Final MBA post!

Well it’s all over.  After 23 months in London, I finished my MBA at London Business School.  Graduation was a little over a month ago and our Summer Ball party, our biggest party of the year, was the next night.  These two events ‘officially’ marked the end of an epic journey.  A few weeks ago at one of the many “goodbye, it’s over, let’s see each other one last time” parties, a friend asked me about the highlights of my MBA.  I actually had a hard time coming up with one or two, because there are so many, but with his question in mind here are a few of the things I look back on.

For me, the LBS MBA...

...brought my wife and me to London, our first experience living outside the United States

...allowed me to meet and become friends with people from all over the world

...surrounded me with some of the smartest, most creative, most insightful people I’ve ever met

...was expensive

...provided me an excuse to travel, lots, to places like Germany, France, Italy, Spain, Scotland, Israel and Thailand

...gave me time to step back and think about what’s important in life

...involved a lot more partying than I expected

...kept me very busy – study, work, socialize, network, clubs, events, speakers, study groups, sports, etc.

...kept me out of the office, allowing me to train for my fourth marathon – 3:45 in Paris!

...introduced me to the company I’m working for now, and allowed me to shift my career focus

...wasn’t about the academics – there’s so much more to business school than the classroom

This list could go on and on. 

I look back on my decision to go to b-school at LBS as one of the best choices I’ve ever made, and I’m certain it will provide benefits for many years to come.  The choice is very personal, and each person does it for different reasons.  I understand why people do the whole economic/cost-benefit/opportunity-cost analysis of a full-time MBA versus staying employed for a few years, but going to b-school is about so much more.  Just do it.  But try your best to pick the school that’s right for you – they’re not all the same.  Attending the right school is important not because of the academic rigor, it’s important because schools generally attract like-minded people, and so much of the MBA is about the quality of the people who surround you.

I told my dad that I would write a final, wrap-up post for my MBA, so dad, this is for you!   

Now, on to the next challenge.

Sell-side analysts: use at your own risk

A colleague recently forwarded me a McKinsey study that evaluated the quality of sell-side analyst earnings estimates.  I've always held the view that sell-side analysts provide excellent information on the companies they cover, but when it comes to insightful investment recommendations and/or useful price targets they're mediocre at best (this is a massive generalization, and there are some good analysts out there, but I think for the most part it's true).  So the results of this study were not that shocking to me (that analysts really aren't that good at predicting a company's future earnings), and I thought the chart below summarizes this finding well.

One of the best places on the web

And it's not Facebook, Twitter, Myspace, Buzz, Bebo, Digg, Xanga, Twackle, etc, etc.  It's Charlie Rose.

Charlie is an American journalist who hosts a one-hour interview show, a job he's had since 1991.  I enjoy watching Charlie Rose, not because he asks the tough questions but because he gets interesting guests and goes in-depth with them.  I also enjoy exploring the archives of his website (www.charlierose.com), where interviews date back 15 years and where business leaders, movie stars and politicians opine on topical issues.  A quick assessment suggests there are about 5,640 archived videos available on Charlie's website (141 pages * 40 videos per page), and thanks to classification by topic and keywords the videos are easily searchable.

Here's a video from 1995 where Charlie discusses Wall Street with Byron Wien (one of my favourite market strategists who spent his career at Morgan Stanley and now is a senior advisor at Blackstone) and Jim Cramer (long before he became a boisterous commentator on CNBC).  At the time the DJIA just passed 5,000 and it appeared the early-90s recession was ancient history.



It's surprising, and maybe it shouldn't be, that a number of the topics discussed in this interview 15 years ago still are being discussed today.  An understanding of history is important, especially in cyclical areas like the financial markets, because it often repeats itself and many market participants either a) have short memories or b) are too young to understand what took place during previous cycles.  Charlie's website offers thousands of hours of free 'history lessons' to everyone.

In this video Wien offered an insightful view on the internet - "the internet could be the most important development since the television".  Easy to see this in hindsight, but remember this is 3 years before Google was founded, only 3 months after the first version of Internet Explorer was released by Microsoft, when the founder of Facebook was 11 years old and when it took Jim Cramer 15 minutes to download a solitaire game to play with his daughter (on AOL, who at the time had a leading market position).  Just think about what you can download today in 15 minutes...

I encourage all to explore Charlie's archives - I bet you'll be surprised who you find and be interested in hearing what they had to say.

Paris Marathon

Last weekend I ran the Paris marathon, a race of 40,000 people through one of the world's great cities. The route took us along the Champs Elysses, next to the Louvre, out to the Bois de Vincennes, back along the river by the Eiffel Tower before finishing at the Arc de Triomphe.

The other day I read that it's the 2,500th birthday of the marathon. I didn't know the race's history, so here's a recap of the marathon's history as written by the FT...

