HOW TO GET AHEAD IN GRADUATE SCHOOL WITHOUT ACTUALLY CHEATING
Look... If you don't agree with this, don't follow it. It's not endorsed by anyone. Heck, hardly anyone reads this page anyway.
Generic Strategies

  • You have to know why you are interested in what you are doing. Who do you want to help with your research? Usually you want to think of what Wall Street, the little guy or Corporate America needs to know. Why not talk to them?
  • Evaluate, adopt and evolve the research agendas of your professors. You will get more interest and input from them this way.
  • Try very, very hard to get a good advisor.
  • Try to write a paper with a professor at the same time you are doing your dissertation. This will help you learn the rather difficult process of writing. You don't need to write too many papers though. A couple of good papers will serve you well.
  • Send your paper off to a journal as soon as it is ready. Your professor will be able to tell you when it is ready. Ready means of publishable quality and representative of your best work.
  • You obviously want to be learning tools and ideas in the area that you eventually will be interested in. Time management is thus a huge issue in grad school. It's easy to think of things you should be doing. It's hard to think of things you could avoid doing. Here's a few:
    • If you are forced to take classes outside of your department that aren't relevant and you don't have to pass, feel free to blow them off.
    • Avoid working for people outside of your department unless you absolutely have to. Live in as much poverty as possible.
    • Don't play around on the World Wide Web (except when reading this document) :).
  • Try to avoid writing a dissertation with hundreds of pages. You can't publish it anyway, so try to get away with writing a shorter piece (or group of them) with high quality.
  • Read the journals to get a sense of what work is going on out there besides what you are seeing at your university. You also learn a lot this way.
  • Attend the WFAs and AFAs. Introduce yourself to speakers and drink a at the cocktail parties. Unless you are from Michigan, just drink a little.
  • Find other people who are in the same boat you are early in your career that you enjoy being around. Comment on their papers and invite them for seminars. They will be your network for years.
  • Try to do a great job when you get a paper to review. You will be repaid for this with better referees.
  • If you aren't a student at a top place like MIT or Stanford you have to worry about signalling your quality to the market. A good way to do this is to get your paper published before you go on the market or, at least, by getting it accepted at good conferences like the WFAs or the AFAs.
Job Market Tactics
  • Don't go on the job market until you have the full support of your advisor. Most places will not hire you or interview you until they have seen your advisor's recommendation.
  • Don't go on the market early. It's hard to get work done in your first year out plus you wont get much credit for going out early.
  • It's better to assume that you will do worse than you think, so send your paper out to some places where you aren't sure you want to go to. This is buying a free option which you may want to exercise later if a surprise takes place.
  • It is typical to send out a job packet including a paper or two and your vita some time in mid to late November (for interviews at the AFA) and in late September (for interviews at the FMA).
  • To get an idea of how you will be perceived, imagine yourself in a room with six or seven people going through 250 job packets. Probably one person looked over each packet ahead of the meeting (along with two dozen other ones). Some people probably never even looked at their packet even though they were supposed to. About half of the packets are from people who look pretty good, but you can only interview 20 of them, and then only hire one or two. It's going to have to be really brutal. Then you've only got a one hour meeting to decide on the 20 people and a bunch of colleagues who don't necessarily find the same thing interesting. No one is going to look at any given packet very carefully. Basically, judgments will be made by reputation if there is any (from phone calls and contacts at meetings), by quickly looking over letters of recommendation, what school the candidate went to (generally schools only hire from schools better than them), who the advisor was (famous advisors with expertise in the area of the dissertation who also have a reputation for producing good students are favored), by seeing if the candidate's topic sounds interesting, then by quickly glancing at the publications section of the vita to see if the candidate has published anything or if there are several finished papers (it looks tacky if the candidate says papers are under submission; anyone can submit a paper; also its best but rare if a candidate published their own paper without an advisor), then perhaps by reading the abstract and jumping through the introduction, tables, figures and conclusion.
    It's a little depressing to see how to the process works. Basically, to make it into the better positions, it's important to have interesting (hopefully published) work on your vita, strong training at a good school and full support of your advisor.
  • When a school thinks that they have a crack at you and you have no intention of going there, let them know. It won't hurt their feelings and you will open up a slot for someone else.
