Dear Tim,

I happened upon a book by Ian Stewart, Letters to a Young Mathematician,Warwick Mathematics Institute | You can find out more about Stewart via the links on the Warwick site. just after getting the email in which you said that you had decided to become an investment analyst.  While the social science of investing is quite unlike mathematics, many of Stewart’s thoughts are useful for you to consider as you embark on your adventure.

We’ve talked many times about the need to cast a wide net, to look for ideas and insights and facts where others aren’t looking.  One of the themes of Stewart’s book is that inspiration will come at you from odd angles, and that “the very best have other ways of thinking fresh thoughts”; they aren’t constrained by the received wisdom of the day.  And, of course, you need to “read around your subject,” as Stewart says, even looking at fields that are completely unrelated:  “My best ideas often come when something I have read reminds me of something I already know.”

Curiosity and the desire to learn will make all of the difference for you.  I don’t know what mathematicians get paid, but it’s safe to say that there has never been a rush of talent into that field like there has been in the investment business in the last twenty-five years.  I can’t tell you the number of young people that I’ve met who are interested in the trappings of the investment profession but who appear to be not very curious at all about anything else.  They might get a job but they’ll never make an impact.

Ultimately, you’ll need to make decisions — lots of them — but you’ll do a better job of dealing with those decisions if you approach each with the same attitude that you had on that research project that you were honored for at graduation.  Granted, you started with a good idea, but it was what you did next that mattered.  You peeled away layer after layer, always reaching for the next source, noting the anomalies that others would have tried to wish away, cursing the dead ends, digging deeper and seeing the connections between details that might have been overlooked, and working harder than everyone else around you.  As one of Stewart’s colleagues said to him, “I really can’t tell who the best mathematicians are, but I can tell who is driven.”  You have that, Tim.

What you won’t have going forward is the luxury of a semester in which to delve into the nuances.  Sometimes it will seem like you’ve had hardly any time whatsoever, especially given what’s on the line.  Soon enough you’ll be making decisions involving hundreds of millions of dollars and the financial well-being of your firm’s clients.  You will have a job to do and, knowing you, you’ll do it well despite the pressures and constraints.

But one day you’ll get the feeling that your instincts are at odds with your approach, and it will be time to take a look around and ponder.  Are you filling in blanks and making calculations and cranking out models, as if by rote?  Are you following the crowd or shooting from the hip because you don’t have time to do anything else?  Have you been swept into a way of making decisions that doesn’t make sense to you?

When those questions come, you will decide what it means to be a professional.

Later,

tom

P.S.  There was so much more in Stewart’s book that I wanted to share with you, so expect another note sometime soon.the research puzzle | Here is the entire series of letters.