I’ve heard the term “quants” many times in my work environment. I’ve always thought it sounded cool – quants. So I’ve looked it up several times to get an idea of what someone that is labeled a quant does. Here is the wikipedia entry:
A quantitative analyst is a person who works in the financial markets developing mathematical models to assist the activities of traders and risk managers within banks and other large corporate institutions. Throughout the industry, such professionals are known as quants.
This goes right along with what I’ve written about in other posts, that jobs that aren’t the next level up will find a way to be outsourced. If you can make it routine then you can create a list of activities for someone else to do. Being a quantitative analyst sure is the next level up. But interesting enough there are new educational programs for the people in this space. Again, here is the wikipedia entry:
The disciplines of finance, mathematics, statistics and computer science are now linked. A corporation whose risk management
policy compels it to lock in a foreign exchange rate must deal with a
foreign currency derivatives trader. The trader bases his pricing and
hedging decisions on the behavior of a Brownian motion, determined by statistical estimation
of parameters and simulated under probabilities that differ from those
of the real world, a simulation justified by the profound mathematical
and financial dual ideas of change-of-measure and risk-neutral pricing.
This linkage has led to the creation of specialized Masters and PhD courses in mathematical finance, computational finance, and/or financial reinsurance.
In particular, Masters degrees in financial engineering and financial
analysis are becoming more popular with students and with employers.
Carnegie Mellon’s Tepper School of Business,
which created the Masters degree in financial engineering, reported a
21% increase in applicants to their MS in Computational Finance
program, which is on top of a 48% increase in the year before[2]. The University of California Berkeley‘s program in Financial Engineering through their Haas School of Business
is considered the leading program in the field and admits 60 students
each year. This surge in popularity has led other schools (the University of California at Los Angeles, Rutgers University, Polytechnic University and the University of Minnesota) to add Masters level degrees. These Masters level programs are generally one year in length and more focused than the broader MBA degree.
Although the original “quants” were concerned with risk management
and derivatives pricing, the meaning of the term has expanded over time
to include those individuals involved in almost any application of
mathematics in finance. An example is statistical arbitrage.
So as the business world changes to create educated professionals streamlined for their needs, other people can take advantage of MFA – Masters in Fine Arts to separate themselves. Educational institutions are developing programs to even attain a PhD level. So what do you do if you are MFA candidate? You select a field like theater, creative writing, film making, or the visual arts. You then spend two to three years developing your craft. The end result is a performance of sorts. I personally think the creative writing program would be a boon to the business that hired you next, but I can’t really see any downside in any of them. Each one is very applicable to today’s business and it completely separates your skill set from, not just outsourcing, but from your coworkers. I’m not sure on the cost, but MBAs are pretty expensive. I’ll go out on a limb and say that a MFA is cheaper.
Two alternatives to an MBA:
- Masters degree in Financial Engineering
- Masters in Fine Art
Working Thoughts 