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ANAT ADMATI, PROFESSOR OF FIANCE AND ECONOMICS, STANFORD GRADUATE SCHOOL OF BUSINESS: So, my journey starts where I took a lot of math. I was good in math and I love the math. So, I was kind of, in my romantic mind when I was in my early 20s, I was going to take but not give back to math, that kind of thing.
First of all, I think the amount of investors that participate in the financialmarkets is much smaller than it is in the U.S. And I think that the financial advisors are used, but not as widely used as they are in the U.S. And definitely, their retail market participation is significantly lower than you can see in the U.S.
So like a component of it was like the standard derivatives math, right? And so like, you know, I got there and I learned derivatives math, right? And so I had the spreadsheet of every convertible bond deal that we or anyone else in the market did. And it restarted in, I wanna say March of 2009, but like onlya little bit.
I didn’t think I would be necessarily doing what I’m doing today, but I knew that I was gonna be interested in financialmarkets of some kind, and I think I probably ended up in the right place. 2009, 10 in that role. So that’s the math. So I, I went to school.
Following the financial crisis and the Fed cutting rates, economy and the market starts recovering in late 2009 and then 2010 and we kept hearing from a lot of different value corners, hey, everything is richly priced. Let’s talk a little bit about the pushback to low expected returns. Bonds are the most expensive.
So how Barry Ritholtz : Do you go from a PhD program to financial engineering masters? Jeffrey Sherman : Well, what it was was, so I, as I said, with applications, there’s many applications of math, and the usually obvious one is physics. Barry Ritholtz : It seems that some people are math people and some people are not.
And I did a lot of options math, which I thought was interesting. 00:10:08 [Speaker Changed] Yeah, so I graduated from HBS in summer of 2009 and I was fortunate enough to join the Grassroots Business Fund, which had been a division of the International Finance Corporation and literally spun out first half of 2008. Makes sense.
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