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Does going to an Ivy League help you become a good trader

  • #1
  • First Post: Nov 14, 2008 6:03pm Nov 14, 2008 6:03pm
Just wondering if going to an Ivy League (not just any university but an Ivy League or Oxford/Cambridge, Hidelberg ,Sorbonne etc) make you a better trader.

The reason I ask is everywhere, everyone says it doesn't matter where you've done your schooling, it doesn't matter in the markets, you could have whatever background etc etc....

But the bottom line is all the good traders are from Ivy Leagues .... gee where do I start lets see Ed Seykota MIT, Niderhoffer (Harvard), George Soros (same deal), Martin Schwartz (Harvard/Oxford whatever), Jim Simons (Harvard), Monroe Trout (Ivy League), William Eckhardt (same thing), Warren Buffet (Columbia) ..... I could go on and on.

If you think about it most of the traders in the market Wizards books are Ivy League types, most of the other top traders who aren't in the market wizard books are also form elite universities.

Wondering if there's a connection between being highly intelligent, very well ( I mean Ivy League) qualified ---------> makes it easier to became a good trader.

Does it?
  • #2
  • Nov 14, 2008 9:42pm Nov 14, 2008 9:42pm
No. It most likely makes it harder to become a good trader. That's why, for some, it works. The discipline of a high quality education (wherever it comes from, through formal institutions or informal means) builds knowledge, character and sound judgement.

IQ, access to quality research/information, and quality mentoring also help.

That said, it would not be possible to answer the question properly without quantitative research of the education backgrounds of all "successful" traders.

For every Ivy League successful trader, there could be 5 times as many unsuccessful Ivy League educated traders. The reasons for success where others fail are likely complex and quite varied between individuals.
  • #3
  • Nov 15, 2008 12:46am Nov 15, 2008 12:46am
Ivy leaguers are too full of themselves.......
Same Whore .... Different Dress
  • #4
  • Nov 15, 2008 2:39am Nov 15, 2008 2:39am
My older brother and younger brother are both ivy league. Older bro is Dartmouth undergrad and Harvard Law. Younger bro is Dartmouth undergrad.

Guess who the trader in the family is.
  • #5
  • Nov 15, 2008 3:02am Nov 15, 2008 3:02am
The thing about an Ivy League school,

It's rarely what you know, but rather, who you know. At Ivy League schools, you are more likely to network with more prominent alumni than you will at other schools. Does it mean you won't meet any prominent alumni if you go to a non-Ivy League school? No. When you network with more prominent or successful alumni, they could end up becoming your big break. And that's generally what happens, an alumni likes this student, becomes their mentor, and gives them a helping hand, thus accelerating the path to success.

With regard to trading, the assumption is that Ivy League students are a cut above the rest. Well, there's something to be said about that. I interned for RBS Greenwich Capital while I was still in high school, and let me tell you, they may be smart, but intelligence only gets you so far in trading. Darwin said it best:

Quote
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”



I was grouped in with the other interns--juniors in college--from prestigious places as Harvard, UPenn, MIT, and Brown, and let met tell you, I almost wet myself, knowing that I'd be working with the best of the best. Although they may be smart, they could not adapt quickly to the changing market. I was able to, and consequently, was effectively promoted by the trader who acted as our mentor and boss during the internship. (That and probably because I was there from 6AM to 5PM, while the other interns were there 9AM to 5PM).

All of the experienced traders here agree with Darwin. If you can't see the market changing, quit trading.

As for me, I strongly believe that you need three things when you go trading:

  1. Bucks
  2. Brains
  3. Balls

RBS provided us the bucks, the Ivy League students had the brains, but I had the balls. These students were stricken by paralysis of analysis. They simply had to be right, if they were wrong about a call, they took it personally, and never bailed out fast enough. To them, bailing out was admitting you're wrong.

  • #6
  • Nov 15, 2008 3:08am Nov 15, 2008 3:08am
Andrew Lahde.

