Why Is Wall Street So Addicted to Prestige Colleges?

[Andy Nguyen]

Why Is Wall Street So Addicted to Prestige Colleges? - CNBC

The snobbery is very precise: you have to go to Harvard, Princeton, Yale, Stanford and, perhaps, Wharton. And the reason for this is not the belief that these schools provide the best education—in fact, many of those evaluating job candidates were critical of the education offered by these schools. Rather, it seems that the elite firms are simply using getting into Harvard, Yale, Princeton, Standford and Wharton as a proxy for intelligence.

 

[Penglu]

It is just a simplified due diligence process

 

[Amber Roxanna]

So basically, if you don't go to an ivy you won't get on wall street ? i'm a freshmen in college and already taking stochastic processes, statistics and econometric this semester, i will be done with my BS in math this year because i took a lot of college courses in high school...won't they see that as a good thing even if i don't go to Harvard ? I'm thinking of Majoring in Computational Computer Science BS for my second major. I hope i get on wall street, doesn't make sense....do i need to transfer out to an ivy now ?

 

[MSFHQ]

Recruiting at an Ivy is an easy way to get qualified applicants. Harvard admissions is a great first screen for the recruiters. They simply do not have the time or resources to go to every school and sort through every resume. I didn't go to a "top" school, but even I support this common sense approach.


With that said, anyone can break into the business. Send some emails, pick up the phone and make it happen. You're going to have to work harder than the Yale kid, but suck is life.

 

[Yike Lu]

So basically, if you don't go to an ivy you won't get on wall street ?

No, you just need a slightly longer elevator pitch. The Ivy league pitch is just... "I went to Harvard."

A normal person pitch might be... "I have a double major in math and CS, 4.0 in all my courses, head of my school's investment club, and I turned $1000 into $10,000 trading my own account."

 

[WushiX]

So basically, if you don't go to an ivy you won't get on wall street ?

Adding to what Yike Lu said, you'll also have to network very actively to get that first interview since the large firms rarely recruit at non-targets. You'll need to contact alumni working on Wall Street or whoever else can help you get that first round interview. If you're just applying online, then you're not going to get an interview (unless you're some incredible exception). But once you get that first interview, it's all up to you.

You def don't have to go to an ivy, it just makes it harder. I go to an unknown large state school ranked 60-80 and I know some people here who've gotten internships at bulge brackets, including Goldman Sachs.

Btw if your school has a good student run investment fund, join it. Most of the people I know at my school who landed trader/sales internships for those IB's were pretty high up in those groups. It looks pretty damn good to say that you led a group of 20 analysts to manage a $5 million equity portfolio.

 

[DominiConnor]

Yike and Wushi have it pretty much right.
One reason that last year I wrote to JP Morgan formally saying (politely) that my firm would not recruit for them is such a myopia. This included being told that someone with my own personal education background would not even be considered for a job there, even though I actually had worked for them.

That's because of an cultural issue in JP's HR department that cannot be fixed.
People have tried. They have failed.

That's not the same as the attitude of management @ JPM. They want smart people, wherever they can be found, which is why I agreed (reluctantly) to phone their HR people (they flatly refused to meet me in person). I have the resumes of a good number of JPs and yes of course you see Ivy/Oxbridge often, but actually there's most places, and a some at director level come from places many here would not even have heard of.

Aside from the atttitude problem of JP HR the issue is that all big firms get a lot of CVs, and so simple filters are applied.
WushiX is perhaps a little bit too cyincal about the filters applied by online systems, but also he is not cynical enough. The keyword search is very very literal, really literal.
There are literally hundreds of hours of my time in our system that uses regular expressions (and other stuff) tto match terms. Don't believe for a second that HR systems are that sophisticated, if the name of your "target" school is not spelled exactly as they type it, then you won't be found.

 

[D Serg]

Why Is Wall Street So Addicted to Prestige Colleges? - CNBC

The snobbery is very precise: you have to go to Harvard, Princeton, Yale, Stanford and, perhaps, Wharton. And the reason for this is not the belief that these schools provide the best education—in fact, many of those evaluating job candidates were critical of the education offered by these schools. Rather, it seems that the elite firms are simply using getting into Harvard, Yale, Princeton, Standford and Wharton as a proxy for intelligence.

