MBA's and risk
Printed From: The Equity Desk
Category: Careers
Forum Name: B-Schools
Forum Discription: Review talk, discuss about your favourite B-School, Discuss what better systems could be put into specific B-schools so as to make them better from the student's point of view.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=4
Printed Date: 26/Jun/2024 at 12:42pm
Topic: MBA's and risk
Posted By: basant
Subject: MBA's and risk
Date Posted: 16/Jul/2006 at 8:25pm
|
One of the most important thing that (except for a very very few top rated) B-Schools do not and cannot teach you is to take on risks. All through out my life quite a few number of MBA's that I have met are risk averse. They prefer to hold not less then 20 stocks, would rather buy the top rate blue chips, hold 25% of their portfolio in cash, put money in stupid LIC policies(under returns that barely beat inflation) invest in 8% R.B.I bonds etc etc. The Dhirubhai Ambanis and the Anil Agarwal are all from the non MBA fraternity. true their children will do MBAs and manage the business very well but that is after a platform has been set for them. Probably the formal teaching that these schoold undertake are quite related to the phrase " Manage Risks" " Control Risks", Hedge your portfolio, diversify, start taking small steps and the likes.
Stock Market investing is more about character then knowledge. In the recent turmoil that we witnesses I know many smart people who sold off only to buy it later whether they get the stocks or not is another issue but they are still witing and my sense is that they would keep on waiting because no body has ever caught the bottom nor sold at the top. As Lynch says a "Market players may have 50% of their portfolio in cash at market bottoms. When the market decides to move up they could miss most of the move."
The MBA institues (especially the 2nd rung ones) with due regard and respect for them should train their students under several situations of stress and see whether they come out of it. True the nature of the CAT exams are such that a student has to cope with more then he can handle but that should be extended to other areas as well.
|
Replies:
Posted By: Ambarish
Date Posted: 16/Jul/2006 at 9:46pm
|
As far as People are concerned I cannot comment and believe that they act so in fear, may be because they deal in such a high amount of money and as far as B school are concerned I haven’t been to one yet but what I hear from my friends is that there are activity groups and finance club for example, IIM ahemdabad: - BETA IIM Banglore:- They Have Papers like Risk Management etc. so it would be unfair to say something About B Schools just with few personal encounter as the sample base is to small and there is no diversity in it to get a correct view we must analyze the risk taking ability of MBA’s/ Management students from all walks of business. ------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: maag
Date Posted: 16/Jul/2006 at 10:10pm
| Obviously that had to be it Ambani etc etc started poor they started from where they could not lose and so they took their bets. An MBA grad knows that he can earn and therefore is at a certain level of wealth matrix so why should he do anything that would make him reckless. |
Posted By: Ambarish
Date Posted: 16/Jul/2006 at 11:03pm
|
the man u r refering to is dhiru bhai ambani he never was an mba nd so he is out of context here and if we take his 2 sons both are mba's and both have a huge fortune of billions to loose and both are not new in taking risk. i say it again as i did in my earlier reply that the sample base has to be big enough to take into a/c all the b school of india or for the matter the world if u want just a few name's there were two alumni of iim a last year who refused to take up jobs nd finacially be secured and took the risk of starting a new business and i'm sure if u look around u'll find plenty more ------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: maag
Date Posted: 16/Jul/2006 at 11:42pm
| Right you see the proportion of people who refuse to take jobs and set up private businesses. From what you said about 2in a few hundred is a very small proportion include all the IIM's and u will know what i am referring to. Even the ones who refuse jobs make headlines not the ones who take (they make coz how much they are able to earn) so obviously there is something unique about starting a business immdediately after getting an MBA degree. |
Posted By: dummy
Date Posted: 16/Jul/2006 at 11:47pm
| Guys. what are u talkin abt? I hears that IIm bang calls students at 3.00 in the morn if that is not teachin how to handle stress then what is and for risk i am yet to come across an MBA who says that after doing his degree he will start a new stuff - he slways says that he will start something but after pitting away a few crores in his bank. Is that taking risk.???? |
Posted By: Ambarish
Date Posted: 16/Jul/2006 at 12:30pm
|
its all about one's perception abt how thing's are as far as the topic
concerns since its in relation with bschool teachin their student in
taking risk i'll just point out few facts here rest u may think what u
want in every b school there are diffrent kind of clubs in relation
with finance marketing etc etc i'm just naming a few here IIM Ahmedabad:- IIM Banglore :- Networth IIM Calcutta :- dhan IIM c also has tradbuzz http://www.iimcal.ac.in/community/FinClub/page.asp?which=tradebuzz - The FinClub’s Online Stock Trading Game. Pit yourself against the real stock market. Prizes up for grabs! and if youwant further information u can look up their site n Further The b school's have a subject know as risk management now if they dont teach abt taking risk again if i look up diffrent mutual fund u'll find hem full of mba's i'll just site an example taken from this forum itself pls refer to topic reliance tax saver now there is an mba taking risk would'nt u say and finally only someone from the b school itself who's been their in the mids of chaos and everythingelse can really have a final say in this nd finally u can belive whatever u want it all abt one perception it may be that i'm wrong but i dont see ne thing to support that fact yet but if u have nething go ahead i'm all ears ------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: dummy