Back in 490BC, so the legend goes, a runner called Pheidippides was sent from the Battle of Marathon to Athens, carrying news of a crucial Greek victory against the invading Persians. Upon delivering his message, Pheidippides is said to have dropped dead. His legacy is the marathon, now run by hundreds of thousands of people around the world every year.

Pheidippides covered about 25 miles, the distance roughly replicated when the modern Olympics were established in 1896. Twelve years later, at the first London Olympics, the race was extended. The marathon began in Windsor and finished at the Olympic stadium at White City in west London - exactly 26 miles - but runners were required to go a painful extra 0.2 miles so that King Edward VII, relaxing in his royal box, could see the finish.

Training for a marathon takes a lot of time, effort and dedication, and it's hard. I believe most people can train for and complete a marathon (given that they're in relatively good health and they don't have any injuries), but I also believe a lot of people are discouraged by the monstrous training schedule. So, I include below a copy of my actual training schedule, alongside the schedule I attempted to follow. I tracked my daily training for 4 months, and as you'll see it's hardly an exact match to what I was supposed to do (click to enlarge).



During the four months I ran over 420 miles, and looking back that's hard to believe. I got blisters, my knees stopped working, I got sick a few times and I travelled a lot. But this was my fourth marathon, so none of this was new to me...all part of the fun of running a marathon!!

Preparing to leave London

With only 6 months left in London, my wife and I decided to put to use one of the first gifts we received after we told our family we'd be moving to London (two years ago!). My grandparents gave us the 'City Walks London: 50 Adventures on Foot'. We haven't used them yet, so we decided to see if we can get all 50 walks finished by the time we leave.

Each walk is outlined on its own individual card, one side with a map and the other side with a detailed description of what's on the walk (points of interests, history, restaurants, etc). Looking through the cards, we decided that we've already completed 16 of the walks, so that leaves 34 to do in 6 months, or about 6 per month. However, before we leave we've already planned around 5 weeks of travel, so I'm guessing we'll need to complete closer to 8 p/month to be successful. Should be a blast!

Square

I don't claim to know too much about technology, but I do know that this is cool. There's a good chance you've already heard of Square because it's caught a lot of press. The company was founded by Jack Dorsey, the same guy who started Twitter, and is backed by a number of high-profile angels. The video below does a good job explaining exactly what the product does.

Venture capitalists say that they like ideas addressing huge market opportunities, and this product certainly does that. There's a chance Square will fundamentally change the way millions of people transact. I look forward to my first "Square" transaction.

Characteristics of Great Investors

Proving that I'm a fan of the overall business school experience and not just the London Business School MBA, here's a video provided by Stanford GSB highlighting Thomas Barrack, Founder & CEO of Colony Capital, and his thoughts on opportunistic investing.

Also, during this video, which was taped in February 2008, Barrack accurately predicts the troubles that would come to Dubai, initially in his speech and in more detail during the Q&A.

It's an excellent video and well worth the 52 minutes it takes to watch it.

Israel

Last year my wife and I spent the Christmas holiday in Italy. It was a fantastic trip, and for me Rome is among the best cities in the world. It would be tough trip to beat.

This year we decided to spend the holiday in Israel. We have a lot of Israeli friends in London, including some of our best friends, and hearing them talk about their country got us excited. We decided to rent a car and spend 10 days driving around the country, starting in Tel Aviv, going north to Nazareth and the Sea of Galilee, going south to the Dead Sea and then driving west to Jerusalem before heading back to the airport in Tel Aviv.

Before diving in to our trip, I’ve found that many people don’t know much about Israel, including myself. So here are a few facts about the country:

Population: 7.5m
Size: 8,500 square miles (about the size of New Jersey)
Borders: Lebanon to the north, Syria to northeast, Jordon to east, Egypt to southwest
Ethnic groups: 75% Jewish, 21% Arab, 4% minority groups
Languages: Hebrew, Arabic (with English widely spoken and written on nearly all road signs)
Currency: New Israeli Shekel; 1 USD = 3.8 NIS

Tel Aviv is known for nightlife, good restaurants and nice beaches. Not a bad place to start. Our hotel was one block off the beach, and we drove from the airport to our hotel with ease (thanks to our trusty GPS). The next morning we stopped in a cafe across the street from our hotel and quickly figured out why Israelis are so particular about their coffee. It was excellent. In fact, over the following two weeks nearly all the coffee I drank was excellent. The Israelis are known to have a coffee culture, and now I know why.

We met up with friends later that day and they took us for a tour of the city. Our evening started at a cosy wine bar that only serves champagne/sparkling wine. After a few bottles we went to a brewery for a taste of the local beer before heading to dinner at a restaurant called ‘The Place of Meat’ (how can that be bad?). The next day we met some other friends for brunch on the Tel Aviv Port, which is on the northern side of the city. It’s a modern boardwalk on the beach with shops, restaurants and cafes, and it was packed with people enjoying the sun on the final day of the weekend.



