Tuck is due to release their November round decision by Friday. I was doing pretty good up until last week, but now I'm pretty "fidgety", as I wait for the result. I don't think that I've been on pins and needles like this since college.
The last time I felt like this was when I got "branched" by the Army during my last year in college. My goal was to get into the Army's aviation branch and become a pilot, but as an officer, you really don't have that much influence over where you end up. They ask what your top choices are, but in the end it falls down to "the needs of the Army". Our Colonel got the results back from the Army but instead of telling us as soon as he knew, he made us put on our Class A uniform and show up at a banquet facility off campus and turned it into a ceremony. Then, he lined us up in small groups and pinned our new branch insignia on our lapel. That was the moment when we found out how the next four years of our lives would be spent. Of course, the week leading up to that was pretty painful. To make matters worse, he threw all the branch insignia in a bag and walked around that week, teasing us by having us randomly pull a branch insignia out of the bag. One person drew out the aviation insignia, so we knew that someone in the cadet battalion was going Aviation. Most assumed it would be me.
I found out that I was going into the Ordnance Corps when that Lieutenant Colonel pinned that little "shell and flame" on my lapel. I wasn't really even sure what it was. The Ordnance Corps was apparently short staffed that year, as several of my classmates received the same surprise. Of course, it was a huge blow to me. I had wanted to fly since I was ten years old, and thought that I had taken the steps necessary to get me there.
Fast forward a few years to the time when I was on a training exercise working side by side with an Aviation branch Captain. He was doing basically the same job I was doing as an Ordnance Lieutenant. Army Aviation handles their own logistics, and that ends up being an important aspect of an aviation officer's career. I talked with that Captain quite a bit and came to realize how lucky I was. Army officers who are pilots tend to get very little flight time, especially if they are not in a command position (which is only about 2-4 years of your first 15 years in the Army). On top of that, I would have owed the Army eight years upon completion of flight school, instead of four years upon commissioning. I was ready to leave the Army after about 2 1/2 years. :)
I actually grew to love the Ordnance corps, and definately learned to respect the people that make things happen behind the scenes. I have little doubt that I am better off from my experience as an Army logistician than I would have been as a helicopter pilot.
The moral of the story for me was to not worry when things don't go the way I had hoped for. I believe things happen for a reason, and sometimes we just flat out wish for the wrong things anyway.
That said, it sure would be nice to get an admit from Tuck. Of course, I also hope I get admits from Johnson, SOM, and Kenan-Flagler. However, I only need a 25% success rate to meet my personal and professional goals and I'm pretty confident that I can achieve that. I would be thrilled to be part of any of those schools. And even if I don't get in, I am still confident that things will work out fine.
--Chris
The good news is that Admissions411.com has a new website. It looks great and now tracks some additional information about applicants. The downside is that it does not work with Firefox. Websites that only work using Microsoft Internet Explorer are a huge pet peeve of mine, and a really bad business move since Firefox is being used in increasingly larger numbers. The picture to the left shows admissions411 in IE, and to right is how it looks in Firefox.
Hopefully, this will be fixed soon. The new site is much more aesthetically pleasing and the improved functionality and data collection should also prove valuable.
--Chris
There are some very interesting posts (see links below) over at Ticker Sense that graph out the historical Price/Earnings ratios over the past five years of some well known stocks. For the most part, they indicate that even though stock prices overall all are generally up, the P/E ratios are actually pretty low when compared to the previous several years.
Most notable to me were General Motors, with no earnings, and GE and Boeing, both with pretty narrow gaps between P/E and share price.
Overall, though, these charts make me pretty bullish. Compare these P/E ratios to the dot.com days, and the stock market looks pretty fairly valued, generally speaking. I have heard a lot of talk about an economic slowdown in '07, but with corporate earnings high and going higer, and P/E ratios at very sane levels, combined with a government almost sure to be in deadlock for the next two years, and I think we have the makings for a good run in '07. Perhaps more importantly, even if things do turn sour, it looks like most stocks are valued fairly enough to keeping the bottom from dropping too far.
Or should I be drawing a different conclusion from these charts?
