Lauren Cohen can remember the precise moment when he realized he wanted to be a business school professor. Just before graduating from the University of Chicago in 2005 with both an MBA and a Ph.D. in finance, he began interviewing at a number of hedge funds in Chicago — and it didn't take him long to make a rather startling discovery.
"Every meeting I had, they said, 'You now have to meet the boss,' and it was always the least impressive person," Cohen recalls. "I left those meetings and decided I wanted to be in a meritocracy. I wanted to be in an environment where the boss deserved to be the boss."
Cohen, now 37, made a career detour, choosing to become a teacher. Clearly, it was the right choice. The chaired professor of finance at Harvard Business School is among the world's most admired and respected young faculty members at any school, nominated by his MBA students to Poets&Quants' list of the world's 40 most outstanding professors under 40. In fact, Cohen was among the top dozen vote-getters this year.
World-class teacher and world-class athlete
The HBS professor differs from his business school colleagues in one big, if unusual, way: his passion for powerlifting. The broad-shouldered Cohen is a world-class amateur powerlifter. The 2001 U.S. Powerlifting Federation Collegiate National Champion has won numerous national and world powerlifting tournaments, and in 2014 he broke the All-Time World Record in the squat in the 181-pound drug-tested division with a squat of 630 pounds.
Cohen's journey is both an inspiring and entertaining story: from a short, chubby kid who was the head tuba player in the school band and a lineman on the football team in the small farm town of Waverly, New York, to the upper reaches of academia.
Son of an orthopedic surgeon and a nurse, Cohen knew he was destined for a career of some kind in business. As a third grader, he dressed up as a stockbroker for Halloween, complete with blazer, briefcase — and sweatpants (it was, he explains, during his "sweatpants phase"). More significantly, he distinguished himself at Waverly High School, which is some 40 miles from Ithaca, N.Y., teaching himself AP calculus and earning valedictorian status in his graduating class. He was both co-captain of the school football squad and a member of the marching band, changing uniforms at halftime to play tuba and changing back again to get back on the field.
'If I can lift 350 pounds today and 375 tomorrow, I've gotten stronger'
It was Cohen's high school football coach who first recommended that he lift weights as a way to build physical strength, and as a way to get into a college, where he could play ball. But after he won admission to the University of Pennsylvania's Wharton School in 2007, Cohen, at just 5 feet, 8 inches tall, decided against playing football in his first year.
He didn't stop powerlifting, though.
"It is incredibly objective," he says of the sport. "If I can lift 350 pounds today and then 375 pounds tomorrow, I know I have gotten stronger. You just know you did or you know you didn't. I like things that are measurable, and in powerlifting, things are very measurable."
As an undergrad at Wharton, Cohen initially entertained the idea of becoming an I-banker. "I was sure I wanted to go into investment banking. The classic path is to go to Wharton, get a job at Goldman Sachs, and then three years later you come to Harvard Business School. With your MBA, you go back to Goldman, become a partner, get a place in the Hamptons, and life is good."
Chicago was 'cutthroat, competitive, and I loved it'
Except Cohen wasn't so sure about that path. At Wharton, he fell in love with the academics, so much that he went straight to graduate school at the University of Chicago. "I wasn't sure I wanted to be a professor," he recalls. "That first job is hard, and not in a way that is intellectually challenging. There is nothing I can do 20 hours a day and be good at — not even watching TV. So instead of going into investment banking, I decided to get a Ph.D. at Chicago and then get my MBA as well."
After graduating from Wharton summa cum laude with a concentration in finance, statistics, and accounting, Cohen packed his bags in Philly and headed to the Windy City in the fall of 2001. "I loved Chicago. It was a sink-or-swim environment. The school kicked out 50% of the students in the Ph.D. program and out of the nine students they took in my year, only four students made it through. It's cutthroat. It's competitive, and I loved it. You feel like you are walking with giants, with brilliant scholars like Gary Becker and Eugene Fama on the faculty."
Cohen's first effort at teaching a math class as a TA at Chicago was humbling. "I had my fair share of fumbles," he concedes, "and the biggest ones came from not having all the tools I needed. I came with a pot and ladle and you need more than that to cook a three-course meal. I have a well-equipped kitchen now."
Gained his MBA and PH.D. at the age of 25
Cohen gained both his MBA and Ph.D. in just in four years at the age of 25, graduating in 2005. (He also met the woman who would become his wife, Nicole, at a local synagogue in Hyde Park.) His first teaching job was at Yale University's School of Management. After two years at Yale, he landed an assistant professorship at HBS in 2007 when his wife got into the Ph.D. program at Boston University.
He's never looked back. Cohen became an associate professor at HBS in 2011, a full professor in 2014, and a chaired professor in 2015. He gained what has to be one of the last great gigs in America — tenure — in eight years at the age of 35. And from all accounts, it would be hard to find a more passionate or enthusiastic professor.