Pay attention to what he says about most of the people that attend Ivy League schools.

http://www.bloomberg.com/apps/news?p...YmY&refer=home
  • #7
  • Nov 15, 2008 4:37am Nov 15, 2008 4:37am
I know a guy who traded for Tudor Jones for 5 years and he was the youngest trader in the history of TIC. He told me once that every guy that came from and Ivy league school either was average at best, or they just couldn't trade at all. He said the best trader he had ever seen at TIC was a retired Special Forces guy. He knew what real fear was and how to deal with it.

Ivy League schools have many intelligent people, but they also have many inbred idiots whose families have gotten them in.
  • #8
  • Nov 15, 2008 4:41am Nov 15, 2008 4:41am
Would have thought military school would be a useful background...
The market reveals who we really are...
  • #9
  • Nov 15, 2008 4:50am Nov 15, 2008 4:50am
Quoting Ronald Raygun
RBS provided us the bucks, the Ivy League students had the brains, but I had the balls.
Probably among 30 years people will be quoting this phrase !!!!
Crudely beautiful .
  • #10
  • Nov 15, 2008 4:52am Nov 15, 2008 4:52am
Sun Tzu, The Art of War .... "know yourself", "know your enemy".


The guys are right, the ability to adapt and deal with fear (and other emotion factors within yourself) is critical. Humility and the capacity to bend with the market and allow it to teach you, also matter. Many traders do not succeed (imo) because ego gets in the way.
  • #11
  • Nov 15, 2008 5:01am Nov 15, 2008 5:01am
This article was interesting, the boys may like it -

Science unveils hidden drivers of stock bubbles and crashes

Posted Fri Sep 19, 2008 1:43pm AEST
Updated Fri Sep 19, 2008 2:13pm AEST
http://www.abc.net.au/reslib/200708/r166723_619980.jpgTestosterone encourages confidence and risk-taking, and has an accumulative effect (Reuters: Brendan McDermid)


Many economists believe that investors make decisions rationally, weighing up corporate data and other pricing signals to evaluate gain or risk before buying or selling stocks.
But this keystone belief in how markets function is now under mounting attack after this month's global stocks crash, the latest in a string of financial shocks over the past two decades.
Proponents of rival concepts say that primitive emotions, herd mentality and raging hormones are among the invisible motors that help inflate an asset bubble and then prick it.
"In standard economic theory, the way that prices in all markets are meant to be set depends on people being rational and having access to all available information," David Tuckett of the Psychoanalysis Unit at University College London says.
"This way of looking at things is almost completely wrong. Markets are operated by human beings."
Investigators into the theories of behavioural or emotional finance say conscious decisions are only the surface of a river with deep and powerful undercurrents.
A boom-and-bust event can follow a distinct path, they say.
At first, investors are sceptical about dipping into a market.
When they perceive that neighbours or peers are getting rich by buying a given stock, they cautiously make a purchase and their confidence builds as the stock's value rises.
The gains fuel enthusiasm, which leads to the euphoric conviction, as the price spirals higher, that this is an easy way to wealth.
At this point - when the bubble is most inflated - the investor becomes indifferent to warning signs, such as share values or price-earnings ratios that are stratospherically high.
What happens when the market starts to tank? The initial response is dismissal, for the investor still believes that his stocks will come back up and there is no point in selling.
As prices slip further, denial cedes to fear and then, suddenly, to panic.
Traumatised by their loss, investors vow never to invest in stocks again - a sentiment that can be durably enforced if many others have also been burned.

