Inside HBS

Harvard Business School, MBA Blog

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Beautiful Morning in Boston

September 15th, 2009 · Uncategorized

I’m fortunate enough to have classes that don’t start until 11:40 on the X-schedule… The last few days have been absolutely gorgeous here. Light breeze, warm sun, temperate weather — this can really be a nice place to live when during those few months of the year in between a sweltering summer and a frigid winter!

Studying in the Morning

Studying in the Morning

Life has been busy lately. Cases are long, and it’s definitely been harder to get in on the discussion. I’ve been thinking about it a lot lately (particularly since I feel like I’m working harder than ever yet seeing fewer returns when I skimmed the cases last year!)

Two potential explanations:

  1. EC professors are more directive, so there’s less room for discussion and debate. I keep on waiting to respond to classmates comments, but the professors this year seem to forcibly lead the classes with questions rather than simply moderating to maintain momentum. Maybe I need to just start answering instead of sitting on my hands waiting.
  2. I intentionally chose classes where my knowledge and experience is lacking, but I don’t think that was a universal principle. My finance classes are full of people from hedge funds and investment banks… Not ex-corporate guys with consulting experience. I actually have to read the book to understand what people are saying, and even then — it’s tough to synthesize the nuances of many of the arguments.

Back to cases!

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First Week of EC Year

September 4th, 2009 · Uncategorized

One week ago today, I was settling into my plane seat for the start of a 12-hr trip return trip from an international vacation.  I’ve only been in Boston seven days now, but it seems like a lifetime!  Reflecting back over the week, it doesn’t seem like there was all that much to do… after all, classes didn’t start until Wednesday.  Even so, I feel like this has been one of the most exhausting weeks of the year.
Here’s a preview of what’s been on my mind lately.  I’ll probably hit each of these in more detailed posts over the next few weeks.
1) Moving.  I hit a better slot in the HRES lottery this year (#5 instead of #11) and took the opportunity to “upgrade” to the on-campus apartments.  For the next year, I’ll be living in One Western Ave… not a penthouse suite by any means, but a lot more spacious than my tiny dorm room.  I’m excited about the chance to try something new, but it’s ridiculously expensive and time consuming to move into a new apartment, furnish it, and try to fit all of my old stuff (that was sitting in a storage unit) into this new, small space.
2) Classes.  My class schedule for this semester is so-so.  I sat in on “Real Property” (a real estate course) on Thursday and Friday… absolutely fascinating course that I really, really wanted to take.  Unfortunately, the add/drop process didn’t work out for me, and I wasn’t able to make it in… pretty disappointed, particularly since I think I could’ve added it fairly easily if I had put more time into thinking through the schedule during sign-up last semester.  The rest of my classes are all popular standbys… they’ll be interesting enough, but can’t say I’m thrilled about any of them.
3) Comments.  I was fortunate enough to receive “First Year Honors” this semester (top 10-15%)… and I’m actually on-track for a potential “Baker Scholar” designation (top 5%).  While I’m excited about it (ego affirming – particularly since I’m one of the few without an Ivy League undergrad), I’m feeling a lot more pressure this semester.  Last year seemed pretty easy – I spent 30min-1hr per case and felt like I could contribute without extensive study.  This year… well, it’s been three days and I haven’t commented yet!  The courses are more specialized, and I’m struggling to keep up… not even close to being in a position where I’m a step ahead to make the “1” comments.
4) People.  In between moving in, reading cases, rearranging my class schedule, and spending time with the girlfriend – I’ve almost completely neglected this critical piece of returning to school.  It’s really a shame… I want to reconnect with everyone beyond the simple 5 minute “how was your summer?” back-and-forth in the halls, but it has dropped off the bottom of my priority list lately.  On top of that, the benefit (?) of switching classes every hour to sit with a new group of people is that it really emphasizes how HUGE this graduate program is.  My weekly interactions have expanded from 89 other people to 445 people (89 x 5 classes)!  There’s some overlap, but it’s still a huge shift.  It helps me appreciate the first year more… the stable section experience makes HBS feel so much more comfortable and manageable.
5) Clubs.  I’m co-President of a club this year and have ZERO desire to do anything with it.  Not sure why I agreed to this… the return per hour invested is just so low on the list that I’m going to have to work hard to keep this top-of-mind (and avoid overloading the other President).
6) Job.  One undercurrent is the whole job situation.  I had a great summer and received a full-time offer, but I’m not 100% sure it’s the direction I want to head with my career.  I have to decide how I’m going to handle this… the recruiting season for ECs is just around the corner, and my offer expires in a couple months.  Is it worth going through the whole networking / application / interviewing hassle again?  Such a time-sink…  I’ve been tossing around the idea of trying something in finance, but is that even realistic?  Or has my summer in consulting locked-me-in to that career path?
… and with that, the first week draws to a close.

