On December 9, 2014, Caltech students convened in Baxter Lecture Hall to hear from alumni about leveraging science and engineering degrees into successful careers in finance. Organized and moderated by Linde Institute Professor of Finance Richard Roll, the panel included the following prominent alumni:
- Robert Gingrich, MS, PhD, theoretical physics; Risk Modeler/Manager, Western Asset Management Company
- Jason Hsu, BS, physics; Co-Founder and Vice Chairman, Research Affiliates
- Kenneth Winston, BS, MS, mathematics; Chief Risk Officer, Western Asset Management Company
The panelists shared their experiences in making the transition from laboratory-based theoretical modeling and mathematical proofs to the world of business and high finance, where theories of decision making, risk management, and quantitative investing are applied in real time with real-world impacts. None of the participants originally intended to pursue a career in finance, but each discovered that rigorous Caltech training during his formative years provided a definite edge over the competition.
In response to student questions about what motivated the panelists to pursue their chosen career paths, Winston explained that his decision grew out of the realization that he would never be in a position to revolutionize the field of mathematics—a field he describes as particularly cumulative, "with very little impact from individuals and difficult frontiers to breach." His advisor at Caltech was working on mathematical models of the stock market, and the idea that quantitative analysis could be used in finance intrigued Winston. Using mathematical models to understand capital markets and anticipate growth, he set his own sights on an uncharted frontier, and it paid off: he has since found this to be an area in which he can do interesting and impactful work.
Jason Hsu, the youngest panelist and a former Page House Techer, acknowledged that finance was not on his radar until his third year as an undergraduate, when he participated in an economics experiment conducted by Dr. Charles Plott, the William D. Hacker Professor of Economics and Political Science in Caltech's Division of the Humanities and Social Sciences.
It was in Professor Plott's computer lab that Hsu came to understand the purpose of the economics "game" he was playing: it was about creating a new collective system comprised of different characteristics determined by the individuals playing the competitive game. "It was absolutely beautiful, in some ways no different from some of the physical or biological systems that I was studying," Hsu recalled. "Each round of competition led to a change in strategy by the participants, and it was incredibly complex because humans modify and adapt behavior so frequently." It was, he added, "far more complex than anything I'd ever seen or studied before," and that revelation motivated Hsu to pursue advanced studies in microeconomics and finance and ultimately to earn a PhD in finance from UCLA.
The panelists made it clear that the skills and training they received at Caltech—shaped by the Institute's hallmark emphasis on logic and curiosity—prepared them well for success in the business and finance industries. And that was a memorable takeaway message for the students in the audience looking toward their own future paths.