I work with one quant researcher who makes more than half a million dollars - it's his officially salary without a bonus.
He holds a PhD degree from Taras Shevchenko Kyiv University - have you ever heard about this university?
Well, not sure that it is famous in US and UK. Education in that university is almost free.
Now, also I work with some guys from Baruch MFE and other bla-bla-bla MFE.. They are not pure researches... Most of them just a hands-on guys to fix the code. They make ~80 - 100K... not so much for my location... really... where housing rent starts from 2k per month.
Now guess how many of those MFE holders work as a real quants?
lim = 0
education -> MFE
is the correct answer.

Sometimes it seems to me that MFE designed for those guys who want to provide support for traders and researches and understand what do they say until they started to shout. Hence, MFE is stress management degree for support guys.
If you pray for your Baruch/Yale/... bla-bla-bla college and you you don't believe in meritocracy than it will never come into your life.
US/UK education system is more political and Oxford, MIT, Harvard are not the best colleges on the earth as they believe.
Just stop to support their belief, make a difference.

 

[Novak]

@Denis: from what I have seen from my older friends in the industry, it seems that a combination of three key factors is what makes for a good quant: first and foremost, it is the technical ability to do the actual work - to know the math (notice that I do not mention programming or finance).

Second, I believe all good workers also need a substantial amount of what could be called 'commons sense' - ability to observe and reason on the real world around them, being that social situations, everyday life, global or office politics, or projections of attitudes of market participants.

Finally, there has to be genuine interest for the kind of work that is done, which requires certain personality characteristics.

I believe that the first condition, the critical one, is fulfilled by only limited amount of people, and these can be seen as a resource - certain country or a university produces usually stable number of those per year. I come from a E. European country of 10 mil or so. Due to a specific education, I am in position to state that there is not more than 10-15 people in a generation in my country that have the sufficient math skills for the job. Failing on the other two criteria, you end up with a E. European country of 10 million with decent math education that produces 0.5 - 1.0 good quant candidates per year. I believe these numbers scale up for the rest of the Eastern and Central Europe, and are moderately increased with the increase of interest in the job in W. Europe and US, still not exceeding 2-5 great candidates per million of population.

I do know of Taras Shevchenko Kyiv Uni. For instance, they do reasonably well at university math competitions. But, Oxbridge and Ivy have achieved (through tradition, prestige, quality - why not!) concentration of the talent/resources on a global scale, and this is what gives them comparative advantage to a 'local accumulation point' such as the Kyiv university.

 

[DominiConnor]

The only way this will ever get better is the emergence of global standard examinations...

Employers want to filter, to be more precise they want someone else to have filtered for them, but since there is no consistency in marking graduates, they use percieved quality of a university as a proxy. That's a noisy signal with appalling lags.

It hurts some good European and American universities a bit, some Russians universities quite a lot more.

So the solution is for some reasonably large collection of universities to band together to promote a common high standard for the marking of degrees. A system like this actually has existed in the UK for many years, but is not formally run.
That can't be done for all subjects of course, but languages and most sciences allow you to have a common standard marked objectively and validated by external examiners.

The problems are of course both the "cat herding" issue with academics and the collective egos of universities.

The EU could have helped, but they are pandering to the French, with hilarious consequences.
The vast majority of top tier Universities in the EU are in Britain, in fact London has more top schools than the whole of France and Germany put together, and that's before we include Cambridge and the two Oxfords. Scotland which legally isn't even a whole EU state, and has a population 1/10 th that of France is roughly at the same level in these league tables, though some put it quite far ahead.
Of course the average at UK universities is not anywhere near as impressive.

The French/EU really don't like that one bit, and have decided that the measurement is wrong, in spite of the fact that there are many such scales, and they don't do very well on any of them, making the case for bias really quite weak.

So they've decided to spent real money on funding a university evaluation scheme with the explicit aim of making European universities look better.
I've vaguely heard of TSK Uni, but I don't have enough data to reach any sort of conclusion, even that degree of ignorance is probably above average.

 

[bigbadwolf]

Interesting blog post about three weeks back by (Professor) Steve Hsu here:

2) Elite soft firms generally want people who are smart, but not too smart. Other factors, like personality, communication and leadership skills, etc. are valued as well. Startups, hedge funds, MSFT/GOOG, etc. generally want the smartest people they can get their hands on, at least for technical roles.

3) The soft firms know that what they do isn't "rocket science" -- it just isn't that hard, and any academic admit to a top university is smart enough. They just have to appear elite and smart enough to snow their clients and sell the work. Thus the emphasis on factors other than intelligence, once the threshold requirement is satisfied. Someone who appears smart and inspires confidence in clients is better than a smarter person who doesn't get along with (often middlebrow) clients.

