Rejecting Groupthink to Find his Niche
University of Idaho graduate Justin Chapman carves out a career in the commodities markets through the Barker Trading Program.
By all accounts, 22-year-old Justin Chapman shouldn’t be headed to Fargo, North Dakota, as a grain merchandiser when he graduates from the University of Idaho this spring.
Chapman’s father builds homes. His mom works in healthcare. No one in his extended family has roots in either financial services or agriculture. Nonetheless, the U of I graduate from McCall will begin at food processor and commodities trader Archer Daniels Midland two weeks after graduation.
“I originally wanted to be a pediatric physician or radiologist,” Chapman said. “But during my senior year of high school I took an introductory economics course, including a stock market simulation game. That’s when I caught the bug.”
With a handful of college credits from advanced placement and dual-credit high school classes under his belt, Chapman decided to follow that bug and seek a Bachelor of Science in finance.
“I came to the University of Idaho to study financial markets in the Barker Trading Program,” he said.
Housed in the university’s College of Business and Economics, the Barker Trading Program includes an on-campus student trading room similar to the Wall Street Stock and Chicago Mercantile exchanges. Instructor of Finance Darek Nalle oversees Barker, and additional relevant courses are taught by Finance Professor Terry Grieb.
“Barker is unique to the University of Idaho because students have the opportunity to put real capital at risk in any market of their choosing,” Chapman said. “We manage our portfolio actively with ebbs and flows of the economy. Other programs either don’t use real money, or don’t give the students enough freedom to explore different strategies.”
The difference between trading real and simulated money is, “the butterflies,” he said.” We want students to have butterflies in their stomachs before making a trade.”
Real money is being made or lost, and Chapman has felt the gravity of financial losses in the student trading room.
“The first semester of my junior year I had, without realizing, placed enough leverage in the market to sink not one, but three student accounts if a worst-case event had happened with the trades I made,” he said. Fortunately that didn’t happen, and “no accounts went bankrupt.”
Overwhelmed with coursework, and still pretty new to the trading program, Chapman admits he wasn’t making the best decisions.
“Professor Terry Grieb benched me for the semester,” he said. “It was a hard crash to Earth being told I couldn’t trade, and that my promotions within the group were stripped away.”
It was that last part – having the opportunity to become Barker’s chief investment officer taken away – that really stung.
But it was just the sting he needed.
“In the trading room, information and knowledge comes at you like water from a firehose. And I showed up every day, ready to drink,” Chapman said.
And drink he did. A year later, Chapman was named the program’s chief investment officer. “Now I’m the one holding the firehose, and realize it’s less about what I know and more how I can teach what I know to others,” he said.
Making that distinction has allowed him to successfully mentor the Barker Trading Program’s 24 analysts and six portfolio managers.
“The students who excel in actively managing the Barker portfolio are invited to become funded traders, and they are allowed to trade anything,” he said. “There are very few constraints. Instructor Darek Nalle rejects group-think and encourages you to find your niche.”
This freedom allowed Chapman to strategically carve out a place for himself in the commodities market.
“So many areas of trading are automated. It’s just a matter of who makes the trade first – did it take five milliseconds, or did your competitor make the trade in two milliseconds,” he said.
However, commodities are a little trickier than just buying or selling.
Factors are ever-changing and so interdependent in commodities trading that algorithms and computers are unable to put it all together. Even if they could, artificial intelligence isn’t capable of converting that data into meaningful information farmers, exporters, processors and transporters can use to make financial decisions. This information seems endless: labor strikes at ports halting exports; replacement part shortages from trade tariffs slowing processing; or record-breaking rainfall that has miles of railroad under 6 inches of water, stalling transport.
“As a grain merchandiser, my job is to maximize profits for farmers while minimizing their risks,” Chapman said. “I will be a hub of information for farmers and everyone who interacts with their crops.”
This means being up-to-date on information regarding exporters, processors and rail companies while simultaneously knowing the latest movements and trends in the commodities markets.
Chapman is ready for the challenge.
“Most important, my time in the College of Business and Economics’ Barker Trading Program has taught me how to learn,” he said.
In the trading room, information and knowledge comes at you like water from a firehose. And I showed up every day, ready to drink. Justin Chapman