Friday, September 30, 2005

Internship Panel Discussion

From the Notice Board:

Five students who recently interned will be sharing their thoughts and ideas about their experiences on Tuesday, Oct. 4 at 6:30 p.m. in the Murphy Auditorium (sections A&B). Each student will briefly discuss his/her internship experiences and provide essential information about internships. There will also be a question and answer period. Refreshments will be served.
Defnitely a good use of your time!

Thursday, September 29, 2005

CollegeJournal | News & Trends

Good news for all students, but particularly MBAs! From WSJ:

CollegeJournal | News & Trends:
"Financial-services and management-consulting companies, the traditional drivers of M.B.A. hiring, flocked back to campuses during the 2004-2005 school year, dangling richer paychecks and signing bonuses. And companies that hadn't retrenched as much as banks and consultants also stepped up hiring, leading to the most robust recruiting season since the severe downturn began in 2001.

'The recovery seems to be solid,' says Maury Hanigan, a New York consultant who works with companies on their campus recruiting programs. 'Companies are no longer as tentative as they set up fall interview schedules at business schools; they feel confident they will need more people by the time students graduate.'"

Tuesday, September 27, 2005

Free Money Finance: College Majors that Boost Your Paycheck

Free Money Finance is a blog I read regularly. They have an interesting piece on various careers:
Free Money Finance: College Majors that Boost Your Paycheck:
"Masaniello said engineering, technology and financial services will continue to be hot field"

Tuesday, September 20, 2005

Finance 301 project

Given the questions I have been receiving as well as those I have not (i.e. in class when I asked on Friday) it seems like some people are either having some problems with the project or are putting it off.

To answer some of the questions, I just put together a podcast that should answer your questions. (think of it as "office hours to go").

I would also suggest that you follow the examples that are provided on the 301 page. These examples include using multiple tabs on the excel file. Something which you probably want to do. Moreover, be sure that everything is in equation form, and and just typed in.

Remember we want to be able to quickly and easily change assumptions.

Specific questions people have had:

* assume all sales for Nike are credit sales
* it is OK to use "sales" and "revenue" as the same thing
* failure to do any sensitivity analysis will probably be a letter grade difference
* think about how realistic your assumptions are. Why?

Good luck! and RELAX :)

Monday, September 19, 2005

Just a reminder

I forgot to mention, the new podcast is up.

also today is a presentation at 2:30 for D&T. A former student is putting it on and she has been hiriung SBU grads, so if you are looking for work next year, here is a good chance!

What we will probably be doing in MS

I spoke to this person yesterday. Whether we are doing it Gulfort, Biloxi, or elsewhere is not known yet. But take a look at his pictures and you will get an idea of what to expect.

He was working with HandsonUSA.

Also here are some more pictures from Dana

If you are on the fence, take a look. I am sure you will want to go!

Saturday, September 17, 2005

Finance 301

* If you have any questions on finding cashflows, I would recommend the Smart Solutions Animation on the text's website for chapter 2.

* Similarly, the animation for ROE comparison and the Dupont ROE analysis are both good and recommended.

* Remember the assignment is due this coming Friday (not Monday as it was originally scheduled.

*And as a reminder, this class does meet on Friday. Rest assured, there will DEFINITELY be test coverage from today's class. For the parts that were not in the book (particularly Adelphia, I would suggest this Powerpoint presentation that Carol Fischer and I made a few years ago.

* I will try to have the podcast available to you by Sunday evening. Unfortunately I have to go to a wedding tomorrow afternoon (Saturday)and I doubt I will have an opportunity to do the podcast prior to leaving for the wedding.

Thursday, September 15, 2005

Assorted topics

* The quiz for 401 will be at the end of class

* I had a couple of questions on internships. I would HIGHLY recommend them I am not saying they are required (and they only count for finance majors as a general business elective) BUT from the standpoint of getting a job and gaining experience, they are invaluable.

* Now that I know most of your first names, I realize there is a great temptation to leave name tags down, but I still think they help class flow and if there are multiple people with the same first name, and you are actively participating, you want to make sure I get the right one :) so short version? please continue to use name tags. (as an aside, if you do not, I will know who is not reading this blog ;) )

* It looks like there will be room for the finance club gulf coast trip. If you were unable to attend the meeting last night and still want to go, see me or one of the club officers.

