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Monthly Archives: April 2016

How I Became a Quant

19th April, 2016 · Susanna Gibbons, CFA · Leave a comment
Susanna Gibbons, CFA

The International Association of Quantitative Finance (“IAQF”) has been participating in a series of panels around the country titled “How I Became a Quant”, one of which was hosted locally by the University of Minnesota’s MCFAM (Minnesota Center for Financial and Actuarial Mathematics in the School of Math) on Friday, April 15 2016.  The discussions are focused on providing students and practitioners a personal view into the careers of a range of quantitative finance professionals. I had the good fortune to be asked to participate on the panel which presented in the Twin Cities, along with Anna Kincannon, Capital Planning Manager at Bremer Bank; Dharini Loknath, Petroleum Products Analyst at Cargill, and Michael Szwejbka, SVP Risk Analyst at US Bank. The panel was moderated by Chris Prouty, an instructor with the Master of Financial Mathematics (MFM) within MCFAM and exotics trader at Cargill.

To be clear – I am not a quant, nor did they expect me to be one. I introduced myself as a “Quant-a-be” (rhymes with “wannabe”), which basically means that my career in fundamental analysis, portfolio management, and asset management has repeatedly crossed paths with our more quantitative brethren, while my actual skills remain mired in prose and poetry rather than mathematics. In spite of my deficiencies, the discussion was excellent, and focused on a few key themes.

First, all of the panelists were in agreement over the importance of communication skills, and the need to work closely with business units on the development and implementation of models, whether they are risk management, decision making, or business analysis tools.  Without clear understanding of the business need, it is very difficult to develop successful tools, and yet much of our industry remains sharply divided along quantitative / not-quantitative lines. There is great opportunity for students who are successful in developing their skills in both areas.

Second, the panel dwelled on history for some time, and the importance of knowing exactly how we have gotten to where we’ve gotten. There is a lot to be learned from understanding market failures of the past, and the role that quantitative finance may (or may not) have played in those episodes. While the development of quantitative models seeks to guide forward-looking decision making, they are based to a large degree on history, and having a solid understanding of that history can help to identify key assumptions and potential weaknesses.

Third, there was a fair amount of conversation around the role that quantitative finance currently plays in the banking world, particularly around the implementation of the capital planning process and stress testing required by the Federal Reserve under CCAR. While there is not necessarily strong agreement around the ultimate effectiveness of CCAR, it is clear that this has become, and will continue to be a driving force around the employment of students with strong quantitative skills.

Finally, there were many topics covered of a significantly more technical nature, during which time I felt rather like Winnie the Pooh roaming the Hundred Acre Wood, humming a little hum to myself until something came ‘round which I recognized. And perhaps, in the end, that is all that we can ever do as Investment Professionals. By I really do believe that the continued evolution of quantitative finance provides those of us who wander with the best of hope of charting a course through the woods.

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Posted in Hot Topic Commentary, Local Charterholders | Tags: communication skills, how I became a quant, International Association of Quantitative Finance, investment professionals, quant, Quantitative Analysis, quantitative finance, Susanna Gibbons, University of MN |

A Letter from Our Society President

12th April, 2016 · Joshua M. Howard, CFA · Leave a comment
Joshua M. Howard, CFA

Spring is here in Minnesota.  Even if the weather occasionally is lousy I still enjoy this time of year, as the first two weeks of April bring the NCAA championship game, the Masters, the home opener for the Twins, the Wild in the NHL playoffs, and the end of another Timberwolves season.  I also seem to enjoy this time of year much more than when I was a CFA candidate, especially as we get closer to Memorial Day.

I apologize for skipping my monthly letter in March – there was way too much basketball to watch. Despite my preoccupation with the Blue Raiders of Middle Tennessee, the Northern Iowa Panthers and all the other lower seeds that pulled off upsets, Society staff and volunteers were still providing value-add programming to our members.  Since my last letter the Society has offered multiple lunches, a Distinguished Speaker Series presentation, an After Market Appetizers event at Surly and the Upper Midwest Research Challenge finals.

In mid-March we also hosted the first ever CFA Institute conference held in the upper Midwest, when the Wealth Management conference came to Minneapolis. Almost 200 people from around the world attended the two day event. The presentations included a variety of engaging topics on behavioral finance, fundamental indexing, philanthropy, asset allocation, and many other topics pertinent to a financial advisor. With roughly a quarter of all charterholders now working in wealth management this conference was very relevant to our membership.

Two final thoughts. First, I want to wish the best of luck to the North Dakota State Research Challenge team as they head to Chicago on April 11th to compete in the CFA Institute Research Challenge Super Regionals (and hopefully the International Finals the next day). They did a fabulous job at the Regional finals in February and will be a tough team to beat.

Second, I want to personally thank Kris Kautzman for the work she did for the Society over the past five years.  Many of you knew her through her work on volunteer coordination, member engagement, or with our prep classes. She has moved on to her dream job, combining her non-profit expertise with her love of music, and I wish her all the best.

Joshua M. Howard, CFA

President, CFA Society Minnesota

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Posted in Local Charterholders, Society President Letters | Tags: CFA Institute, President's Letter, Research Challenge, Society President, Wealth Management Conference |

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