  • Salaries vary enormously now in Finance (in 1998 offers have run from the low-sixties to 115 plus summer money). Most places in the top 30 are paying 95 to 115 plus two ninths summer money). In the next 50 schools down the list look for a number around 65 to 80 plus two ninths. People are starting to deal on teaching. This hasn't happened much until salaries crossed the 100 mark and deans were pressured to bargain on other dimensions. Many schools don't realize when they are offering a non-competitive salary. If you think this has happened to you, get some hard information about offers elsewhere and convey this to the person you are talking to. Emphasize that you would like to go to that school, but that it's only fair that you receive the market wage.
  • Solicit frank feedback after you are turned down from a few campus visits if you think you can handle it. Common problems include arrogance, incomprehensibility, boring topic, poor seminar presentation, concern that your interests are too narrow, concern that your interests are so broad you will have little impact, concern that you wont fit into the social environment, concern that you will fit into the social environment so well that you will get no work done, concern that your topic is boring, concern that you will not be able to teach MBAs or concern that you won't be sufficiently productive to make tenure because you are going to be such a great MBA teacher that you will be swamped with students. People will rarely voice these concerns in talking to you but will instead say nothing or make up some excuse like "we can't hire right now" or "we are really looking for an Asian Dutch Auction specialist". So if you don't ask what went wrong (or better yet, put one of your advisors up to the task), you may continue to torpedo yourself on the job trail.
  • The days when teaching didn't matter are gone. If you have won teaching awards or have high teaching numbers, don't be afraid to put that on your vita. Teaching counts and you should try to communicate your competence. The best thing you can do to accomplish this is deliver a good seminar.
  • People like someone with a sense of humor. Wackiness (in moderation) is not a bad thing.
  • Remember that most people who are talking to you went through the same thing you did once and may not have done it that gracefully. Treat people like people, enjoy them, learn from them, talk to them. They will sense this and it may help you.
  • Write thank you letters after your interview. Keep it short and emphasize what you think you could add in a sentence or two.
  • If you talk to a school that you really want to go to, but you think they may not realize this, communicate it in a thank you letter after the interview.
  • Job Seminars:
    • Definitely present your seminar at home before you hit the road.
    • Use overheads with no more than 20 words each on them, preferably in bullet points. 24 point type is good.
    • How you set up your slides says something about your image. Guys from Carnegie-Mellon use slides done in LaTeX and talk a lot about asymptotics. People from Harvard use Powerpoint in color, etc.
    • Tell a few jokes if you are wacky. Don't if you are not.
    • Tell people up front in your talk what you found and what you are going to say. It may be the last chance you get.
    • When people ask questions, respond to them directly. If you don't know the answer say so, or say you will think about it rather than beat around the bush.
    • Don't feel bad if the seminar generates lots of comments and heat. That's a sign that people find your topic interesting. That's better than if no one says anything.
Topic Selection
  • Start with well-defined ideas but shoot for big ones. Ultimately, you are most likely to be recognized for home run ideas. But, it's hard to publish big ideas early so starting with well-defined singles and doubles will allow you to improve your research skills.
  • People who do good corporate theory seem rare...
  • There seems to be a shortage of good econometricians working in asset pricing these days.
  • There is also a fair bit of interest in people who do methodology work in corporate. For example, what is the best way to do long-term performance studies? This area may have been pretty well done by now though.
  • There appears to be quite a bit of interest in going "back to the basics" in asset pricing. Have we overlooked obvious issues with the CCAPM and CAPM.
  • Looking at equity pricing from a bond pricing perspective. Zhiwu Chen at Ohio State has begun to do this. Lots more work to be done.
  • Market to book and Fama/French has probably been done enough unless you have a really good twist.
  • Practitioners focus a lot on earnings revision models where analyst revisions of their forecasts appear to predict stock returns. This phenomenon hasn't received a lot of academic attention (if any?).
  • Someone ought to take the last 25 anomalies and test them out of sample (e.g. in the time since the papers were written). On average, we would only expect X percent to persist if they really were anomalies. There was a practioner paper by Speidell in the Journal of Portfolio Management some time back. He found that most anomalies are anomalies. This could be a cold shower for the behavioral modelling types who are trying to motivate stories of systematic error by appealing to the anomalies literature. Long dissertation topic...
  • No one has done much of anything empirical with putable bonds, trust preferred, asset-backs, mortgage-backs, & corporate bonds lately. Wall Street rolls on with new innovations every month, but academics don't do much empirical work on it. Why are these instruments used? How are they priced? What are their economics? Increasingly, the data are available.
