This WSJ.com article gave me some flashbacks to what some people have been saying for a while now:

Market's Jitters Stir Some Fears For Buyout Boom

If you take a look at the graph halfway down the page, the sheer magnitude of the present day buyout deals was what was surprising to me when you compare them to junk bond deals of the late 1980s. For those of you in WEMBA Class 32, I had a flashback to Prof. Percival's finance class last term when he was talking about this exact issue, as well as to a Knowledge at Wharton podcast on the same subject.

We're living through an interesting time while studying finance at the most sophisticated b-school in the world, and it will be interesting to see what happens to the buyout boom over the next few months. I also saw that recently IPO'd Blackstone just fell 2.7% yesterday to $29.92, below it's IPO price of $31/share. Let's see if KKR continues down the initial public offering path. Prof. Tyson must be working his retailer over, assuming he got it in writing as usual.

BTW, here's a link for the Knowledge at Wharton podcast channel in iTunes:
itpc://knowledge.wharton.upenn.edu/podcastcurrent.xml

Customized Portfolio Tools are Improving

I just got a call from a UBS PWM VP soliciting my money yesterday who turned out to be a Wharton grad. I kindly thanked her and said no thanks, I manage my own portfolio and asset allocation myself. It's getting easier and easier to self manage your own portfolio using free tools on the internet. It used to be that the tools were pretty simple and not very useful, but that has started to change during the last few years. I have even started to see asset classes such as private equity and hedge funds listed in your asset allocation tools.

Just found this ETF website out there from a WSJ.com article on Better Ways to Measure Your Portfolio:

http://www.indexuniverse.com

The website has some good content for those of you looking for articles on index ETF funds to match to your asset allocations. There's also even a good hedge fund overview article towards the bottom of the first page. I used the search engine to look at some REIT data, which was great to look at after looking at our Real Estate Finance course that started last weekend. I haven't had a chance to look at the free x-ray tool at Morningstar.com or on Yahoo Finance, but if anyone has an opinion, please post it.

Is Pass No Pass Academic Hazard?

Recently, WEMBA implemented a P/NP policy for elective courses in the 2nd year. Is this a Good Thing or not? The way it works is that up to 1 cu per term can be taken P/F. I was thinking about it and I think the spirit of the policy is a good thing overall. It allows us some additional flexibility in choosing electives or courses that we may have an interest in but may not choose to take for a grade. It also reduces competitiveness, which is also a good thing, as I think WEMBA is too grade focused with the switch to letter grades. However, you just have to be honest with yourself and not make it an academic hazard. The problem is that anything north of a D- is still a pass, which incents you to do the bare minimum if you choose this option. This potential academic hazard is doing yourself a disservice, akin to the moral hazard problem involved with insurance/risk management or certain types of executive compensation.

Some things to keep in mind are if you need the courses for a major. Some majors do not allow P/F units to count toward the major, such as finance.

Some advice for Class 33 and beyond:

• Starting in Term 4, there are two main sections, The Finance Section and The Marketing Section. I was one of those who was on the fence and sat in the beginning parts of both classes this term. I ended up in The Finance Section, which made me far worse off from a work perspective but better off (IMHO) from a learning perspective. Leading up to last week's International Finance midterm, I wasn't so sure if I made the right choice. But it was pretty fair so I am overall glad that I have taken the course, which has taught me a lot. If you like Abel's Macroeconomics class, you will like Bodnar's class.
• When you vote for your electives, make sure you get the requirements for majors and keep them in mind. We could have used them for our voting process, and I assert that we would have chosen different classes if we knew that.
• Keep in mind that the class pairings are what is key for the electives. It's still a great mystery of how they do it, but my guess is that they use Prof Bodnar's international finance concept of "you get screwed" when they run the LP. The optimization constraints must be to balance the number of students in each class, so that the most popular classes get paired against each other.
• Take a close look at the difficulty ratings and professor ratings for the classes offered. They will help you choose wisely.

Internet Biz Content Rocks

Diffusion of innovations theory gives us an idea about the how, why and at what rate the spread of technology diffuses through a culture. Here's a link: link. I consider myself somewhere in between innovator and early adopter, depending on the technology we are talking about.

Recently, I've found that I have started to heavily use some internet business content that previously was purely old school-based. For example, I'm using the web more and more to get information faster, and I have started using my iPod beyond just listening to Wharton lectures and Knowledge@Wharton podcasts. It's all about getting the right information at the right time. For example, I now use the Wall Street Journal online edition more than the print version. I end up reading it online first now! I also now have quite a large collection of RSS feeds loaded into IE and Firefox, and I have since cancelled my newspaper print edition. I do still read the headlines for the online versions, BTW. Another example: I found some Stanford Technology Ventures talks on iPod U that were quite good on entrepreneurship. Tien Tzuo from Salesforce.com has a very interesting talk recorded on SaaS, and there are a ton of others from some well-known VCs and CEOs in the Silicon Valley out there. The topics range from paths to entrepreneurial success, a startup panel, and software development in Silicon Valley. Quite good stuff! Saves me from having to go attend these conferences and seminars on my own time, and instead listen to them in my car during my commute.

Recently, I've been recording my Wharton lectures on a USB enabled voice recorder and then converting the WMA files to MP3 format for listening on the iPod as well. Listening at 1.5x speed enables one to more efficiently listen to the lectures. Plus you can rewind key parts to make sure that you really get the point.

So why is this important? Well, for one, the world is going electronic and there is no longer a need to print stuff out. Those of us that figured out how to use the Ikon scanner to PDF in the fifth floor copier at Wharton West now have the PDF versions of all the bulk packs. It sure beats lugging all that paper on the airplane, plus you can search. Suggestion to Wharton Reprographics: it sure would be nice (and it would save trees) if we just got the PDF versions of the bulk packs....

Boom Time for MBAs

(Forwarded from Ambal...thanks):

It's a great time to be an business school student, especially if you want to get into finance. According to the Financial Times, this year is the most competitive since dot.com bubble popped. The main source of activity seems to be private equity firms and hedge funds. Boutique-like investment firms and real estate companies have also become more active; in addition to the investment banks. The number of recruiters has risen. And they're paying more to attract talent. So we're seeing more students get multiple offers.

http://www.msnbc.msn.com/id/18909425/

My take:
I'm wondering if it's better to be off-cycle or on-cycle for business careers. There's a strong trend toward PE these days, which means a glut of talent going into the field for the big $$$ that are flowing in. But that's not necessarily a good thing. Remember when investment banking, consulting, .com startups, and VC were all the hot flavors of the day?