I think I have become more curious and questioning about what is written, published etc. The research part also prepares you to perform better when uncertain and to embrace that uncertainty - when a new project comes in or decisions are to be made.
Multi-Asset Market Strategist, Avanda Investment Management Pte Ldt, Singapore
COULD YOU TELL US ABOUT YOUR BACKGROUND AND WHAT YOU ARE DOING TODAY?
I did most of my studies in India. My undergraduate studies were in Electronics and Communication Engineering and later I did an MBA from the Indian Institute of Management, Ahmedabad and after graduating from there I have worked in investment related roles in Citi, Lazard Asset Management and now Avanda Investment Management Pte Ltd, which is a Singapore-based investment firm focusing on multi-asset investing.
WHY DID YOU ELECT TO DO A PHD AT THIS STAGE IN YOUR CAREER AND HOW DID YOU CHOOSE THIS PARTICULAR PROGRAMME?
There were multiple reasons for doing a PhD. Firstly, the sentiment of lacking in-depth understanding. For example, in any MBA course, CAPM and Black Scholes are taught, but there is very little discussion on the origins of the theorems and formulae, the assumptions and what else has been proposed. A PhD programme focuses on all these aspects. Secondly, I have worked as a quantitative analyst for a substantial part of my finance career, so deeper understanding of quantitative methods and knowledge about new ideas always helps. Thirdly, it provides a training ground for one's thinking process - whether it is asking questions, addressing shortcomings or questionning what is there.
Once it was settled that I wanted to do a finance-focused doctoral programme in an executive format the choice was obvious. While several schools offer programmes in an executive format, EDHEC is the only one focusing specifically on finance. This means the courses are tailored particularly for finance research. Also, for both the core courses and electives, the faculty is outstanding. Learning from members of the core faculty was a very enriching experience. For electives, guest faculty comes from world renowned universities. This is very different from a typical university programme, where you get to learn from faculty based in that particular university. This exposes you to different schools of thought.
WHAT IS YOUR EXPERIENCE WITH THE CORE COURSES OF THE FIRST YEAR AND WITH THE ELECTIVE COURSES?
In short, very enriching. It was for the first time during Professor Raman Uppal's classes that I was finally able to thoroughly understand Black Scholes. The faculty teaches in a way that you are unconsciously preparing yourself for doing research. During the core courses, they do not simply teach the basic methods, they also discuss contemporary research. My first paper was essentially produced from my informal discussion with Professor Abraham Lioui during the financial economics course.
While four core courses does not seem to be many, they were tough enough that we were always rushing to meet deadlines. Electives are essentially in two formats - ones discusses methodologies in more detail, such as Professor Bandi's on Econometrics while others like Professor Hong's on Behavioural Finance focus more on literature discussion. All the elective faculty are global leaders in their specialisation and they go to a lot of effort to clarify their thoughts. These doctoral research seminars can also help in developing more research questions and provide an opportunity to discuss your work with the faculty.
WHAT IS THE MAIN CHALLENGE IN THE PROGRAMME FOR YOU?
I think there are two main challenges: time and motivation. With a full-time job and family as well, finding time out for the programme can be challenging. Frankly, it is not feasible without your family’s support as finally most of the time will be carved out from what is supposed to be spent with them. While the programme is truly challenging, if one commits enough time on a regular basis it is feasible. The key here is - regularity. Success requires continuous committment. During the research stage, it is easy to get demotivated when expected results are not forthcoming or when forming a clear hypothesis is proving to be a challenge. This is where it is important to be surrounded by people who can help you keep motivated. In my case, my wife, who herself comes from a research background and my advisor Dr. Abraham Lioui have been very helpful in this regard.
HOW HAS THE PROGRAMME IMPACTED YOUR DAILY WORK?
I can notice two changes in my daily work. I often get involved with quantitative aspects of investing, e.g. Portfolio Construction or Risk Management. Here, there is improved regard for methodology and a willingness to try new approaches. Often when it comes to quantitative investing, academic papers are taken as the gospel. But thanks to the programme I have realised that this is not the case - different authors have different approaches, biases and assumptions. In a similar vein, I think I have become more curious and questioning about what is written, published etc. The research part also prepares you to perform better when uncertain and to embrace that uncertainty - when a new project comes in or decisions are to be made. Programme requirements and deadlines also force you to be more efficient in terms of time management.
ARE THERE BENEFITS TO INTERACTING WITH OTHER PROGRAMME PARTICIPANTS AND TO HAVING A MAJORITY OF PROFESSIONALS IN THE CLASS?
Yes of course. Firstly, I would be lying if there is not a networking aspect to it. If I look at my cohort, many of the participants are in leadership positions in their organisations and have much more experience than me. Simply listening to their views can be useful. Secondly, as each of us have different roles in the industry- - sell-side or buy-side, or assets - equity or fixed income or something else we gain a different perspective. Discussions can be quite lively during the classes and during the breaks. This is also very helpful for some of our assignments where we need to work in groups. For the second part of the question, my knowledge is only of this programme and I do not have much of an idea about how a typical full-time programme would work. But I do have some friends who are pursuing finance/economics doctoral studies in a full-time manner in the standard format and one objective can be different. Professionals tend to have a wider focus and a more applied one. Also, there is a greater appreciation for how things will work out in the real world.
YOU ARE CURRENTLY FINISHING YOUR FIRST PAPER. COULD YOU PLEASE INTRODUCE THE TOPIC AND THE FIRST RESULTS OF YOUR ON-GOING RESEARCH?
My first paper addresses questions related to behavioural finance and asset pricing. Recent research has shown that heterogeneity/differences in beliefs plays a role in asset pricing. Several papers have shown that the magnitude of this difference (e.g. standard deviation in analyst estimates) has an impact on expected returns, traded volumes and volatility. However, the source of this disagreement is unclear in the literature. Some of it has been shown to be dependent on asset characteristics - e.g. more levered firms have higher disagreement. Similarly, firms which have more macroeconomic exposure like energy companies also have higher disagreement. My research focuses more on exogenous factors which fall outside the asset-specific realm and are more universal. My first paper focuses on trust prevailing in a society. Results indicate that societies which have higher trust have lower heterogeneity/disagreement. It also introduces a new trust-related metric called radius into financial literature. The metric focuses on the difference in trust a person has in someone they know well (such as a family member) and a stranger (someone from a different country).