contribution to society (Phd's, scientists, and other talented people) are joining this club in such large numbers rather than working in industry or research. But that's capitalism for you.