Over on Wilmott.com, we’re arguing about deMorgans law and whether it is asked about in quant interviews….

Sadly, it is the case that people often get jobs without proving they know it, indeed most people who call themselves programmers don’t know it either. It’s described in wikipedia

Maybe you don’t know this law by name, but it is slightly scary that people write code without even doing very basic undergrad logic.

Quanting is not the only career option if you are good with maths and computers.

A good process outline is to change variables through a range and see how sensitive your conclusion is to them. If you haven't done at least half of these, of something like them, then the chances that you've made a bad decision are worryingly high.

Quant careers can be very lucrative and interesting, but not for everyone, and you need to evaluate your chances of actually enjoying it This is not an exhaustive list of course, you have personal preferences and you've made assumptions, and as we have seen for the last year assumptions can really go badly wrong.

Questions
For instance if quanting paid the same as teaching, would you prefer that ?

If you knew for a fact that at 40, you'd have to leave this line of work ?

If you believed you'd only ever work in small unknown firms ? That is I believe now a much more probable event.

If the ratio of maths to IT was 1:50 ? What value could you cope with as a long term position ?

You'd have to work in some shit place like Birmingham or Frankfurt ? Are you flexible on location ?

What if you maximum pay was known to you in advance, and was (say) 200K ?

Would you work for a year free to get into quant finance ?

One trend that was clear before all this started to go wrong was that quant skills were diffusing into the rest of the business.

At one stage long ago, there were a few quants, often working as individuals attached to a single business unit.

Traders rarely, if ever had even the most basic quant skills, many did not even have a degree of any kind, let alone a PhD in maths or physics. A small number had MBAs but that was more often coincidence than a requirement to do the job.

Risk was mostly run by accountants who not only had no understanding of derivatives, but based their credit limits on conversations at golf clubs. That's not an exaggeration, and it was still happening more recently than you might think. The head of fund management at one well known asset manager has a degree in English. And yes, before you ask, their performance has not exactly been stellar.

Now it is very difficult to start a career in trading, fund management or risk without at least core quant skills, and many roles in software development, operations will test you on quant skills before they let you start.

Some areas that you might think of as wholly non-quant now have significant penetration like sales and even the accountancy functions. Although relationships are a key driver in sales, the best margin products have also been the most complex, and there has been a growth in the sophistication of advisers who help the buy side make less terrible decisions. This means some sales staff have more than a shallow understanding of their products.

In the current climate, quant techniques are now required in some parts of compliance, which to me is the signal that all parts of finance have finally become within the reach of quant career.

This is of course a positive view. Of course I am not saying when overall finance employment will hit the current level agaqin, but I am clear that for quants the decline will be less sharp because of the greater % of jobs that will require your skills.

Of course these positions will have a very different mix of types of work than the classic Derman quant, and will require a wider mix of skills. This will be difficult for some of you, and more than a little disappointing. The sharp divide between quant and non-quant job will continue to erode, which will mean greater flexibility in the sort of work you can do, but at the price that you may end up doing more work that you neither enjoy nor excel at.

Part of my reputation is for sharing the best information I can to help guide people through their careers in finance. Obviously some things I know are really confidential and thus my lips are sealed.

One surprise item in "Paul & Dominic's Big Book of Banking Secrets", that you will never read, is our ranking of the various masters in finance out there. Obviously we have opinions based upon experience of the sort of people who come out of them, and how hard it is to find the graduates jobs, and what sort of roles they can hope to get, facts that are of some real valuable to most people in this line of work. That is of course one reason for not sharing this information too widely, we have to know more than the opposition, else get a real job.

The next issue is that we get samples of the market, we do not yet have the position in the market where we see everything. There is one university where every person we've seen from it, got a good job very quickly. It doesn't even have a finance program, but also we've only seen three people, so what does this mean ? I don't know, so I'm not pinning my firm's reputation on publishing it.

This is made more of an issue by the way that different managers in different firms vary hugely in their opinion of each MFE,MFin and of course the CQF. Hiring managers do not keep their opinions constant either.

It is the CQF which all by itself means we will probably never publish such a list, or even share it privately. The lists we have seen are hopelessly biased, either by design or simple laziness on the part of the compiler. Some have people from MFE programs in the small clique who decide which school is where. Nearly all restrict themselves to some stupid criteria such a geography, when anyone who cares knows that finance is a very international sport. Over on Wilmott.com there was a loud, but curiously futile argument about whether French quants are too powerful at Goldman Sachs, New York. This is of course wild exaggeration, but under the hype, there are a lot of French people in both London and NY, and almost none went to "ranked" schools, because most rankings are US or Britain only. I've never seen Moscow university on these lists, yet looking at my files on successful quants, it is a useful source of smart people. Paul and I both teach on the CQF, a disclaimer to be found frequently on our advice on career/education choices. We are therefore interested parties, and there is a conflict between us producing this sort of list, and our hard won reputation for telling it like it is.

I am conscious that we enjoy confidence from many that we would not "adjust" the list for our own ends, but of course there still exist people who don't know who we are (mostly living in caves I suspect).

I also believe that the real value of such a list lies in how it helps people make better decisions. An argument over which course is 4th vs 5th is to me a lot of work that delivers very little utility, either to someone choosing it, or someone looking to hire from that program.

Obviously the schools concerned care, but we can deal with such lobbying.

The real value is surprise. That is where we tell you things you weren't expecting. Some schools are better than their rankings in various lists tell you. Some are tragically bad, and some worry us a great deal.

