Teaching computational finance to ordinary mortals.
Time sure flies when you are having fun. It’s been 7 years and change since we first started this project as an experiment. An initial dump of class notes for my students dedicated to teaching computational finance that over time grew into eleven hundred posts, received visitors from 240 territories, 16,800 cities and generated 3,250 orders.
The amazing bit about that statistic – of the 3,250 order we were only requested to do 8 refunds of which 4 were duplicate orders. And exactly one case of credit card fraud. Who would rob or steal from a teacher?
If you had said that we would hit all of these milestones in February 2010 when we first started thinking about this idea we would have laughed it off. Our starting budget was US$100, the only amount available across all my credit cards that we spent miserly over 4 months to cover domain registration and hosting bills.
Our first few posts were nothing more than simple text dumps. Our first Excel model just showed how to estimate value at risk from a price series. The collective initial offering was so basic that today we give all of that way for free. Product offerings grew from that single basic excel file to over 100 plus combination of self paced video courses, study guides, validation templates and DIY Excel models.
Our first major site redesign effort crashed our host servers. Our second knocked us out for 15 days. It took us two years to sort out our shopping cart. Three to finally move to our own servers. Five years before we started offering an unconditional, no questions asked full refund policy. The unstated policy of offering complimentary free access to full time students was rolled out at the end of the first year when we actually had content that full time students wanted. Yes it has been a long ride.
The only reason why we kept on improving was because of our customers. Customers who kept on asking, can you build a model for this? Do you have an Excel sheet that does x? And the quite often week maker – “thank you so much for doing what you do. You made a difference in my life”
You came from all over the world.
London, New York, Singapore, Hong Kong, Mumbai, Sydney, Toronto were expected. What was unexpected was who stayed for the longest duration. But then these cities and countries also made our work worthwhile. To think students and professionals in Guinea Bissau, Cuba, Liberia or Solomon Islands used our pages and lessons to get more comfortable with the Black Scholes model, with option pricing, with Monte Carlo simulation, make the pain go away. Traffic, orders and sales dollars are always welcome but in the end real meaning is what really makes the world go round.
Since our inception through requests from our users we have solved some really interesting real world problems. We got back into building interest rate models because a traditional text book doesn’t really do the job for an ordinary mortal. The same held true for pricing exotic options or doing valuation opinions under FAS 157 for level 3 assets and non liquid, contingent liabilities or developing IRS tables for tax reporting.
If you don’t have a PhD in Physics or Finance, traditional sources in computational finance essentially speak a combination of Latin and Greek that you can’t decipher. It doesn’t matter if you are an accountant, an actuary, a risk specialist, a model builder or a regulator. The books just don’t speak to us the way they speak to individuals who have cracked the PhD barrier.
We faced the same challenges during our initial actuarial exams and then later with our risk and treasury practice. Fortunately for us our customers helped out with their patience and their willingness to walk us through product behaviors. That willingness and patience is rare in the banking and financial services industry and without it none of this would be possible.
Whatever weaknesses were left in our modeling portfolio were picked clean by difficult questions asked by the many batches of executive MBA students I was blessed enough to teach. In class rooms in Dubai, Abu Dhabi, Bahrain, Riyadh, Singapore, KL, Karachi and Bangkok we put many of the missing pieces together. Four books came out of the work we do with students at executive MBA programs, our corporate treasury training practice and on this site.
Three of the books focused on building computational finance models, one on building more robust startups through a framework for handling failures.
We used the same approach with the text books we wrote. Focus on real world applications; building real world models. Models at work was the introductory text book. Option Greeks Primer not as much. Portfolio Optimization – dedicated to Alpha optimizations using Excel Solver.
If you have an interesting financial problem to solve, that you need help with interpreting, please drop us a note. I have grown slower over the years in my responses but we are always on the look out for a challenging modeling problem. Even if we don’t respond in time you can rest assured that if your problem is an interesting one, it will find a place in our model building queue.
This June we finally took a crack at TARFs because a prospective student asked a difficult question that we didn’t have an answer for. Four posts and two models came out of that conversation.
If you are a full time student in the field and need access to something on the site, please drop me a note with your requirements. We would be happy to share whatever we have that can help.
I just wanted to take a minute to thank all of you.
Those who drop by from across world to look up an equation or a solution, to those who are kind and generous enough to send their thank yous, to those who have send queries over the years that I have not been able to respond and to those who ask difficult questions that ultimately shape our work and keep us young. Thank you once again. Your support means the world to us. Don’t give up on your interaction or on us. Keep dropping those notes.
We have been guilty of a lot of things. We have been slow and yes our responsiveness can certainly improve. The first version of our models were often off but we have managed to fix that in recent years as we have added a more detailed peer review process. Our models are illustrative and academic in nature. They focus on teaching concepts rather than supporting industrial strength applications. If you needed enterprise support we also wrote software that ran risk and treasury applications for enterprise customers. We still do but only for a few select customers who appreciate what we do. Other than the one golden year in the middle (2012) when this is all we did, the site suffers from all the misery of being a side pet project. We steal time three to four times in the year to run major updates and roll out new content. If we had more time, you would see a lot more activity on a regular basis other than the current occasional spurts of activity.
The focus of this site however had always been making it possible to connect the dots in a field that is notorious for its arcane terminology and models that appear nothing short of black magic.
As the site and its need have grown we have had to ask for outside help. Our up time last year was 99.9% That would not be possible with out the continuous support of Uzma who keeps the site going and Agnes who contributes much more than I do on the problem solving, model building and sounding board front. And finally Yusuf Jan, the very first of all believers who saw the promise in what we were trying to achieve and has always pushed us to take a harder more quantitative look at the bigger picture. Thank you.
Remember feedback is a gift. We would love to hear back from you. Tell us what you think. Tell us how bad a job we are doing. Drop me a note at jawwad at financetrainingcourse dot com.