Orientation Week Over

Orientation week kicked off on campus, but after only a few hours we hopped on a bus and went up to Lord’s Cricket Ground. If you’re like me and don’t know anything about cricket, this means absolutely nothing to you. However, if you’re a cricket fan, a huge smile just came across your face. Lord’s is ‘mecca’ for cricketers, and widely considered the home of cricket. Cricket has been played at this location since 1814.

Lord's Cricket Ground

LBS MBA2010 is a group of 320 people from all over the world. Our group’s nationality diversity was highlighted when we played the “International Citizen Game” on our first day of orientation. We created around 25 teams based on nationality and each team prepared a two minute presentation on their culture and what it’s like to work with people from their country. The Chinese won first place, followed by a team from the U.S. (interesting given what happened at the Olympics!!).

One of the most anticipated events of orientation took place on Wednesday – finding out study groups. The school creates our study groups to for us, and there’s no changing them. I think I got lucky; my study group looks like this:

• A Swedish guy who most recently lived in Brussels with a background in operations management
• A Bulgarian guy who managed businesses in Bulgaria
• A Colombian woman who most recently lived in the U.S. with a background in corporate finance and investment banking
• An Israeli guy from the telecom industry who formerly served in the Israeli military
• A Canadian guy who most recently lived in Vienna and is a concert pianist

I think it’ll be great to work with all of these people, and I know I’m going to learn a ton from them.

Thursday was our “Away Day”. We ventured up in to the English countryside to a corporate training site for team building exercises. The really fun stuff was on the ropes course, and two best events involved climbing up 40 foot telephone poles. (I hope to post a photo soon!) Many of us were skeptical about how much we would take away from the day, but on the way home we all agreed that it was a fantastic experience that provided us a chance to get to know all our team members extremely well.

After a great orientation week it’s finally time to get to work – 6 hours of business statistics on Monday, ugh…

First Day in London

I just finished my first day in London. After arriving at Heathrow airport 30 minutes early, a nice middle-aged man driving a Peugeot hauled me over to my home for the next 3 weeks, 3 Durweston Mews, Marylebone. Upon arrival I found a well-furnished, two-story flat that definitely could serve as home for the next three weeks. Yes, it’s small, but it’s well maintained with new appliances and should make for a good place to stay while Jamie and I find a place to live.

Immediately I had a long overdue shower, and then I walked over to LBS to get my student ID and welcome packet. My student ID afforded me access to the LBS library, where I sent emails to my family announcing my safe arrival in London. Next on my to-do list, a cell phone…

Well not so fast. In order to get a monthly cell phone plan, the company must run a check to ensure the address on your bank account matches your address in London. Of course mine did not. So, after being denied a UK mobile, I went to the bank to update my address to the flat where I just moved in. We’ll see tomorrow if this works.

After paying £9 for a chicken sandwich and fries (yes, that’s just under $18) I proceeded over to the evening’s festivities – the LBS Flat Hunter’s Pub Crawl. Undoubtedly created by students, this ‘reason to drink’ takes place every day of the month leading up to the start of business school. Marketed as a way for students to meet flatmates and share stories about estate agents, this gathering of MBA2010s was an excellent way to socialize with my new classmates. After hanging out at the pub until 1am, I called it a night. (BTW – This pub served Sierra Nevada, however I preferred the local brews that I’ve never had before.)

I left San Francisco 29 hours ago. I’ve already met so many cool people, and so far my time in London has been great (as I listen to the rain outside my bedroom window!).

Why I'm Excited About my MBA

Today I read a great story about two LBS students (an MBA2009 and his wife, a MIF2009 [Masters in Finance]) and their new business, Gelato Mio. As if the rigour of the LBS MBA and MIF programs wasn't enough, these 2 students decided to open a new chain of gelato stores in London.

Check out this video showing the success of the store's recent opening...I can't wait to go try their gelato!!

http://www.youtube.com/watch?v=TTQt9na6WMM

San Diego Rock 'n' Roll Marathon

I finally developed the photos we took during our San Diego marathon weekend. Here's a photo of us with some friends at the finish line...yes, we just ran 26.2 miles, and I think we look pretty good!

(Chantal, Marjorie, Jamie, me and Scott)

This marathon was the FIRST marathon for everyone in this picture except me. I know how special it is to finish one's first marathon, so hats off to Jamie, Chantal, Marjorie and Scott!!

Also, Jamie, Marjorie and Chantal all ran for the Leukemia & Lymphoma Society's Team-In-Training program (thus the purple shirts). Among the three of them they raised nearly $10,000 for blood cancer research.

Where I'll Spend the Next 21 Months

Jamie and I finally made a trip to London together. With less than 2 months to go before our move, this trip offered us a chance to figure out where we're going to live, open a bank account (an ordeal for non-U.K. nationals), attend the London Business School Admits Weekend and spend a few days enjoying one of the greatest cities in the world!

(River Thames and The London Eye -- tallest Ferris wheel in the world until May '06)

The highlight of the trip was Admits Weekend. LBS organizes this weekend so that all the admitted students can come to London, meet each other, learn more about the program and get an idea of what the next 21 months will be like. Also, for LBS, the weekend offers one more chance to sell the School to any undecided applicants (I only met one -- deciding between LBS and INSEAD, a decent French b-school just south of Paris). Here's a photo of me at LBS.

For me, Admits weekend really drilled home how international the program will be. At my breakfast table, I met future classmates from France, Bulgaria, Germany and the UK, and the following day I grabbed a beer with a consultant from Canada (who's Mexican), an entrepreneur from Boston and a consultant from London. I really enjoyed meeting so many interesting people from all over the world.

