If you ask me why choose M.Fin, one of the most important reasons I will give is the academic environment here at Sloan. Sitting in classes taught by professors like Nobel Laureate Professor Robert Merton or Professor Andrew Lo who has just been listed as one of TIME's 100 most influential people, you can always expect to be intellectually challenged and refreshed.
Among all the courses that I’m taking at Sloan this semester, the most interesting ones are the special seminars. Professor Merton is teaching two courses this year, both are special seminars. One is called “Functional and Strategic Finance” and the other is called “Retirement Finance, Lifecycle Investing, and Asset Management”. Both courses explore how to apply finance science and financial engineering to real life problems. The former covers financial institutions and the latter covers portfolio management.
Due to schedule conflict, I’m only taking one of them – “Retirement Finance, Lifecycle Investing, and Asset Management”. It has helped me to developed a set of very useful tools for decision-making in the development and delivery of asset management services to clients of a firm and the innovation and design of financial products and services in the area of retirement and asset management”. As mentioned by professor Merton, “with the long-run horizon in mind, the emphasis is on topics and tools that are believed to have a long "shelf life" of usefulness across geo-political borders, even in a rapidly changing institutional, regulatory and technology environment that characterizes the global financial system.” While this course prepares for careers in asset management, especially retirement financing, it is also very useful for me to understand, plan and adjust my personal investment in the future.
Another very interesting course is “Valuation” by Professor Stewart C. Myers, the co-author of the classic textbook “Principles of Corporate Finance”. This corporate finance course is project-based, and students work in teams to value major investments. The valuation projects we are doing for this semester are 1) valuation of an oil field where the main focus is estimation of industry betas, costs of capital, and estimating the market risk premium; 2) valuation and privatization of infrastructure – the Indiana Toll Road – where we practice discounting cash flows using the after-tax WACC approach and the adjusted present value method; 3) valuing investments in pharmaceutical R&D where we learn how to use two discount rates to discount a single project; 4) the Cape Wind project where we need to value debt-equivalent cash flows; and 5) the proposed Alaska Natural Gas Pipeline to help us understand project financing and rate of return regulation. We usually have one or two classes before each project for concepts and valuation techniques that will be used for the project. Then we divide into teams and used data and information given to make appropriate valuations and recommendations. In the end, we prepare a valuation report and resent it either to the class or directly to the professor.
These are just two of the courses that I’m taking right now, but of course Sloan offers way more than these. The problem is never not enough good classes, but always not enough time to take all of them.