That afternoon we drove north to our friend’s family’s house. They live in a kibbutz. Many people have no idea what this means, so I’ll take a stab at explaining it. A kibbutz is a type of community in Israel. It’s a neighbourhood that supports the collective best interest of the people who live there. The people who live in the kibbutz receive income and housing not based on how much they earn but based on how much they need to support their family and how much the kibbutz has to offer. Traditionally a kibbutz earned money through farming and agriculture, but today some kibbutz communities also earn money through manufacturing. This means some are wealthier than others, and the level of wealth translates directly the overall living standard of the people who live in the community. The kibbutz we stayed at had farming and agriculture in addition to two manufacturing plants, one of which manufactured high-tech equipment for the military and hospitals. As a result, the community was very nice – a brand new Olympic size swimming pool, tennis courts, playground, restaurant and art museum (where we took a personal tour, and it was amazing).

This is the view we had from our room at our friend’s house:



On our last night at the kibbutz we heard on the local news that the Israeli Army would be flying test missions with their fighter jets in the area. We heard them flying, went outside and saw one jet fly really low overhead, and since it was dark the jet’s after burners lit up the sky as it flew into the distance. Very cool.

Changing gear a bit, Israel has many important Christian sites (and important sites for many other religions too). In Nazareth, where one of our friends grew up, we saw the site where Mary lived, and where Gabriel visited her to tell her she would give birth to Jesus (Church of the Annunciation). We made a day trip to the Sea of Galilee, where we saw the site where Jesus was baptized by John, where Jesus gave the sermon on the mound and where Jesus fed thousands of people with fish and bread. Jerusalem has many more religious sites, but that’s later in our trip. First, the Dead Sea.



The Dead Sea is a big lake in the middle of a desert (Jordan is on the east and Israel and the West Bank are on the west). Its shores are 1,385 feet below sea level, the lowest elevation on earth’s surface on dry land. The water in the Dead Sea is 8.6 times more salty than the ocean, which means it’s really easy to float. The water feels different too, it feels oily. I was excited to have a float. Little did I know how difficult it would be to NOT float – keeping your body upright is not easy. Unfortunately we didn’t take any pictures of us floating, but you would have seen us lying on our back motionless, head flat on the water, soaking up the sun.

The other must-do activity during a trip to the Dead Sea is seeing the Masada, an ancient town on the top of an isolated plateau where Harod the Great lived between 37 and 31 BCE. There are two ways to get to the Masada, 1) on a cable car that takes about 2 minutes to get from the base to the top of the mountain, or 2) an hour hike up the side of the mountain, on a trail called the Snake Trail. Of course we chose #2, and we decided to start our hike at 5am in order to see the sunrise over the Dead Sea from the top. It was the right choice, and the sunrise was epic.





After two days of relaxing at the Dead Sea, we were off to Jerusalem. After an hour and a half drive we arrived in the Israeli capital – the traffic was bad, but the city’s skyline was littered with historical buildings, and as we drove along the wall of the Old City I knew it was going to learn a lot over the next couple days.

We arrived in Jerusalem on Christmas Eve, and we found a Christian Christmas Eve service at the Jerusalem International YMCA right next door to our hotel. The service had standing room only, and it reminded us of the services we grew up with back home. Afterwards we went across the street to the King David Hotel, a Jerusalem landmark. On the floor of the hotel’s lobby are names and signatures of many of the hotel’s famous guests, including six U.S. presidents, five British prime ministers and numerous movie stars. It was a perfect place for having a drink and snack before going to sleep.



The next day we took a tour of Jerusalem in a bus with a local guide. In the morning we went to one of the most memorable places of our trip, Yad Vashem, the Holocaust museum and Israel’s official memorial to the Jewish victims of the Holocaust. It was an eye-opening experience in a number of ways. In the afternoon we walked through the Old City of Jerusalem. One highlight was the traditional location of where Jesus was crucified, prepared and buried in the cave. I say ‘traditional’ because there is no way to prove the exact location, but this is the place where Christians from all over the world come to visit and remember Christ.



It was Friday, and as the sun went down the Jewish Shabbat began. Around that time we were visiting the Wailing Wall, an important Jewish religious site in the Old City of Jerusalem, and inside the gated area we no longer were allowed to use our cameras. Before visiting I didn’t fully understand how much the city complies with the Shabbat. On the Shabbat no work is allowed to be done (in fact, I learned there are 39 prohibited activity categories), and we saw this first hand at the restaurant for dinner. The menu was entirely cold food. I ordered a simple sandwich that came with fries, but when my meal arrived I had crisps on the side (can’t use a stove). It was interesting to us, who come from a country that separates religion and state, to see how intertwined the two are still today in Jerusalem.

We drove back to Tel Aviv the following day, visited the Tel Aviv Museum of Art (which had a lot of modern art by local artists) and flew back to London. We had a great trip, and I hope more people now can understand how much Israel has to offer visitors!