"This is the best job in the world," Cohen says matter-of-factly. "I get to wrestle with ideas with these bright young people and they pay me to do this! It is awesome. I get to reinvent myself with every project. In this job, you can be someone different every day. You walk into a class or start a new project and it's a new beginning. That keeps me young, and I can't imagine doing anything else. I love coming to work every day."
Cohen's work in behavioral finance has been featured in stories in The New York Times and The Economist, and he won the Smith Breeden Prize in 2008 and 2010 for the best paper in the Journal of Finance, published by the American Finance Association. Many other academic prizes fill his CV, along with scholarly publication in the Journal of Finance, the Review of Financial Studies, and the Harvard Business Review. Of all his academic achievements, though, he is most proud of being awarded a National Science Foundation CAREER Grant, among the most prestigious grants given to the most promising young economists.
'Every class I teach I think of as an adventure'
At Harvard, Cohen teaches the core Introduction to Finance course for first-year MBAs as well as several advanced electives on investments, from Investment Strategies to Stock Pitching. For Cohen, every class is something of an escapade. "Every class I teach I think of it as an adventure we are taking together," he muses. "Every time you go to a new intellectual place, we find new things and we learn new things."
Judging from his work schedule, he can't wait to get to work. On a typical day, Cohen wakes up at 4:30 a.m. From 6 to 6:30, he sweats his way through a powerlifting routine, ultimately taking the bus to Harvard Business School and getting to his office in Baker Library by 7:30 a.m. "We turn into pumpkins at 8 o'clock," he laughs.
For teaching inspiration, he nods to Andre Perold, an emeritus HBS professor of finance and banking. "He could read a menu and it would sound profound," Cohen says with full admiration. "I went to watch him. He goes in and poses a question: 'What is beta?' And then he asks the student who answers the question, 'Is that really what it is?' I tried the same thing and they all said, 'Yes, it is.' It flopped. I had to find my own way."
He loves finance but what matters most to him is his family
That he did. Cohen's students rain praise on him, admiring him not only for his thoughtfully provocative classes but also for his family values. "As a professor for the Required Curriculum Finance 1 class, Lauren is tasked with the impossibly difficult job of teaching a classroom that has a mix of both former Goldman/Blackstone PE guys and former Teach for America teachers. He performs admirably," says Daniel Siegel, a student in the Class of 2018. "Professor Cohen is what I would think the ideal professor for the 'millennial student' looks like. In at least one class per week, Professor Cohen would share stories about his wife, his kids, or his latest weightlifting pursuits. It was clear as a student that while he loves finance (and has a ridiculously great CV to back that up), what matters most to him is his family."
Pasha Nahass, another HBS student who has taken Cohen's core course, says that the professor builds an environment in class that is "truly comfortable and conducive to learning. For those of us with no finance backgrounds, our first finance course can be extremely stressful. But Professor Cohen kept the class energized and light, and this promoted a relaxed environment where we could take intellectual risks without fear of looking foolish."
Cohen is not merely a brilliant teacher, however. He has also done a fair amount of groundbreaking research in his field. "The line between teaching and learning is porous," he maintains. "I learn from the students in the class. I learn something new each time and there is nothing better in this world than learning something new about incentives, agency costs, or other things that interest me."
A flurry of hate mail from his research on patent trolls
Some of his most cited research derives from an insight he had while on a six-hour drive from Chicago to a powerlifting competition in Southern Illinois. On NPR he heard a story about truckers losing their jobs because of a drought in the Midwest. "I would never have made that connection, that there would have been a supply chain shock," he remembers.
"I put that into practice in looking at equity markets. Firms have to report their major customers, so I could estimate the supply chain impacts across the universe. When Ford Motor reports higher sales, the maker of the hoods on Ford cars and trucks will go up. But it has enabled the creation of a customer portfolio so investors can maximize outcomes."
To Cohen, finance is not just about the numbers. "I push on intuition," he says. "Finance is how the world works. If you understand that incentives drive behavior, it is the pyramid upon which every good business school is built."
Cohen's exploration of patent trolls — a 10-year study of patent litigation with policy implications — fueled a pile of hate mail from firms, called non-practicing entities, that amass patents for the purpose of suing other firms for patent infringement. Cohen and his colleagues found that firms that are targeted by patent trolls significantly disinvest in R&D, and are more likely lose critical talent or go bankrupt due to the litigation.
A headstone inscription for a rockstar professor
His latest revelation comes from tracking changes in the 10K documents publicly filed by public companies. "We look at the full text of 10Ks and look specifically for big changes (from one year to the next)," he explains. "These changes massively predict big returns on the negative side. If you create a portfolio of these, you get these huge alphas." He calls the phenomenon "lazy prices" because, he says, "lazy investors don't read the 10Ks and compare them."
For all his formidable professional accomplishments, Cohen is most proud of being married to Nicole, clinical faculty member in the special education program at BU whom he calls a "superhero," and of being a father to four children (ages 7, 5, 3, and 1). "If I wasn't a professor, I would be a stay-at-home dad or a nanny, because I love kids," he says.
Asked the best way to describe himself, he says he would sum it up with a phrase he can envision on his headstone:
"Adoring Father — everything else were footnotes."