This is an ongoing debate. One that requires serious study and more empirical studies. One that is very important given the money and time pour society spends on sports.  As CPA, CFA and MBA tutors our focus is on helping students with finance, accounting, statistics, etc but we also want to help them truly evolve as individuals. So we do encourage sports as we believe it builds various aspects of personality in individuals.

Here is an excellent article on this topic. It does not provide any statistics or facts but is an excellent and entertaining read drawing on the authors own experience and some classic history. Recommended read for all tutors and not just CPA, CFA and MBA tutors.

MIT has just launched MITx. MITx will be a learning platform that hosts a number of MIT courses online. It will be interactive and free to students from around the world. MITx will also enable students to grade themselves on the subjects too. What is truly innovate IMHO is that they will allow student to show their mastery over a subject to get a certificate of completion (although not from MIT to distinguish and presumably not to diminish the value of their on campus programs!). This is moving towards competence based education rather than time based education.

MIT has been in the forefront of open course ware or OCW since its launch 10 years ago. They are taking it even further with the launch of MITx, an initiative led by MIT Provost L. Rafael Reif.  MIT deserves significant praise for their efforts in freeing up education.

We at GraduateTutor.com are on standby to assist students who may need some private tutoring to master the subjects of choice.

Jeffrey R. Young writes about external graders and even computers grading papers and assignment in some universities. The two examples provided are not business schools. Read the full article here. Its very interesting and brings out some great points in support for the practice. I especially agree that it will reduce the grade inflation. See if you spot an issue here.

Do you spot a trend here?

Source: chronicle.com

I wonder if this is something we will see more of in business schools! With more MBA schools opting for non disclosure of grades, this may be less of an issue for students and more of an issue with faculty. What do you think?

As MBA tutors who prep students for b schools in statistics and math boot camps we get asked a lot of pre MBA questions. One of those ‘Does where you go to b-school matter?’ is almost an age old question. Questions related to this include: How important is the b-school brand name? Are rankings important? Which ranking should I use? Should I not go to b-school if I dont get the one I want?

There is a great amount of research that has gone into this. In our opinion (as MBA tutors) there is no clear answer (yet). Here is an older article that address this question from the NY Times.

While I haven’t read the original report (which is available here) and dont agree with everything the article states, the author’s conclusion is good in my humble opinion! To quote:

“My advice to students: Don’t believe that the only school worth attending is one that would not admit you. That you go to college is more important than where you go. Find a school whose academic strengths match your interests and which devotes resources to instruction in those fields. Recognize that your own motivation, ambition and talents will determine your success more than the college name on your diploma.”

Note carefully that the author says clearly “Find a school whose academic strengths match your interests and which devotes resources to instruction in those fields.” Its not that the brand name or reputation does not matter at all or is irrelevant. Its not the only thing!  Also often if a school has a specific academic strength and “devotes resources to instruction in those fields” it will build a reputation in that area.

Also, please don’t join any school just for the sake of it. As MBA tutors we have seen students come out of MBA programs no better than when they join it! You must be intentional and join an MBA program with the right attitude to learning and growing as an individual. The people you learn from must be able to impact your way of thinking. That is education and how and where you get it does not really matter.

Google’s recent bid to buy Groupon’s business offers interesting lessons in valuation. Rather than rewrite the story, I want to point you to a finance tutor‘s article on business valuation.

Finance Tutor addresses the article from the perspective of testing the valuation concepts you learn in business school. With their permission, I repost finance Tutor’s article here.

Part 1

You learn the about business valuation in business school. But are the business valuation concepts you learn in business school used in business valuations in the real world?  Lets check a current business valuation:

You must have heard about Google’s interest in buying Groupon’s business at a reported valuation of $5-6 Billion! How could Google arrive at this business valuation of Groupon’s business? Valuation principles direct us to use either the discounted cash flow method orvaluation multiples method to arrive at business valuations.

Business Valuations using the Discounted Cash-flow Method

To arrive at business valuation using the Discounted Cash-flow (DCF) process, we need to project out the cash flow of the business into the foreseeable future.  We discount this cash flow at the appropriate discount rate to arrive at the present value of cash flows for this valuation period. We then estimate a terminal value (present value of the cash flow beyond the foreseeable future assuming cash flow grows at a constant rate usually inflation rate or slightly higher).  The sum of the present value of cash flows for the foreseeable valuation period and the terminal value form the basis of the business valuation using the DCF method.

Can we estimate Groupon’s business value using the DCF method? We will need detailed projections of Groupon’s future cash flow which we do not have! We can try arrive at the business valuation with some estimates. But why do this when we have an easier approach?

Business Valuations using the Multiples

Business valuations using the valuation multiples is essentially looking at the business valuation similar companies have obtained recently and relating that to known business metrics like sales, earnings per share, customers,  etc. Groupon does not have any comparable companies with publicly available data. We therefore need to look at companies with similar business characteristics, growth rates, profit margins, etc to arrive at the appropriate valuation multiples.

