Pete Locke

No free lunches

Professor of Finance

On the TCU faculty: Since 2006.
Previously: Faculty at George Washington University; staffer at the Commodity Futures Trading Commission.
Education: PhD, Texas A&M; BA, University of Oregon.
Expert in: Financial markets; microstructure; derivatives.
Career leadership: Member of the board of editors of both the Journal of FuturesMarkets and the Review of Futures Markets.
International involvement: Board of editors, Asia-Pacific Futures Research Symposium.
Hobbies: Blues/rock piano and guitar, culinary arts and gardening.

The Neeley approach: Whether an MBA grad is working in investment banking or in corporate mergers and acquisitions, the approach is much the same: “Figure out what’s going on with a company, what the cash flows look like and what a reasonable discount rate in the future might be. We teach finance from a very sound basis –– there are no free lunches.”

Strong portfolio: MBA students get hands-on experience in the Educational Investment Fund, a $1.5-million stock portfolio through which they execute trades, convince associates of their investment proposal, discover different investment styles and learn the merits of sound asset diversification.

An audience with the Oracle: TCU’s MBA students annually meet the Oracle of Omaha, Warren Buffett. He answers questions about his approach to value investing, poses for photos and even drives a few students to lunch in his own car. “As a value investor, you start from a premise that everyone should hold diverse portfolios, and then ask whether there’s anything else we can do, any place to make a little extra. Those opportunities are rare, but, as Mr. Buffett always reminds us, you can find them with hard work.”

On the road: Networking trips to Houston, Chicago, New York and other cities are organized through the Capital Markets Club and other student organizations. Students visit Neeley alumni on Wall Street, as well as discuss career opportunities in a variety of geographies and industries. So what is Locke’s advice to students? “Get the interview, even if it isn’t the perfect job for you. The more you meet people and the more questions you’ve heard, the better you are at your next interview.”

Building on the foundation: Locke, the co-author of one study about how windy days in Chicago affect the behavior of traders, is known for his ability to explain complex constructs like derivatives in an understandable — and often memorable — fashion to students. He’s good with reporters, too, once noting in print that futures trading has been around at least a millennium, since grain barges were bargained for on the Nile. “I try to keep it as simple as possible. I use the least amount of complication I need to get the point across, and then I go to the next level. Once a student has a base of knowledge, you can expand.”

Informal but important: The personal size and approach of the TCU MBA program means students and faculty have a high degree of informal interaction. “As a faculty member, I’m on campus more or less all the time. I get a sandwich and sit down with a bunch of MBAs hanging out for lunch. That’s probably not going on in a lot of business schools.”

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“Get the interview, even if this isn’t the perfect job for you. The more you meet people and the more questions you’ve heard, the better you are at your next interview.”

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