Head is almost over water

Some of the second and third year students I’ve interacted with regard this 3rd quarter of year 1 as the most grueling one (academically) in the program. Both Finance and Operations courses are fairly intense. The curriculum requirements include several problem sets and cases, other than the midterm and final exams. In fact since the weekday cohorts started 4 weeks ago, we’ll have our mid-term exams next week. The silver lining here is that we’re getting a preview of disciplines that are essential for the functioning of any organization. And, any aspiring business professional needs to be very comfortable with both of these.

The other day we had a Finance case on the Lockheed TriStar program. This multi-billion dollar defense project from 1970s ran into cost-overruns and had revenue projections which were fairly unrealistic. (This is just a plain text read of the case, not my expertise of analyzing multi-billion dollar boondoggles 🙂 ) You’d wonder that if it was evident to every MBA-student who’s solved this case in the past decade, then why Lockheed executives didn’t realize this. Of course, not everything is black-and-white. Some of these financially unacceptable ventures are green-lighted for socio-political and strategic reasons. I can’t help but draw comparisons with the current banking-bailout. But let’s leave that for some later time. Anyway, working on such real-life cases has been really exciting.

Btw, one month into the quarter, I finally understand this finance profession joke:

Said the epitaph of a naïve banker “He who lies here wanted all his relationships to be NPV positive”

Operations Management is no less interesting in principle (as I realized after working on an NYPD scheduling case problem). Have you ever felt that the other “queue” is faster while waiting for security checkin at an airport or standing in a line at Starbucks? All of this scheduling is (can be) done via complex scheduling models. And it was news to me that in the common case, having a single queue is faster than the multiple queues we see in our daily lives. A big part of this story is apparently, perception. One line appears to be too long and 5 small lines, while slower, give us the feeling of being served faster!

The summer quarter elective list was released recently. Taking classes in the summer may be an NPV positive decision and will certainly optimize scheduling for future semesters, but I am hoping that socio-psychological reasons will prevail in the end. And I will be able to spend the summer months re-introducing my “fun” side to friends and family. Wait, I dare not day-dream; it’s just too far to be real at this time.

– Div

I Forgot How to Use my Calculator

I know. It sounds lame. How can you forget how to use your calculator? Don’t you own the thing? Didn’t you use it before?

It all started last summer. I went to the Finance Workshop – a one day seminar to get first years used to doing NPV calculations so we don’t get overwhelmed in January when the class rolls around. Promises were made, suggestions were given. It all seemed harmless. We were strongly encouraged to purchase an HP 12c – the ultimate financial calculator – if you don’t have one, you don’t look like what you know what you’re doing. Apparently, even when you have one, you might look like you know what you’re doing, but I still don’t remember how to use it.

We had Finance class for 9 weeks. I avoided using the calculator like the plague. It uses RPN. People who don’t know what that is often describe it as Reverse Polar Notation, but it’s Reverse Polish Notation. Anyhow, I only used it to make calculations that my trusty scientific calculator couldn’t perform. And now, more than 6 months later, I forgot how to even do that. Worse yet, I’m taking another Finance class – Corporate Financial Management. I need to figure out how this thing works – and fast. Assignment 2 is due as soon as the weekend is over….

How I Became A Quant

I recently attended the “How I Became A Quant” panel session sponsored by Barclays Global Investors and presented by the International Association of Financial Engineers. We listened to panelists from Goldman Sachs, MSCI Barra, Barclays Global Investors, and PAAMCO. It was a great opportunity to get an inside look at investment banking – what all this talk about buy-side and sell-side means, whether or not you can still have work-life balance in this type of position and how each of the panelists got into the field in the first place. The unusual thing was that they all seemed to just fall into their quant jobs – although they were quant to begin with (many engineers and folks with a technical background) none really sought out i-banking/risk management or knew they were going to do it, but were just at the right place at the right time talking to the right people. That seems to go back to the need for networking. Nevertheless, it was a good opportunity to get a first hand look at finance and the Master’s in Financial Engineering (MFE) program at Haas. One other cool fact, the MFE program director guaranteed that she would help MFE grads find a job such that all of the MFEs would be employed within three months after graduation. How cool is that?!

I am not alone

By Saturday, everyone will be back at Haas. This week, it was noticeably just that much more difficult to find parking, there were strangers coming into our classroom that were trying to find their classes, and Jimmy Bean’s FIFO cafe is once again open.