'Tulip Mania'


A famous example of this process was "Tulip Mania", which occurred in the 17th-century Netherlands.
Tulip bulbs, then a rarity in Europe, scaled extraordinary heights in the course of a mad year, only to fall just as abruptly.
At the Mania's peak in 1636, a single bulb of a particularly coveted strain, the Viceroy tulip, changed hands for the equivalent of more than 25,500 euros ($44,859) today. When the bubble burst, there was a wave of moralising and calls for tighter controls against speculators.
Trond Andresen, who specialises in behavioural analysis at the Norwegian University of Science and Technology, says investors may think less about the intrinsic value of a stock and more about the perception of its value.
This is an important distinction, he says.
"Short-term volatility is created when you have people running after each other," he argues.
"If people stopped chasing what they think the other person is thinking, rather than actually trying to value a stock on their own best terms without second-guessing people, the volatility would disappear."
John Coates, a Cambridge University researcher into biochemistry and behaviour, says market fluctuations are amplified by hormones.
In a past life, Mr Coates traded at US investment house Goldman Sachs and Deutsche Bank in New York.
During the dot-com boom, he says, he was stunned to see male traders "displaying classic symptoms of mania," with symptoms of omnipotence, raging thoughts and diminished need for sleep.
Quitting finance and heading for Cambridge, Mr Coates explored a hunch with Joe Herbert, a professor at the Cambridge Centre for Brain Repair.
They took saliva swabs from 17 male traders at a London stock-dealing firm twice a day and measured the samples for two hormones.
These were testosterone, which is associated with male aggressiveness and sexual behaviour, and cortisol, which is summoned by the body to deal with "fight or flight" emergencies.
When the traders were in profit, their testosterone levels surged. But when they were in loss, or in fluctuation, it was their cortisol that rose sharply.
Testosterone encourages confidence and risk-taking, and has an accumulative effect, which could explain winning streaks in sports teams, for instance.
But research in animals suggests that, over the long term, high doses of the hormone impair judgement and encourage excessive risks.
Similarly, cortisol has a beneficial, euphoric effect in the short term, but after two weeks of exposure to it at high levels, the hormone can turn negative, eroding confidence and magnifying fear of risk, Mr Coates says.
"If you were to take an identical set of facts and present them to someone high on testosterone and someone who's got chronic cortisol, the first one would see opportunities everywhere and the second would see nothing but risks," he said.
In this light, says Mr Coates, fund managers would be advised to get an "endocrinal mix" on the trading floor.
Women and older men would add a calmer, longer perspective to the headstrong, testosterone-driven actions of young male colleagues.
In 2007, Mr Tuckett interviewed dozens of fund mangers at top investment banks around the world.
Under crushing pressure to perform, they blocked out the risk factor and convinced themselves, day in and day out, that they had had the keys others were groping for.
"The 'Master of the Universe' really does believe in his own invincibility," Mr Tuckett said.
"Even though many of the traders I interviewed told me 'this boom can't go on forever', they kept on investing in it."
- AFP
Tags: business-economics-and-finance, economic-trends, finance-markets, stockmarket, united-states
  • #12
  • Nov 15, 2008 5:28am Nov 15, 2008 5:28am
Old school... Ivy league connections put you in touch w/ ppl that provide you with cash to manage, allowing you to get a big name. A big name doth not a good trader make. LTCM anyone?

The barrier to entry on trading has decreased over time. That will allow ppl w/ a natural talent to succeed regardless of where they went to school.
  • #13
  • May 28, 2009 9:02am May 28, 2009 9:02am
I do not think the Ivy League education per se makes you a better trader. What it does do though is open doors to the big banks with prop desks where you can ply your trade - i.e. Goldman Sachs, Morgan Stanley etc. Without the diploma, the odds of you even getting an interview at these firms is ZERO.

Once in, your Ivy League education means ZERO - you either make $ or you do not.

A little horn tooting here - I was accepted at the EMBA program at Oxford for Jan 2010, so I guess we can use me as a guinea pig for the hypothesis posed here in the forum.
  • #14
  • May 28, 2009 1:19pm May 28, 2009 1:19pm
Quoting Jade Gate
No. It most likely makes it harder to become a good trader. That's why, for some, it works. The discipline of a high quality education (wherever it comes from, through formal institutions or informal means) builds knowledge, character and sound judgement.

IQ, access to quality research/information, and quality mentoring also help.

That said, it would not be possible to answer the question properly without quantitative research of the education backgrounds of all "successful" traders.

