“My life as a quant” is an amazing book, where Emanuel Derman tells how he went from Particle Physics research to Wall Street. I’m not going to write a real review of the book, because there are some excellent reviews already available on the Internet (Quantitative Finance, Wilmott, Slashdot, Financial Times, Bloomberg Businessweek, …), but instead I will just say a few random comments and put a few quotes of the book.
After studying Physics in his native South Africa, he did his PhD in Particle Physics in Columbia University in 1973. Then he followed the usual academic career and, after three postdocs (Pennsylvania U., Oxford U. and Rockefeller U.) he got a permanent position at Colorado University. In the book Derman spends quite a lot of time talking about this part of his life, and I’ll just say that it’s quite surprising how little things have changed in the last 40 years. I think 90% of what he says is still nowadays perfectly applicable to the life of a postdoc in Particle Physics.
For different reasons, but mainly to go back to New York, where his wife was working, he decided to look for a job out of academia, and he ended up in Bell Labs, where he worked for a few years. The experience was not great at that company, but he improved a lot his knowledge about programming and computing, what would be relevant for his subsequent career.
Then he found a job at Goldman Sachs, where he essentially stayed for more than 15 years doing quantitative finance. He had a very successful career, and in 2000 he was named Financial Engineer of the year. Finally he went back to Columbia U., where he is now a professor of Financial Engineering, and is also the Head of Risk and a partner at Prisma Capital Partners.
If you are a physicist (and especially a PhD in Physics) you will find very very interesting to read about his experience in Finance, because it’s kind of “Wall Street described by a physicist”.
The honesty of Derman describing the pros and cons of Wall Street and the academic world, talking about the salaries, the interviews, the intelectual freedom, etc. is something very difficult to find in books or even in informal conversations, so I totally recommend the book.
Some final comments:
- Here you have an excerpt of the book.
- In Derman’s website one can find several articles written by him, interviews, …
- I find particularly interesting for physicists the last 2 questions of this interview:
- It’s pretty appropriate for this blog his article “Finding a job in finance”, although it’s a pity that he is too superficial: he is not clear about what a PhD in physics should do to get a job in Finance…
Some interesting quotes of this book:
- “At age 17 I wanted to be another Einstein, at 21 I’d have been happy to be another Feynman. At 24, another T. D. Lee would have sufficed. By 1976 I realized I had reached the point where I merely envied the postdoc in the office next door because he had been invited to give a seminar in France.”
- “Grad students are socialized to view other options (teaching, industry, …) with contempt”.
- “I met corporate lawyers and Wall Street salesman who touted the fringe benefits of their jobs (…). In physics, the life itself was the benefit”.
- “I was naively shocked at Bell Labs to apprehend that both my time and my office belonged to AT&T, and could be invaded at any moment without apology or warning knock from my boss, [or] my colleagues (…). Wall Street would lay claim to even more of my personal space and time”
- “Physics is a harsh meritocracy. Most of the merit is concentrated in a small numbers of legendary figures. (…) A competent but not brilliant research physicist had little to feel good about; who needs what you provide?”
- “I found life as a quant to be richer and less isolated than life as an academic”.
- “Bell Labs offered me much more money [$42K] than the University of Colorado [was paying me as an assistant professor: $18K]. (…) In the end, I accepted the job with the deepest misgivings and guilt. I was committing treason”.
- “Wall Street was one of the few places where you could eventually make $150K a year without running your own business”