about Bob Park
I started to invest in the stock market when I was in the ninth grade so I could earn enough money to buy my first car by the time I turned 16, which is when I could first get a driver’s license. I wasn’t that bright. It was a used car.
I entered the investment industry by joining a Canadian national broker-dealer firm at the end of the 1970’s.
The modern OTC derivatives market gained traction in the mid-late 1980’s. While attempting to raise personal investment money from corporate executives for a successful options arbitrage investment program, my FINCAD co-founder and I discovered a real imbalance in derivatives knowledge and capabilities between the sell-side and the buy-side. By the end of the 1980’s there were regular and frequent reports of major non-financial companies taking large earnings statement hits that resulted from them taking on derivatives-related risks they didn’t understand. FINCAD’s first marketing piece was a simple one page sheet titled “Derivatives Fiascos” that listed the names of those companies and the amounts of their losses. Every couple of months we could add another name to the list.
We decided it would be more fun to leave the investment industry and venture out on our own. So we set out to provide knowledge and technology to the customers of the banks to help them take control over their derivatives activities in an informed way; to level the playing field. So we started FINCAD, originally aiming to help corporate treasurers understand the derivatives market and enable them with software tools to use that knowledge.
When we first started selling our services I would visit a corporate treasurer, ask him if he used derivatives and, if he said “yes”, [often they would say “we’re trying a couple”], I would put my ‘Derivatives Fiascos’ sheet on his desk and say “Could this happen to you?”
Over the past 21 years we have provided our technology to more than 4,000 different organizations in over 80 countries around the world. We started working almost exclusively with non-financial companies but our clientele grew to include banks, traditional asset managers, hedge funds, insurance companies, central banks, all the major global audit firms, governments and other financial software vendors and service providers.
A lot of water has gone over the bridge since we founded FINCAD. Derivatives are more complex. The math is much more sophisticated. But the markets remain driven by human beings and that means common sense remains an essential factor in successfully participating in the financial derivatives markets. Too bad it isn’t so common.