MIT Sloan Students Speak: MFin Class of 2012

Classes

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.  

 

Congratulations Prof. Lo!

Hello everyone,

At this moment I am writing you from a bus going back from New York to Boston. Yesterday many MFins attended the MIT Sloan Finance Day in Midtown Manhattan where we heard from Sloan Professors research talks on credit risks and financial guarantees, the effect on economic conditions on the CEO labor market, the financial reform, predicting the market and other interesting topics.

The half-a-day program was a celebration of MIT Sloan’s Finance tradition, where Professors that have shaped modern Finance (like Robert Merton, Stewart Myers, Andrew Lo and Stephen Ross) expressed the desire of MIT Sloan on continuing its tradition in leading the field. One of their objectives is to educate the incoming practitioners that will lead the field in the future through the Master of Finance program.

On a different note, Professor Andrew Lo was recently appointed as one of the 100 most influential people in the world, according to TIME magazine. To give you a little context, Andrew Lo is the Charles E. and Susan T. Harris Professor of Finance and the Director of the Laboratory for Financial Engineering at MIT Sloan. His research on “adaptive markets” is doing a great contribution in understanding how markets really work.

The Sloan community feels very proud of this accomplishment, and for us MFins is particularly special as Prof. Lo has been directly involved with the Master of Finance program. Unfortunately he hasn’t taught any course to my class but he was briefly with us during the summer talking about the financial crisis and making us think further by explaining how Finance could potentially solve problems we couldn’t even imagine, like finding a cure for cancer. Furthermore, Prof. Lo’s talk during the MIT Sloan Finance made clear the high expectations set on the MFin program.

I hope you have the time to read the article and to learn more about Prof. Lo’s research.

For those of you who have started preparing your biddings I wish you the best!

Cheers,

 

The Home Stretch

The finish line is almost here! After 4 years of MIT classes, clubs, sports, fraternities, and friends, my time at the Institute is almost up.  My plans for the next two years are now set up, I'll be joining the Global Power and Utilities Investment Banking group at Morgan Stanley. It was my first choice of group because they are incredible people, work on deals that range from huge equity and debt deals for utilities, to IPOs for clean tech companies, to mergers and acquisitions across the globe.  I am very excited to be joining them in June.  I've also locked up an apartment in Union Square with a friend from MS.

Outside of that, my life is much more relaxed than it has been in years.  For the rest of the semester, I have 1 pset, 1 final, and 2 projects, and then I am completely done  Crew is still going strong, with daily 6:30 practices making sure I don't become a complete free loading senior just yet ;).  

This past weekend was a 4 day weekend.  Sunday night was the annual Dance Til You Drop party held by my living group.  It's the largest party of the year at MIT, and after running it last year, this year I was able to sit back and just have a great time.  That butted up right into Monday, which in Boston is known as Marathon Monday, because of the Boston Marathon.  It was a beautiful 85 degrees outside, and the race goes right by my fraternity, so I got a lot of high fives from some of the best conditioned athletes In the world.  School starts up again today, and I should probably start getting my books and things in order.

For all the people who send me emails THANK YOU! I love talking about this program, and your questions are always insightful and show you really care about what we are doing here.  Bye everybody!

On/Off

Since many of you requested more information regarding housing at MIT, I figured I could balance the strange feeling of having to leave my dorm soon with the happiness of sharing with you my experiences.

Most of the MFins chose to live on-campus, and that is mainly because it is often more convenient. Ok, you might find cheaper places if you don't mind living off-campus, but the MIT dorms provide us with all utilities and facilities we need to keep our focus on studies. There is no need to spend too much time doing laundry, since the dorms have many washing/drying machines. Group study meetings are much easier since there are several study rooms available and your classmates will all live close to you. Arriving at school on time is much easier, since we have 'free' shuttle buses on our door every 10 minutes. Common kitchens allow us to enjoy dinner with friends quite often. Reasonably good gyms allow us to be healthy without have to leave the building. Dorms also offer a wide variety of entertainment options, from movies to bycicles. Oh, and dorms also promote many events, such as interesting talks, cooking competitions, free brunch every month and free coffee hours every week.

Living off-campus, however, gives us more flexibility in terms of location and overall living preferences. It may also help us avoid a small inconvenience that MFins might have to go through. MFins start school in the summer, when dorm rentals are still not available. That is why MIT allows us to sublet a room from someone else while we wait for the move-in date. I know, the moving can be troublesome, but for most of us, who moved from our countries far away, it is not too bad.

If you do choose to live on-campus, there is still one more decision to make: which dorm? MIT offers graduate students a wide array of options. The majority of MFins stay in either Ashdown House or Sidney Pacific (these are literally a 2-minute walk apart). Ashdown is a bit newer, has a modern look and features its own pub. Sidney Pacific, where I live, is larger, has overall more spacious rooms and features its own cafe. Both dorms are very close to the supermarket.

Whatever decision you make, Cambridge is a very nice city that breathes knowledge and the atmosphere at MIT. Wherever you live, you will quickly be dragged into the intense mindset of studies and work, and most probably your dorm will only be a place to sleep (or work some more!) after a day of challenging endeavors!

Tchau!

March

Hi everyone,

March is now over and besides the traditional March Madness (U.S. college basketball tournament) there were many events that kept me entertained during the past month. The first event was the AdMIT day where I had the pleasure to chat with some of you, get to know your ideas and share my experience during the past year. I am convinced that bright minds are coming to the MFin program!

Another event happening early during the month was the Seventh Annual MIT Sloan Investment Management Conference organized by the Investment Management Club and the Quantitative Finance Club (founded by MFins). The topic for this conference was “Fundamental and Quantitative Strategies for Turbulent Markets”, during March 9^th we had the opportunity to meet people like Congressman Barney Frank (member of the House Financial Services Committee), Ron O’Hanley (President of Asset Management and Corporate Services, Fidelity Investments), Donald Sussman (Chairman at Trust Asset Management) and also learn about the Million Prices Project led by Professors Roberto Rigobon and Alberto Carvallo.

On the funny side of the month, we celebrated Pi day on March 14^th (3.14). During that day we remembered the famous number with various activities: Student Life Office at Sloan provided pies for everyone, most of MIT regular admissions decisions were released that day (at Tau time) and, among many other things, there was a Pi recitation contest at my residence (Ashdown House) where someone actually recited hundreds and hundreds of Pi’s decimals.

During this month, I also discovered that Boston has a significant number of Irish-descendant residents compared to other cities in the country. On March 17^th and 18^th we celebrated St. Patrick who is recognized as patron Saint of Ireland. During the first day many people gathered around Irish pubs to enjoy Irish culture and traditions. Although the traditional date is the 17^th, on March 18^th 2012 there was a big parade in South Boston. The summer-like weather allowed the green colored crowd to enjoy the parade floats. It was incredible the amount of people there, below you will be able to see some pictures from that day.

 

Finally, but not less important we had our well-deserved spring break from March 26^th to 30^th. I personally enjoyed traveling with some of my friends to San Francisco, Las Vegas and the Grand Canyon where I enjoyed delicious food, great views, nice shows and outstanding company. As far as I know there were other MFins escaping Boston as well, some taking cruises, others going to Dominican Republic, Puerto Rico or Brazil. I bet that tomorrow many of my classmates will have a nice tan and will be very relaxed!

Even though I have the tan, I am not relaxed anymore, as I was writing this blog I remembered the many things I have to do: midterm next week, write a paper, start the next Valuation project and lots of readings... such is life at MIT!

Thank you for reading us. Have a nice week!

Cheers,