  • Why do people make money with collateralized bond obligations (cbo's). These are pure repackagings of existing assets. The answer must related to liquidity premia or clienteles reached by tranching.
  • The credit insurance market covered by monoline insurers hasn't been well studied. What does the profitability of these guys imply about the world?
  • There has been a lot of work lately on risk management and a lot of interest in the topic. We haven't seen a whole lot of work yet on energy and commodity risk management (other than the Tufano papers). More to do here. A neglected topic seems to be the reasons not to engage in risk management. Presumably risk management has a price (called the risk premium) that should only be paid by natural risk avoiders and should be collected by natural risk bearers. Figuring this out ought to shed some light on the "why don't all these people hedge?" papers.
  • Interest in models of organization theory (what goes on inside the firm) is rising. People are working on the Hart and Moore model, influence costs and other approaches.
  • Identify and focus on hard problems. For example, conventional wisdom has it that you can't empirically separate signalling from agency stories in events like new security issue stock price effects. This probably means we haven't tried hard enough. For example, why not look to see if earnings rise unexpectedly afterwards (e.g. Hansen and Crutchley, JB paper)?
  • Stay away from event studies unless you have a really interesting idea.
  • The time seems to be ripe to import macro real business cycle tools into the corporate finance literature. David Gross at Chicago has done this and the techniques open up huge swaths of virgin territory.
  • Beware of virgin territory unless you are a pioneering type.
  • Don't hand collect more than 200 observations unless you have a really, really interesting economic idea.
  • Be wary of using fancy econometric techniques which often do not yield new economic insights such as Gibbs sampling, Granger Causality tests, VARs, hazard models, neural networks, chaos, ridge regressions, co-integration.
  • Be wary of certain types of models which are short on economic insight such as tricky tax stories, irrational managers and signalling stories which rely on self-inflicted pain to get a separating equilibrium.
  • Avoid well-plowed fields such as LBOs, IPOs and the book-to-market effect unless you have a pretty different angle.
  • Microstructure can be a good area, but for some reason it seems hard to publish there.
  • There is likely to be more work to do related to cross-country differences in tax laws. Dividend imputation systems (or lack thereof), vary dramatically across countries.
  • Someone ought to look at the interaction of the Asian financial crisis and corporate finance decisions (e.g. leverage and liquidity) on valuation (e.g. market to book).
  • The Kaplan-Zingales / Hubbard "puzzle" is unsolved. Why is it that relatively non-constrained firms invest more out of free cash flow? The answer must be that there are other uses of cash flow for constrained firms or that we have our measures wrong or that their is some behavioral story that we haven't tapped into.
  • There is increasing interest in "real world", policy-oriented work.
Writing Papers
  • Read Struck and White's The Elements of Style.
  • Read anything by Donald McCloskey (e.g. Economical Writing in Economic Inquiry, 1988). The recent material by her counterpart is equally good.
  • When you write your paper, look at a piece with a similar format in the JFE or JF at the same time and look at its language, structure and style.
  • Don't be afraid to say "I" instead of "we" when you did something.
  • Always rewrite your introduction at least five times. Spend a lot of time on this. Very few people will look at much else. Referees like to try to figure out what they are going to say about a paper quickly and read the intro most carefully. Obviously, the abstract and conclusion are also crucial.
  • Normally, the introduction should address three issues: (i) What I do, (ii) Why you should care and (iii) What I found.
  • Make conclusions short and pithy.
  • Don't send off paper with more than 30 pages of text. Preferably keep it 20 pages of text or less.
  • Be parsimonious with footnotes.
  • Try to make papers readable by keeping footnotes in the text (not as endnotes) and including tables in text where discussed. You can follow journal style requirements later.
  • Try to make figures and tables self-contained. Could someone who hasn't read the paper figure out what you did by just reading a table?
  • Circulate your working papers before they are sent off. Try to find hypercritical friends to read your paper. Then take the comments seriously.
  • Anxiety about paper writing is a huge problem that causes people to avoid working and engage in various dysfunctional activities. The best solution is to write early and write often. Better to have something than nothing. So what if you reveal you are not a genius? The alternative is worse. Once you have something down you can get feedback and work on improving the thing. It generally takes writing a few papers before you even get to the point where you can produce something publishable.
Web Links for Ph.D. Students
This list was put together based on discussions and writeups with PhD students and junior faculty members at several institutions.