Part 2 of this post shows you how valuation multiples can be used to arrive at the business valuation of Groupon.

Mint.com has an excellent article on student loans. It highlights a few WSJ articles on this subject too.

The key take away is that student loans have now surpassed credit card loans. So please manage them just like you would any other debt. Mint.com has a few suggestions. Go to a college you can afford! Take the core classes from a community college and transfer credits go to a brand name college for the later part. What was shocking (and I too did not know this) was that these loans have some ugly fine print. Heavy fine print for missing payments, nuisance calls from debt collectors, etc. What is appalling is that these student loans live on even after a student dies. The co-signers need to pay the loan off! You cant even get this debt off in bankruptcy!!

Read this article. Its worth it. Take the news out and tell your friends about it.

Here is an additional tip from us as MBA tutors who can assist you with business plans. Just like you would write a business plan when you think about starting a new business, write up a plan for your MBA idea. Consider the total cost of getting an MBA at the schools of your choice. Make sure you try the full time ones, part time, distance eduction, local colleges, top tier, etc. Compare the cost and the payoffs, expected salaries, how you will finance them, etc. Treat it like a business decision not an emotional one.

Today’s NYT has an interesting piece on college applications. It is essentially highlighting the importance of submitting a high quality and thoughtful application that truly reflects who you are and your desires and ambitions. That is way more important than getting your application in early.

So as you go about getting your applications ready, take the time and effort to do it well. Dont rush it. Be mindful of the deadlines and plan ahead. Feel free to call one of our MBA tutors should you need assistance. It is helpful not to have to wait till the last round in business schools as one of the factors the b-school admissions officers consider is the mix of profiles in the class.  But quality still trumps speed. Let your application truly reflect who you are. You will come across as more credible when the impression you make in the interviews is consistent with your admission applications.

If you havent read this tale below, you must. Of course, as MBA tutors, most of us at Graduate Tutor are MBAs, CPA or CFAs and have the attitude of the MBA in the story! I spent some time thinking about this story. What do you think about it!?

A management consultant, on holiday in a African fishing village, watched a little fishing boat dock at the quayside. Noting the quality of the fish, the consultant asked the fisherman how long it had taken to catch them.

“Not very long.” answered the fisherman.

“Then, why didn’t you stay out longer and catch more?” asked the consultant.

The fisherman explained that his small catch was sufficient to meet his needs and those of his family.

The consultant asked, “But what do you do with the rest of your time?”

“I sleep late, fish a little, play with my children, have an afternoon’s rest under a coconut tree. In the evenings, I go into the community hall to see my friends, have a few beers, play the drums, and sing a few songs….. I have a full and happy life.” replied the fisherman.

The consultant ventured, “I have an MBA from Harvard and I can help you…… You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have a large fleet. Instead of selling your fish to a middleman, you can negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to a city here or maybe even in the United Kingdom, from where you can direct your huge enterprise.”

“How long would that take?” asked the fisherman.

“Oh, ten, maybe twenty years.” replied the consultant.

“And after that?” asked the fisherman.

“After that? That’s when it gets really interesting,” answered the consultant, laughing, “When your business gets really big, you can start selling shares in your company and make millions!”

“Millions? Really? And after that?” pressed the fisherman.

“After that you’ll be able to retire, move out to a small village by the sea, sleep in late every day, spend time with your family, go fishing, take afternoon naps under a coconut tree, and spend relaxing evenings having drinks with friends…”

~author unknown

Here is what I thought about this!

• Its wonderful to know what we want. This is however not very easy as we have to remove external influences that create needless desires within us.
• I truly wonder if life will be so simple and if it will stay this way when everything around you is progressing down another direction.

What ever conclusions you reach, we must all agree that it is important to try and figure out what we really want with our MBAs and our lives in general and aim towards it. Otherwise we will spend our lives climbing up the wrong ladder and on reaching the top feel that we have waster our lives.

Have we learnt our lessons from the economic crisis? Or do we still need more financial risk tutoring? What can MBA programs do to promote an understanding of financial risk in MBA students who will lead in the future ?

The economic crisis over the last two years has seen plenty of paper, ink and blog space being used to point fingers at almost everyone! Governments, political parties, organizations ( both private and public), individuals, leaders, society, habits, et al have been accused of contributing to the crisis. Economist.com has an interesting take on financial risk. In a special report on financial risk Matthew Valencia talk about various views. Read it in detail.

Much has been written and talked about. Have we learnt our lessons? Or do we still need more financial risk tutoring? I believe we still need more financial risk tutoring. Creative financial accounting, fancy economic models and financial modeling, etc are not the solution. Business schools must make financial risk management an integral part of their MBA programs.