A Few Questions for Twofish-Quant.

[kylem]

Quick question:

Is an Applied Math PhD better than a Physics Phd, or the other way around?

(or do they have pretty similar opportunities on Wall St?)

 

[twofish-quant]

I know this is a bit off topic, but I was wondering Two-Fish Quant if there are any good texts you would recommend on reading to get a better idea of the financial world?

I'd start by going into the bargain bin of the local college bookstore and finding some intro business/finance/marketing/economics textbooks. Finance is different from physics in that in physics there is one set of basic knowledge that is standard. In physics there are three theories that explain 100 things, whereas in finance there are 100 things that explain three things. So if you pick up a few random texts, that's a good way of getting started, provided that you look at those texts in the same way you'd read wikipedia articles.

www.ssrn.com and wikipedia are also pretty good places. Wikipedia has pretty good coverage over legal and mathematical aspects of finance. Random law review books are also useful. Economic history texts are also useful.

Sorry if this sounds a little vague, but finance is one of those things were you are better off *not* reading the same textbooks as everyone else, because the textbooks might be wrong.

By this I mean teaching you the different types of basic technicals you might look at.

Professional investors look at "technicals" the same way professional astronomers look at astrology. No one I know takes technicals seriously. The google terms for what professional investors is "modern portfolio theory."

There is another style of investing which professionals do, which Warren Buffett is the king of, and that involves looking into companies in huge depth and picking out the good ones. For this sort of investing your main expertise shouldn't be finance. If you are analyzing trucking companies, then you need to go out and learn everything you can about the trucking industry, talk to truckers etc. etc.

Also the basic strategies of dealing with different types of markets.

The trouble is that for a small investor, you don't need a book to deal with markets. What you need to know can be written in one page. Scott Adams, the writer of Dilbert, did it.

http://www.early-retirement.org/forums/f27/dilbert-scott-adams-guide-to-personal-finance-15177.html

I also would like a book that would well inform me on all the debt crisis going on and what it means.

No one knows what it means. A lot of people are just guessing. The books that I've found useful are those that don't try explaining "what it all means" and just focuses on telling the story about what happened with interviews with people that were there. Gillian Tett and Aaron Ross Sorkin are two writers I think did that well.

http://phillipswagel.com/ has a link to a really good "this is what I was thinking when everything fell apart" paper.

The other thing is that there is a ton of stuff on the web. All of the major lobbying associations have websites, so you really should visit them to see what "group X thinks the problem is."

 

[twofish-quant]

What other kinds of PhDs are common where you work?

Math, statistics, computer science, engineering. Anything technical.

Curiously the department that I work in doesn't have anyone with finance or economics Ph.D.'s. Also the split of the department that I work in is 50% masters + work experience and 50% Ph.D.'s

 

[twofish-quant]

Is an Applied Math PhD better than a Physics Phd, or the other way around?

No one care much what you got your Ph.D. in. The care if you have computer and numerical modelling skills.

 

[kylem]

That's about what I figured, thanks. :)

 

[NINHARDCOREFAN]

I have a question. I have a undergrad degree with double major in Math and Computer Science and a Masters degree in Computer Science. If I get into financial industry, will my salary have a very low ceiling because I don't have a PhD?