Sunday, April 11, 2010

Reflections on the Kent State University Program in Financial Engineering: Investing in Your Career

I had the pleasure today of talking with graduate students from the Kent State University master's of science program in financial engineering. They were interviewing for internship positions at trading firms; those internships can eventually lead to full time positions with proprietary trading firms, hedge funds, and investment banks.

I can't begin to tell you how impressed I was with the students. They blend analytical abilities, strong teamwork skills, and a sound work ethic. Most of all, they are learning tomorrow's skill sets today.

The Kent State program is unique in that it combines a quantitative and analytical focus with practical trading skills. The program operates a trading floor on site and provides students with experience in trading a variety of markets. Guest speakers from the financial industry visit the students and provide real-world insight and members of the board of advisers (which I am one) help the students find promising internships and jobs.

When these students graduate, they will have significant skills in statistics, programming, and financial modeling. They will be able to test trading ideas, develop trading systems, and manage the risk of individual positions and diverse portfolios. They will also have the training in economics to help them identify global risks and opportunities.

Personally, if I were a young person starting out a trading career, I would seek out this kind of training. There is a vast world of trading activity and opportunity that you never read about in the popular magazine articles and books on trading. There are cutting edge skills you can learn to help you identify and profit from these opportunities.

Invest in your education and you will see a significant return on that investment. While education in the world of finance is not cheap, a lack of education can prove particularly expensive.
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11 comments:

Darren said...

Nice! Got my Ph.D. from Kent State and loved the school. This program was not around when I went there but seems like a great opportunity to learn. I'd rather pay my tuition to the school than the market. Pretty sure the market's tuition is much higher.

Curtis said...

Very fascinating program... but

I can't help but think this is setting someone up for a 9 to 5 job.

The truth is that for most traders or want to be traders (like myself) the single primary reason they are not able to trade is a lack of capital. Such a program immediately places more debt on the would-be trader. The greater question on my mind is whether this program would truly help one to hone in on their strengths or produce more of a cookie-cutter type of product.

If you follow your 2% rule then this would mean the trader should have a 1.5 million starting balance.

Even with my misgivings, I'd certainly consider it an opportunity if it were afforded to me.

Esoterictrader said...

Could you provide some feedback or perspective on Kent State's program versus ones offered by UCLA or Columbia?

Thank you

Curtis said...

Correction you stated 10%

"Personally, I would never spend more than 10% of my trading capital on educational products, services, and software; my actual expenditures are considerably less."

Gangineni Dhananjhay said...

Dr Brett,

Nice to hear from gret teachers like you. I consider lack of finance education with focus on conceotual integration as you often expound in your articles is really the need in India. I wonder how many traders and investors pay huge tution fees to the market for not considering the basic foundational materials.

I have recently launched BlackSwan FMB-School with an intent to provide concepts of trading and markets.
My reference books are

1. Trading & Exchanges - Larry Harris
2.Three books by Dr Brett
3.Two books by Victor
4. Investments - Bodie, Kane, Marcus
5.Valuation - Damodaran

My blog is at www.hilotrader.blogspot.com

Keith said...

I find it interesting that there are no psychology courses listed (did I miss something). In my experience, the math, economics, and finance are the easiest to learn, they are taught many places. Seems like the program should also deal with the psychology of trading - when these graduates experience their first series of losses -- how will they react? Does the program cover any of the psychology of trading? Should it?

Brett Steenbarger, Ph.D. said...

Good point, Keith. They do indeed cover psychology, including the very important and practical work in the area of behavioral finance. Those that intern at firms where I work will also get the psych coaching integrated with their daily work.

Brett

Chris said...

Dr. Steenbarger -

Have you been compensated in any way to promote this program? If *not*, I would seriously consider re-wording the post, as that is the impression one gets.

Brett Steenbarger, Ph.D. said...

Hi Chris,

Glad you brought this up. The heads of the program didn't even know I was going to be writing the post; I'm in no way compensated for mentioning them. Although I like the KSU program, my major point is about the value of education in financial markets--not the touting of any single program.

Brett

John said...

First off, I would like to thank Dr. Steenbarger for the press of the MSFE program at KSU.

I am a graduate of that program. I considered attending programs similar to KSU at IIT, Columbia, NYU, Rutgers, etc. In my opinion, what differentiates KSU from some of those others is the focus it puts on understanding the markets, the mental game you play (behavioral) and trading. Much of the other programs focus on the programming and the mathematical side of Financial Engineering. If you want to become a quant, those programs are perfect. However, if you want to trade or be involved in the derivatives market leveraging these tools other than in a purely quant role, the KSU program I felt offered the best mix of understanding the math, market, and business sides of the world.

During the program I interned with GS in the product management side of the business learning the broker/dealer world along with the technological importance to trading. Currently I work with traders on the development and implementation of automated strategies via a server side low latency engine.

I may be biased, but coming from a small town in NE Ohio, getting a degree from a small non-ivy league undergraduate school, then graduating from KSU's MSFE program, I have transitioned into a great role focusing on markets, traders, and the technology side of this market right in NYC.

The access to market participants via networking, guest speakers, the 10 week internship and actual trips to Chicago and NYC allow these students to truly have a great chance in landing a competitive job in the current landscape.

And I most definitely do not work 9 to 5.

In one sentence, the KSU program can be dubbed (my opinion of course): "Developing Quants that can Trade"

Timer Trader said...

First, Two books in programming Excel (VBA) will do the most aggressive financial modeling, along with some softwares that have embedded programming language such as Metatrader,

Second, One book In Statics will do.

Third, Several books in money management will help diversify portfolio and Position sizing.

Fourth, Economics can't be used in Forecasting , so economics course is useless they only explain why what happened did happen !!