<p>I’ve been investing ever since I turned 16 and I’ve been pretty successful, not just out of luck I do a lot of research and actually delve into the numbers. In one and a half years I’ve turned 500 of my own hard-earned dollars into roughly 2,500. I also help my dad out with his 401 k because he really doesn’t have as much time on his hands as I do. I’d really love to work for a hedge fund one day and maybe even start my own if I ever have the opportunity. My problem is that I’m a very average student, and wouldnt really consider myself a “wall street type” I have an 1800 SAT and roughly a 3.5 GPA i’ll be going to an average school such as Loyala MD, UMass Amherst, or Hofstra to study accounting. And I’ll probably work as an accountant for a certain amount of years until I feel comfortable to take some risks and shoot for a big time job at a hedge fund. (As you can tell I’m pretty naive and don’t really know where to even start in my aspiration.) </p>
<p>I have a couple questions and would really appreciate any insight at all.
do you have to be a genius to work for a hedge fund?<br>
do you have to be extremely gifted in math?
from what you’ve read do I have an alright plan? And do you think someone like me (average but hard working, and trustworthy) could attain and handle a job like this?
Any additional insight, or holes you see in my goal?</p>
<p>Smart enough to know finance and economics.</p>
<p>There’s a lot of different jobs in a hedge fund, but it sounds like you want to be a trader and then maybe someday own your own fund and employ others. A top trader will run his own book and be paid primarily on net trading gains and losses. The hard time tested way is to get an Ivy league MBA, go to work for a large investment firm and gradually meet people and build a reputation as a trader. The easier-nerves of steel way is to march into the head traders office and give him/her a few great trading ideas. If you keep barging into the office with enough good ideas, you just might get a shot with a small book of money. BTW be well versed in commodities and derivatives. Stocks will only get you so far. Also a knowledge of economics micro & macro is a must have.</p>
<p>Stanley Drunkenmiller went to Bowdoin college and then entered a PhD program at U Mich but dropped out. He is one of the greatest investors over several generations. You just have to be really smart at investing to be a good hedge fund investor.</p>
<p>Thank you both so much for the insight @sosomenza I think that the latter approach will most likely be my way in, even if I could get into an ivy undergrad I wouldn’t be able to afford it let alone an ivy grad program.
And yes a trader would probably be my forte, but is there any job in a hedge fund that evaluates the companies involved in the strategies to ensure that the investments are safe? And if so do you think that an accounting degree and experience can make up for a non-ivy MBA?</p>
<p>Very few people in finance/investing understand the details of the models and pricing tools they use. They train on them, learn how to use them and then implement within - one hopes - the boundaries established by their bosses. This enables them to make more than the people who actually write the models and tools. </p>
<p>Traders are, from my experience, more akin to salespeople than analysts. When you trade, you are essentially “selling” your positions to your firm, meaning you need them to buy what you’re doing. This requires a sales confidence rather than a deep understanding of the ambiguities of the potential consequences. As you move up, analysis becomes more important because then you are either being “sold to” by other inhouse traders or you are responsible for bigger bets.</p>
<p>I know two people fairly well who work at hedge funds. One graduated from Princeton with a major in Math and a PhD in…Math again? Not sure. And in between, he drove a NYC cab for a while. He started his own hedge fund and is routinely in the Top 10 hedge funds.</p>
<p>Then my nephew graduated from Harvard, went to Harvard Law School, is working at a hedge fund. He is pretty smart. I have met some of his co-workers; they are also impressive people. </p>
<p>Both of these people are accomplished pianists. </p>
<p>If your interest is:
you might want to start out at a ratings agency. </p>
<p>Ideally, you could find someone working at a hedge fund and discern their career path.</p>
<p>Warren Buffett - I looked him up and thought he started out at U.Nebraska but it looks like he started out at U.Penn. My take on you question would be go to whatever school you get into and do well, then work for a while and do well, then you can advance into any job field you set your mind to. Persistence. Many very successful ppl in all fields start out at the local U. It is perfectly fine and will not hold you back.</p>
<p>There is likely a due diligence department in a hedge fund but also for the same work consider working for a mutual fund. They need more bodies and might appreciate an accounting degree. BTW due diligence is for long term trading. Most traders trade day by day and can operate somewhat independently within a given level of risk.</p>
<p>Do you live anywhere near New York…or even Boston or Philly? (just guessing based on the schools you listed.) </p>
<p>Contact a few Hedge fund managers…tell them about your interest (not your test scores) and ask if you could shadow them for a day or two. They could be very impressed with a HS student having such a strong interest in their profession. And…you’d have an opportunity to see what other people in the firm do.</p>
<p>Investment companies have research analysts. In many cases these are the people who do the “evaluations.” Try to find some people with this title and contact them, too.</p>
<p>Lergnom, you’re mixing up traders and brokers. Very different things.</p>
<p>OP, don’t have a goal of working for a hedge fund at your age. Have a goal of understanding how the economy and finance and math work. Then, if hedge funds aren’t for you when you get there, you’ll have skill sets you can use.</p>
<p>Do you play sports? Or would you be the type to go into the military? It sounds strange, but traders tend to have been athletes or dancers or military people. It’s a stamina thing and an ability to live in risk and work 12-15 hour days, these days.</p>
<p>It’s a brutal field. If it turns out to be what you want to do, that’s fine. But, look into all sorts of things and keep an open mind.</p>
<p>Study hard, get a high GPA, major in finance or econ and try to get a job as a research analyst in any sell-side firms. Most hedge funds like to recruit sell side analysts, the ones you often see being interviewed on CNBC. While you are working as a research analyst, get your CFA. And you need a bit of luck too because breaking into hedge-fund is many times harder than being Ibankers because hedge-funds don’t have a formal recruiting process.</p>
<p>poetgrl, I’m not. Traders work within the confines of a firm. When you want to take a position, you sell what you’re doing to your boss. I’m referring to “internal selling”, meaning what people who work on commissions, on margins they make in trades, etc. sell to the people they work for to get approval.</p>
<p>Lergnom, are you claiming to have worked at a hedge fund? I’ve never even heard of that structure at a hedge fund or a trading house or even really at a bank.</p>
<p>also, cbreeze is right. Hedgefunds want your P&L for a few years. They want a track record. </p>
<p>They aren’t asking you to sell your position to your “boss” at a fund. They are really only hiring people who can BE the boss.</p>