One week ago today, I was settling into my plane seat for the start of a 12-hr trip return trip from an international vacation.  I’ve only been in Boston seven days now, but it seems like a lifetime!  Reflecting back over the week, it doesn’t seem like there was all that much to do… after all, classes didn’t start until Wednesday.  Even so, I feel like this has been one of the most exhausting weeks of the year.

Here’s a preview of what’s been on my mind lately.  I’ll probably hit each of these in more detailed posts over the next few weeks.

  1. Apartments.  I hit a better slot in the HRES lottery this year (#5 instead of #11) and took the opportunity to “upgrade” to the on-campus apartments.  For the next year, I’ll be living in One Western Ave… not a penthouse suite by any means, but a lot more spacious than my tiny dorm room.  I’m excited about the chance to try something new, but it’s ridiculously expensive and time consuming to move into a new apartment, furnish it, and try to fit all of my old stuff (that was sitting in a storage unit) into this new, small space.
  2. Classes. My class schedule for this semester is so-so.  I sat in on “Real Property” (a real estate course) on Thursday and Friday… absolutely fascinating course that I really, really wanted to take.  Unfortunately, the add/drop process didn’t work out for me, and I wasn’t able to make it in… pretty disappointed, particularly since I think I could’ve added it fairly easily if I had put more time into thinking through the schedule during sign-up last semester.  The rest of my classes are all popular standbys… they’ll be interesting enough, but can’t say I’m thrilled about any of them.
  3. Comments. I was fortunate enough to receive “First Year Honors” this semester (top 10-15%)… and I’m actually on-track for a potential “Baker Scholar” designation (top 5%).  While I’m excited about it (ego affirming – particularly since I’m one of the few without an Ivy League undergrad), I’m feeling a lot more pressure this semester.  Last year seemed pretty easy – I spent 30min-1hr per case and felt like I could contribute without extensive study.  This year… well, it’s been three days and I haven’t commented yet!  The courses are more specialized, and I’m struggling to keep up… not even close to being in a position where I’m a step ahead to make the “1” comments.
  4. People.  In between moving in, reading cases, rearranging my class schedule, and spending time with the girlfriend – I’ve almost completely neglected this critical piece of returning to school.  It’s really a shame… I want to reconnect with everyone beyond the simple 5 minute “how was your summer?” back-and-forth in the halls, but it has dropped off the bottom of my priority list lately.  On top of that, the benefit (?) of switching classes every hour to sit with a new group of people is that it really emphasizes how HUGE this graduate program is.  My weekly interactions have expanded from 89 other people to 445 people (89 x 5 classes)!  There’s some overlap, but it’s still a huge shift.  It helps me appreciate the first year more… the stable section experience makes HBS feel so much more comfortable and manageable.
  5. Clubs. I’m co-President of a club this year and have ZERO desire to do anything with it.  Not sure why I agreed to this… the return per hour invested is just so low on the list that I’m going to have to work hard to keep this top-of-mind (and avoid overloading the other President).
  6. Jobs. One undercurrent is the whole job situation.  I had a great summer and received a full-time offer, but I’m not 100% sure it’s the direction I want to head with my career.  I have to decide how I’m going to handle this… the recruiting season for ECs is just around the corner, and my offer expires in a couple months.  Is it worth going through the whole networking / application / interviewing hassle again?  Such a time-sink…  I’ve been tossing around the idea of trying something in finance, but is that even realistic?  Or has my summer in consulting locked-me-in to that career path?

… and with that, the first week draws to a close.

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Another Monday, Another Morning Flight

July 20th, 2009 · Uncategorized

City Skyline

City Skyline

The Pool I Wish I Were Swimming In

The Pool I Wish I Were Swimming In

It’s 6-something and dawn is approaching.  I’m waiting outside my apartment complex to catch a taxi to the airport for another week of living out of a hotel room.  Ahhhh…. the consulting lifestyle.

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Last Day of RC Year!

May 16th, 2009 · Uncategorized

There’s an interesting paradox in blogging: the more you have to write, the less time you have to write it in.  I’ve been out-of-town on personal trips 7 of the last 8 weekends, and that’s amidst a continual flow of cases, finals, and other HBS activities.  There’s a TON to talk about! 

A disclaimer: I’ve been sketching out what I need to post about here and there are 29 (!) posts sitting in the queue, waiting to be fleshed out and published.  That’s a bit overwhelming, and I thought it might be somewhat confusing if I continued posting “as is” without any explanation for why final exams are happening in July. 

