The more kids I see graduate and earn money and then watch their spending habits the more I believe you are either born a spender or a saver and the circumstances you were raised in makes little difference.
Luckily, DS seems to be a saver, but time will tell.
The high-end of the “regular” undergrad job market is around the 400k-450k mark for first year pay, with probably about 150-300 jobs a year in the quant space. I have heard that a very small number of 500k offers are negotiated, and one 600k+ offered (but not taken) two years ago. Some examples are Citadel, JSC, HRT, Jump, maybe Radix etc. It is not a steep cliff from that level – there are more jobs at lower numbers.
Seriously? What’s their hiring criteria?
Hard and serious math, and/or Hard and serious CS. 5-10 hours of interviews for even the internship. Then you look at the person for 3 months in the internship, and make an offer to the people you like. And there are some school biases I think. For example, here is Citadel Securities:
Not to derail the thread but here is the reality of “quant” based investment strategy.
Boggleheads unite.
https://www.reddit.com/r/wallstreetbets/comments/sb7ari/breaking_cathie_about_to_be_outperformed_by/
The ARK Innovation fund is not a quant fund. But, yes, quant funds can lose money. Anybody can lose money. It is not hard to lose money.
Do you know anyone that does “quant” modeling for a VC/IB firm that was offered $500K++ after a bachelor’s degree? If you do, my advice would be to not invest in that firm.
FWIW, a close family member of mine does asset allocation and risk modeling for a major global bank. MS in economics with “quant” background and deep knowledge (not AI/machine learning) and several years of experience. He makes close to $300K+++ bonus stock etc. Maybe he is just unlucky.
:-). The quant modeling is not done for a VC or an IB firm (strictly interpreted). It is often done for a prop firm – i.e., they are trading their own money. In fact this is part of the draw for a potential employee. Sometimes these are funds – like 2 Sigma or DE Shaw. Even Citadel offers funds for people to invest in. I think Citadel’s market making arm, called Citadel Securities, maybe Ken Griffin’s own money. Of course you can also go and do quant modeling at Goldman. It doesn’t pay quite as much.
Long Term Capital Management was “the” quant firm that paid outsized money to attract talent back in the late 1990’s until of course they precipitated a global financial crisis requiring a massive bailout.
Very smart guys with amazing credentials, very bad risk managers.
My hope is that after the next financial crisis, all these incredible brains who are doing quant modeling go into the public sector and apply their skills to agronomy, oceanography/coastal erosion, epidemiology and viral transmission, and climatology. All of these fields need strong modeling. And many of them have incredibly talented people doing the work. But it would be great if the pool were deeper…
There is often some distinction between how a hedge fund trades and how a prop shop trades. At a prop firm, it is all partner capital. Full skin in the game. The risk management tends to be very robust.
It is easy to pull people into a field if you pay them well. Really not hard.
Some day NGO’s which work with subsistence farmers on techniques to increase their crop yields, and on strategies for developing seeds which produce with limited water and higher temperatures as the earth warms, will be able to pay their people on par with hedge funds and banks. But that day isn’t here yet.
The graph only shows a 2 year period. I’d be more interested in how the fund compares to market indexes over a longer period. For example, a comparison between the referenced Berkshire Hathaway fund (assuming BRK.A) and the Morningstart US Market Index is below:
Past 15 Years – BRK.A = 10.02%, Index = 10.03%
Past 10 Years – BRK.A = 14.37%, Index = 14.79%
In 2008, Buffer of Berkshire Hathaway made a million dollar bet with hedge fund manager Ted Seides that an S&P 500 fund would outperform a basket of 5 hedge funds Seides selects over a 10-year period. The S&P 500 gained 85% over the period, while the best performing of the 5 hedge funds was 63%. Buffet donated his winnings to charity.
The point I am trying to make is a “quant” based investment strategy doesn’t guarantee that you’ll outperform a standard market index, particularly over a period as short as 2 years.
Do you personally know someone making $600K or not with a bachelor’s?
Why are you coming at me? I never claimed to know anyone making that amount out of undergraduate.
I am directly aware of several kids at places like Citadel and Bridgewater that have earned in and around $300 but fairly specific circumstances.
In most of these jobs, the base salaries are low six figures (say $200k or so). What really matters is bonus and/or becoming a partner (allowing you a share of the firm’s profits). In a good year, those are several times base salary.
I know of (i.e., second hand) several people that have had offers in the 400-600 range. These offers would be 200 base, 100-150 guaranteed first year, and 100+ sign on. And on occasion these people are supposed to have made more than the initial agreed package.
The word “quant” in “quant”-based strategy and the word “hedge” in hedge fund are overused and misused. They mean different things to different people. All trading/investment strategies have some quantitative aspects, but their degrees of quantitative sophistication are dramatically different. Hedge funds, unlike most mutual funds, are supposed to be absolute return vehicles, not meant to be measured against some market indices. They’re supposed to deliver returns to investors regardless of the direction of the market. However, the reality is that few of them are truly “hedge” funds. They don’t really “hedge” away their risks. Risk-free arbitrary strategies don’t exist in this day and age. Besides, no quantitative model can capture all the risks. The models are only as good as the assumptions built into the models. One of the most dangerous assumptions has always been about correlations. Correlations change, and change dramatically, when an abrupt and extreme event occurs, as it happened in '98 and in '07, and will inevitably happen again in the future.
Well, I do not mean to come after you. I wanted to see if you actually happened to know someone that was employed as such. Your answer is “NO.” Ditto for @neela1.
“I am aware of” is not the same as “I know,” which is not the same as “I know of.” I speak from personal experience, albeit from 2001, and a sibling who is employed in the banking sector. DE Shaw was around then and they recruited kids, both undergrads and MBA, from my alma mater. Yes they paid more, but not the kind of numbers that are being thrown around here. Maybe 10% IIRC. Also, at least back then, they did not do campus recruitment. They would only hire through references, typically professors that were paid consultants. Back then, IB analysts were getting $60-80 + $5K relocation + bonus TBD, usually another $20K. MBA associates were making $120K + $15-20K + 25% bonus. Analysts basically still make a reasonable salary because IB banks and VC houses know that these kids are green horns and really do not add a lot of value. Most are weeded out after 2 years and they go to MBA school or do something else altogether. Top MBA kids, and I want to emphasize top programs, now do make a lot more. Maybe market dynamics? But even these kids do not make anything close to what is being thrown around here. These kids have basically the same amount of average debt as doctors minus job security.
These unicorn jobs are just that – unicorns. I think this sets unrealistic expectations for kids and parents. And I can also guarantee you that these companies are not hiring 400 kids at that price point.
I have nothing more to add and again, don’t mean to be offensive to anyone. Peace out.
