Quarter Life Crisis

Since I’ve become a full time working man, I’ve started to realize that the highlights of my days, weekends and holidays all revolve around food. Not just food like grabbing a burger food, but good food - like the type of food where you have to make reservations and eat what they serve you type thing. It’s not just me either, 8/10 people I know (varying from unemployed to consultant to engineer to banker) all love doing the same thing. I guess it’s the way people our age celebrate our semi-financial independence from our parents and new found money appearing in our bank accounts. Or maybe it’s because we want a taste of the high life and feel like we’re in control if only for a few hours. It’s definitely not a great habit to get into at our age unless you’re already pulling in mad cash, but hey, for a lot of us at this stage in our lives, it could be only time when we can spend so freely. If you’re concerned that you’re spending too much on food but don’t want to stop with the fine dining, this Morton’s coupon should help ease your conscience.

I will be posting off and on about my thoughts on the MFE program since that is where I am in my life at this point. I just finished my first week of classes.

There is a strict focus on career. During orientation we had mock interviews in which randomly chosen people were grilled in front of the class. Keep in mind, classes didn’t even start yet! We also had to “fix” our resumes during the orientation. There is a writing professional to guide us on our resumes and cover letters. These go through numerous revisions throughout the program. We meet with him one-on-one every few weeks.

The class — There are 65 students in the class. Half have at least a few years of significant financial experience. The other half are “career-changers” with little or no relevant experience. There is a guy who is a former market-maker, as well as a guy that has his own statistical arbitrage fund. However there are also plenty of fresh graduates from either Bachelors or Masters programs. A good amount of professional-level programmers. Very, very diverse across ranges of age, race, and experience. I have never been part of such a diverse group of people. Women are the minority, I would say less than 20% of the class.

What’s important — A statistical background and programming languages (C++, Matlab, SAS, other statistical software packages). Math is also good, second to stats. My engineering background would be a distant 3rd. From observing the first week, it seems that the people from stats backgrounds are having an easier time.

Classes — 8 week blocks! 2 weeks less than a quarter system, which I though was very quick already. I actually prefer semesters — more time to think. Definitely a barrage of information just from the first week. Classes this first block include:

Empirical Finance — Stats-heavy, simulations in Matlab, currently focused on linear regression and time series processes such as the AR(1) (simulates a process through time while taking into account randomness as well as past history)

Stochastic Calculus — Replicating portfolios, breaking down assets into their basis, risk-neutral measure (a measure where risk is adjusted into the probability), martingales (expected value of X in the future is equal to the current state of X. A fair coin flipped independently and sequentially is a martingale — essentially you “start over” at every iteration)

Theory of Investments — Investments and their origins, theory, history of finance