Starting this fall, students at the Frank G. Zarb School of Business will gain a real competitive edge in preparing for high-level positions in the financial world, when they become the first classes to use the new trading room facility in the newly constructed Financial Technology Center.
An artist’s rendering of Hofstra’s new trading room, which opened in time for the fall 2005 semester.
“We want to integrate the trading room into existing courses so our students can experience how the market actually works,” says Dr. Ralph S. Polimeni, dean of the Zarb School. “Finance is a very dynamic field, and it’s more exciting to experience it” by means of Wall Street-like trading floor simulations than by simply discussing “bids,” “ask prices” and “spreads,” says Dr. Nancy W. Huckins, associate professor and chair of the Department of Finance.
The simulated electronic trading room, located on the main floor of C.V. Starr Hall, was completed during the summer. Upon their return to campus for the fall 2005 semester, students will find this 1,500-square-foot facility complete with wall boards and a ticker displaying data from various equity, fixed income, foreign exchange, and derivatives markets. These features join the 34 dual-panel Bloomberg terminals that were installed in January 2005, to provide students and instructors with access to Bloomberg professional data and information services – the same industry-standard data, analytics and software used by Wall Streeters to make investment, trading and financing decisions.
Although only a nominal number of students and faculty were given a closeup look at the high-end terminals while the room was under construction, Drs. Polimeni and Huckins estimate that several hundred students will use the trading room this fall semester.
“It won’t be a typical classroom,” Dean Polimeni promises. “There are a lot of bells and whistles. It will be an exciting room to be in. Students will be using the same real-time data as the investment and financial pros,” he says.
Moreover, he notes, “The trading room will enhance the overall reputation of the Zarb School. It’s a very powerful tool that puts us at another level, among top-notch business schools. It gives Hofstra and our students a major competitive advantage.”
Dr. Huckins adds, “It also gives us a very dynamic classroom experience. Having our students training on actual Bloomberg terminals will put them ahead of those at most other universities.” As a result, she says, “They’ll be able to hit the ground running” at major financial firms.
Besides the 30 Bloomberg terminals for class use, there are four terminals set aside where faculty and advanced students can do research. The room also houses television monitors tuned to CNBC or Bloomberg Television. Costs for construction of the Financial Technology Center and its trading room have been funded through donations to the University.
The trading room’s schedule will be tied to courses and research projects in several disciplines, especially finance, business computer information systems, and quantitative methods, as well as accounting, marketing and management. Dr. Huckins says that she would like to incorporate more hands-on experiences into such courses as financial markets, financial modeling, and derivatives. In addition, she notes, “We can bring in other students who are taking introductory courses,” as a way to make the subject matter come alive for them.
“This project has been three or four years in the making,” Dr. Polimeni points out. “It has been a major undertaking.” As part of the process, the Zarb School developed a detailed business proposal for the center nearly two years ago.
Inside the Financial Technology Center’s trading floor
“We were looking for something distinct, to enhance our classes as well as help faculty in their research,” says Dr. Huckins. “We looked at comparable colleges that already have such facilities,” she says, adding that she visited a few, such as Baruch and MIT.
Looking ahead, Drs. Polimeni and Huckins disclose that additional enhancements are being discussed for the trading room. A course in “Market Microstructure,” for example, is in the works as a way for students to engage in virtual Wall Street trading. Professors, as they alter market conditions, will monitor how students handle the changing situations. At the graduate level, the room will be utilized as part of Zarb’s proposed M.S. program in risk management, Dr. Polimeni adds.
“This is also a marketing tool to draw other students to Hofstra,” Dr. Polimeni points out. “There’s nothing like this on Long Island.”
In fact, Drs. Polimeni and Huckins proudly maintain that very few schools have anything like Zarb’s simulated trading room, even though a dozen or so colleges and universities around the country have built their own, such as Columbia University, Penn State, Rutgers, and Carnegie Mellon.
In addition, very few have as many Bloomberg terminals as Zarb’s center offers, they state. “We have 34 terminals. That’s a rarity,” says Dr. Huckins. Zarb has thus joined an elite number of business schools offering such a technology-rich facility.
