Seeing movie star Michael Douglas wheeling and dealing on a beach via a brick-size cell phone made an indelible impression on Jonathan Clarke when he first watched the film Wall Street in 1987.
“I think my Dad took me to that movie to teach me about the evils of Wall Street,” remembers Clarke, now an associate professor of finance at Georgia Tech Scheller College of Business. “But truthfully, at age 14, that movie made the world of finance seem so glamorous. It made me think, ‘Man, I want to be Gordon Gekko!’”
Gekko – Douglas’ character who famously proclaimed that, “Greed, for a lack of a better word, is good” – was ultimately caught for masterminding insider-trading schemes.
Clarke, of course, gained understanding that business ethics matter as much on Wall Street as anywhere. Still, he became hooked on learning more about finance. He began reading books and soon entered a stock market simulation for high-school students sponsored through his hometown newspaper, the Pittsburgh Post-Gazette.
“I just loved it,” he remembers, even though he didn’t win the contest.
Hoping to stimulate other high-school students to learn about finance, Clarke was instrumental in the creation of the Wall Street on West Peachtree program held each year at the Scheller College’s Ferris-Goldsmith Trading Floor. Clarke teaches in the one-week summer enrichment program, which enables local teenagers to learn the fundamentals of finance, investments, and financial management.
He encourages them to start saving early for retirement, diversify their investments, and minimize investing fees as much as possible. “People have a tendency to get the big purchases wrong in their lives, such as buying too much house. Cars are my pet peeve,” says Clarke. “You buy a $40,000 car and in six years, it might be worth $10,000. That $30,000 invested for 20 years would pay for one of my kids to go to school.”
First held in 2008, Wall Street on West Peachtree has grown to be the most popular program offered by Tech’s Center for Education Integrating Science, Mathematics, and Computing (CEISMC), which works to prepare K-12 students for success in those fields.
“Our camp’s stock market simulations get these high schools students really interested in finance,” Clarke says. “It’s a great career and an important area to study.”
Clarke says he enjoys teaching Full-time and Evening MBA students as well as undergraduate students. But his particular fondness for the latter motivated him to assume the position of associate dean for the Undergraduate Program in 2012. “The great thing about undergrads is that you can have more impact on what careers they choose, what paths they follow,” he says.
“I went straight from earning my BA to entering a PhD program, so I know what it’s like to be an undergrad,” notes Clarke, who earned his doctorate at the University of Pittsburgh after graduating from Indiana University.
“I keep in touch with some of the undergrads I’ve taught over the years, and they’ve gone on to do spectacular things, working at companies like SunTrust, Coca-Cola and Invesco. I have no doubt that I’ve taught the future CEO or CFO of a Fortune 500 company.”
Balancing an administrative role with teaching and research (in addition to being a father of two young children) is challenging, Clarke says, but his careful time management makes it possible. “It helps to be able to switch gears quickly,” he notes.
Stock Market Analysis
Much of his Clarke’s research through the years has focused on sell-side analysts. “They are a fascinating group to study,” Clarke says. “What they do is basically issue buy/sell/hold recommendations on stocks. We can look at how good they are at picking stocks; whether they make meaningful recommendations.”
A recent Clarke paper accepted by the Journal of Finance, titled “Are analysts’ recommendations informative?,” is significant because it refutes previous research showing that sell-side analysts weren’t that effective, he says.
Working with Tech associate finance professor Suzanne Lee and two other collaborators, Clarke found flaws in the data used by two previous studies. The stock trades listed in a popular database weren’t always time-stamped correctly, he explains.
“You basically have 15 minutes to trade on an analyst recommendation before the information is stale,” Clarke says. “We found a timing error in the database that, once adjusted for, means that sell-side analysts are indeed important. We’ve helped correct a misconception in the finance field.”
Clarke says that the significant growth in the size of the Scheller College faculty since he joined in 2001 has led to many opportunities for research collaboration. “It’s been fun working with the junior faculty members who’ve come in,” he says, noting that he almost feels like an old-timer, given how much the College has grown. “You can’t imagine how smart these people are.”
Impressive hires in his own academic area have helped increase awareness of Tech as a great school for finance, he says. “We’re seeing our students get good jobs in finance at both the undergraduate and MBA levels,” he says. “I think that’s a testament to our faculty group.”