Date Posted: 16/Jul/2006 at 12:36pm
| the idea is not learning risk management but actually goin out to take it you know it is so very nice to play stocks in a agme coz u can start it all over again but when it comes to real stocks u will nver play it the same way for example if some one were to play a game he would not buy infy coz he might think that price is 2 high he will buy something lesser priced at prob below rs 100 so perceptions change depending which you you are actually looking at it from. and MBA's ya they add great value to society but by working for others who are prob more smarter since they give 30 lacs and make 1 cr from the same guy - both are happy win win situation, by the way are you an mba !!! |
Posted By: Ambarish
Date Posted: 16/Jul/2006 at 12:47pm
|
i dont disagree with that all i'm saying is that they give their
students all experiance wether it be risk or pressure or ne other for
that matter it all as u said the pupil is himself scared to take risk
the fear is always their i never disagreed with that and also a risk is
taken when there is a 50 -50 chance if you invest ur money in a lost
cause u cant say u r taking a risk and no i'm not an mba
------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: Muskan
Date Posted: 17/Jul/2006 at 2:40pm
| I would agree with your last statement but the point is if MBA grads could take risks why is it that only <5% of them take up careers as first generation businessmen. Clearly one would have thought that since they earn let us say 10 lacs p.a their employers will extract 20lacs from them otherwise why will any one give you that money and the best part is some body who does not do an mba gets into business because his father has set it up from him. The exact reverse thing should be happening. An MBA should add value as an entrepreneur whereas some body without knowledge and exp. should be working for some one else. |
Posted By: Ambarish
Date Posted: 17/Jul/2006 at 5:41pm
|
well most of the indian management institutes do not take experince as
an eligibility critaria ( thank heavens on more of a personal note) so
i belive its a good idea to gain some experiace b4 u get into business
arena as an entreprenure and secondly we must also take into account of
pressure from parents which forces most of the students not to venture
into unknown territory, thirdly most people take loans to finance their
higher education and its repayment also add as an extra burden on them
again if any one gets out of these binding there might be problem in
securing finance financial institution may not help u just because you
are an MBA there are lot of issues that a person has to face and
chances are they'll give in. its basically the mind game that forces
them t react in such a way and lastly i'm sure that no one will like to
employ someone without knowledge or experiance to make decisions their
post in the corp world which have decisionery powers
------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: Muskan
Date Posted: 17/Jul/2006 at 6:50pm
| Right. but finally the point is that MBA's should be adding more value, getting into newer businesses rather then following some one else. IF 10 IIM grads get into new businesses each of these can add a further number of people to employment and GDP could go up but if all 10 join some existing company then the value creation isn't that significant you see... |
Posted By: basant
Date Posted: 17/Jul/2006 at 9:19pm
|
Do you mean to suggest that 10 M.B.A's working in one company will add less value compared to all these 10 workin in different start up companies?Is this not a generalised statement of sorts or have you seen anything like this before. |
Posted By: Ambarish
Date Posted: 17/Jul/2006 at 9:50pm
|
you also need to look wether the demand for MBA's are falling or rising
and the increasing paycheck solves this particular query if MBA"s were
not adding value then why are they so much in demand the salasry of an
mba from india has gone to a level high of INR 10000000
------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: Ambarish
Date Posted: 17/Jul/2006 at 9:51pm
|
in domestic
------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: dummy
Date Posted: 17/Jul/2006 at 11:28pm
| Yes MBA's are adding value but that the value that they are adding is far less then what they could have added in case they started a business.If some one gives them 1 million rupess then he would extract a work for 2 million from them. The additional 1 million our budding management grad loses because he does not want to take on risk and prefers to stay protected. |
Posted By: vineet
Date Posted: 01/Aug/2006 at 1:25pm
|
Hi all, I have been a long time MBA aspirant. I have been working for the last 2 years and have been very keenly observing the kind of role MBAs play (read: choose to play) when they join a professionally run organization. Over the years I have noticed that a burgeoning economy offering fat pay-cheques often prevents fresh MBAs from toying with the idea of entrepreneurship which I believe is what entails when we talk of "taking risk". And come to think of it, it does make sense. Vineet ------------- "Don't be humble.. you're not THAT great." - Golda Meir |
Posted By: basant
Date Posted: 01/Aug/2006 at 2:08pm
|
I have been thinking hard on thie debate for quite a while A few conclusions that I am able to draw are
(1) Since a normal graduate does not get a high paying job he wants to bet hard on life. Start a venture or join an existing family business.
