How a small town girl from Montana ended up managing a $100bn portfolio in New York
Lessons from the battlefront - An unfinished PhD, a front-row seat to the crisis of 2008 and rising from the ashes of Wall Street
So what can the world of business learn from her experience during the crisis? Among the hysteria of the rumour-mill and the notorious silence from the partners upstairs, Schultz maintains that diversity of thought is essential and could have averted many of the mistakes made due to too many nay-sayers on the wrong side of the debate. Mixing genders, personalities and opinions as well as having a life outside of the office, she says, is the key to survival in the ruthlessly competitive world of high finance. Did she endure specifically because of her solid, if humble foundations? Perhaps, she says, but like any good businesswoman, her educated gambles were backed by knowledge and experience, something she credits for much of her success in interviewing for new roles and getting along with the many different personalities she has worked with.
A deep understanding and consideration of the risks inherent in our world appears to be an ingrained habit of thought. Schultz is now very vocal about the future upheavals awaiting her sector which she believes will come through the development of Artificial Intelligence. Although this technology is still in its infancy, Schultz is frank in our discussion about how her job could soon become obsolete, favouring computers that are increasingly effective and efficient at handling data and pattern recognition tasks. Understanding that human interaction will always be essential in finance, she still remains determined to expand her abilities in order to match the digital competition and to help the world predict the future in order to change its course for the better.
The Formative Years
Let’s start at the beginning. How were you raised and how did that impact your career?
There are times when I feel like it’s all been a bit of an accident. I was raised in the middle of nowhere in Montana. My mum actually has 4 degrees whilst my father didn’t graduate from college, but both of my parents have always been driven by curiosity. I never questioned the fact that I would go to university and that there was this world beyond Montana that was full of possibilities. Curiosity and other pursuits were absolutely encouraged by my parents, and this definitely shaped my upbringing. We were not very well off; money was always a struggle. There was a moment where we were making popcorn, and I spilled the bag of popcorn all over the floor and my mum made us sweep it all up so we would not have to buy more. As an adult, I understand that was because my mum was an anxious person, but at the time, I read it as, ‘wow we are so poor, we can’t afford to throw it away’. At that moment I made a promise to myself that ‘when I grow up, I want to be rich enough to just throw the popcorn kernels away.’
"I had this flash-forward to the rest of my life, creating data sets and cleaning the data sets and coming up with different specifications of the model for years... So I quit my PhD programme"
I did go through a PhD in Economics but didn’t finish it. I initially planned to go down the teaching route and academia. In the end, having a paycheck that allowed me to do the things that I really valued in life beyond work was important to me. I’ve always wanted to travel and having a job that allowed me to do that became essential. I started studying Political Science and Philosophy at university, but very quickly switched to economics. I had a professor early on who told me he thought economics was the perfect combination of philosophy and the engineering business mind-set. Political, but you can still be creative with it.
I ended up doing a PhD at Princeton for a couple of years. I remember sitting in my second year seminar, with a professor from MIT who was presenting a paper on worm treatment in Kenya with the paper going to Econometrica (i.e. the very best in the field) and for an hour and a half we kept raising our hands and asking ‘did you check this specification?’ and he would say ‘yes and it did not significantly change our results’. I had this flash-forward to the rest of my life, creating data sets and cleaning the data sets and coming up with different specifications of the model for years, so I could answer a bunch of grad students in a seminar and continuously say ‘yes I checked it and it did not significantly change my results’. So I quit my PhD programme.
How did she transition from junior portfolio manager to being entrusted with a $50bn portfolio? Read Part II here