Dr. Ahmet Karagozoglu, co-director of the trading room, said, “Hofstra students will be able to obtain Bloomberg Certification by completing the necessary training courses.” Hofstra students will be among the few who are able to obtain such certificates prior to graduation, giving them a distinct advantage in obtaining top-level jobs at financial institutions. Dr. Karagozoglu adds, “We plan to conduct regular seminars in the trading room for all Hofstra students to further develop their technical skills and to provide them with hands-on experience in using today’s professional resources.” The view from outside the Hofstra campus seems just as bullish. At Bear Stearns Asset Management’s New Castle Funds, Managing General Partner Mark Kurland ’71 regards the new trading room as a real academic and professional plus for Zarb School students. “There is no substitute for real-time simulation. Books and lectures can only be helpful to a point.”
“It is impossible to duplicate the excitement of a real-life trading floor,” says Robert Martorelli of Merrill Lynch, but he adds that the facility “will make the students greatly appreciate the pace at which split second decisions are made, either costing or saving millions upon millions of dollars.”
Diane Garnick ’96, former head of the U.S. Portfolio Strategy for Dresdner Kleinwort Wasserstein, upon hearing about the simulated trading room, says the facility likely will translate into not only greater “Street smarts” but more job opportunities and greater earning potential for Zarb School graduates. “Just as every hour in the library can improve your GPA, every hour on the trading floor can improve earning power. The easiest people to hire are those with both academic prowess and experience on trading floors.”
Ms. Garnick, who specializes in various aspects of equity derivatives and portfolio management, adds, “Critical thinking on noisy, fast-paced trading floors can make or break careers. Students shouldn’t have to wait for their first job to learn how to think in that environment.”
Finance Stars Remember Their Hofstra Roots
It’s not as far as you might think from California Avenue to Wall Street. In recent years, many of Wall Street’s brightest lights are proud to name Hofstra as their alma mater. Two of Hofstra’s most high-profile alumni have even more in common than their affiliation with Hofstra and their success on the Street. Sal Sodano, former chairman and CEO of the American Stock Exchange, and Joe Gregory, president of Lehman Brothers, share Long Island roots, a solid middle-class background, a drive to succeed, and a passion for philanthropy. Their success stories are an inspiration to alumni and current Hofstra students alike.
Sal and Joe both came to Hofstra as non-business majors. Sal came in as a pre-med major, but found quickly that science was not his calling. “I took an accounting class with Dr. [Nathan] Slavin, who’s still teaching, and he said that accounting was the language of business. It stuck with me, until this day, and I make sure the people I work with understand that.” Sal, whose experience includes positions at Price Waterhouse, J.P. Morgan, Bankers Trust and the National Association of Securities Dealers, Inc. (NASD), the parent company of the NASDAQ, credits Dr. Slavin for inspiring him. “I am where I am because of him.”
Joe, who planned to teach high school history, saw that finance was the right career for him after spending his summers working at Lehman Brothers, first as a messenger and later, during college, trading commercial paper. Majoring in finance, he found that the combination of business education, particularly a general business course that teamed classmates together in a corporate game competition, and the demands of a liberal arts core curriculum, prepared him to ascend the corporate ladder.
Both Sal and Joe agree that the new Zarb School of Business trading floor gives Hofstra graduates a real advantage on their first day on the job. “Your first day on the job can be overwhelming,” says Joe. “I think that for undergraduates to have the ability to see what a live trading floor is like – especially in a world that is so technologically advanced – is critically important that they get use of the tools.”
“Having a trading floor here at the University forms a very important basis for how the capital markets really work,” said Sal. “Wall Street is a huge part of the world. And we’re fortunate to be close to Wall Street physically here at Hofstra University.”
Most remarkable about these two titans of finance is their commitment to service and their emphasis on integrity. As president of Lehman Brothers, Joe, who has spent his entire career at the company, speaks frequently to young associates starting out at the firm. His advice? “First, do the first thing you’re asked to do well. No matter what it is, be a team player and pitch in. Second, the thing that can never be taken from us is our integrity and our character – we can choose to give it up. So what I stress with people very aggressively is to make a very careful decision because you’ll be in a situation where there will be a right fork and a left fork. The left fork may not be exactly the right thing to do and you may get pressure to take the left fork – don’t take the left fork – because you’ll be making a personal decision to give up your integrity.”
And Sal, who recently retired as chairman and CEO of the Exchange, recalls “when we’ve had Hofstra students come to the American Stock Exchange, I tell them it is really not so much about the technical stuff they learned, but what matters are your interpersonal skills, how you deal with people, integrity, giving back to people you work with, volunteering; those are the things that clearly make you better as a whole.” Sal, who has spent the past three years chairing Hofstra’s Board of Trustees, says, “it’s important that you take the knowledge you gain and the skills you gain and you give it to others … it’s part of leadership.”