MIT Sloan Students Speak: MFin Class of 2012

The Virtues of Taking It Easy

After three and a half years at MIT, I have convinced myself it's finally time to take it easy for a semester. During my undergraduate studies, I never took fewer than 5 classes a semester, and sometimes up to 7.  If I could go back, I wouldn't change a thing, but I wasn't able to enjoy college as much as if I had taken my foot off the gas for a little bit and stopped to smell the roses. 

Now, however, I am taking four classes, and two of them are H1, meaning they are first half of the semester only.  Seeing as we are three weeks into the semester, those two classes, Mergers and Acquisitions and Entrepreneurial Finance, are already half over.  M&A is a really interesting class for me, plus I feel I bring a little bit of a different insight after working on a few deals over the past few summers.  Speaking of which, the other deal I was working on this summer went through! (http://www.reuters.com/article/2012/02/07/us-goldman-dwight-idUSTRE8161T320120207)  I'm enjoying Entrepreneurial Finance because I'm learning how VC's actually value deals, and the start-up I'm helping out on (usecloudtop.com) will potentially need funding soon.

My full semester classes are taking up more of my time, but I still find myself with more free time than I've ever had at MIT.  I'm in Robert Merton's Retirement Finance class, and although I find the subject matter rather mundance, Professor Merton is an amazing lecturer and I love going to that class.  My last class, the last of my 30 total units this semester, is probably my most difficult class, Valuation with Stewart Myers.  Professor Myers is one of the fathers of corporate finance, and he has forgotten more about valuing companies than I could ever hope to learn.  This class is definitely my favorite so far, since we are valuing an oil field, then next week moving on to valuing the Indiana Toll Road privatization project.  

I should probably take this opportunity to explore new things at MIT, but to be honest, I'm relaxing as much as possible before I start in June at Morgan Stanley.  The great thing about MIT is that even if I'm not looking to get involved in new things, something always ends up pulling you in and getting you excited.  For me, that was the AGC M&A cup, which I competed in with a group of fellow Sloans students a few weeks ago.  Things like this will come and go, and they really give you the opportunity to step back and realize how amazing a place Sloan is.  

As always, good luck with admissions, and feel free to ask me questions at rdixit@mit.edu.  Good night everyone!

 

Nobel Spring

 

Choosing a graduate school is a decision that involves several factors, among which one of the most important is faculty. When people choose MIT, they know they will work very hard, but also learn a lot from the best professors and researchers in their fields. It is indeed an honor to be able to listen to Andrew Lo's inspiring talks, watch carefully Leonid Kogan derive some option pricing models, learn from Douglas Breeden's vast experience, be able to take classes with Stewart Myers, John Cox, Steve Ross, Jun Pan, Hui Chen and many others. When people consider MIT, they know it is the birthplace of modern finance, and being able to learn directly from its fathers is an unique experience. As a matter of fact, one of the most important contributors to modern finance is now here, and many people are curious about having the chance to take classes with Nobel Prize winner Robert Merton.

 

The first question that comes to mind is: Is he really teaching? The answer is yes! And 2 classes! I am taking both his courses: Retirement Finance and Lifecycle Investing, and Functional and Strategic Finance. From these two weeks so far, I can say both of his classes are very interesting, with Merton providing a very high-level view of relevant topics in finance. The topics themselves might appear simple, or well-known to some, but Merton provides us with many intelligent insights on items we would not pay a lot of attention to. For example, in his last Retirement Finance class, he talked about alpha generation, and how a private equity firm could report very high alphas with no change in the strategy. An apparently simple topic, but Merton's twist totally makes the difference. 

 

The only reason I cannot say I am looking forward to his following lectures is that I will be closer and closer to the end of the semester!. But I am happy many of you, incoming MFin students, will have the opportunity to live this starting this summer!

 

Tchau!

 

Ready, Set... Spring Term is Here!

Welcome again to our blog!

It has been two weeks since the  Spring Term started, our last one at MIT. The following months look challenging in terms of the new knowledge we will acquire and all the readings, problem sets, papers and exams we have to do before graduation. The courses I will be taking during this semester are:

• Psychology and Economics (14.137) with Drazen Prelec
• PoF: Private Equity and Hedge Funds (15.419) with Phil Cooper
• Options and Futures Markets (15.437) with John Cox
• SSM: Valuation (15.S02) with Stewart Myers
• SSM: Functional and Strategic Finance (15.S12) with Robert Merton
• Research Practicum (15.S26) with John Minahan
• Taxes and Business Strategy (15.518) with Michelle Hanlon

As you may notice, the Spring Term does not require any restricted electives for MFins, provided they have completed the Proseminar (either on Financial Management or Financial Engineering). Similar to the Fall Term registration process, in order to enroll a course at Sloan (the ones that have the "15" Prefix) you go through a bidding process.

I would like to briefly explain how the bidding process works. Everyone is given an endowment of 1000 points which you need to allocate among the courses you are interested in. When the first bidding round  opens, only graduating students are allowed to place their offers (as an MFin you will have priority). You may allocate your point endowment as you like, trying to bid more for those courses that you think demand will be high. Notice that you don't have any restriction in terms of the number of courses you can place a bid as long as you don't go over the 54 credit limit that you can enroll at Sloan (66 in total between Sloan and other schools per semester).