We also had some time to figure out where we want to live, or at least we narrowed it down to a few possible neighborhoods -- St. John's Wood, Swiss Cottage and West Hampstead. All three neighborhoods are near the Jubilee tube line (subway), which swings by both LBS (for me) and Mayfair (for Jamie). Here's a picture of the St. John's Wood High Street - the main street in the neighborhood. (St. John's Wood is famously known for the Abbey Road Studios, where The Beatles recorded.)

Earlier this week I announced my final day at Lehman Brothers -- July 18. The next chapter in my life is rapidly approaching, and I know I'm not ready!

Rising Fuel Costs

This week the price of oil passed $125 a barrel, and the national average price for mid-grade gasoline stands at $3.898 (5/9/08). A year ago, the average price for that same gallon of gas was $3.223. We all hate paying more to fill up our gas tanks, and the high gas price is killing our wallets, but how's it affecting the overall economy? I did a little digging and found a Morgan Stanley report that suggests a 1 cent increase in the price of gas translates to a $1.3 billion reduction in consumer spending. All else equal, that means $87.8 billion of consumer purchasing power has been pumped in to the gas tank over the past year. Ouch!

While I'm writing about oil & gas, I thought it would be neat to show how rising oil prices impact gas prices. So, see below. Today, the cost of crude oil accounts for about 68% of the price of gas, up from 43% in 2001. Of note, nearly all of the increase in gas prices over the last 7 years is due to increasing crude prices, not increasing taxes, refining costs or distribution costs.

Safety, Investing and Investing Safely

I recently read a letter written to clients of Oaktree Capital Management (http://www.oaktreecap.com) by the firm's Chairman, Howard Marks. Howard's been around a while, and he offers some excellent insight. Howard discussed a number of relevant and important topics, but I particularly liked the following line:

"Investment safety doesn't come from doing things safe, but from doing things safely."

Risk aversion leads too many people to shy away from investing [safely] simply because they believe it's unsafe. More people should consider their own investment policy in the context of Howard's idea above.

Expensive Cities

Jamie made her first trip to London last week. She visited Big Ben and Westminster, had dinner in Mayfair, enjoyed Regents and Hyde parks and visited the London Business School! In doing so, she figured out why everyone tells us London is such an expensive place to live. After living in NYC and San Francisco, surely we're accustom to the "expensive" city lifestyle, right? Wrong.

Items in London cost the same as in San Francisco. A venti Starbucks coffee: 1.75, a cab ride from the City to the airport: 40, lunch at a Thai restaurant: 10. However, instead of having a "$" symbol in front of the number it's a "£". Ah, the exchange rate. Today, $1 will fetch about £0.50. That means, in London, a venti Starbucks coffee costs $3.50, a cab ride to the airport runs $80 and that simple Thai lunch is $20! Now I'm beginning to see why so many people warned us about the cost of living in such a great city!

In case you're wondering, only one city beats London in this year's list of the world's most expensive cities (as compiled by Mercer). Surprisingly, San Francisco didn't even break the top 20!

1. Moscow
2. London
3. Seoul
4. Tokyo
5. Hong Kong
6. Copenhagen
7. Geneva
8. Osaka
9. Zurich
10. Oslo
11. Milan
12. St. Petersburg (Russia)
13. Paris
14. Singapore
15. New York City
16. Dublin
17. Tel Aviv
18. Rome
19. Vienna
20. Beijing

The Sage's 31st Letter

Last week, Warren Buffett provided his 31st letter to Berkshire Hathaway shareholders. Buffett's first letter, written in 1977, two years before I was born, described a company with operating earnings of $21.9 million and an investment portfolio worth $181 million. In 2007, Berkshire provided $20.2 billion of operating earnings and held an investment portfolio worth $75 billion. Not bad, Mr. Buffett.

Buffett's annual letters are insightful and relevant, and I encourage anyone interested in business, investing, or just a good 20 minute read to download the most recent report here.

One interesting story in this year's letter describes the outcome of Berkshire's investment in PetroChina, the Chinese oil and gas company. In 2002/2003, Berkshire invested $488 million in the company and in 2007 sold it's stake for $4 billion. Again, not a bad job. But, with heafty gains come heafty taxes. Berkshire paid the IRS $1.2 billion in taxes on this gain, which paid ALL costs of running the U.S. government for about four hours. Wow.

Goldman Gets It

Today, Goldman Sachs announced one of the largest philanthropic initiatives of any Wall Street firm. The program, called "10,000 Women", aims to raise $100 million for women running small businesses in developing countries. Goldman's money will be used to train these women in areas such as marketing, e-commerce and accounting.

So why such an effort for this specific demographic? Goldman research indicates that closing the gender gap in employment in key emerging markets could lift per capita income 10-14% above baseline forecasts by 2020.

Hopefully you noticed the link to Camfed at the bottom of my blog. Camfed supports the education and development of young women in rural Africa, and Goldman named Camfed one of their key partners for this new initiative. After spending time in rural areas of Kenya, seeing first hand how children cope with poverty and lousy living conditions, I immediately connected with Camfed's cause, and it's great to see such a meaningful commitment from Goldman.

Check out www.camfed.org, you'll find it really interesting. Meanwhile, props to Goldman for putting up a bunch of money for a great cause. However, just to put it in perspective, $100 million represents 0.5% of Goldman's 2007 compensation expense.