(2) The MBA Grad who is probably more smart and skillful compared to the normal grad is lured by the six and seven digit pay checks. This is the paradox. SOme body who ought to do something creative is doing exactly the opposite compared to some one who should not be risking his capital (the normal grad).
The answer or the answers if you have any more (I am sure people will have a lot of new theories on this):
High School economics taught us about Opportunity cost. It is defined as " the next best alternative sacrificed in order to obtain a commodity or service"
In the case of a normal grad the opportunity cost was too low (the low paying jobs) so he started a business. In case of our MBA friend the opportunity cost was quite high the high paying job so he went to work.
Of course ther would be other factors determining the course of action and it would be interesting to see what they could be. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Ambarish
Date Posted: 02/Aug/2006 at 12:27pm
|
actually no there are plenty of people out there who are employed getting decent salary and are only Graduates. i have observed that a lot of people play the blame game here and the best scape goat that they have is their education or to blame it all on the institution and they will never except their own disability to start a business or even join their family business if that's an option available to them there are a few things that i'll like to mention here as far as the institutions are concerned i have come across a varity of courses that grooms students to start their own business or to develop their family business further then again the question of an mba doing something creative is concerned he can be creative in a job or a business how does that matter. Again has anyoone thought this that an mba what he will be able to earn in a salaries job from starting he migh not be able to perform that well in the starting years of his own business and the starting years are very important for a man's cofidance if for one reason or another he loses that will be a devastating blow to his cofidence and he can kiss his career goodbye ------------- www.halwasiya.uni.cc “Wining is not everything, it is the only thing” |
Posted By: prashantmohta
Date Posted: 16/Feb/2007 at 9:48pm
|
is it true that iim pass out joins good growing co. and they keep themselves away from the cyclicals co. anybody please
|
Posted By: kulman
Date Posted: 16/Feb/2007 at 9:59pm
|
is it true that iim pass out joins good growing co. and they keep themselves away from the cyclicals co. ....anybody please ---------------------------------------------------Don't know.
But I recall a comment from Dr. Marc Faber:"Short the industries which are currently popular with Harvard MBAs" ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: deveshkayal
Date Posted: 16/Feb/2007 at 10:17pm
|
Most of the IIMs join Barclays,Lehman,Mckinsey,ICICI,etc mainly in the Financial sector,Investment banking to be specific. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: basant
Date Posted: 16/Feb/2007 at 10:19pm
|
I have known many MBA's from almost all the top colleges in the world and I would categorise those schools as glorified placement agencies.
AN MBA by itself will get you nothing it has to be backed by the burning desire to think unconventionally. Sunil Mittal, Kishore Biyani, Dhirubhai AMbani, Narayan Murthy, were not a part of any of these glorified placement agencies. But a company whose CEO is an IIT/IIM combine does well because these guys know how to carry the business along structured lines - not so sure about the initial vision though.
Satyam's CEO is a HArward alumni though! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deveshkayal
Date Posted: 16/Feb/2007 at 10:31pm
|
AN MBA by itself will get you nothing it has to be backed by the burning desire to think unconventionally - Excellent Basantji.I think there is a book called "What they dont teach you at B-School"
I think MBAs r preferred over CAs in investment banking job.(Talking from my brother's exp.) ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: kulman
Date Posted: 16/Feb/2007 at 10:36pm
|
That book by Mark McCormack is a must read! ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: omshivaya
Date Posted: 16/Feb/2007 at 1:36am
|
Vision, Creativity, Burning desire for that unconventional dream is like Maa Shakti, Stree(unpredictable and yet that is the basic seed necessary for the child to be born).
Walking a disciplined and predictable path is like Lord Shiva(Calm, fixed intent, one-pointedness with predictable effect for a prec-conceived cause. Something like 1+1=2).
Shiva is Potential Energy and Shakti is Kinetic Energy. Ultimately it is all energy.
But we need Shiva(man)-Shakti(woman) both for a child to be born. Thus every great company needs a Shakti-form(visionary, unconventional) for that evolutionary seed and then Shiva takes over who can direct that energy along a predictable path.
