I-HSUAN, FAN

MPS-ABEIC

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The statement of purpose should include your reasons for
undertaking graduate work and an explanation of your
academic interests, including their relation to your
undergraduate study and professional goals.
As an undergraduate, I came across Malmendier and Tates
(2005) study of corporate investment and overconfident CEOs. The
empirical work has shown, above all else, that overconfident CEOs
are likely to over-investif only because they have the power to do
so. They have also shown that over-investment has direct
relationship with the existence of external financing. The
behavioural study ends on the wistful note that, wherever possible,
organisational designs should be carefully studied.
That was an episode in my journey for truths and answers. I have
always relied only on positivistic methods, which I studied in-depth
as an undergraduate. I was a strong believer in how systems and
theories can, and will, manifest in our lives. I once believed that a
CEOan entity that holds the utmost power in a corporationhas
an bermensch-like quality to allow him/her to hold that position.
In particular, I believed that mathematical theories and correct
answers to thought experiments are predominant in our lives.
However, not only was I wrong with CEO (which many studies have
gone into great lengths about), but also with my perception of the
world.
In my earlier twenties, I entered the insurance industry as an
analyst. Back then, my job entailed one simple component: to help
clients minimize the risks of investments; by which I mean I did a
lot of number-crunching, and applied stochastic models to predict
how value of investments will change over time. As I quickly found
out, not all theories Ive learned are completely useful. Regression
analysis is useful insofar as risk factors remain unchanged over
time (which rarely happens); game theoretic approach to
investment rarely works in an irrational financial market (which
Taiwan has).
Then, the other half of the story happens as I rose up the ranks. By
my
mid-twenties,
I
noticed
that
many
educationally
underrepresented people wholacking the technical knowledge of
the financial markethave no idea how to begin creating
investment portfolios. They are those who are extremely
susceptible to believe in irrational investment choices. I cannot
help but reflect on the reality of our world. For me, having learned
advanced level mathematical modelling, econometrics, behavioural
economics, and analysis, I have the tools necessary to judge the

I-HSUAN, FAN

MPS-ABEIC

risks of investments. However, there is a certain truism in saying

that knowledge is power, and that we create the order. Since then, I
began reflecting how I am at a position to help my communities in
achieving financial securityby being very good at what I do as an
analyst.
But how? Some time ago, I started reflecting on my parents career
in the insurance industry. By being persistent, staunch, and true-tothemselves, they began as salespeople (thirty years ago) and
worked their ways to senior management. However, in the
Information Age, where not only are most things data-driven, but
also extremely susceptible to sudden changes, I realised that if I
want to develop professionally, I must gain: (a) high level of
expertise in modelling financial markets; (b) understanding of
individual behaviour in financial decision-making; (c) knowledge
techniques and methods in place to deal with risks in the modern
Information Age (i.e. in-depth knowledge of financial systems). In
other words, in order to be a true professional, I must be at the
forefront of our time.
I find, in Dyson School, many opportunities and resources to help
me in my professional development. Chiefly, courses in behavioural
and managerial decision making, advanced corporate finance,
investments in global economy, applied econometrics, and in asset
price management will aid me significantly in my growth. In the
short-term, I wish to understand irrational trading and fluctuations
in financial market; notably, I want to cultivate my sensibility in
efficiently managing returns on investment. Through studying
behavioural economics, I want to gather how behavioral biases and
psychological effects can influence ones investment decisions;
through that, I wish to inform best practices for investors
especially the educationally underrepresented I mentioned earlier.
In the long-term, my goal is to gain expertise in household
portfolio allocation. Ultimately, because I am in the position to
create financial security for others, I hope that I can create
affordable, efficient household investment options for peopleto
achieve just that.
Like I have enumerated before, my purpose in attaining a graduate
degree is not so that I can flaunt an advanced degree to others. I
am interested in putting theories into practice, in understanding
how abstraction can be applied to our world. I am interested in
continuing the lifelong education I have launched for myself
chiefly, by being committed to (a) give back to my community, and
(b) search for answers that will, once again, allow me to develop as
a learner.