Faculty Guest Post: Becoming an Effective Quant

Individuals from various quantitative backgrounds – physics, economics, finance, mathematics, statistics, etc. – all converge in the back rooms of the top financial institutions.  While the collective brainpower is undeniable, some of the sharpest minds are labeled as stereotypical “quants” and are often overlooked for leadership roles because they make some basic mistakes. Here are four quick tips to help you avoid this stigma and achieve success:

1. Know the assumptions.  While it’s rare to see a seasoned quant make an arithmetic error, it is unfortunately all too common to see talented quants fail to understand the basic assumptions underlying their models (everything is not normally distributed).

2. Know the limits.  Remember, models are merely abstractions from reality.  They are always wrong – it’s just a matter of who is less wrong.

3. Be flexible and learn to think on your feet.  One ticket to success in the finance industry is being able to change gears and answer unexpected questions.  While it sounds simple, this skill is often the key to success.

4. Become a translator.  Learn to communicate to others who have not read your dissertation.  If you can’t communicate your findings to managers, investors, supervisors, or even other quants, your brilliant ideas will likely not get off the ground.

Brian Clark is an assistant professor of finance at the Rensselaer Lally School of Management.