Name: Richard Warr
Role: Professor of Finance & Department Head, Department of Business Management
Education: Ph.D., University of Florida, 1998
“Academics do two things,” Dr. Richard Warr said. “We create knowledge, we understand new things, how things work, and then we share that knowledge with other people.”
Financial markets are complex, the regulatory landscape is changing and the impact of new financial instruments is still being measured.
That makes Professor Warr’s goal of demystifying financial markets, helping Poole College of Management students make informed decisions, all the more important.
A native of York, England, Professor Warr’s doctoral studies brought him to the University of Florida, where he earned his Ph.D. in Finance in 1998.
Warr has been a faculty member at NC State for 13 years, and has served as head of the Department of Business Management for 3 years.
His own experience has shown him the value of an international perspective, and Professor Warr also encourages students to travel abroad and learn about other cultures – both for their own enrichment, and for a better understanding of the career world they’re about to enter.
Q: What are some of the most important skills or knowledge you want Finance students to take away from their NC State coursework?
A: What’s important from a student perspective is understanding the broader interconnectedness of financial markets. We used to think of just buying stocks or bonds, but now those markets are more complex. In fact, a lot of what led up to the 2008 financial crash was due to that complexity. So, students need to understand that complexity. It’s challenging, from a teaching point of view, because the markets keep changing.
Q: How does the financial knowledge they get in Poole College of Management courses make NC State graduates more effective in their careers?
A: In my courses, I try to relate what the students are learning to the kinds of decisions their companies will be making. I try to take the mystery out of investing. We’re helping students learn to take a problem and not only solve it analytically, but then interpret the solution.
In finance, you have to get away from the idea of, ‘Oh, I’ve got to plug numbers into a formula.’ The challenge, ‘How do I take the complex financial information that’s coming at me, and help the decision-makers at my organization make an informed decision?’ That’s what our students will do.
Q: Aside from understanding financial markets and theory, are there other skills you try to emphasize when you work with students?
A: Well, I want to take the mystery out of investing, and I also want to help students understand their own finances. The big piece of advice I give to students is, ‘Max out your 401K.’ The key decision is not what to invest in. The key decision is to invest. I tell them, “Come back and find me 20 years from now. You’ll thank me!’
Also, communication skills – being able to explain to a non-finance person why a concept is important. I heard a physics professor say recently that he knew his students had succeeded if they could explain a physics concept to their grandmothers.
Q: As a researcher, what are some of the topics you’re currently exploring?
A: One thing I’m interested in is how investors become confused about investments because of the influence of inflation – the classic inflation-illusion problem. I’m also looking at how CEOs are able to opportunistically trade around corporate events without being charged with insider trading. This is not a good thing, and I’m trying to shed some light on how this is being done.
Q: Since you and Dr. Srini Krishnamurthy of NC State have just been appointed editors of The Financial Review, what will you hope to accomplish in that role?
A: One of the goals with that journal is to try to disseminate the research to a wider community. We’re going to use social media to do that. There’s important research in the journal, and so what we want to do is tell people, “This is what we’ve found. This is what’s interesting.” It will be an interesting challenge.
Q: What do you like to do in your spare time?
A: I play guitar … badly! I like everything from punk rock to Wilco.