Hi… I’m thinking of pursuing a Master in Economics as CFA gives me an impression that it is better for micro-analysis (bottoms-up approach), rather than a top-down approach. I’m hoping to get a deep understanding of all the factors (both marco & micro) that can influence the equity market performance and subsequently the industries and companies. I am considering further studies and wonder if this specialisation is a viable or useful route to go… I am currently going for CFA level II at the same time. Master of Finance seems like an overlap… and whilst specializing in Corporate Governance at Master Level could also potentially benefit a research analyst… it seems like the focus is still on the micros. Would anyone be able to advise if understanding of the macro factors help for a research analyst? Is a Master of Economics worth it or are there better specializations out there? Thanks in advance!
Is there another subject (apart from economics) that you are more interested in?
CFA is pretty general overview of finance. You can literally couple it with just about any other business related grad degree and make a good combination.
Squeeze a financial accounting course in there if you can, unless you are accounting undergrad. If would have figured that accounting / corporate finance and maybe a strategy course would be better for bottom up approach than a straight econ major.
Thanks all for the advice… this is interesting… as a number of schools I’ve looked at do offer a general Master of Business which allows one to take modules from Accounting, Economics, Risk Management, Strategy, Corporate Governance etc. My other interest was to take modules from all these different specialisations to acquire the skills & knowledge I’d like to have when I’m accessing a company… but I was afraid that having no specialisation might dilute the Masters education. Would employers favour a specialised Masters over a general one? But from the feedback I’ve got it seems to feel like this might be a better way to go!
If you’re interested in furthering your career I’d say an MBA would be the way to go if you can get into a good one. If you’re interested in a particular subject then you may want to pursue a degree in that.
I’ve got a masters in Economics, I’ve traded and consulted. Here is what I know: 1) All economics is micro economics. Anyone who says otherwise hasn’t a clue. Simply put, macro conditions are the manifestation of incentives at the micro level. Only elementary and fundamentally flawed keynsian models work in macro aggregates. 2) The field of economics reaches far beyond finance and, at the graduate level, requires substantial calculus and statistics. It’s not hard to learn, but know this going it. If you’re only interested in finance, this is also not for you. 3) All of the economics in the CFA curriculum is mid-level undergrad stuff at best, so there won’t be any overlap with the Masters program. 4) Like almost all disciplines, excluding physical sciences, everything in economics can be learned from reading a book. I went to a top school and had truly exceptional instructors, but at the end of the day I could have learned everything from a book. 5) If you’re after a networking opportunity (like in an MBA) a masters in econ is not for you. Your classmates will be economists who will most likely end up in the basement of a central bank, not business students who want to take over the world.
^ probability and Stats - yes ; not so much with ODE / PDEs
^ You’ll definitely run into matrix calculus. Maybe in a perfect world you could sidestep the heavy calculus course, but I wouldn’t. Much of the applied econometrics relies on a sound understanding of matrix calculus.
i think a job compliments a CFA very well.
plus a masters in economics is the stupidest degree out there. it wont help you do sh it. noneof the stuff they use is applicable to the real world.
SuperiorReturn Wrote: ------------------------------------------------------- > plus a masters in economics is the stupidest > degree out there. > it wont help you do sh it. > noneof the stuff they use is applicable to the > real world. This is so incredibly ignorant that I’m not even sure how to ridicule you.
Hayek Wrote: ------------------------------------------------------- > SuperiorReturn Wrote: > -------------------------------------------------- > ----- > > plus a masters in economics is the stupidest > > degree out there. > > it wont help you do sh it. > > noneof the stuff they use is applicable to the > > real world. > > This is so incredibly ignorant that I’m not even > sure how to ridicule you. how is it ignorant? they rely on their models that need the world to be perfect in order to work economists are the stupidest people out there. what do you do for work?
Econometric models are no different than any other model out there, they rely on a set of assumptions and are useful within that context. The key to good analysis is understanding the limit of the analytical tool you’re employing. As with any discipline that attempts to recreate a complex system in a simplified form for the purpose of studying it, the most interesting and meaningful results generally come from instances where the model breaks down (ie: the assumptions are violated) and critical thought and further investigation are required. I agree with you that anyone, economists included, who forces a complex reality into a box of assumptions and blindly follows output from a simplified model is, as you put it, stupid. It sounds as though your interactions with economists have been limited to some pretty narrow minded folks who adhere religiously to some textbook models they picked up in school. I’m a consultant.
I agree that the comment of economic models being useless is quite ignorant. They are tools for facilitating decisions so you are not basing everything off your gut. Same logic holds for financial models. I recommend reading a businessweek article of Derman and Wilmott on financial models: http://www.businessweek.com/magazine/content/09_02/b4115059823953.htm “Whenever we make a mathematical model of something involving human beings, we are forcing the ugly stepsister’s foot into Cinderella’s pretty glass slipper. It won’t fit without sawing off some essential parts. Trimmed for simplicity or beauty, models inevitably mask risk rather than expose it. At bottom, financial models are tools for approximate thinking, a way to help transform one’s intuition about the future into a price for a security today. The key word here is approximate. The most important questions about any model are: “What does it ignore, and how wrong is it likely to be?””
what do you do as a consultant?
For your concerns about micro/macro, I think you ignore that portfolio optimization is basically a microeconomic problem of maximizing utility under the conditions of constraint. Anyway, I don’t think a single one of my MA econ classes covered equity markets and what drive equity returns. This is at either the micro or macro level. At best we talked about the equity premium puzzle using really sophisticated models that I’ll never use. Hayek Wrote: ------------------------------------------------------- > I’ve got a masters in Economics, I’ve traded and > consulted. Here is what I know: etc etc I have a similar background to Frederic von and would advise the same thing. You’re better off getting a pure Quant degree or an MBA unless you’re really passionate about econ. The best thing about my MA program is the statistics training I received (which would be much better than what MBAs receive) and the ability to take courses outside the Econ department. I think really challenging statistics is not easy to learn on your own, but most of economics is. Further, you don’t need to know how to calibrate a dynamic stochastic general equilibrium model to understand the world around us (that’s all graduate macro is, btw). I also disagree with SuperiorReturns, but if he wants to debate the value of economics and economists he can start his own thread rather than highjack this one.
Well said Pennyless. The nature of consulting in my geographic market has given me the opportunity to do a wide variety of things. Everything from forecasting work for banks and governments to investment analysis for large companies. Generally speaking, I’m a whore. What do you do SuperiorReturn? Also, I didn’t mean to offend with my earlier remark re: ignorance. I’m overly sensitive to being painted with the same brush as the economists you see in your mind’s eye.
ok. so I didn’t know wh o re wasn’t allowed on the forum. That’s what the @#$%& was in my last post.
eyesight Wrote: ------------------------------------------------------- > Is a Master of Economics > worth it or are there better specializations out > there? MBA - its also a fairly across-the board, play-date with a variety of business topics. Unless there’s one topic you want to remain dedicated to (econ, corp fin, acctg, etc.) i’d recommend keeping it general until you can decide.