Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0

I’ll be the first to say that most classes geared toward investors are absolute bulls##t. After all, in econ they teach things like the efficient market hypothesis and in finance they teach models that do not come close to accurately predicting the market. If someone out there has created a model that can predict future movements of the market why would they share that model?? I know if I developed such a model I wouldn’t tell anyone about it and then I would retire and live life on the beach.

Yesterday, an outside (econ) professor came to my university to present a research paper. The topic was bubbles in different markets. Clearly, right when I heard the title I was interested. Before the speaker could develop the model, he had to make restricting assumptions about the number of assets available (10 different assets to choose from), the number of agents in the market (5 agents), and that the game would end at a certain period (this is the most ridiculous assumption in my mind because I don’t know one person who believes that the market is going to come to end any time soon).

As you might have guessed, his model didn’t yield any useful about how to spot a bubble or how to take advantage of one. The only thing that he could conclude is that when the market contains people with experience bubbles don’t occur. I have my qualms about the validity of this result since there were numerous people with years of investing experience who bought into the tech boom during the late 90’s.

The moral of the story is that those of you who aren’t taking advanced finance or econ classes aren’t missing a thing if you’re striving to become a great investor. Naturally, the question arises of what classes should one take to become a great investor. I have never heard a definitive answer, but I’ll gladly give you my thoughts and you can tell me if I am off the mark. I believe math is the subject that greatly enhances an investor’s ability. Math problems force people to think logically, which is a necessity to for investors trying to find bargains in the stock market. Since math deals so intensively with numbers investors with a math background aren’t intimidated by the numbers on the balance sheet or formulas to calculate free cash flow or annualized growth rates. Also, if you are looking for a job in finance a math background is a great asset when applying for jobs. Lastly, and most important, math teaches students to work diligently and thoroughly which is the most important tool an investor can have.

There are my thoughts on what classes investors should take. I have to say that I probably am biased since I was a math major in undergrad, but if anyone else knows of some good classes for investors let me know before I register for next quarter…

 

Print the post Back To Top
No. of Recommendations: 0

I don't know any classes you can take in a university to improve your investing skills.  I know I read an article a while back and they said some of the best stock pickers were music majors and so for a while the investment fund companies were hiring a lot of music majors to run their stock funds, though the article never explained why this was true.  I have heard they have backed away from this practice a while back and started hiring finance and accounting majors because if they got sued for fund underperformance it looked better in court if your stock picker was a math, accounting or finance major instead of a music major.

The Morningstar website has a series of articles, (or at least they used to, I haven't checked for it in a while), that was under the category of Morningstar University that explained pretty much all about the market, stocks, mutual funds and diversification, with a short test, (about 5 questions), at the end of each article, (each about 2 screenfulls long).  I learned a lot reading all the stuff in Morningstar University but never got college credit for it.  It did help me in real life make real money though, so I think it was time well spent.  Good luck in your schooling, career and investing.

Craig 

Print the post Back To Top