Posts

Showing posts from July, 2011

On Campus: No Summer Slowdown

Image
Virginia-Darden Dean Bruner Just weeks ago, members of the MBA Class of 2011 dispersed all over the country--first to take well-deserved breaks and vacations, second to prepare to move to big cities or other outposts to start new positions. Business schools get a short respite, a chance to pause after a bustling school year. Afterward summer activity picks up again at most schools.  Many have summer semesters and course offerings. Most are gearing up to welcome the parade of bright, confident faces who will make up the Class of 2013. (Some have representatives who have just returned from the Consortium's Orientation Program in Minneapolis.) At some schools, orientation starts in a few days. At most, deans will inevitably proclaim the Class of 2013 as its best, most ambitious, most talented, most diverse and most interesting. The pulse of business discussion, academic research, and the continual revamping of b-school curriculum is as vigorous as ever. Business schools, including the

Financial Planning Q&A

Recently I wrote an article for a women's magazine - Citta Bella. Perhaps some of the questions addressed here are your concerns as well. Here's the article: Q & A For Citta Bella Case: 30-year old Single Office Lady 1. I have 20K, how do I invest my money? According to your risk preference, you may invest in fixed deposit, shares or unit trust. Fixed deposit is the safest investment however it generates only 2-3% per year return. As for shares and unit trusts there is certain investment risk involved but the potential returns are much higher than the fixed deposit, in general the gains are usually around 7-12% per year. For a 30 year old single office lady, you can tolerate much higher risk than those who are married with children and those who are nearing retirement age, hence I would advice a 25:75 asset allocation for you, which means you may put aside RM5000 (25%) in the fixed deposit and invest RM15,000 (75%)in blue chip stocks. Asset allocation is how much money y

Business Schools: "Satisfied" Alumni

Image
Dartmouth's Tuck leads top business schools in alumni-participation in donations Who are the most satisfied alumni among top business schools?  "Satisfied," for these purposes, isn't defined by the alumni happiest in their careers, the most content in their outlook,  or the most optimistic about business opportunities. Satisfied," in this case, applies to alumni who are happiest about their business-school experiences.  They are the ones who most appreciated the two years of toil to get the MBA and reflect fondly on time spent with professors, deans, classmates and career advisers. They might recall cheerfully the class "field trip" to China, the end-of-year skit performed before a standing-room crowd, or the thought-provoking cases in project finance. They will have appreciated the school's brand-new, state-of-art facility--featuring technology marvels and electronic wizardry. Sometimes satisfaction in career correlates closely to satisfaction at b

Margin of Safety

"A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable and rapidly changing world." Seth Klarman By far the most effective behavioural finance strategy which is highly recommended by many investment gurus is value investing. The virtue of value investing is that investors buy at prices that are already low, so there isn’t much room for further down play. I would like to introduce to you our "Father of Value Investing" - Benjamin Graham. Benjamin Graham Benjamin Graham, born in 1894 witnessed the devastation of the 1929 crash and has since developed resilient techniques that could be used by any investor. He popularized the examination of price-earning (PE) ratios, debt-to-equity ratios, dividend records, net current assets, book values and earnings growth. That earned him the name of the “Father of Value Investing”. He brill

Affinity Groups: To Join or Not to Join

To join or not to join. To get involved or not.  The New York Times Sunday posed the query to Consortium CEO Peter Aranda in its July 3 edition:  Should members of under-represented groups join the "affinity groups" that exist in certain business settings?  They are special-purpose groups within a company that attract a membership of women, Hispanics, or Asian- or African-Americans. Or they may be groups that attract others with shared interests or backgrounds:  LGBTs, Native Americans,  Arab-Americans, or South Asians. They may include--within the institution--groups of African-American investment bankers, an Asian society of traders, researchers and analysts, or women in risk management. They could include Latinos in private banking or financial consulting. The Times posed a challenging question, one that many within these groups grapple with from time to time. Is there an advantage or disadvantage if you choose to affiliate with affinity groups while you are ambitiously

Herd Mentality

“Although markets do tend toward rational positions in the long run, the market can stay irrational longer than you can stay solvent.” - John Maynard Today I would like to share with you a mental bias that concerns every investor, which is known as "herd mentality". But before that, let's acknowledge that the phenomenon of the herd mentality can be useful in many ways. For example, research shows that although 5% of the animals in a herd know the location of the water source, the entire herd is able to find it. In our daily lives, we use this instinct to navigate to the exit in cinemas and crowded streets. We have to admit that herding is our human instinct. Herding always makes us feel comfortable, and being the odd one out make us feel uneasy. We are programmed to feel that the consensus view must be correct one; and this mistaken belief has led to many disastrous decisions such as the “Four Dragons” and “Four Tigers Era” of the 1990’s where many investors who were i