 
David Trone (CS’88), MBA ’95, is a familiar face for those who follow
financial news. In his role as a leading financial analyst with Fox-Pitt, Kelton, Trone is often quoted in publications like The Wall Street
Journal, Business Week and Forbes magazine and appears
several times a month on such CNBC programs as “Closing Bell” and “Squawk
Box.” He has a 5-star rating from Starmine and a reputation for both uncanny
acumen and unshakeable principles.
Trone is an equity research analyst covering the stocks of financial
services companies, His clients are giant institutional investors like
Fidelity and T. Rowe Price, who seek his advice on which stocks to add or
remove from their portfolios. Trone says it is exciting and high-profile
work, but also high-risk. “There are substantial expectations,” says Trone,
“not only of your proficiency in picking stocks, but also of your
insightfulness—how you think about a company, but also how you think of your
entire industry.”
Trone began his career in the computer software industry, but when he
moved into management found that he needed some additional business skills
to move his career along. He enrolled in the Smith School part-time MBA
program, and enjoyed the classes so much that he eventually transferred to
the full-time program. “As an undergraduate computer science major, I had
never taken a business course,” says Trone. “The MBA program was
challenging, but it opened up a whole new world for me.”
 Trone, who was
interested in marketing, intended to work for a big consumer products
company after finishing his MBA. Instead he took a job with Bank of New
York. That was his first step into the world of finance.
“One of the things I learned at the Smith School was to never stop
networking,” says Trone. In his first year at Bank of New York, he met a
fellow Terp who was also one of the world’s top financial analysts. That
contact offered Trone a job at Credit Suisse First Boston right before the
stock market took off in the late 1990s. “I experienced some very heady
times,” says Trone. “Everything you read about in the newspapers I saw from
point-blank range.”
“Our team was independent from investment bankers—we actually had sells
on stocks, which was unheard of at that time,” says Trone. When Credit
Suisse First Boston merged with DLJ, another major Wall Street firm, Trone’s
entire team was fired, because they were considered too independent. It
became a major controversy, with the team considered by many to be the
poster children—and martyrs—for independent research in the industry. Since
then, there has been an increased focus on regulation within the industry
and a push to create more independence among analysts.
 In the past few years, increased scrutiny and more stringent regulations
have been imposed on the industry, which Trone thinks may actually hinder
the market. “Wall Street firms are probably too conservative now,” says
Trone. “The capital market system is built on risk-taking. As some of the
more unnecessary regulations are starting to loosen up, I think Wall Street
is shifting back to a middle ground as far as risk tolerance. The merger
business is heating up quite a bit, IPOs are starting to come back, and the
private equity business is red-hot.”
Trone, who has been a Terps fan since childhood, found that his main
connection to the university was through watching its sports teams. With his
recent appointment to the
Smith School Board of Visitors, he hopes to give
back by helping the school better prepare students for jobs on Wall Street.
“I’ve hired a number of Maryland alumni for my staff, and I’d like to see us
better represented in the industry. But you need more than just an academic
knowledge of finance. You also need practical knowledge—all the details you
get from someone who knows how things work.” Trone is the perfect person for
the job. |
