Hey guys, I am finishing my first year of college and already picked my major. It's investment/financial major, at the same time I will be minoring in Economics and Philosophy. Third option for minoring is psychology. Well the reason I starting this thread is to gather more objective upon the field of Finance. ultimately I want a gathering of people with some experience in the field and their thoughts on what is the most interesting field for them. Personally I am thinking about going to Asset management, although Investment Banking seems like fun as well. Of course if you don't want any life that is. Which is suitable for me. Also I was pondering about academic fields of finance such as quantative finance. Although today I noticed a very interesting paper on behavior finance. This got my attention very quickly. (see attachment) This new exploration which a stumbled upon has for the lack of the better word, excited me. SO guys, sorry girls as well, please acquaint me as well as others with your stories and insides on the 'institution' as well as the jobs out there. thanks
Asset Management and Investment Banking do not connect to any extent to the academic community's research (Lo, 2005). You see by this paper (Lo, 2005) that there is no bibliogaphical overlap with (Hong, Stein, 2007). Why? There is no overall enveloping thrust of the financial industry in concert with the academics;this represts a lack of direction (Lo, Repin. Steenbarger, 2005). Defining a sceince and math oriented approach has come from either the bottom up (Lo, 1999) or top down (Ben-Hiem, 2006) viewpoint. Again you see no overlap in the bibliographical support of these people's work. You will find the reason is stated IN EVERY SINGLE REFERENCE made above. It is the deeply seated pervasivestandard Orthodoxy (conventional orthodoxy). That is the road you are headed down. The second paragraph of page 2 explains this matter quite cogently. (Hong, Stein, 2007). Thus, investors do no maximize utility. "Instead utility is satisficed and robustness to uncertainty in returns is maximized." (Bein-Hiam , 2006). Follow the trail: Odds Probability Sufficiency Info-Gap Decision Theory Nesting Contraction. Equity Premium. You have now made it from robustness to opprtuneness. Robustness simple states that requirements are always satisfied: opportuneness states that sweeping success is possible. Someday, people will determine how to make money. some people have made that determination. As one of them I have posted a critical path that anyone can follow. It is in the form of a chart with the components of the financial industry ennunciated. It comes down to making money where there is no premium to be paid (if there are more people doing something than the something can sopport, to play they have to pay a premium). Most od ET is about playing at trading where in a near zero sum game 90% of the players cannot affort the premium. They are called losers. You, wisely, plan to leave trading as you know it and believe it works (See the topics listed as the forums of ET). This is run on copy not reread or edited and the references are just from last week's reading. You do not plan to study anything that could let you author anything about the research of the many aspects that are contained in these writings. John Nash arrived at grad School where Hong is now a professor. He could construct and support views about what he thought of things (See the movie "Beautiful Mind"). So far, up until this year, no one has written up how to make money in the schema of the research cited above. No one (financial industry or academics) has been out there to see it happening nor envisions its possibility, it turns out. Here is the rough out: Go to Table 3, page 15 of Lo, Repin, Steenbarger, 2005 and modify the table. Fill in an appropraite sett of characterisitics, smooth the account sizes to their vertical average mean and move the decimal point two places on those P&L's. So your bottom line is a dilemma. You are getting educated to take a job in a setting that have a pervasive SO. If you want participate in a personal aspect, you can't afford the premium; if you want a salary, you have to follow the party line which goes nowhere. If you go the academic route you see the RFP's are written by the government (SF, et al or the industry with the pervasive SO). This is just like the geology industry was a while back. The before and after is the advent of the Techtonic Plate theory. Before, everyone was putting electrical tape on the hard ball; after they got a new ball park and are playing a different game top to bottom Call it football or something other than baseball. The alternative, AMH (Lo, 2005), strikes out too. You will see why simply by looking at the measurement tooling which was dragged over, lock, stock and barrel from the EMH. The geologists did not make the mistake of dragging the math forward. What do people who are the academic stars of the financial industry do with their pervasive training at the schools of Hong and Stein (Princeton and Harvard)? They keep starring in trained ways. Some of your faculty members may be so trained also. SF honored a program they financed that I ran. My Econ Prof was in the audience. We spoke afterwards. He siad:" I remember you, John, you were always asking questions." So I didn't do the dilemma. You will. There is this elephant. I have looked at it for 50 years, thank goodness. HDO suggested that ET do white papers. ET isn't going to do it. Pannels, reviews, etc...academic excercise... not going to happen here. But it is going to happen. It will be shunned for a while. But sooner or later it happens. ford grant>>>....field work >> book>>>>environment>>>> PL 92-500. field work>>>book>>> training>>>construction>> sales>>>added to fuel>>>>increased usage>>>>slow CO 2. 50 years of trading>>> four boks>> fifth book>>>>??????? I believe there is a critical mass right now. For me the paradigm shift is occurring. There is a way out of the financial industry dilemma. Taking money out of the pools and using it to fix things that are busted, globally is what some young poeple are beginning to do. This is not the Bling, chicks, cars and money that ET characterizes which comes from the conventional orthodoxy. The heuristic, oft repeated, cannot be seen or heard by those with the SO beliefs; but it is a solution that does not have a premium. There is no cost to play like the 90% rate of SO.
Daytrader, eh? Well I do this at the current moment, futures(ER2 and YM) and forex. Technically I want to make an impact on the world. Not a major one of course a minor one, like for instance breaking the bank of England as Soros did. Just joking. Something in the lines of Brett Steenbarger or Jack for that matter (although a lot of people would tend to disagree with me on that one.) Or at least known as, "Hey, thats the guy who made me nice amount of money in year so and so." As for post by Jack: If I understand you correctly, I have a dilemma which is virtually unsolvable? Well, yes. So many choices so little time. There is a guy in my College which I am currently attending. He came on second place this year in the IB's Collegiate Investment (all mechanical systems only). So, my school newspaper did an article on him. I am a writer for the newspaper so I had a choice to chat with him. He worked for Bear Stearns in IT department. What he stated was that quantative finance is good. Meaning easy accessible opportunities, but there are downsides as well. Quant guys usually work by themselves. (not really for me, b/c I am maybe not that outgoing but I love to discuss situation, work, etc. with others). Technically this is not a bad route but I am still debating. Asset management looks promising and Investment Banking is almost shoved down your throat in my school. Dilemma, Dilemma.........