Diary 25th June..

Been a hectic week. Lots of classes. Assignments. & First round of decision making in Markstrat simulation. It was interesting to work with it. Lot of what we are learning in Marketing can be applied to this. I guess real fun will start once the TA runs the simulation for the entire batch & round I results come out. Lets see.
Today's was an evening well spent. Prof. Jagmohan Raju spent an informal evening with the batch of 06. He is one of the founding forces of ISB. It was enlightening to hear from him about ISB's story, marketing in general, IIMs, Wharton, what separates the schools like Wharton from others, his own career, research, etc. Its always a pleasure to hear from him.
To top it all, he sponsored the booze for the evening. Generous he. :-)

Diary 21st June..

Had a brilliant first Marketing - 2 class today by Prof. Jagmohan Raju. He uncovered insights into the competitive scenario between Sony & its smaller rival called Barco in the industrial projectors market. By the end of the class, I realised some fine approaches into analysing a marketing case. Very impressive I must say. & with introduction of simulation game Markstrat, it is supposed to become more interesting. I am totally looking forward to Marketing - 2.

btw, I realised after this class that the opportunity cost of not coming to ISB would have been very, very high.

Whats up, hows life...

kinda conversation with my quadie proved quite insightful (okay, atleast for me) today. as usual, on being asked abt the day, I said the I find it real hard to stay awake in the gyaan laden Strategy class. he was surprised & said the he is enjoying the subject. I thought.. okay .. another instance of 'I-can-see-big-picture-better-than-others' types. So, i got pretty enraged. Said it has no direct application for most (say 95%) of people passing out of a B School simply because they dont land up in a senior (or upper middle) management role directly. & Thats where you would ideally do a firm level or an industry level analysis. & by the time most people will reach that senior level (if at all they do), they would have kinda forgotten all frameworks & models they learnt at their B School days 10-15 years ago. (Ok this is a bold statement, what I mean is that they would perhaps value their experience more than a textbook theory).
So, question remains - what is the utility for an average B schooler to read Strategy? His response was quite insightful. What he meant, in a nutshell was that while most of the strategies may emerge from the line manager ranks (people who do day to day operations), whether those proposed strategies are good enough to be implemented at a firm level ? Every credible idea that makes its way through to senior management has to be vetted through a proper framework to see if it is in larger interest of the company. Hence the need for a formal strategic planning cell in any large organisation. & Hence the need for us to read Strategy. :-)

bam'Booz(e)'led

Lots of booze in last 3 days. First the sec B party on thursday eve. Got sloshed, dunked. Then batch party y'day. Free booze so again got sloshed, albeit a little less. Today, attended a 'Smirnoff Tastemaker Session' at a pub called Bottles n Chimney's in the city. A small 3 hr session on cocktails. Now I know how to make martinis & cosmopolitans & a good bloody mary. Session was excellent. Great value for money. Tulleeho!!!
btw, final grades for Microeconomics came out y'day. First one at ISB for this batch. A small percentage of people even got D grade, which I feel was completely avoidable. Understand the need of differentiating, etc but such severity could have been avoided in the first term, first subject. Anyways.
Term II is hotting up. Economics (Macro) seems to be a good read. I dont find Strategy interesting.
Another thing is, with almost all GSB posts finalized, real action is about to start in clubs. Plus a host of other activities stare in our face. I need to quickly decide on things I would be immersing myself in.

Diary ..

First week of term II been a little better.One class per day. That too with a subject like 'Competitive strategy'. & its been raining almost everyday in the evening.
Today was also the last soapbox for candidates of GSB. I have now started feeling that Students Board (GSB) is a little too big. So many official posts, I wonder whether each elected representative gets to make an impression during this short period of 9 remaining months. Some presentations were really good. Showed true intentions of making a positive difference. Others simply smacked of nothing but furthering personal gains out of the mileage a Leadership position provides.

Anyways, received Stats marks today. I fared very poorly as expected. But I didnt feel bad at all and that which made me realise that subconciously I have kinda given upon race for grades. In fact, this could prove counter productive. I must do as well as I can, atleast. & For the record, learning from Stats during term I was best compared to other subjects.

Now, to the tagging business. One who is tagged (as I am in this case) is supposed to talk abt atleast 5 books he/she is currently reading. Well here goes my list (in order of my liking for them) ..

# Crossing the Chasm - Hitech products marketing (finally reading it)
# The Goal - Goldratt (started reading it.. sounds interesting)
# Learning Statistics thru MS Excel (JMP aint gonna be around after ISB)
# The Art of War - by Sun Tzu (this some how is also on the recommended readings list for Competitive strategy subject. I have read this book thrice over in last 3 weeks. Been taking it to the loo with me. All I could take from it is - All warfare is based on deception. Fine, great idea but why is it such a great insight for business. What gives it the status of a classic. I cant understand. & btw, I am not enjoying the Strategy subject much as well. Too much of high level gyaan & jargon. Makes me feel that its basically hyping up simple common sensical things. Maybe I am not made for strategy. I guess so.)