For every Ivy League successful trader, there could be...

that's interesting because i know for a fact that banks (or at least deustche bank) take all their new recruits from ivy league schools. mainly yale because it's closer to the NY branch, but they also get them from brown, columbia, and harvard. idk about the other ones though. i dont know why they do it either, but they do it. i know this from talking to a person on the FX trading floor there. i dont know if they do this for the equities and options floors though. im assuming they do.
  • #15
  • May 28, 2009 1:26pm May 28, 2009 1:26pm
I forgot were I heard this, maybe it was Jim Rogers.
"If you are smart you can learn to trade in 1-5 years, if you are VERY SMART 5-10 years".

People that will become successful traders will make it regardless if they went to Ivy Leauge or not.
Why is it called Ivy Leauge anyways?
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #16
  • May 28, 2009 1:38pm May 28, 2009 1:38pm
Quoting blacksun1
that's interesting because i know for a fact that banks (or at least deustche bank) take all their new recruits from ivy league schools. mainly yale because it's closer to the NY branch, but they also get them from brown, columbia, and harvard. idk about the other ones though. i dont know why they do it either, but they do it. i know this from talking to a person on the FX trading floor there. i dont know if they do this for the equities and options floors though. im assuming they do.
If you look at the people who end up getting jobs in banking, they almost always have ridiculous resumes compared to their peers.

I went to a state school, one person (as far as I know) from my graduating class got a job in banking (and not even NYC bulge bracket, but still a good job nonetheless) and his resume was pretty absurdly stacked. Semester abroad in Ireland, domestic exchange at Yale, was on the debate team at an Ivy league level school (which was essentially across the street from my school), helped lead the finance society, same for the investment club, great internships, and a 4.0 GPA.

It's easy to see why they recruit almost exclusively from Ivy league level schools, just look at the kids who go there-- tons of motivation, incredible work ethic, almost guaranteed to be considerably smarter than the average person (all of this is on average, of course).

Of course, none of this matters when it comes to being a good trader, so I wouldn't worry about it, unless of course you are trying to get a job as a trader at a first tier bank or hedge fund
  • #17
  • May 28, 2009 1:40pm May 28, 2009 1:40pm
Quoting smittens4212
If you look at the people who end up getting jobs in banking, they almost always have ridiculous resumes compared to their peers.
Well that explains the mess we are in huh? All these people were taught and trained the same way. LOL
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #18
  • May 28, 2009 1:49pm May 28, 2009 1:49pm
I would have to agree regarding the stuffed resumes. I went up for an internship interview for this summer at Goldman Sachs, and my resume paled in comparison with the other candidates I was up against. Granted, they're juniors and seniors in college.
  • #19
  • May 28, 2009 2:14pm May 28, 2009 2:14pm
Quoting LasVahGoose
Well that explains the mess we are in huh? All these people were taught and trained the same way. LOL
You joke, but there is something to be said for the culture and sense of entitlement present all over Wall Street, and it's easy to see where it comes from:

Quoting Andrew Lahde
The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.

All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God Bless America.
Wall Street would probably do well to diversify their talent pools, i.e. not exclusively hire priviledged 20 year olds who went to school on their parents tab and padded their resumes with cushy 'volunteer in Africa' jobs while their peers were busy working summers to be able to still pay for college at all.

Of course we know that won't happen, years from now it will still be the same priviledged 20-somethings descending from their ivory towers to run Wall Street.
  • #20
  • Jun 15, 2009 4:32pm Jun 15, 2009 4:32pm
Quoting Ronald Raygun
I would have to agree regarding the stuffed resumes. I went up for an internship interview for this summer at Goldman Sachs, and my resume paled in comparison with the other candidates I was up against. Granted, they're juniors and seniors in college.

i know what you mean. i was offered an internship at a bank by someone sort of high up, but got shot down by her boss for a ton of reasons, one of which was the fact that i didn't have an ivy degree. it didn't matter that i had trading experience or was a registered CTA, just that i didnt go to an ivy league school. that sort of sucked a bit.
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