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Do Ph.D.s Make Better Traders?

What is the real value of a Ph.D. on a trading desk, a reader wonders.

Perhaps inspired by the animated discussion of the role of quants in trading that appeared in our earlier debate thread devoted to Wall Street and Its Sectors, a reader emailed us, "Does a Ph.D. buy you common sense? I think not. What's the real value of a Ph.D. on a trading desk?"

What do you think?

AUTHOReFinancialCareers News Insider Comment
  • re
    27 May 2008

    There is no question the value of good statistical analysis in investing or trading. Beware, though, I tell you as a successful ex pit trader, the thing that kills you in this business is ego. The ability to admit you're not smarter than the market and the ability to reverse positions on a dime are qualities NOT seen by those with big egos. Do you know even a few PHds without the ego? Big egos = big losses = HF blow up !!

  • bi
    2 March 2008

    I am flabbergasted that the PHD question still is being asked after the biggest meltdown of the capital markets since 1929. Isn't it the 'quantitative everything' mantra and the 'correlation game' by the quants, rather than the common sense of a trader that prevailed successfully for decades that has gotten us into this mess? Perhaps the quant is less emotional in his programming as to when to take the profits and lets them run less emotional, but that seems to also be the case on the loosing side. Is it not the quant that created the ill fated super leverage and duration missmatches of epic proportions just in the hope the fat tails will never happen?

  • Al
    28 November 2007

    I agree with Six. I am even slightly surprised about the original question because in general PhDs are trained not for trading but for research and quant analysis, so their ability to trade better than someone else (if present) has nothing to do with being in gradschool.

  • Si
    12 November 2007

    I am a PhD but I do agree that PhD wont help much for a trade or even worse. The ability of PhD is not "original ideas and pick things up on your own", anyone can do that regradless of the education. The quality of PhD is that we put up idea more completely than others. It surely take times. Unfortunity, this is not suitable for a trading role want. As a trader, you need to move faster, react faster, no time for you to analysis completely. Simply to say: PhD is the General who lead the Army. Trader is the soldier who fight the battle. Let the General go fight, you lose the battle. Let the soldier lead the army, you lose the battle. Let General plan and let soldier fight, you win.

  • Mi
    Miguel Hughes
    9 November 2007

    I have to agree that a Phd doesn't give you what it takes to be a good trader. Some of the guys who started the biggest firms on wall street did not even have a college degree. In today's world they would not even be able to get a job on wall street as an assistant. It doesn't make any sense. The ability to make money from the markets and a PhD in advanced whatever has no link.

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