...

But this doesn't matter if the success of HYPS grads becomes a self-fulfilling prophecy. Once soft elite firms and large parts of the rest of society (in particular, clients) have accepted the idea that elite universities should be trusted to do the filtering, these schools will automatically produce large numbers of successful alumni -- the imprimatur itself has value. The outsourcing of human capital filtering is more dangerous for hard elite firms, with their more objective criteria: if they find that Yale grads aren't actually any good at pricing derivatives, writing code or designing chips, then they'll have to adopt a different filter. Fortunately, since even the dumbed down SAT is still pretty g loaded, hard elite firms can be confident that the lion's share of top talent is at elite universities.

And though unrelated to the discussion, this is an interesting point made by a commenter (Steve Sailer):

Contract law is a sort of late medieval programming language. Contracts contain a huge number of if-then-else statements, often nested in complex manners. I once spent a couple of weeks at Oracle's headquarters overseeing the writing of the contract for our firm's software division to Oracle. When I made this observation, all the programmers involved in the process agreed, while all the lawyers were aghast.

 

[D Serg]

@DominiConnor

The real bad thing for UK/US colleges is that they becomes less valuable compare to Russian education system.
Here is my prove:
-Just come to my Asian location and see how it's easy to get a degree from ~20 UK/US colleges (they have branches here), for post-graduates sometimes you don't need even pass GRE/TOEFL.
-Online education system is the most worst thing has ever been invented by UK/US colleges
-Just come to Russia and see how some colleges close part-time education simply because they believe that it's not possible to get an adequate knowledges on part-time studies.

even that degree of ignorance is probably above average.

I think you need to read more about probability theory, and less about political science.
Books like A. Kolmogorov, who was also from Soviets.
In Ukraine education level and GDP are on different level. Engineering education is definitely one is the best in the world. GDP problem is because of a transition from communism to democracy.
You may buy ratings, but try invent something like this:
From "2012, We were warned" film, the biggest on earth: http://en.wikipedia.org/wiki/Antonov_An-225

 

[KaiRu]

The French/EU really don't like that one bit, and have decided that the measurement is wrong, in spite of the fact that there are many such scales, and they don't do very well on any of them, making the case for bias really quite weak.

I believe that they have all the rights to think so. The "problem" with universities in Germany/France/Russia is not that they are weak but that academics in these countries have created their own "ecosystem" where they teach courses in russian/deutsch/french, are published in journals in russian/deutsch/french and they participate in conferences in russian/deutsch/french. Every "ecosystem" has its own roots but they suffer from such rankings in the same way.

For example, consider this part from THE ranking methodology where they explain how they deal with citations

http://www.timeshighereducation.co....2010-2011/analysis-methodology.html#citations

Citations are widely recognised as a strong indicator of the significance and relevance — that is, the impact — of a piece of research.
However, citation data must be used with care as citation rates can vary between subjects and time periods.

The rankings this year use normalised citation impact, where the citations to each paper are compared with the average number of citations received by all papers published in the same field and year. So a paper with a relative citation impact of 2.0 is cited twice as frequently as the average for similar papers.

Of course citations in english speaking journals will get more citations than in french speaking because english is more popular in the world than french. That's it. More to say, even in english speaking world there is a very well observed bias in rankings, for example somehow THE has a twice more British universities in Top 25 than ARMU let alone Russia/Germany/France.

 

[D Serg]

@DominiConnor about French education.

I'm quite good in history too. Again, thanks to my education.
I understand that in your western books you may write what is politically beneficial to your country,
but there is the other side on this planet where clever people understand underlying things.

Anyway, I know about subtle French - UK relations since Joan of Arc's times until now.
I read news and for the last years I heard comments about France from the Queen of UK
and comments about UK from the former president of France.
Paul Wilmott also likes France, that is why he included "French Polytechnique" article into his PWOQF book.

 

[D Serg]

Dominic, more information to think

Barclays PLC has moved 500+ Frond Office Development jobs to Kyiv.
http://news.efinancialcareers.co.uk/News_ITEM/newsItemId-26517

"a huge pool of innovative IT talent in Eastern Europe that banks are keen to gain access to."
BarCap has cited strong local technical talent and analytical skills available as the primary motivation for the move. This in itself could have UK IT professionals getting a little hot under the collar.

I like the words "hot under the collar", especially, when someone says not so good words about my country.