--Chris
Venture Capitalist Jeff Busgang has an interesting post over on his blog, Seeing Both Sides, that anyone looking to get into VC should read. If you dream of riches as a Venture Capitalist, realize that the path may be a bit slower than you realize. With Private Equity and Venture Capital being one of the most talked about subjects in MBA circles lately, this could be an important, expectations-setting read for a lot of people.
--Chris
All you need to get free tickets on Air Tran is a screaming 3 year old. You almost feel bad for the family until you realize that they got free tickets and seem to blame the incident on the airline. If I had been on that plane, already delayed fifteen minutes because of a temper tantrum, I'd probably be pretty happy to see the screaming three year old removed from the flight.
Of course, now that I've said that, the same thing will probably happen to me some day....
--Chris
$242.60 per word. That is how much this 400-word essay on leadership for the application to the Roy H. Park Leadership Fellows Program could be worth. No pressure, though. Right?
--Chris
I hate to admit, but I have actually found myself thinking about which school colors I actually prefer. That's hardly a selection criteria, but if I were to rate the MBA programs to which I am applying based solely on the t-shirts I'll get to wear, this is how it would go:
- Yale School of Management - The clear winner. Blue is my favorite color.
- Tuck School of Business at Dartmouth - Perhaps a surprising second, given my penchant for blue and the colors of #3, but I prefer dark, bold colors and Dartmouth Green is a close second to dark blue. Green is my "almost favorite" color.
- Kenan-Flagler Business School, University of North Carolina at Chapel Hill - Yes, it is blue. Light blue...a little feminine perhaps, but I can work with sky blue in the land of the first flight.
- The Johnson School at Cornell University - Red!!! The colors of my alma mater's nemesis! Not to mention that I work in Madison and get heckled every time UW plays Purdue.
So there you have it. Based solely on the aesthetic appeal of the swag I get to buy as a student and alum, that is how my chosen schools rate. Note, however, that I have it on record that school color was not part of my school selection process.
Can you tell I'm trying to keep my mind off of the fact that the decision from Tuck is due out by next Friday?
--Chris
Don't you hate it when you find a grammatical error or awkward sentence in an essay that you have already submitted? I was just looking at one of my Tuck essays and found a sentence where I removed a dangling participle but didn't really adjust the sentence properly afterwards.
Well, nothing I can do about it now. Given all the considerations that go into an app process, I'll have to go on faith that one awkward sentence won't kill my prospects.
--Chris
[Business] Why I Don't Trust Financial Advisors
and investment strategies I wish I had taken instead
The statement "I don't trust financial adivsors" is a generality and isn't totally accurate. What I really mean is that I don't trust salespeople. Most financial advisors are salespeople. They would argue with that, I am sure, but let's make this simple: if you make your money based on a commission from the products you sell, guess what: you are a sales person. If you are salesperson, your interests are in conflict with mine. For example, a certain financial advisor I recently spoke with, let's refer to her as "ML", will only advise me to put money into loaded mutual funds. Why? Well, because she makes her money off of the commission. Now, I understand that people are in business to make a buck, but right off that bat that means that a huge array of options (no/low load mutual funds) will not even be considered because she can not profit by them. I like to call that a "confilct of interest". Now, don't get me wrong; ML was honest about how she makes her money and fully disclosed the loads on the funds she recommended. Regardless, I'm always going to be left wondering what other options I might have had.
My skepticism comes from having already recieved very bad financial adivce. When I was a 23 year old 2nd Lieutenant in the Army, I met a financial advisor that sold me into the Fidelity Destiny Plan. This "adivsor fund" was a contractual plan with a 50% front end load and a 15 year commitment to make monthly contributions (read more about these rip-offs here). The selling point was that with such a high front end load, people would be inclined to leave their money in the plan for the long haul, which of course everyone knows is what you have to do to (please read some sarcasm and cynicism into that). Well, a few months ago I recieved a letter from Fidelity telling me that such plans were now illegal. It turns out that other "financial adivsors" were all but stalking military personnel and aggressively selling plans like this one, and worse. The Military Personnel Financial Services Protection Act (H.R. 5011) banned the selling of such plans. You know an investment has to be bad when it is even obvious to Congress. I had just been putting my money into the plan and not following it closely, thinking that I was stuck with it until my 15 years were up. After getting that letter, though, I called and found out that I could terminate the plan at any time. Over the next few weeks, I cashed out of the plan. How did I do? Well, take a look at the performance of the plan over the past 10 years in the chart to the right. The Destiny II plan is the line at the bottom of the chart (never a good thing), and the lines higher up are market indexes. Keep in mind, that is just the cost of the shares themselves and does not include the front-end load and other fees. I'm still working on figuring out what my cost basis is (since the fund doesn't help me with that either), but I am thinking that I will be lucky if I broke even.
