More Stock Picks: Bon-Ton Stores BONT

Before I put this pick out there, I should note my last pick done for the Securities Analysis class was a concrete manufacturer which took some damage from the whole housing crisis. I was right on my view for the next quarter's earnings and its impact on share price but was very, very wrong on the longer horizon.

This pick is one I did for the Seminar In Value Investing class. Its a great book and done from the Value Investing viewpoint as taught by Professor Bruce Greenwald at CBS.

They tell you in Value Investing to write down your views and track them to protect yourself from hubris. Releasing them to cyberspace should be even more effective. My pick:

http://docs.google.com/Doc?id=df9wrf5s_52g8sktfg5

The Yahoo Finance link (for your own research):

http://finance.yahoo.com/q?s=bont

Working One Day A Week; Why No School-Run Fund?

I was chatting to a friend active in CIMA and I got a question answered that I used to wonder about during admissions. Schools like Cornell and Wharton have student run investment funds. Columbia which is the Value Investing school, doesn't. Apparently the reason why it doesn't happen, is that a fund like that requires a faculty sponsor. If they set up a fund it would be $10 million or so. At Columbia, the faculty who have the skills to sponsor it, don't consider something like that worth their time. Its New York! They are way more likely to take a paid role in a hedge fund of some kind if they wish to manage money.

Students have the same attitude in some ways. We are in New York and plenty of students headed to private equity, venture capital, buy side or hedge funds took jobs taking up 1-2 days per week.

This is something that you probably wouldn't put in an application essay because admissions thinks it detracts from the overall experience. However, it is a good move if you can find the right firm. I do have to say though, that everyone I know taking that route seems to be a little distracted from the academic experience.

Subjects: What I Took, What I Want To Take

So what subjects would someone headed for Global Markets do at Columbia? I am putting my subjects done to date up on the web and listing what I intend to take. I was hoping to achieve some knowledge of Derivatives, Securitization and Fundamental Equity Analysis. Improve on my quantitative skills a little but have at least a few Strategy and Leadership courses.
The system is more flexible than you think and you can overload from the typical 15 credits a semester.

I like the exemption system, it gives you a way to demonstrate your knowledge if you want flexibility. Basically, a day of revision and passing an exam lets you avoid taking CORE subjects if you know 75% of the material before coming to b-school. In some cases I made sure I got copies of the lecture notes for courses I exempted as reference material (Decision models, Statistics, Capital Markets). A CFA in Columbia should take advantage of it.

It seems possible to be going into your internship with a lot done. While sticking with your cluster is great, some electives under your belt going into your internship seemed very valuable to me. Deferring some CORE to second year is also an option to get more electives in year 1.

By End Of Year 1:

CORE
Macroeconomics, Accounting, Corporate Finance (By the end of this course, you can do a Free Cash Flow based valuation of a company under exam conditions. Good course but I didn't get a 'H'. I got the mechanics right but missed the subtleties of the growth assumption under exam conditions). Marketing Strategy, Strategy, Marketing Techniques, Leadership (I'm in trouble for this half semester course. It just seems to be less the "command & control" leadership I am used to. Will learn but big chance of bombing my grade), Accounting II (Management Accounting), Creating Effective Organizations (The best CORE subject around).

EXEMPTED FROM CORE
Capital Markets (Passed exemption , although this course is good enough I got someone in it to send me the lecture ppt's and have read through them), Statistics (Passed exemption, did statistics in undergrad), Decision Models (Passed exemption, I'm a former actuary!), Operations (Passed exemption, I was also in consulting), Microeconomics (Passed exemption).

ELECTIVES
Education Leadership Consulting Lab (Very practical education project with lots of non-MBA students), Venture Seminar (Fun course, great guest speakers, taught by a pair of lawyers), Option Markets, Securities Analysis, Security Pricing (joint with Fin. Eng. people).

My second year plans (hoping I bid well):

ELECTIVES
Advanced Applications of Credit Derivatives, Fixed Income Derivatives, Advanced Derivatives, Financial Markets and the Economy, Seminar in Value Investing, Economics of Strategic Behaviour, High Performance Leadership, Applied Equities Analysis, Advanced Corporate Finance, Decision Models II, Entrepreneurial Selling.

POSSIBLES
Hoping to get permission to take Introduction to Econometrics. If I miss High Performance Leadership, I 'll be picking from Money Markets, Negotiations or Equity Derivatives. If I miss Applied Equities, I'll go for Valuation/Financial Statements.

Looking at my electives the mix, if all goes well is-
Stock picking - 3
Strategic economics - 1
Soft Skills- 2.5
Venture- 1
Derivatives and quant subjects- 6.5
Macro economics- 1
Corporate Finance- 1

Lighter on soft skills than planned but some variety. If I had ducked on the exemptions I would have only 10 electives in total...but had more time to enjoy the first year experience. In hindsight, not a bad call. I'll have to make it a point to attend leadership guest speakers a lot in second year. Possibly take mandarin as an extra-curricular..

So is b-school making a difference? Yes.

Is it worth two years out of the workforce and the loan? I'll know for sure in 5 years time from a financial viewpoint. From a personal achievement point, I was sure in the first 3 months.