Tuesday, September 13, 2005

Finance 401 class codes

Yeah! :) finally got class quizes will start on Thursday.

for the 1:00 pm class: M14040A425
for the 2:30 pm class" L14043L461

to register go to's student login

if you want to learn more about the system itself, it can be found at

Monday, September 12, 2005


just a reminder: the weekly reviews for both 301 and 401 are online.

podcast main site

Wednesday, September 07, 2005

Finance 401 -suggested problems from chapters 2 and 3

Some suggested problems from chapters 2 and 3 for 401

Chapter 2

Practice Questions page 31--#2, 3, 4, 5 (good but long), 8
questions P 32--#1, (2 is probably good, but so long I doubt it is worth

For chapters 3---A great chapter for practice problems
Questions: 1 (really easy), 2 good for understanding,
3 and 4 are much
5 is very similar to some test questions I have
8—again a former test question
9—practical question
21-worth doing
22—past test question (with different
23—challenging but this is my 301 second project...don't tell them

Challenge Questions

1.a almost always useful
2-if you want tables
for the test, here is your
3—again similar to a past test question

Monday, September 05, 2005

Finance 301 chapters 1 and 2

For Finance 301 students:

A few quick comments that may make your lives easier

  • For Finance 301, there are several topics in chapter one (specifically section 1.3 on the legal forms of business organization) that were not covered in class. You should read these sections. We will cover them in a later context during the semester (for instance 1.3 will be covered in our Entrepreneurial Finance day in November.

  • You are responsible for the videos mentioned from the text (see class notes). The ethics videos (on Intel will be good introduction to why ethics matter.

Suggested problems from Chapter 1---you should know the questions and problems

As for the problems, know how to do 1.1 but I doubt I will ask one, but the idea will be important in entrepreneurial section in November.

Chapter 2

Questions and problems: pay particular attention to Q2-1, Q2-4, and Q2-6 to Q 2-9

problems: P2.2 is excellent and the animated solution is available on the text's web site.

P2-11 is much like a test question I may ask.

Hope this helped

Saturday, September 03, 2005

World is Flat video

Here is the video (interview with Thomas Friedman with focus on The World is Flat) I promised for Finance 301. It is from CSPAN. HIGHLY RECOMMENDED!

While most of the three hours is very good, pay particular attention to:
  1. the first 12 minutes
  2. 17:00 minute mark: on Indian school system
  3. 52:30 on the EU and the challenges facing them
  4. 1:00 on globalization
  5. 1:28 On importance of studying and working hard
  6. 1:46 on Wal Mart and our Nexus of Contracts
  7. 2:00 on Globalization
  8. 2:27 on multinational corporations and the power they have
  9. 2:30 on Creative Destruction
  10. 2:53 on Globalization and rising standard of living (creation of middle class)
I think you will really like it!

Friday, September 02, 2005

The following is an email and my response to a former student. I am sharing it mainly because I do think too many people are so negative on things.

Original email (name removed)


It seems that things around the world are continually getting worse. And the more I read about the latest issues, the more shocked I become.

I’ve always been somewhat of a conspiracy theorist so it does not take much to get me to buy into things easily, however, after everything I have learned in school and experienced in life, there just seems to be many things that just don’t equate. Living through the DotCom bubble and seeing fortunes won and lost and investment banks floating some of the most questionable IPOs, watching wars planned and executed on the some of the thinnest justification, and watching our economy being run recklessly.

The list of issues and topics is extensive. Global economics, CEO pay, record low interest rates, housing prices, energy prices, etc. It’s difficult to put so many of these topics into context. It just seems that a group of wealthy & powerful people are playing Monopoly on a global scale and they are playing to win. The middle class is become extinct. Now we have energy prices skyrocketing. Is the government telling us everything they know about the energy situation? How will people afford to commute to work if gas goes up to $4/gallon? How can they move closer to the cities they work in if they can’t afford to live there?

Here are some doom and gloom web sites I’ve been reading lately. Have you read any of this? Is it plausible? Hope you are doing well

And my response:

Hey ______,

What a nice surprise. I have not heard from you in a long time. Thanks for the update. It sounds like things are going well for you.