OK, I was stupid. But the problem is most people are stupid when it comes to managing money. A Financial Advisor is supposed to help financially stupid people make good investments. But how can they have their customeres best interests in mind when the biggest payoff for them often comes from the worst investments for their customers? The gentleman that sold me that Fidelity Destiny plan was a retired Army Colonel who had decided to stay in Germany and "help" young soldiers plan for their future. He seemed like someone I could trust. He may have even thought he was doing me a favor; after all, a career in the Army doesn't exactly make you a financial wizard. At least I learned my lesson while I'm still relatively young and am just entering my prime earning years (well, minus the impending lean years of graduate school).
So what do you do? Not everyone has the time or inclination to make themselves savvy investors. In my opinion, there are three approaches one can take to investing wisely, and I wish I had done any of them instead:
NOTICE: Before you read any further, understand this - I have no formal financial education, training or certification. What I have written here is my opinion and is based only on my life experience. Generally speaking, I have been a poor investor to date and have made some really bad decisions. What follows is my current thinking about how not to make similar mistakes in the future.
The first approach would be to find a financial advisor you can trust. I bet you weren't expecting me to say that, were you? A financial advisor can be a great help, just make sure you find one whose interests are aligned with yours. Remove the conflict of interest. You can do this in one of two ways (that I can think of). First, find an advisor who charges flat hourly fees. These types of advisors do exist and they tend to charge quite a bit per hour, but at least the conflict of interest is gone and you won't have that same feeling you get when you think the mechanic at the garage is making up charges about your car repair bill. The other approach is an advisor who gets paid based on his performance, such as a percentage of Assets Under Management. In this case, the advisor gets a percentage of total amount of assets he manages for you. The benefit here is that the advisor has incentive to grow your money. The more money he makes for you, the more he makes for himself. Now, his interests are squarely in line with yours.
The easier approach to take is to simply pick a few no-load index funds. The "load" is the sales commision that the much loathed financial advisor skims off the top of your investment. You skip the advisor and go strait to the fund manager when you buy a no-load fund. Basically, you are on your own to pick the funds and you would likely enroll and send in your money and never even talk to a single person (if you do it online). I would probably choose Vanguard's index funds or those of T. Rowe Price, as they are very reputable companies and their funds tend to have very low expense ratios (so most of your money actually goes into your investment instead of paying for the administrative costs of running the fund). Index funds seem to be very much in vogue right now as many (most?) actively managed funds don't even do as well as the market as a whole. You could potentially earn better returns in other funds, but picking those funds is the trick. 
The major indexes are what fund manager's performance are gauged off of, so investing in them means you will always do "average". Don't let average sound bad. Remember: 50% of everything is below average. Spreading your investment across a few no-load index funds means that you should at least keep up with the market and feel comfortable that you are keeping your money for yourself. With this approach, I'd probably at least split my investment across three funds, probably a broad market or S&P500 fund, and international index fund, and round it with either a Value or Large-Cap index fund.
The last, and probably best option: stop being financially stupid. Put the time and effort into learning to understand investing. You don't have to be an expert, but at least learn how mutual funds and the stock market works. Learn what dividends, yields, loads, expense ratios, bonds, large/medium/small caps and value/growth stocks are. The concepts are not hard and the information is available for free via the internet (some links on the bottom). Perhaps start reading Kiplinger's or a similar magazine. Your success in investing will likely play heavily in your ability to retire well, or retire at all. Don't you think it is worth your effort to understand what your nest egg is doing (or how to build one)?
Obviously, I'm working on the last approach. The anger that built over realizing how incredibly foolish and naive I was to make such an investment has spurred me to take much more interest and become much more active in my investments. I'm even doing a little "discretionary investing" (i.e., money that won't hurt my retirement if I lose) directly in the stock market . Hopefully, at least one person who reads this can learn from and avoid my mistakes.
