Sanjiv Das is Professor of Finance and Data Science at Santa Clara. After a childhood in Bombay, India, then moved to New York to get a Ph.D. from NYU. Dr. Das has worked in banking, and served as a professor at Harvard Business School and UC Berkeley. When he’s not researching machine learning, derivatives pricing models or portfolio theory, you might find him riding his racing motorcycle along the California coastline.
In this conversation, we touch on personal finance advice for young people, then discuss how he balances all the demands of being an academic (hint: it involves waking up early). We spend a chunk of time discussing artificial intelligence and how the future of work will look, then wrap up by discussing Dr. Das’ passion for the ocean and motorcycles.
Selected Interview Highlights:
Gavin Cosgrave: You went to business school in India, then worked in the banking sector building software models and trading systems around Asia. What was it about banking that you loved and enjoyed?
Sanjiv Das: It was problem-solving. I was very lucky to be in many units where there were problems and I was learning to think out of the box, whether they were people problems, financial problems or math problems. I think I got good at it, which is maybe why I was sent everywhere. Doing research is similar to that because you’re trying to solve open problems that no one has solved before. It’s a little harder because the problem doesn’t come on a plate, you have to find a new problem.
GC: What personal finance advice would you give students?
SD: The most important thing is not to wait to start saving. Most people only start saving when they’re 35 instead of 25. If you start putting money in at 25, you end up with double the money at age 65 than if you started at age 65. Even though it’s ten years off, you get double the money because of compounding.
The second thing is don’t pay too many fees to money managers for asset allocations. If you don’t want to be an active trader, just put your money in index funds. An actively managed fund would take 1% or so per year. Over a 40-year period, you would end up with 1/3 less if you pay 1% to a fund manager.
The third thing is don’t trade too often. A lot of people get tech jobs and day trade all the time. If you constantly sell stocks, you have to pay taxes on the gains, so your portfolio drops by a notch, so it has to grow back to the original point again before you see the benefits. Start saving early and you’ll be richer than you can imagine!
GC: You recently wrote a blog post about all the different parts of being a professor: teaching, research, committees, editorial boards, consulting, and conferences. How do you decide what to spend your time on?
SD: I call it super-tasking, it’s not even multitasking anymore. All of us who are working as research professors usually have 5-10 research projects at one time. Then you’re teaching and constantly updating materials. If you’re senior enough, you’re on editorial boards and writing reviews. Many business school professors do consulting to stay connected to the real world. I work with the Attorney General’s office to do financial analysis.
The way I do it is to get up really early in the morning. On good days, I’ll get up at 5 or 6 in the morning and I’ll work at home for four hours straight on my research. After that I’ll come into my office and do all the administrative stuff for the data science program. Then I have a bunch of meetings around lunchtime. After lunch I keep for students, and I teach grad school at nights. Tonight my office hours are 4-7 and I teach from 7:30 to 10:15.
I sometimes look back on my days in industry and think that was easy. The thing that keeps me going is that this is not work. I really enjoy doing research, teaching and meeting my students. It doesn’t feel like a pain.
GC: How will artificial intelligence (AI) change the way we live in the next 5-10 years?
SD: In the old days, AI took something humans did and replace it with a machine. Those were rule based systems, like a chess-playing machine. Today’s AI is giving data to machines and letting them learn everything through pattern recognition. Previous programs could not be better than the human that created them, but now AI can find rules that humans could not find.
Any job where data is being generated at risk, or if anything takes one second, it can be replaced. Jobs are on two axes: one is manual or cognitive, the other is routine or not routine. Manual and routine jobs like a tollbooth operator are gone. Cognitive but routine is like a police detective who looks through a book to check for a suspect. That’s automated by image-recognition software.
On the other axis, you have routine but cognitive tasks, like paralegals checking documents, that’s gone as well. You might think a trader is a sophisticated job, but Goldman Sachs had a dealing room with 600 equity traders and they have two left.
Lots of jobs will be AI enhanced. For example, doctors are already seeing that with x-rays. In the old days, doctors wrote reports on x-rays. Then they shipped the tapes to India and outsourced the work to save costs. But now image-recognition is so good that you can have AI look at the x-ray and write the report. The radiologist here will get back their job and look at the report that the AI generated. Jobs that are being outsourced will be replaced by AI.
Trump is talking about bringing jobs back, but he’s not going to do it. Technology will do it anyways. Certain functions of jobs will go away, but jobs will be enriched.
GC: Why do you love the ocean?
SD: I grew up in Bombay in India, and I could see the ocean from my window. I grew up sitting by the rocks and spend our evenings there after school. The funny thing about my life is I’ve never lived inland. I lived in Hong Kong, Singapore, Brunei, Kuala Lumpur, Sydney, Tokyo, New York City, Boston and now here. I haven’t found another person who has moved and never lived inland. Maybe it was because I would never be able to live away from the ocean. I can sit there for hours just watching it. I’m very fond of marine life: sharks, whales, otters. I like hiking and driving along the coastline.
GC: I see you have plastic model motorcycles in your window…
SD: I have a racing motorcycle. I’ve been riding for more than 20 years, and so far no accidents. It’s a liberating experience because I have taken roads I would never take in a car. On a bike, you smell everything, and that enhances the experience. And then of course there’s the speed and acceleration.
I’m a rock climber too. Rock climbing is the only sport I’ve ever played where my mind is completely focused. When you’re on the wall it requires 100% focus.