Term II begins...

Classes for 2nd term commenced today. Subjects this term are 'Competitive Strategy' - first strategy course for us, ' Marketing Decision Making' - continuation of Marketing, 'Decision Model Optimisation' - an excel spreadsheet modelling course & 'Global Economics' - Macro.

Have just 1 class perday this week. Had first Competitive Strategy class today. Infact, when I opened the course description a few days back, I was wondering what is the logic in having a Strategy course in term II - so early in MBA. Strategy is supposed to hold all other disciplines of business together & makes most sense when you have an appreciation of most of the business functions. Some people refer to it as mother of all subjects. So, with this doubt lingering in my mind, I entered the class of Prof Aks Zaheer. & I was pleasantly surprised to know that this question was the first he addressed. His view is that having strategy early into the course gives a good idea of where each of the functions fit in, as & when we study them. According to him both the approaches, Bottom-up - where Strategy is taught as a capstone & Top-down - course like ours where strategy is introduced early on, make equal sense.

Personally speaking, I would have liked a corporate finance course in this term. Not having to read a Finance core till term III in a 1 yr course might create a temporal disadvantage to people looking to shift to Finance.

Anyhow, the strategy course sounds interesting. Read first case - Cola wars in the 90's. Good to read about the industry value chain. In fact, a great analysis of 'Why soft drinks industry is so profitable ?' is available here.

btw, received marks for Micro Eco today. I did not fare as bad as expected. Thats all I can tell ;-)
Now, Subbu has tagged me. I need to find out what it exactly means in blogger's parlance.
Also, have been thinking of improving the design of this blog since many days. I better do it before I leave ISB :-P .

Term I ends..

Phew, finally all 4 exams are done. Accounting was good. Eco was terrible. Stats was fine too but for a stupid error in reading the exam instructions on my part. Marketing was grueling but manageable. I think I should just scrape through to the interquantile range of scores. Hee Hee (thats mid 50% of the class 25%-75%).

Time to chill for next few days before grind restarts..
Just finished watching 'Barbarians at the gate'. A gripping movie about the famout 'Leveraged BuyOuts' of the 80's at the wall street. Its based on a novel by the same name. & is based on true facts. Its not fiction. Not a financial book. Is more like a suspense novel. Good to see category.
Plan to use the LRC's DVD collection to a good extent in the next few days.

exams are good !!

Simply because they provide incentive to gain depth & breadth of subjects. Now, am not talking about acing my grades. I leave that task to lesser mortals.

Meandering through introductions of concepts like risk, correlation & regression models in Statistics, I somehow ended up spending last 2 hrs reading about one of the most spectacular financial meltdowns - the collapse of LTCM.
{LTCM - Long Term Capital Management is (was!) a hedge fund started by legendary trader & a few Noble prize winning economists in mid 90's}

This article is a great primer all about LTCM & its rise n fall.

'When Genius failed' is a book written by Roger Lowenstein about the story of LTCM. Added this to my 'to-read' category.

I gotta quote some pieces from the article:

And, of course, beating the market was the game that Meriwether and his cohorts were playing. LTCM concentrated on what are called "relative value" trades. Imagine, for example, that Ford and General Motors are essentially the same--in their profitability, riskiness, and prospects. Assume that both earned $2 per share last year. But also assume that today, Ford's price in the stock market is $20 and GM's is $30. Something is screwy here in the relationship between Ford and GM. So an investor might buy a share of Ford stock and sell short a share of GM. (In selling short, you borrow the share from another investor, selling it immediately for cash and promising to return the share later. Your hope is that the price of the share will fall, so you can buy it back more cheaply.) With this trade, you expect that the natural, logical state of affairs will soon come to pass--that the prices of Ford and GM will converge. You really don't care if the market rises or falls--or whether Ford stands still and GM drops, or Ford rises while GM stands still. All that counts is the convergence--Ford's price in comparison with GM's.

This is correlation in action.

If there was one article of faith that John Meriwether discovered at Salomon Brothers, it was to ride your losses until they turned into gains." In other words, if you have enough capital to stay in the game, to make the interest payments on your borrowings and even to increase your position, then, in the end, you will win the bet.

Is this concept same as we learnt that statistics rewards patience? I dunno but I would guess so.

& This one takes the cake:

Merton, who was teaching a class at Harvard, got a three-minute ovation from his students. He humbly warned, however, 'It's wrong to believe that you can eliminate risk just because you can measure it.'

Phew, enough of indulgences. But statistics has definitely whetted my appetite for finance core courses coming up in next terms.

btw, if life keeps going like this, I might have to review the title of this post in a couple of days.

Sec B - Prof. Mark Finn

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Originally uploaded by capreal26.

Fin Acc prof Mark Finn with Sec B on the last day of the course. Thanks Mark, for a great intro to accounting !

PS: yours truly is first person on the left of prof.

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Originally uploaded by capreal26.

View from my room.