--Chris
Resources:
My interview time has been confirmed for Monday, February 5th, and all travel arrangements made. Thankfully, I was able to get reasonably priced tickets into Hartford as well as a good hotel deal via HotWire.com. If Elizabeth could have been able to get some time off work we would have made a weekend trip to Boston out of it, but since she can't, I'm flying into Hartford Sunday evening then right back home Monday afternoon. I'm looking forward to it!
--Chris
I took a pummeling on my Apple stock today as everyone rushes to sell. After hours trading is showing that I'll lose more tomorrow. My plan was to cash out after the earnings report, expecting there to be a spike in the stock after Apple announced that they blew away the estimates. Well, they did blow away the estimates, yet the stock is plummeting. Why? Well, likely because the forecasts for the next quarter weren't so great. I'm sure there is some profit taking, too, which is what I should have done last week. I'm not sophisticated enough yet to know if hedge funds might be up to some tricks to keep the price were it needs to be for their options. Either way, though, I definately leared something:
Lesson learned: how much money a company earned last quarter isn't nearly as important as how much they expect to make next quarter.
Of course, I already knew that but I didn't connect all the mental dots. If amateur little me knows that nothing is really going to move Apple over the next few months, then I should have figured that others might feel the same way. At this point, though, I'm going to ride it out. I don't want to sell during this frenzied panic as I am betting that tomorrow, or pehaps even later today, a whole bunch of investors are going to look at Apple and go "gee, look how cheap Apple is. What a great time to buy!". Actually, if I had sold a few days ago, I'd probably be buying it right back up again while it is under $90. Still, my theory on why I wanted to sell Apple after the earnings announcement should have told me to sell before the earning announcement: not much will be going on for Apple until this summer when they start shipping iPhones. I think Apple is still a great long term play, but I expect it will be a bumpy ride for the next six months.
--Chris
Great news: I have been invited to interview at Yale School of Management! I'm pretty stoked about that as SOM seems to pretty selective even for the interview invites. As a bonus, it looks like I can make cheap travel arrangements, too. I plan on having the travel arrangements complete by the end of the week.
--Chris
Apple just reported their killer Q1 results. I was expecting them to beat estimates, but this far exceeds anything I could have guessed. Oddly, Apple's stock was off 2% today and right now shows a downward trend in after hours trading.
Highlights of the report include a 50% increase in iPod sales over the same period last year, and a 28% increase in Mac's. Gross margin increased to 31.2% from 27.2%.
It will be interesting to see what the stock does tomorrow, although I expect there to be a lot of buyers. With the iPhone coming in the 2nd half of 07, I bet that Apple stays on a pretty nice trajectory for the forseeable future.
--Chris
Just when I thought I was done with my applications, I received this email:
In reviewing your application for admission to the Johnson School, I thought you might also want to consider applying for the Roy H. Park Leadership Fellowship.
...
To be considered for the fellowship, please complete the following essay question in 400 words or less and return it [...] within 10 days:
...
Thank you and we look forward to hearing from you.
I'm quite pleased to have received this email, even though I suspect it goes out to all applicants who didn't opt to apply for the Park Fellowship. I didn't select to apply on my application, but only because the option did not show up for me. I read on the Business Week forum (I know, I shouldn't be there, but it looks like something positive my have actually come from it this time) of an applicant who had a similar problem. Since "leadership" is a subject near and dear to my heart and I really want to apply for the fellowship, I sent the admissions office an email telling them of the glitch in their online application. So, I'm not sure if this is a result of that email, or if it is something that just generally goes out to applicants. Regardless, I've got one more essay to write this week. That's fine; my preschool books won't be here for a few days anyway.
--Chris
[edited 01/16/2007]: I removed the essay question as there is a possibility that it is not supposed to be common knowledge.
It honestly feels kind of odd having all of my applications submitted. Applications for business school have been my singular focus since the end of August when I finalized my decision to pursue that path, and now there is a bit of a void. However, I am reasonably confident that I will be matriculating this fall somewhere, so I know that the next month or two are simply the calm before the storm. Life for Elizabeth and me will become very busy, exciting, and difficult once the dominos start to fall.
