Tag Archives: finance

Investing in life

Gary Furukawa (BA 1981) is the chief investment officer for Freestone Capital Management, a wealth management firm. Recently, he spoke at the Foster School about his career path, gave an overview of the financial markets and shared his personal insights on a range of topics, including what Freestone looks for in potential employees, books to help you develop your own investing framework and more.

Furukawa started his career with Deloitte & Touche in Seattle as a Certified Public Accountant. In 1982, he joined Smith Barney as a financial consultant, eventually rising to senior vice president. In 1999, he founded Freestone. He has been a highly successful investor along the way, investing in a wide variety of asset classes: distressed real estate (1980s and again after 2008 crisis), private equity (early 1990s) and thrift conversions (1988-present). He was also an original angel investor in Amazon.com and aQuantive.

Top insights from Furukawa’s talk:

  • Most useful courses he took at the University of Washington: English/writing courses, sociology and psychology courses and behavioral finance courses. Furukawa said, “Learning about the flaws in the way you think is very powerful and will help you make better decisions.”
  • Your life = the sum of your decisions.
  • Through your education, you should try different things until you find something you really like. It should be something you have the potential to be good at.
  • Self-knowledge, obtained through reading, thinking and life, is the most important knowledge. Learning really starts after you graduate from college.
  • Wealth is primarily created three ways (in the U.S.): owning a business or owning stock in a successful business, owning real estate for a long time or inheriting money.
  • Your pay check funds your lifestyle, but in order to build wealth you have to save and invest your money.

Watch video highlights, which include his ideal employee traits, investment lessons, recommended reading and life insights.

Gary Furukawa was one of UW Foster School of Business Dean Jim Jiambalvo’s guest speakers at the annual Leaders to Legends Breakfast Lecture Series, which include notable leaders in an array of industries from greater Seattle and around the country.

Foster finance workshop explores the ABCs of HFTs

Guest post by Jonathan Brogaard, an Assistant Professor of Finance at the Foster School

Jonathan BrogaardIs high frequency trading good or bad for financial markets? In January, the Foster School Department of Finance and Business Economics hosted a high-level summit to discuss how the increasing automation of financial markets is affecting investors, market volatility and order execution.

The discussion brought together Foster finance faculty and senior executives from local investment firms.

As an early investigator of this emerging topic in finance, I was asked to present the leading academic findings.

First, a bit of definition. High frequency trading (or HFT) is the fastest subset of computer-based algorithmic trading. HFTs act either as market makers or exploit inefficiencies in the market. They buy and sell constantly, hold very little inventory at any given time, and end each day with zero positions. In short, they run a volume business, picking up fractions of a penny over and over and over again. This leads to regular—and sometimes extravagant—profitability.

But HFTs are shrouded in mystery. Little is known about these firms and their algorithms that dominate market trading. HFTs are obtuse and generally unregulated. And they have been linked to scary events such as the flash crash of May 6, 2010.

A small group of academics, including myself, study the effect of HFTs on market quality—how well markets operate. The consensus of our findings is that, on average, HFTs are improving the quality of markets. That is, they are adding to price discovery (making prices more informative), increasing liquidity (making more shares available to be bought and sold), and decreasing spreads (the price difference between what a buyer and a seller will pay).

But what are traditional investors experiencing in the markets? Our workshop guests voiced a variety of opinions on HFTs, and shared experiences that will help me and other researchers fine-tune our measurements to better reflect the realities of an increasingly computerized market.

We certainly share their concerns about the lack of understanding around high frequency trading. We have much to learn. Do HFTs increase or decrease the risk of flash crashes? What is their presence doing to investor confidence? Are they beneficial in the market for smaller stocks?

We tend to fear what we don’t know. But high frequency trading is certainly here to stay. So we’re working diligently to shed light on this powerful new force in the financial markets.