Whereas we can deal with lobbying over 4th/5th position (or 19/20th) when warning people about some courses it requires rather greater dilligence, which is why to the best of my knowledge I am the only person with a strong position in this market who ever issues such warnings. Fordham got this, but that required me to comb through their marketing material to discover they were making promises they could not deliver. The bizarre claims for being part of a tradition that produced famous people who died before Fordham was even founded made the task easier. But in general this is a lot of work to get right.

That does not mean we do not counsel people on choices, that happens at least once a day and at CQF open evenings, Finance Focus meetings, and Random Walkers beer sessions that reaches dozens. We are always happy to answer questions, but I'd be happier if I didn't have to turn people down for this quite so often.

Mark and his team have been busy gathering interview questions, and preparing answers to them.

In a highly competitive market at entry level his timing for releasing the book could not be better. As a headhunter, I am of course a student of the questions asked by banks to try and work out who has ability beyond exam results. This of course means that many people study brainteasers in just the same way as they do any other subject.

The obvious comparison is with the Crack books which sell in impressive numbers. Your intuition is probably that given the age and wide availability of this small subset of possible questions, that their success undermines themselves, and that the one question you know you won't get is in Crack. Wrong. Talking to people after interviews, it is clear that some are asked simple variations on classical Crack questions, and some are asked [i]exactly[/i] what is explained in the book. The danger of course is where you think you have been asked the well-known question, or a slight variant which means you look like a parrot that forgot his lines. To help deal with this, there are follow on questions suggested for you to think about, so that you are not too tightly focused on the exact ones asked.

Thus merely by enabling you to think through questions outside the time worn Crack set, Joshi's book justifies the price both in cash, and more importantly the number of hours it will consume to make sure you do this stuff right. Give there are >225 main questions that can work out as one to two weeks of your life, and of course, I have to tell you that the longer you take to work through it the more time you should work on this stuff to get the job you want.

The first critical issue is the correlation between the contents and what you might expect to see in real life. Certainly on the Brainteaser side, it is excellent, and that is the clear focus of the book. It could be longer on "algorithmic" brainteasers, the type covered by recursion, divide and conquer et al, and of course it is relatively generic across markets, meaning that you need to do some work on making sure that if the question is put in terms of the market you want to work in, that you can do the translation. In that way it is almost entirely disjoint from Wilmott's FAQ book, which will help you start on that equally important part of your interview process.

The C++ questions although "real" are not as vicious as many asked at interview.

The explanations are clear, and I did not find any ghastly errors, though I will confess that I did not check enough to be sure that it is defect free.

Given this review you can expect to see it in the new recommended reading list for our Quant Career Guide.

As promised in "When it hits the fan, a guide to job hunting in a difficult market", I'm not putting up details of networking events of interest to people in finance.

July 16 Bloomberg Exotic Derivatives Conference, Free

Guest speakers, Bruno Dupire, Bjorn Flesaker

14:10 FX & Commodities derivatives pricing & Monitoring

14:30 Advanced Interest Rate Pricing Made Easy

14:50 CDS market pricing vanilla, Options, baskets & CDO's

15:10 Pricing equity derivatives from plain vanilla to advanced equity linked 16:10 Local Volatility Model for Pricing of exotic structures

17:00 Credit Derivatives. A review of Tranche CDO's and loan CDS pricing 18:00 Cocktail Reception Full agenda - http://www.bloomberg.com/promo/Jul/29786358/29786358.html

Although this is not the happiest time in banking, however bad a quant developer may see this market, at least they are not a games developer. The witless arts graduates on the BBC happily parrot the Games Industry line that there is a "shortage" of the right sort of graduate. BBC correspondents regularly struggle to even pronounce technical terms correctly, much less understand them.
http://news.bbc.co.uk/1/hi/technology/7460870.stm

Slashdot has conversations which illustrate the real problem.
Money
http://news.slashdot.org/article.pl?sid=08/06/19/1719206

The skills for quant development and games are actually very similar. C++, applied maths/physics and bloody minded determination. FPGA, GPU, and PPU are beginning to make their way into banks as well for high end processing.
Although the hours at many banks can be tough, they are almost all lower than in video games development. You are however safe from your job being offshored to India because Indians will not work for such low wages.
You can see that as good or bad.
EA Games, like several other games manufacturers has actually been prosecuted under minimum wage laws.
If you are a games developer, and wish to move to a job where you are at least occasionally treated with respect and paid more than a shelf filler in a supermarket, feel free to get in touch.

I have (at last) completed recording the CQF C++ course. We got from "so what are these 'variable' things, to loops, functions, classes, inheritance & OO, operator overloading, patterns, debugging, C++ compilation nasties, STL, Boost, and building both DLL and XLL addins for Excel.
No doubt when you've digested that lot, you'll want more (and hate the sound of my voice), so when you've got past that, let me know.
CQF
Also,the guide Paul Wilmott & I have written to careers in quantitative finance is now on version 2.1, so send your CV to Dominic@Pauldominic.com

Because we hate lawyers as much as anyone else, we're suporting a bunch of Jones Day Lawyers who are running themselves into the ground. Their page is here

Whereas the media is getting so very interested in minor credit issues, at P&D we are trying to solve a major problem.
Because of the global nature of quantitative finance, I've got used to reading CVs at a "higher level of abstraction", where I simply don't notice minor glitches in candidates use of English.
That means that for a few months, a new and disturbing trend went unnoticed.

Empathy.

Before Christmas last year, not one candidate had caught this virus. Now we have more than 20 people looking for their first job who "have empathy".
No. I don't know what it means, and frankly I am slightly afraid to ask.
Actually I do know exactly what it means....

Some CV writing service has listened a bit too closely to what some bank has told them they are looking for, and yes it is true that to work in a team, you ought to have some basic social skills, but "empathy" is tragically weak word to have on your CV. Lose the word.
Do it now.

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