Trader and blogger Michael Martin has been talking to Aaron Brown, chief risk officer at hedge fund AQR Capital Management and the man whom Nassim Taleb apparently called “the Dean of Wall Street Risk Managers.”
Martin’s interview is very long and very informative and includes such trading (and potential career management) gems from Brown as:
“These are many of the most successful people in the world follow that strategy and people look at them and try to imitate that strategy. They don’t realize that it was a fool’s strategy that just happened to work out. If the person loses their big bet, they blame it on black swarm, an unexpected event, it’s not my fault, I couldn’t control it, but in fact they could.
They could have made a hundred smaller bets, they would have been guaranteed to be in a better place.”
Most interesting, however, is Brown on the qualifications relevant to a risk-related job in financial services.
Notably, he thinks an MBA is pointless, claiming:
“I think there are some valuable courses in it and you can actually learn some things in an MBA program if you want to. But you can certainly get an MBA without learning anything useful, for finance anyway, possibly for any kind of business.”
He’s also wary of mathematical finance courses, arguing (along with the likes of Paul Wilmott) that they give people a false sense of security:
“The more quantitative financial degrees are primarily offered by people who are already very good at quantitative things, and want to apply it to finance. That can be kind of dangerous. I feel that I would rather have somebody who knew something about taking risk, who had a feel for finance and money and was willing to learn a little math to do it than someone who is really, really great at math but you had to explain what money was and what taking a bet was and how it felt doing it with money and so on.”
Although he offers the following caveat:
"On the other hand, if you really love finance and you want to get into it and you can handle the math in one of these [quantitative finance] programs, it can be. It certainly will get your resume pulled up higher."
Which qualification does Brown like then? The CQF. He says:
“ The CQF is, I would say, a more elite program, it’s taught by really some of the top practitioners in the world. It’s a very small group.
And the people who have completed it, they’re held to a very high rigorous mathematical and practical standard. And one of the things I’ve heard from them is the connections you make in the program are really invaluable.”