So, to keep my mind occupied and take advantage of this brief quiet spell, I'm thinking of the things I can do now that will help me prepare for B-School. Obviously, taking an econ or finance class would be beneficial, but I've decided against that; after all, those are what I'm going to school to learn in the first place, and I'm confident in my ability to absorb the material quickly once there. I've decided instead to read BCG's book on strategy. I figure this will be beneficial for a few reasons. From what I hear, recruiting basically starts the day you get on campus, so I want to be prepared (BCG is a company I really have my eye on). Secondly, I don't think I'll have much time for "discretionary reading" once school starts. And lastly, I do think this can help me get my head in the game before I even show up for class.
If nothing else, perhaps it will help me keep my mind off of those impending decision dates and from being tempted to even look at the BusinessWeek forums....
So what is everyone else doing for "preschool"? Do you plan to read or study anything before starting school? Taking any prep classes?
--Chris
For those of you interested in pursuing a consulting career after B-School, here is an interesting read about a student consulting project at Tuck. I think this is a good example of the types of things that consulting-heavy programs frequently offer. The article doesn't specify, but I imagine that this project was part of the Tuck Student Consulting Services. I it is safe to say that even if you aren't planning on going into MC, projects like this seem to offer a great way to apply what you are learning, while you are still learning it, and that has to add value to anyone going into business.
There is another lesson in this for businesses. If you are looking for new ideas for your business and have a business school in the region, it's probably worth your time to contact them. A relationship like this is mutually beneficial to both the school and the business.
-Chris
After a few experiences of frustration with "Financial Advisors" where I was left with the impression of "I could do better than that" and feeling like they were making more money off of my investment than I was, I've decided to put my money where my mouth is and invest directly in some stocks. I'm just dabbling for now, as I don't want my initial lessons in the market to be too costly; the majority of our money is in mutual funds.
I have to admit that Jim Cramer of Mad Money is also a big reason why I'm investing. I had flipped past Cramer on CNBC a few times and my first impressions were really negative. I'm a pretty laid back guy, and hyper people get on my nerves. It wasn't until I heard Cramer's bio that my opinion of him turned around and I've been watching him semi-regularly for the past few months now. He seems to be a pretty polarizing figure, and perhaps the antithesis to the finance professors I will likely be exposed to in business school; however, I believe he provides valuable insights into a pretty mystic industry. However, I am certainly not going to follow his advice blindly, but I believe he is the last person on the planet, err street, that would advocate that I should.
I'm off to a pretty decent start. My first picks have been AMD, OSK, NYX, and AAPL. I had buyers remorse with AMD after a week or two, and sold it on the upside, although after transaction fees I lost about $6 on the trade. But, the stock is almost $3 down from where I sold it, so I still did pretty good. Why did I sell? I think AMD makes a great product and they are slowly chipping away at Intel's market share, but the fierce competition between the two is reducing profit margins as each try to undercut each other. Great for consumers, bad for investors.
Oshkosh Truck Company, headquartered just 30 minutes away from me here in Wisconsin, is a well run company with excellent products. I think they are a long run play and one of the better mid-caps. They have been getting more business outside of defense, so they aren't as sensitive to that line of business. This stock is actually one where I ignored Cramer's advice, but I'm up about 7% to date.
My next pick is the New York Stock Exchange itself. I bought in to Cramer's thesis on this stock. They are buying the European Stock Exchange Euronext and look to have their sites on Japanese and other foreign exchanges. They are also automating their operations. The trading floor of yore is turning into a lean money-making machine.
Lastly is everyone's darling, Apple. I had pretty good timing on this so far and bought it a little depressed and right before the iPhone announcement. Let's see how Motorola's lawsuit affects this.
So, there are my initial picks. I'm planning on picking two more stocks, then letting the $2,500-$3,000 mill around and see what comes of it after a year or two of my personal management. I've added my portfolio to the sidebar so you can follow along if you are so inclined. Let's see if I'm smarter than the market, or, more importantly to me, those "financial advisors".