After the results of the first round are posted, you are able to see if you got into the courses you wanted. At this point the number of points that you will have is your initial endowment (1000) minus the clearing price of the courses you got in. The clearing price is the bid placed by the last person that got into a course that is now full. If a course is still open, the clearing price is zero and you get a refund of the points you originally bid for that class. During the second round, you can still bid for a course that is full as other people might renounce to their seats and make those spots available. This round is open to all students at MIT so the competition can be tougher.

When the results of the second round are posted you might still have one more chance to get into those courses that are closed. There is a waitlist round where you get back 1000 points and can place them into closed courses. The highest bids get priority in the waitlist and, when classes start, it is the Professor who determines if those persons get in.

From my experience and that of my classmates, I can tell you that if you do a little research before you place your bid it is very likely that you will get all the courses you want. By this I mean that you read the information that Sloan registration provides you and that you talk with other fellow Sloanies. For instance, checking the results of past evaluations of the courses, learning the clearing prices for the previous year and assessing the level of popularity of a Professor, you should be able to make an educated guess about the number of points that you have to bid.

The popular courses among MFin students for this term are: Valuation (15.S02), Functional and Strategic Finance (15.S12), Retirement Finance, Lifecycle Investing and Asset Management (15.S14, this is the other class taught by Prof. Merton), Analytics of Finance II (15.460), Entrepreneurial Finance (15.S05) and Fixed Income (15.438).

By the way, I am looking forward to meeting some of you during the AdMIT day!

I wish you all a nice week!

Cheers,

Hi Everyone,

It has been a little while since my last post and I hope everyone is doing very well. Today I would like to share with you my winter IAP experience.

Winter break at MIT can be cold, but it could also be as fun as any regular semester. During the month of January (January 9th to February 3rd for this year), we have one of the most special periods at MIT – the Independent Activities Period (IAP). During those four weeks, students from all departments of the school can organize or participate in various teaching and learning activities. These activities can be anything you would like to try hands-on, ranging from classes on How to Win at Texas Hold'em Poker to externships that connect current students to alumni in workplaces.

My IAP activity was the Finance Research Practicum offered by our own Master of Finance Program. Similar to the Proseminar classes that we took during the fall semester, the Practicum is an opportunity to work on real world problems posted by leading financial institutions. The sponsor of our project is Blackrock, and our research question is developed around global equity portfolio construction. To us, this is not only time to apply our knowledge and skills acquired in the past few months but also a great learning experience. Although the problems themselves are unsolved when handed to us, all of our sponsors have been working on and are experts in related topics. They usually offer great insights and guidance to us that are otherwise not taught in classrooms.

Having said this, it doesn’t mean that you need to be an expert in finance to participate in the Practicum. My team is made up of three fellow M.Fin students (including myself) and one PhD student from the Chemical Engineering Department – every one of us offers a unique perspective and skill set. Every weekday, we commit a few hours working together, and by the end of the week, we communicate with our clients over the phone to keep them updated.

In order not to confuse you, I should mention that there are two types of Practicum projects: on-site and remote. Unlike the on-site teams who work in clients’ offices, our team works remotely in Cambridge and meet once a week with our sponsor over the phone. This is one of the primary means to talk to our client about our progress and hear back what comments and suggestions they may have.

So far we are making some good progress, but due to the scale of our project, we will take the option of extending IAP into February. In the first half of the spring semester, everyone who has taken the Finance Research Practicum will meet once a week as a class and each team will make a thirty-minute presentation. I look forward to hearing from my classmates soon about what they have done and learnt.

Florida Rowing Trip

Hi everyone!

I hope your January's have been as interesting as mine has.  After my last final, Analytics of Finance, I headed back home to Kentucky for a few days.  I got to spend some time with my friends from high school and with my girlfriend, who goes to Boston College and is also from Kentucky. 

After a few days of relaxing at home, I headed to Cocoa Beach, Florida for the annual MIT Crew Winter Training trip.  Since the Charles River in Boston is frozen, and spending time indoors exercising gets old, we take the entire team down to Florida for a week of practice, beach, and pool time.  We do two-a-day practices on the Banana River, and we have plenty of other activities to fill the time in between, although we mostly spend that time sleeping!

Florida is an important bonding trip for our team, and it made me think about other types of bonding trips I've been able to be a part of at MIT.  I think everyone should come to MIT for the education, which I think is the best in the world.  But the one thing every person who comes to MIT should take advantage of is MIT-sponsored trips.  For graduate students, there is everything from ski trips, to finance field trips to New York, and of course the Asia trek.  MIT can be a pretty difficult place sometimes, and you don't truly get to know people until you get away from the stress and pressure and just relax somewhere together.  Maybe on a beach, or maybe on the side of a mountain. 

For the rest of IAP (Independent Activities Period), I kept myself busy with classes (for fun of course), practice, and travel.  I took an incredible wine tasting class with Professor Linn Hobbs.  There were five 3 hour sessions, and each one was jammed packed with wine knowledge and tasting.  I highly recommend it.  The other classes I am taking are a poker class and a MatLab class to brush up on my skills.  For practice, the MIT crew team is still going all the way through the winter, jamming away on our indoor rowing machines.  It's a tough sport, but I love being there every day. And for travel, I got to slip away to New York City for a weekend to meet with some of my future colleagues at Morgan Stanley, and to celebrate my birthday with some of my best friends.

The semester picks up next week, and I'll be back to give you an update of what's going on with me then! Stay warm everyone!