Finance class is turning into an emotional roller coaster. We have now completed week three of our nine weeks of classes and therefore have finished two of our weekly quizzes (only six more to go). It’s definitely questionnable whether it’s better to have one midterm and one final or to have a quiz every week for the rest of the term. So here’s the schedule – at 6pm, class begins. At 6:30pm, the first of the people who are anticipating the test leave the room to get a drink of water or go to the restroom. There’s an unusual steady state of people doing this as anxiety builds up until 7:10pm at which time our professor starts to hand out the quiz. In his usual manner, he reminds us “Don’t Panic” which only causes many of us to start to panic. At 7:30pm, the tension is alleviated and the quiz is over. It’s time for break. For the next 20 minutes, we students talk over the quiz amongst ourselves and wonder what just happened. Sometimes you hear shouts of joy as your answers are confirmed, and other times, it’s cries of anguish. It’s one quick ride because by 8:15pm, lecture begins again. The only consolation to this schedule – you know that you’re not alone.

Back to the Future and your best Sexy Vampire walk

So if anyone ever told you that you couldn’t travel in time except for watching Michael J. Fox in those Back to the Future movies, then you haven’t taken Finance yet. According to my classmate Alison, practicing your excellent skills at time travel can be fun 🙂 In Finance, we’re learning how to determine the present value of a cash flow that takes place sometime in the future as well as how to determine the future value of a cash flow that is deposited in the bank today. So you really can know what things in the future look like now (at least in the perfect world of first year finance where there is no uncertainty).

At the Winter Careerfest this past weekend, we had some great opportunities to do improvisational networking with partners and groups. One of the exercises included walking around the room taking on the posture and behavior of a dictator and just a few minutes later, doing the same exercise as a sexy vampire. Haas students are amusing if not anything else as dictators and sexy vampires. What does this have to do with networking? It showed us that our attitudes towards networking impact how we network with other people and it loosened us up for the rest of the fun and games. Time for me to go practice my walk….

C is for Cookie

While first year weekenders are still enjoying the fresh powder on the slopes and visiting far away places, I concur with Deanne – the first year evening folks are back in the full swing of things.

Before class even began, we received an email from our Operations professor reminding us read the case study about cookie manufacturing for day one of class. To transition from the discussion of the syllabus to the case study, Professor Terry Hendershott showed us a clip of the Cookie Monster himself. Yes, C is for cookie, and if you take a big bite out of a cookie, it really does look a lot like the letter C.

The expectations for finance were similar. Three chapters of reading for the first class and all before we had even returned to Haas. There is no doubt that the semester has started up for the first years.

This weekend is already packed with Haas events. Saturday is the Haas Winter Careerfest – a day of learning how to network, how to brand yourself for the internet, and much more. I expect to see some of the second and third years as well as full timers participate this weekend as well. After the careerfest is the finance discussion session. And then don’t forget Sunday – an all day Statistics workshop to help us brush up in preparation for the many problem sets for ops and finance. It’s one packed weekend.

Finance Conference

Last Friday, I had the great fortune of being able
to volunteer at the First Annual Berkeley Finance Conference. Acknowledgments go to Hull Xu and Josh Bleharski for co-chairing this most excellent event. Props to the rest of the Finance club officers and members too. And special thanks to those who spoke at and/or sponsored the event. Here’s a pic of some of the esteemed club officers who helped make this happen.

The morning began with registration and in true Haas tradition, a breakfast loaded with caffeine and yummy pastries. There’s nothing like a good cheese danish to start the day 🙂

Goldman Sachs partner, George Lee, gave the keynote speech, and we were off to a running start for the rest of the day. The morning panels included discussions around investment management, corporate finance, and private equity. Here’s a photo of the private equity panel.

I attended the corporate finance panel and learned about the path to becoming a CFO from folks heading Paypal, McKesson, and United Commercial Bank. Lunch was accompanied by a lot of group networking, and the afternoon panels included discussions of Corporate Social Responsibility (CSR), the CleanTech sector, and Investment Banking. During the CSR panel, we learned that the responsibility lies not just with big companies, but each consumer can do her share too. Europe is far ahead of us in the CSR arena, and we have much to do to catch up.

After Reuven Glick, VP at the Federal Reserve Bank, gave the closing keynote speech, we enjoyed more networking with our sponsors and one another. Good wine, good cheese, and great conversation.

Tomorrow is the Haas Diversity in Business Conference, Saturday is the Haas Inside Innovation Conference, and Monday is the CleanTech conference. There are so many cool things going on at Haas, that sometimes I wonder who has time to go to class (just kidding!!) – usually I forfeit sleep instead.

For those of you who are applying for Round 1, today’s the big deadline. Good luck to you all!