What I learned at b-school: Week 9 … and 10

I’m running a little behind on my weekly lessons. Blame Halloween. Blame an insanely hard finance case. Blame a networking/job hunting/interview prepping frenzy that is November. Just don’t blame me. I’m clearly having inventory management issues.

Here you go, two weeks of learning for the price of one:

It’s not about you. This is my friend Leslie’s mantra. Every time one of us gets our nose out of joint about someone who’s wronged us – ex-boyfriend, annoying coworker, cruel boss – she often reminds us: “It’s not about you.”

And you know what? It usually isn’t about us. The crappy behavior we’ve received often has nothing to do with us. Instead, it’s often about experiences or forces beyond our control.

Turns out macroeconomics is the same way.

Our professor told us this week to stop thinking about the economy in terms of what we would do. Maybe you would take that $5,000 bonus and stash it away in the bank. Maybe you would cheat on your taxes to avoid paying the government. But macroeconomics is not about what you’d do. It’s about what the typical person would do. And if you try to base it on your personal choices, you’ll never get the big picture.

Diversification is something for nothing. One stock alone has a risk. Another stock alone has a risk. But somehow – magically! – when you put the two together, their total risk is less than their individual risks. You haven’t done anything to lower the risk. You’ve just diversified (the magic word in finance, I’m learning). And that simple action gets you something (less risk) for nothing.

Put all your money in an index fund. I have to admit, I learned this lesson years ago from the lovely folks over at the Motley Fool. But it was nice to have that lesson confirmed by finance class. After spending a class talking about mutual funds, our professor pointed out that most mutual funds only slightly outperform the market – and any gains you get are quickly gobbled up by fund fees.

Even missiles have a supply chain. This week we learned about supply chain management and how hard it can be to get inventory where you need it when you need it (more on that later). At the end of class, some folks were sharing their real-life experiences with supply chains. MBARenee talked about manufacturing office supplies for Wal-mart. Another guy talked about cigarette distribution. And then the former Apache helicopter pilot in our class raised his hand.

“I used to be involved in supply chains when I was in charge of ordering ammo,” he said. “We had one missile that was really popular and if we ran out of stock, it was impossible to catch back up.”

Needless to say, his example literally blew everyone else’s out of the water.

Food tastes better – and costs less! – on small plates. It had been awhile since any of us had eaten a real meal out, one that didn’t involve ordering at a counter and eating something wrapped in deli paper. So when we didn’t have study groups on Thursday night, my very smart friend Sarah suggested dinner out at Mas, a tapas place.

The food was fantastic. It had been ages since I’d eaten tapas and I’d forgotten how great it is to try a bunch of different things and not get bored with what’s on your plate. We had a constant stream of yummy food coming to the table – bacon-wrapped dates, duck medallions, seasoned shrimp, a salad that was “spanked” by mustard, according to the menu. And, best of all, after a big pitcher of sangria, a full meal and dessert, the bill was only $30 each. Including tip. Score!


About missmba

What happens when a language-loving, mathphobic liberal arts major goes jumps on the MBA train. Follow my adventures at a top 20 business school.
This entry was posted in Classes, Economics, Finance, Learning, Social life, Stress. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s