World cannot exist just with Shakti or just with Shiva: we need them both for a child to be conceived or for a great company to be born. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: Mohan
Date Posted: 16/Feb/2007 at 8:15am
MBA gets you in the door. Very true. Bigger schools get you in bigger doors. Rest is upto you. ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: PrashantS
Date Posted: 17/Feb/2007 at 6:50pm
| well " the rest is upto you " goes for any kinda business u do...MBA certifies you that u can handle the intial cruches of the business and the builds the intial faith to hire a person...I think the real key is to get the best out of your MBA.................... |
Posted By: kaushalchawla
Date Posted: 17/Feb/2007 at 12:33pm
|
http://www.theequitydesk.com/forum/member_profile.asp?PF=149&FID=9 - omshivaya , Very well explained. ------------- Warm Regards, Kaushal |
Posted By: omshivaya
Date Posted: 17/Feb/2007 at 4:21am
|
Thank you Kaushal ji for your simple yet kind words. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: vineet
Date Posted: 18/Feb/2007 at 8:27pm
There are innumerable examples of people who are CEOs but are from IIMs (et al included) and those who are CEOs who are not. I think "glorified recruiters" is a more fitting sobriquet for the IIMs. And actually they are not very placement agencies; they need to do a lot of brand-building and marketing. Take this: only IIMA has a full-time experienced person for media relations. I am presently going through the selection process at the IIMs and that is one area where I don't see much scope of improvement. Vineet ------------- "Don't be humble.. you're not THAT great." - Golda Meir |
Posted By: deveshkayal
Date Posted: 18/Feb/2007 at 11:56pm
|
Vineet, u got 98.65 in 04 and 98.1 in 05, right. how much u scored in CAT in 06.Man u r very intelligent in maths and english but u need to brush of your knowledge in business.Thats where i see your weakness.My stengths lies in the later rather than former.Visit pagalguy.com thats where all aspiring MBAs discuss.
Wish u lots of luck... ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: vineet
Date Posted: 07/Mar/2007 at 11:28am
|
Devesh,
Thank you very much for the suggestion but it appears that you are assuming things.. The posts that I have done so far are too less to give you enough information on my profile, strengths and weeknesses, I mean, in terms of say my academics or my knowledge of business; just the way I can't comment on your claim that business knowledge is your strength. My best bet is to take things on face value and not assume anything that is unstated and unverified.
Pagalguy is far from informative.. u wud feel "been there, done that"-types.. wat's ur take on this?
Anyway I scored 99.70 in CAT '06.. Did u too take CAT?
Vineet ------------- "Don't be humble.. you're not THAT great." - Golda Meir |
Posted By: deveshkayal
Date Posted: 09/Mar/2007 at 2:08pm
|
I was saying that bcoz u hv given CAT trice so may b u didnt get well on the GD-PI front....yes u r right one cannot say s&w just from posts..
U r right on pagalguy but sometimes u get ppl who is serious about MBA with whom u can discuss things...
No i did not take CAT right now i m studying CA along with BCom.
How was ur selection process...u must hv got calls from all IIMs...All the best once again.. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: vineet
Date Posted: 13/May/2007 at 2:42pm
|
hi Devesh et al,
That was a year back. And I didn't get any IIM calls then 'coz I had scored badly in one of the sections.
But this year I scored 99.70 and am finally joining IIM-Calcutta..
I got it mostly because of my good performance in the business case we had in the GD.. so don't assume my knowledge in business.
Thanks,
Vinet ------------- "Don't be humble.. you're not THAT great." - Golda Meir |
Posted By: deveshkayal
Date Posted: 13/May/2007 at 10:50pm
|
Congrats...This proves you are one of the smartest of the lot....
My best wishes to you... ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: omshivaya
Date Posted: 13/May/2007 at 11:13pm
|
Well if iit s indeed true, good luck ahead Vineet jee. Cheers!!!! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: vineet
Date Posted: 13/May/2007 at 11:20am
|
Thank you very much Devesh and Om. :-)
@ Om: Pls don't call me "jee".. Vineet is just right.
------------- "Don't be humble.. you're not THAT great." - Golda Meir |
Posted By: omshivaya
Date Posted: 14/May/2007 at 1:12pm
|
Bad habit of mine, can't change Vineet(ji). ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Don't mind.Posted By: Janak.merchant1
Date Posted: 27/Jan/2008 at 6:41pm
|
Hi Ambarish,
R u sure both Ambani Brothers have an MBA Degree?
From which place?
I would be grateful for your reply.
JM ------------- I love my money, not my opinion. So i am ready and willing to change my opinion for the sake of protecting my money. |
Posted By: deveshkayal
Date Posted: 27/Jan/2008 at 7:33pm
|
Anil from Wharton and Mukesh from Stanford. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: PrashantS
Date Posted: 27/Jan/2008 at 8:38pm
| did you know that kids of businessmen have a reserved seat in B schools |
Posted By: kulman
Date Posted: 27/May/2008 at 10:08am
Some interesting names albeit from USA...
------------- Life can only be understood backwards—but it must be lived forwards |