--Chris
Jim Cramer got another one right on his show Mad Money. Several weeks ago, Cramer made the case for Six Flags (NYSE: SIX), basically as a real estate play. Well, Six Flags is selling 7 parks and there stock is up a quick 9% this morning. As I recall, his thesis was basically this: The company stinks, but they are sitting on a gold mine of real estate worth more than the company itself is valued, therefore the stock is cheap.
--Chris
I submitted my last January application last night: Yale Shcool of Management. SOM's application is by far the easiest. There was also a lot of overlap in essay topics with some of the other schools to which I submitted applications, making things a bit easier. Given SOM's small class size and the fact that around 40 admits from last year deferred to this year, I believe my chance of getting accepted to Yale are more slim than any other school that I'm applying to.
Either way, it is a relief to have all of my applications submitted. Now it is a waiting game, but, with the expectation that I will be admitted somewhere, I am going to start making preparations for a major life change immediately.
--Chris
With the weak US dollar, it's pretty wise to have a fair percentage of your portfolio in overseas markets. China and India are obvious picks. However, I wouldn't want to put any of my money in increasingly socialist states that are becoming more and more hostile to private investment, the most recent example of which is Venezuela's plan to nationalize U.S. owned utility companies.
--Chris
It stands to reason that a guy applying to business school might have a few thoughts on business that he would want to share on his blog. Thus, I've added a new category to my blog, as seen across the top.
Hopefully, this will get me to make more frequent posts, as business is a topic that is frequently on my mind, be it investing, entrepreneurship, management, or business leadership. We'll see how it pans out.
--Chris
I just submitted my application to the Johnson School at Cornell, with a whole day to spare! It's tough to really give a sense of yourself in only two 400-word essays, but I think I did a good job of answering the essay questions while still letting something about me show through. I know I put together a competitive application, but I'm hearing how much more application volume they have hadso far this year, so it still feels like a crap shoot.
The more I have learned about the Johnson School, the more I like it and the more I know it is a good fit for me. Unfortunately, it is the only school that I'm applying to that I have not visited. Hopefully, I will get a call to interview, and then I can visit. One of the downsides to having worked my list down to just four schools is that they are all schools that I would really enjoy attending, which means I am much more emotionally attached to the decisions that I will receive.
Well, wish me luck!
--Chris
I told myself that I would get Cornell and Yale apps submitted weeks before their due dates, yet here I am just a few days out and still working on them both.
Here's some advice for any future applicants out there: Have all your applications in before Thanksgiving. I think for most people it can be really difficult to be productive over the holidays, especially if there is any traveling involved.
I have Cornell's essays pretty much wrapped up. Just letting the family scrutinize them for me. Yale's application just needs one more essay to be polished off then I can submit it.
I eagerly await having all my apps in, but then I just get to move on to doing my taxes and financial aid forms. :(
--Chris
I just submitted my application for Kenan-Flagler at UNC. I still have my visit and interview report in draft form for my blog, so later this week after the last of my applications are in I should be able to get to completing that. I have a lot I want to say about my excellent visit to KFBS, so the entry is taking a long time to complete.
The essays for KFBS were challenging yet I'm not sure I really liked them. The 1200 word background and goals essay seemed long at first, but given my "above average" years of experience, I had a lot of ground to cover for 1200 words. The "Obstacles" essay was my least favorite, as, quite frankly, I've been a pretty luck guy and have had no major obstacles to overcome. And when I do hit obstacles or challenges, I tend to take them in stride pretty well and not worry about things outside of my control, so they tend not to feel like obstacles or challenges; just life. I was happy that they gave me an optional essay to talk about my international experience. Being stationed in Germany for 3 years is an important part of my life, so I was glad that I got some extra space to talk about it.
I have pretty high confidence in getting in to KFBS, as I think I put together a great application and I really had a great experience during my interview. Still, I wish I could have had my app submitted for the December 1st round. But, improving my GMAT so substantially was worth the wait, plus it gave me the opportunity to visit the school before completing my essay. I believe that has some strong benefits, too.
Two more applications to go: Cornell and Yale. Both are due next week. Yale's is pretty much done, so I'll try to wrap that one up tomorrow.
I can't wait to have all these apps behind me. To all the other peeps out there work'n hard on your apps, good luck!
--Chris