From Physics to Finance
New Field, New Country and New Program at Owen are Nothing New to Jacob Sagi
Suggest to Jacob Sagi that Finance today isn’t quite rocket science, and you’ll stand corrected. It’s not just because Finance is a challenging discipline. It’s because, literally, if you can master the study of derivative instruments, you have the mathematical chops to work for NASA.
That’s one reason why Sagi, who recently joined Owen as Associate Professor of Finance, made the transition—one that’s “not as unusual as you might think,” he points out—from a PhD in Physics to one in Finance.
Sagi (pronounced suh-GEE), who served on the faculty at the University of California-Berkeley before coming to Vanderbilt, realized he was not interested in a career in physics around the time he was finishing his doctorate in the subject. “I decided physics wasn’t for me,” he says.
During a year of soul-searching, a friend suggested he look into Finance and gave him a book by John Hull that still occupies a spot on his office shelf. Right away, he noticed the similarities to physics. “In rocket science, one employs mathematical analysis to figure out how to control the effects of random factors on a rocket’s trajectory. The same analysis is also used to control risk using derivative instruments in finance. This is partly why, since the 1990s, more and more people from the quantitative natural sciences have been attracted to Finance.
“What nailed it for me,” he says, “was that it was really interesting. And I didn’t appreciate just how interesting it was until I picked up a book.”
Reading a few books led Jacob to take a few independent study courses in Finance. Emboldened, he sent his C.V. to a finance firm in Toronto, which encouraged him to deepen his knowledge of the subject. Ultimately, he returned to his alma mater, the University of British Columbia, where the chair of the Finance Department, Alan Kraus (an old friend of Professor Hans Stoll at Owen) persuaded Jacob to enter the doctoral program.
“At first I said, ‘I don’t want another PhD,’” Sagi recalls. “One was plenty. But (Professor Kraus) told me, ‘You’re burned out on physics but not on academia.’ He knew me better than I knew myself.”
Dramatic moves, like the leap into a second doctoral degree, are nothing new for Sagi. At age 11, his family moved from his native Jerusalem to the United States. Several years later, they relocated to Nova Scotia. After his undergraduate education in Toronto, Jacob went to the Pacific Coast, in Vancouver, to study physics.
Now, at Vanderbilt, he agreed to take on a new challenge: developing the course offerings in real estate finance into a full-fledged specialization track.
“We believe there is a healthy demand among students,” he says, “and among recruiters and potential recruiters with firms large and small in capital markets, development and management of real estate portfolios.”
Next spring, in the fourth mod, Professor Sagi will teach a new course in real estate capital markets. In conjunction with the Vanderbilt Law School, Owen also plans to offer two short, intensive courses on law and real estate.
The promotion was only part of the attraction for Jacob to come to Vanderbilt. “This is a school with ambition and resources,” he says. “And Owen has a fantastic Finance group with people who have made big impacts on the field as a whole. It’s a very classy faculty.”
For at least 12 days every year, however, expect to find Jacob back out west, on a ski slope. He spends most of that time on the well-traveled runs of ski resorts, like those he favors on the western side of Utah’s Wasatch Range. But give him his preference and he’ll take on pristine, ungroomed, deep powder in parts of British Columbia that are accessible to skiers only by helicopter.
“It’s a little riskier because of avalanche danger,” he acknowledges. “But nothing is ever risk-free. And the group has an experienced guide from an outfit with an excellent track record.”
In fact, he says, like an inveterate numbers guy, the mathematical chance of being overtaken by an avalanche in the backcountry is 1 in 10,000. While that makes heli-skiing a little more risky than his other therapeutic pastime, playing the piano and listening to classical music, it doesn’t take a rocket scientist to conclude that the odds are pretty good.