So, (to reveal the true timeline)… 

Yesterday was the last class day of the RC year!  I have conflicting feelings  about the whole thing:

  1. Academically: We’ve studied and discussed hundreds of businesses over the last year, and it has been a fascinating journey.  From start-up to multi-national, from retail to raw material, from citizen to criminal, from gov’t agency to NGO.  When I stop to think about it, the sheer magnitude of businesses we’ve studied is astounding.  Taken individually, 30-page cases seem short, but they add up quickly (one statistic from BGIE shows we read over 1000+ pages in that class alone).
  2. …but, I’m not sure how much of that has translated into generalizable lessons.  Where are the hidden business secrets that are reserved for those who devote time to deep study?  Should we be modeling about all those esoteric complex financial instruments like they do at Chicago?  Or is the learning  possibly more surreptitious at HBS?  I think you have to hope that the 500+ cases have built a deeply embedded database in your mind… ready to be drawn to the surface by pattern recognition when you encounter a similar situation in the future.  Realistic?
  3.  Socially: I’ve been blown away by how close I feel to the 90 people in my section.  I would never have expected to build the bonds we’ve built… part of it’s the way the case method works (like a big group discussion) and part of it’s from the social activities.  I definitely feel like I could call any of these people up in the next 5-10 yrs and ask for a favor.
  4. …however, I’m not sure if I’ve built the type of relationships that last 10 yrs+.  Part of it’s due to choice – I’ve definitely spent more time “outside the HBS bubble” spending time with my significant other than most.  Most of it just has to do with interests… the majority of people here seem to go out and drink every night.  While I wish I could enjoy that more, it’s just not my scene.  Still, even though that crowd get all “the press”, I think there’s a huge portion of my section (and HBS) that are more like me.  
  5. …the real tragedy is: every once in a while I’ll find someone who likes exploring the outdoors, enjoys museums, prefers dinner parties and politics, and might even humor a dorky game of Pictionary.  My greatest regret from the year is that I didn’t seek these people out and spend more time with them. 

All in all, though, it’s been a fantastic year and I definitely wouldn’t give it up for anything!

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David Einhorn: Fooling Some of the People…

April 28th, 2009 · Uncategorized

I finally had time over the weekend to read something outside of the 1000s of pages of cases that we’re assigned each week.  Fooling Some of the People All of the Time by Greenlight Capital’s founder, David Einhorn, has been sitting in my (growing) pile of unread books collecting dust for a while now.  I think I purchased it based on a recommendation by Paul Kedrosky months ago.

Anyway, it’s a great, easy read — I highly recommend it!  The first half of the book provides an excellent summary of his hedge fund’s philosophy.  (For those who don’t follow this industry — a hedge fund is different from typical mutual funds in that 1) it’s private and 2) has less rules.  This gives the fund much more flexibility — chiefly, allowing it to “sell short”, that is, bet on a stock declining.)

Here’s a classic example: Let’s say that you think Pepsi’s stock price is a great deal.  You weighed your aluminum can the other day and discovered that it’s 25% lighter!  You think the material savings will be huge, and you don’t think anyone else has noticed the change yet.  If you were a mutual fund, you’d buy 10 MM shares of Pepsi stock and hope that it would go up as Pepsi started to realize the cost savings.  But… what happens if the economy goes into a recession and people stop spending money on soda?  Or what if China decides that soda rots your teeth and decides to ban all imports?  In both of these cases — you might be 100% correct about the new cans, but the stock would drop and you’d lose money.

A hedge fund, on the other hand, could buy Pepsi stock and “short” Coke stock.  That is, they would make money if Coke stock falls.  Why would they do that?  Well, it might have nothing whatsoever to do with any expectations they have about Coke… but it would help “hedge” their risk against market and industry uncertanties.  Consider what would happen in the scenario above if you were a hedge fund.  Both stocks would fall 30% based on economic news, but then Pepsi would rise by 10% based on their new cans.  For a hedge fund, the fall in Coke (by 30%) cancels out the fall in Pepsi (by 30%), which leaves them with the 10% gain from the new cans.  A much better outcome than the mutual fund could obtain!

So, back to Einhorn… Einhorn’s approach has less to do with “classic” hedging above, but is more along the lines of acting as a financial detective of sorts.  He (and his staff) spend time studying all sorts of firms looking for fraud and mismanagement.  I think what’s so interesting about this is that there’s a huge profit motive to uncover firms that are lying to the market…  This is a pretty amazing “self-correcting” market mechanism.  When you ask the question: “Why don’t corporations blatantly deceive investors and fabricate their financial statements?”, there are two answers: 1) the SEC and government or 2) market incentives.  This book makes a strong case for #2.

Anyway, that’s enough finance for one post.  I guess I find it particularly interesting because I’ve always viewed finance in a somewhat demeaning light…  after all, shouldn’t these people be making “real things” instead of just “shifting money around”?  The type of role described here (as detective / judge / advocate) makes me feel like there might be more here than just traders bleeding out miniscule value gains from efficiency by trading stocks.

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