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Transcript for Trading Theory for Practice
with Gavin Brown
“My name is Gavin Brown. I’m a Senior Lecturer in the Accounting, Finance and Economics
department. I specialize in corporate finance, teaching at level 6, third year undergraduate as well as
postgraduate.
When I joined the university two to three years ago now, my focus really was bringing a more
applied approach financial economics. So, obviously, there is a lot of conceptual theory, and
formulae, and mathematics around that, but I really wanted to try and demonstrate to the students
that in the real world it doesn't really stand up in the same way. So, what I have done is I use a
platform called Bull Bearings, which is a free online platform available to students and also casual or
leisure investors, as well. And, what it does is it allows students to trade with a fictitious amount of
money, so not real finances, but based upon the real stock price movement of London listed stocks.
So, what I do is I give half a million pounds to each of my students, and they trade across various
stocks and shares, foreign currencies and derivatives, and what it allows them to do to experience
real world behaviour and really just understand how the theory doesn't stand up in practice.
Basically, for me, I still teach the same theories that would get taught on any corporate finance
course, but what it allows me to do for their assessment, their summative assessment for my unit at
level 6, is rather than just saying ‘go away and critique the journals and critique the theory and
provide a 3000 word report’ or whatever it might be… I actually get them to explain their
occurrences of what happened on this platform. So, what that enables them to do is to tell me
whether they made money, whether they lost money, and why they think that may have been the
case. Invariably what that means is that the theory didn't work. So, by actually demonstrating that
they theory doesn't work, they have to show me that they understood the theory and then try and
postulate as to why the theory didn't work in practice. The benefits this includes; it gives them a
more applied knowledge so it captures their imagination a bit more, but I think more importantly
then that, it shows them that the real world is much more complex and messy than the academic
theory would have them believe.
They start on day one really. So, effectively I introduce it as a key component of the course and then
as we proceed through the course, week by week, they learn about different instruments and then
following that education process, they can then, almost as part of their homework and their reading,
they can go away and trade those instruments in the real world. The actual platform itself is very
easy to set up. I just create a league for a given class in a given academic year. The students compete
against one another, and at the start of each individual class I actually bring up the league up so they
can see how they all rank against each other in a very kind of healthy competition, to capture their
imagination. It is also quite interesting because on Bull Bearings there are lots of other universities
across the UK and globally doing this. 97 UK universities do it, and so I also show how their aggregate
impacts as a class ranks alongside other UK institutions. So, for instance, last academic year we
finished 22nd out of 97 universities, so it was quite nice to see them gelling as a group to try and out
compete their peers at other institutions.
I think, from my perspective, because I come from a non-traditional academic background, I have
the same qualifications but I have come from experience in the city as well. I used to work in hedge
funds and investment banking, and it was always one of the things that was really impinged upon
me was this notion that the financial markets are not rational, they don't behave as you would
expect them to behave. I was really keen to translate what I had seen in the real world, so to speak,
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into my classroom, because I didn't want my graduates to leave MMU with this notion that we have
a great book understanding but actually in the real world, they are likely to get chewed up, for want
of a better phrase, when it comes to trades stocks and shares. So, I really wanted to bring that
home, and as well as that I think, you know, the academic theory can be relatively dry but as soon as
you put it in the context of making money, competing against your friends, incorporating that into
the experiential learning of the assignment, competing against other universities; it suddenly then
raps up to bring the motivation and the inspiration to study more to the students. So, that was kind
of a twofold thing: capture their imagination and also to demonstrate that the real world is different
to the academic one.
I keep in contact with a lot of my students through things like Linkedin. That is how I provide my
references. I put them up on their profiles so they can see them and a lot of the time they will
feedback to me, often when they have been successful at interview or even in their jobs at the
moment, and the word that always comes back is this notion of 'applied', you know, they found the
applied nature of my course really useful. It means that when they go to interviews… last academic
year the key thing was Royal Mail, floatation of Royal Mail, and that was a big part of our course,
you know, a lot of my students traded that, made a lot of money off that, and it meant that when
they were in interviews and they were having to talk about contemporary issues, maybe a moving
exchange rate, or something like the Royal Mail share price, they weren't just able to comment on it
quite articulately, but they actually read a lot about it, they were passionate about it and they were
then able to go on and talk about whether they had made of lost money using this Bull Bearings
platform, and that allowed them to be differentiated as a candidate compared to other people going
for the same position. So that is rewarding for me as well because I can see that my students aren’t
just getting superior learning but they are translating into graduate positions when they leave.”
Student Comments:
C: “My name is Callum, I study Economics at Manchester Metropolitan and this is my third year.”
A: “My name is Alex, I'm in my third year, which is my final year here at MMU, studying Economics.”
C: “It is one of these platforms that take your theory and allow you to apply it to more real world
scenarios without any risk, so it is all fantasy money but it the real principles and it is the same as it
would be in the real world. The competitive side of things at the start of every class, where we are
shown the leagues and we are all competing against each other, there is the inter-university
competition as well which is also pretty good.”
A: “I really like it because it enables me to apply the theory that we learn in class to real world
situations and it is quite fun to do, competitive in the league. It is nothing I had done beforehand,
however since participating in Bull Bearings I have developed a greater interest in investments and I
have actually spent more of my own time looking into it, reading as well as placing practice trades.”