Those who think you have to be street-smart (or plain purchase-happy in a bull market of rising stock prices) to peel money off Dalal Street had better read this. There now exist MBA programmes focused on capital markets.
Mumbai University's Narsee Monjee Institute of Management Studies has recently unveiled a two-year MBA "to train students who are agents of change in the capital markets of the future," in the words of Sunder Ram, programme director.
The course was designed in response to a request from the Bombay Stock Exchange, which "wanted an image change from the Harshad Mehtas and Ketan Parekhs to a new breed of skilled professionals who could differentiate between a capital market and a casino." This called for the creation of a "distinct body of specialised knowledge" in the field of stock investment.
So what's so special about the MBA?
While a regular MBA in finance has asset management and portfolio diversification as part of the curriculum, this offers rigorous simulated training from live BSE data, apart from a market-specific grounding in legal issues and ethics.
Also, there is plenty of research matter to debate the "efficient market hypothesis," for example, that has been exercising young minds across the world.
Specifically, there are modules on behavioural finance, popularised recently by Daniel Kahneman, who won the Nobel Prize for describing irrationality in decision-making processes.
Behavioural finance is manifest in manias, panics, asset price bubbles, herd-behaviour, noise amplification and so on -- all key to understanding capital markets, as they incorporate elements of investor psychology into financial economics.
The MBA idea has been welcomed by market players, by and large. Or at least by those in the institutional sector. Gagan Banga, director, Indiabulls Securities, makes a case for the specialised MBA on the grounds of complexity.
"Today, the size of the capital market as well as all its parameters have expanded," he says, "Individuals who execute decisions in the market on a daily basis need to understand its nuances and scope. . . an MBA brings about a certain amount of systemisation and discipline."
Shankar Sharma, managing director, First Global Stock Broking, seems positively bullish on the prospect of stock-specialised MBAs.
"I believe in the power of an MBA," he attests, adding, "It will provide accelerated learning about thousands of companies compressed into a matter of two years, which could otherwise take several years of experience to master. Applied case studies make all the difference. An MBA programme will help deliver information in a structured and fairly analytical format."
However, Alok Agarwal, senior analyst, Motilal Oswal Securities, is not so sure. He offers a contrary perspective: "Academic programmes certainly offer methodical principles. In the long run, however, it's an individual's own savvy that counts. The ability to interpret changes, read the future accurately and understand valuations correctly are all skills that cannot be taught or simulated in a classroom."
There's no learning like being in the actual thick of things, Agarwal holds, with all its surges of adrenalin and tricker tape tremors.
Agrees Abhay Aima, country head, equities and private banking, HDFC Bank: "An MBA can sometimes be counter-productive. One learns to think 'within the box'. Capital markets, unlike debenture or bond markets, require an understanding of human psychology and anticipation of the future."
Risk taking, in this view, is about having the nerve to think for one's self, rather than operate on the basis of some pre-programmed investment model put together by researchers. But yet, it always pays to know all the leading-edge thoughts on investment.
All said, an MBA has always been a terrific launch for a career on Dalal Street, and specialised MBAs will only sharpen the advantage.
But be warned: any MBA who tries to claim authority on the basis of the education would probably have to become wiser (the hard way too). Even bull markets are demanding.