As for your questions on the gloom and doom that you feel pervade the world. Please do not take this personally, but totally disagree. In fact that is why I waited a while before responding. I wanted to be sure I had read your mood correctly and not just reply off the cuff.

Writing this in the aftermath of Hurricane Katrina with its amazing suffering, destruction, egregious looting, and apparent lack of recovery planning, it is easy to get caught up in the idea that things are not good, that the world is doomed, and that people are inherently evil. I disagree. Of course things are not perfect, but they are much better for most people than they ever have been.

“Things” are by and large good. Indeed arguably things are better than they have ever been. Yes that is a massively large statement, but I do believe it to be true.

(Indeed, I would suggest that you read the first half (the second half of the book is very political IMO and not nearly as good) of The Progress Paradox by Gregg Easterbrook. In the book he brings up the very interesting point, if you could pick a time, ANY TIME, to go back in history on the condition you had to stay there for the rest of your live, would you? I would not. Sure we have problems, but so did everyone else who has ever lived.

If I could, I would like to address some of the points in your email:

DotCom bubble and accompanied market volatility: yes prices were too high and yes people lost millions of dollars. But I would add to this is not the first, and is unlikely to be the last, so-called bubble. In these bubbles, people lose money. It has happened going back to the time of the middle ages. That so many ordinary investor lost money in stocks this time is or of an indication that more were investing than ever before. Sad for the individuals (who should have been better diversified etc., but definitely not evidence of a conspiracy theory.)

In my classes we cover the bubble and subsequent corporate governance crisis in some detail. We go back and remind students that people are REMMs (see my site for description if you forget from class ;) ) and that they look out for their own best interests and respond to changes in the environment. During the period leading up to the governance crises (post bubble burst period where fraud and corruption were exposed at Enron, Adelphia, Tyco etc.), much in the environment changed. In sort of a “perfect storm” these changes allowed, and even encouraged, the problems of fraud and risk taking to occur. I think understanding how the problem developed is important to lower the fear that can accompany the volatility as well as to prevent future problems.

I will not deny that these were (and to some degree continue to be) problems, but they are not so severe as many believe. Moreover, a few “bad apples” does not mean that all (or even the majority) of apples are bad. In fact, that these events were news at all suggest that they are atypical.

On to another topic that you bring up: global economics. I do not know exactly what you mean in this regard. If you are suggesting that global economics is a bad thing, I again have to disagree. In fact, there may be nothing we can do to lift the world’s poor more than to engage in free trade. One needs only to look at the success of nations that embrace free trade to see that this does work. As some evidence I give you two Alan Greenspan speeches:

1. From November 14, 2000

2. From March 10, 2005

Note, this is not saying that there are not many very very very poor people in these developing countries, but it is to say there are fewer of the poor because of free trade than there would be in its absence.

Now free trade does lead to many changes and there are losers involved. However, these losses tend to be short-term and fairly isolated. A problem however is in what is isolated from a global economic perspective is very concentrated for those who are the losers. (indeed in The World is Flat Thomas Friedman writes something to the effect of “for the unemployed worker, the jobless rate is not 5%, but 100%).

As for your next topic, energy prices, sure they are rising, but until this week most of the rise seems to be demand driven. A relatively simple rule of thumb is that when economies pick up, so too does energy demand. Yes there is talk of “peak oil” and at some point we will run out of oil. But whether that is now or 100 years from now we really do not know. However, that said, the best way to prepare for that eventuality is to allow market forces to work. As the price of energy rises, more and more so-called alternative energies will be developed.

If we were to somehow keep prices low (be it through caps, subsidies to producers, etc), then we would fail to develop the alternative energies needed. Indeed, a few years ago, the Saudi oil officials argued that high prices were a threat to the oil business for exactly this reason.

Again the rising costs of energy do cause problems and are inconvenient, but in the big picture, these costs and inconveniences are that not necessarily that harrowing. Moreover, imagine a previous age where people had to reply on wood for power. Not only was this MUCH more expensive, but the energy produced was both dirtier and less powerful. It is likely that at some point in the future humans look back and laugh at our use of oil and gas.

