Graduate / The chaos theory - Personal Statement for Master of Finance and Economics in LSE [5]

Requirement: It should describe your academic interests and your purpose and objectives in undertaking graduate study.

The butterfly effect refers to a popular hypothetical example of chaos theory--how small initial differences may lead to severe unforeseen consequences over time. I first came across the idea through the homonymous movie, and I did not stop believing it was just the movie plot until a global financial crisis hit China unexpectedly in 2008. Then I began to wonder why a regional financial crisis in the U.S. would finally get almost every country involved.

Eager to find out the reasons, I started to read relevant articles online to learn how the crisis was triggered and escalated. With little professional knowledge, I had great difficulty in understanding the terminologies, let alone underlying theoretical principles. Nonetheless I was not discouraged; inspired by the obstacles instead, I could not stop seeking more materials to have a thorough understanding. Upon going to college, therefore, I chose to major in quantitative economics to explore the complicated economic and financial world.

Expectedly, I gained a comprehensive mastery of fundamental principles of economics from quite a few specialized courses and was able to analyze the mechanism of daily economic events. Besides, I also laid a solid foundation in mathematics and statistics through such courses as Mathematical Analysis, Probability and Mathematical Statistics, paving good way for understanding economic and financial models and doing quantitative analysis. Meanwhile, I immersed myself in programming and studying statistical software. So far I have mastered C++, SAS, Eviews, Stata, etc.

Rather than confining to learning knowledge and developing skills, I actively put what I had acquired into practice through researches. Right after finishing courses of my freshman year, I participated in a national research project that aimed to study the current situation of rural-urban migration in China. I traveled for twenty-six hours by train to the remote Anxin Town in Hebei Province to gather primary statistics. When I was on the train, I started conversations with strangers to get valuable information about local political and economical situations. After interviewing over two hundred villagers within five days, I gained an authentic set of data about population transfer, land resources, etc. Based on the primary data, I performed an in-depth quantitative analysis on the correlation between the rate of rural-urban migration and family income, resulting in a regression model to demonstrate the causal relationship. As the team leader, I endeavored to create a positive and active working atmosphere by encouraging my teammates to express their opinions and complaints freely. Through this experience, I significantly sharpened my quantitative analysis and modeling skills, and enhanced my face-to-face communicative skills and leadership abilities.

Aware of the importance to connect myself to the real word, I initiatively sought internship opportunities to hone my skills. My internship at OC&C Strategy Consultant, in particular, has taken me a leap forward, not only further strengthening my analytical capacities, but also teaching me to work under pressure. On my business trips to Beijing and Guangzhou, I was charged to interview hundreds of customers from different backgrounds to gain their feedback of shopping experiences in big malls. Under the pressure to accomplish my assignment in two weeks, I learned to keep myself level-headed and communicate effectively with the interviewees, particularly those uncooperative or offensive. Then I conducted a detailed analysis to study the main influential factors on the malls' operation and prepared a comprehensive report. The intensive work made me aware the demanding requirements of careers, and motivated me to make efforts to be a competent candidate.

Impressed by my outstanding performance in research, internship and others, Professor Yen-Teik Lee from the School of Finance invited me to join his project of investigating the impact of clawback compensation on corporate performance. I was assigned to process thousands of company provisions in publicly-traded firms, and build a clawback sample with 1636 firm-year observations for further analysis. The sample was subsequently used to build a model to study the impact of clawback compensation provisions. Surprisingly, we found that there was indeed a strong negative relation between voluntary clawback adoption and firm innovation. This experience woke me up to the huge practicality of finance that can guide firms to maximize profits and minimize risks by identifying correlations and providing strategies, so my aspiration to engage in the financial industry was aroused.

After serious consideration, I made up my mind to pursue further studies first to build a solid expertise and prepare for a career in the financial sector. I am glad to find that the MSc Finance and Economics programme provided by LSE is a good fit for me. It can give me formal instructions of model adaptation and test, which makes well-known models applicable to new market environments. Its rigorous curriculum can enable me to develop analytical thinking and critical analysis abilities. Besides, its well-rounded career services can help me make future career choices and raise the possibilities for me to be employed by pronounced corporations that can provide me with invaluable experience.

After graduation, I hope to land a job as a quant at an investment bank to further train myself in quantitative analysis and reinforce my financial skillset. For the first three to five years, I plan to serve as an associate to gain an in-depth insight of corporate businesses and develop transferable skills. After accumulating experience and expanding social network, I will become a vice president and then managing director to lead high-level projects and control overall risks in a company. In the long run, I aspire to start my own company to provide financial consulting services for Chinese enterprises and contribute my share to their prosperity. I believe your distinguished programme can enable me to materialize my career planning.

Equipped with a strong foundation in quantitative economics, rich experience in modeling and quantitative analysis, and strong interpersonal skills, I believe I can quickly adapt to your programme and put on outstanding academic performance afterwards. With world-leading faculty and top-notch resources, your programme, I am convinced, will offer me a worthwhile learning journey.