To your question of how people can afford to commute if prices continue to rise, it is likely that this is one of the “inconveniences” I mentioned above. It might mean they need to take mass transit or car pool, or work from home, or maybe it means they live in a smaller home nearer to work (thus slowing suburban sprawl). However, it is worthy to point out that most of these are longer term fixes. As the tried and true economics’ adage holds that things tend to be fixed in the short term but variable in the longer term.

Your email reminds me of missionary who came to the door shortly after 9-11. She claimed that we lived in the most violent time ever. I am sure she meant well, but I refused to believe her argument. Instead I explained to her that that while every violent death is one too many, the number of people dying violently today is arguably much lower than at any point in our history and definitely so if you measure it on a per capita basis. What is different is that technology now allows us to experience the violence: we see the explosions, we hear the cries, we see the bodies. That is vastly different than in previous ages where thousands, indeed millions, of people could be killed without the world knowing about it for years.

In finance classes we often discuss the idea that transparency is good. The same can be said about this technological change that has increased transparency in all aspects of life. This transparency can help prevent crimes from occurring. (One exception of course is terrorism, the advocates of which crave the attention.) However, this transparency comes with a cost: it plays on the mental health of all.

To make matters worse for our mental sanity, bad news sells better than good news. When was the last time you heard about the person who did not get robbed? The house that did not burn? Or even in the current case of Iraq we do not hear of what is working but only the problems. We rarely hear of the hospital being built, the school that is now open, or the new businesses starting. We hear about the bombings, the violence, the deaths.

This is almost always the case. For instance, currently I am watching TV on the aftermath of Katrina. The VAST majority of stories are on looting, fires, and suffering. Not about how a neighbor helped someone, or the strangers who are sharing what little food they have.

Thus, we are constantly hit with bad news. It makes it seem like things are really bad elsewhere. Indeed, I thought it interesting that you say you are doing well but are worried about others suffering in the economy. Your concern for others is natural but many of those you are worrying about would say that they are doing fine but that they are worried about you.

The websites you mention are a by product of this. Indeed they are part of a larger attempt by certain people to convince others of the “gloom and doom” facing the world. This message is not new. It has been around for hundreds (and probably thousands) of years. Indeed, Economics has gotten the nickname of the “Dismal Science” for that reason.

Added to the mix is the fact that we do live in a time where change is occurring at a faster rate than ever before. And since change is always scary, the times have leant themselves to many fear-mongers who want to stop change or to revert back to some supposed idyllic past era. These proponents live in all areas, across all time periods, and hold many beliefs. And to make matters worse, they generally mean well and almost always have convinced themselves and their followers that they are doing the right thing. However, I feel they are merely making themselves, their followers, and others miserable.

What they are missing is that things are good and getting better. The average standard of living is higher than it has ever been, people are living longer than ever, and people are healthier than ever. This is true not only in the US, but in most of the world.

So to wrap up, I would say that Chicken Little has it wrong, the sky is not falling, in fact it looks mostly sunny!

I realize this answer was way too long, but the tone of your email sounded so negative and so many people have the same view (you are the third person this week who has mentioned a similar sentiment to me) that I felt that a thorough response was necessary.

keep in touch,



Do me a favor, pass this one on. I played a small part in the idea so I really want it to work.

St. Bonaventure is offering free room and board and one-half tuition scholarships to students from higher education institutions in areas affected by the hurricane so those students can continue their studies here at St. Bonaventure on a temporary basis.

“Our doors — and our hearts — are open,” said Sr. Margaret Carney, O.S.F., S.T.D, University president. “We have put into motion every effort to accommodate students from higher education institutions affected by the hurricane and invite them to contact us. Our goal is to help these students continue their education without interruption.”

We're asking all faculty, staff and students to help us by sharing this information with any professional or social organizations you're affiliated with.

"We expect students to return to their home institutions at the earliest possible moment and will make every effort to help them with that transition," said Mary Piccioli, dean of enrollment. "Our classes began August 29, so it’s important that students contact us as soon as possible if they’re interested in attending classes at St. Bonaventure."

Interested students can contact St. Bonaventure via Mary Piccioli at (800) 462-5050, or via e-mail at For full information on St. Bonaventure’s response to Hurricane Katrina, please visit the University’s Web site.