Not enough student interaction. There were a lot of presentations - one after another, and a lot of student panels. But it was all too structured -- it felt like a conference at a hotel, not an admit weekend. It's hard to ask questions to a panel of 7 students in front of 120 other admits - not because you are embarassed, but because your questions might be a bit too specific to really take up time. This was dissapointing but all the evening drinking events made up for it.
LEAD looks mighty silly. It's exactly what you'd expect from something called LEAD - and it reminded me of a corproate team building retreat. I was waiting for them to ask us to fall backwards and have people catch us to build trust. It wasn't that bad, but they did have us do a little event where we had to get across an invisible lake using only file folders we could put on the ground. You basically had to work as a team to do it - basically it was a LIFO problem. It was pretty silly and I didn't really enjoy it. Maybe I'm too cynical about this stuff, but it just felt so cheesy.
As for the mock class, I'll walk you through that -
" How do you define the price of capital? You buy something at time t, lets call that Pt, but you own it for a while and then eventually resell it, right? So really, the price of capital isn't the price you pay, its the rental price. How do you define the rental price? "
(some students guess)
"Correct. Pt - P(t+1) gives you the price. But that gives you the price of something new today and something new tommorow, so you ahve to account for depreciation. How might an economist figure that out?"
(more guesses)
"No, you are all wrong. See, you'd take P(t+1) divide it by Pt giving you 1 - delta, thus the differential in depreciation in one year. Now, that gives us the rental price of Rt = (1-delta)Pt.... bla bla... but whats wrong with this formula?"
(more guesses)
"Right, time value of money. Thus how do we account for it?"
(more guesses)
"Correct, the value of one dollar today is 1/1+r ... where r is the itnerest rate, etc, thus divide by 1/r, we now have Rt = Pt - P(t+1)/1-r etc..."
It went on like that. The professor went on to discuss the gasoline market in Hawaii, or specifically the gas station market and real estate, and how the true value of capital is defined not by its price but by its rental price. He explained how the relationship of Pt - P(t+1) to Rt varied greatly depending on what were talking about. Cars depreciate thus P(t+1) < Pt, but real estate does not, in fact, it apprecaites, so in fact the sign of Pt - P(t+1) would be negative. Meaning that real estate is often decreasing the rental price of capital wheras the a car has much higher rental price. He used this to explain why when the Haiwaan real estate market didnt' do well gas stations started closing. It seemed paradoxical after all - its just land, why would it cost more to run a gas station in a down market than in an up one? Cars drive all the time regardless of real estate, etc. We ended up with some kind of formula like
Rt = r(Pt)+Pt(1-delta)+ (P(t) - P(t+1)/(1+r))
something like that, I don't remember it exactly.
He then draws some Supply and demand curves to explain the relationship of capital to labor, and particularly the policy effects of taxing capital at higher rates than you might now. This is all relating to an opening statement about why we have increasing income gaps in the US. He goes on to show hte affect of taxes on capital by shifting the equilibriums and elasticity of the curves - and here I lost him, somehow by impacting the tax of Rt, he suggested that the net result would be a loss in labor wages, a relationship I didn't fully follow.
I say this is both good and bad because frankly, I was astounded at the amount of stuff he covered in an hour with almost no explanation - I mean, the guy jumps right into price elasticity halfway through and just adjusts his diagrams - but he never really explained why he changed the slope in the way he did. That's fine if you know economics, its not complicated, but there must have been people in the room that didn't, or that didn't remember it. I was also shocked how quickly he moved from a discussion of appropriate policy to wage gaps into formulas. For a school trying to dispell the myth of being a quant jock friendly place, it seemed like the wrong approach. Moreover, his subject choice seemed overly esoteric. The policy implications of taxing capital on affluence gaps in the US? It seems, I don't know, a bit left field. I would have thought he could have found something a bit more down to earth.
The scary part wasn't really the math - it was just algebra - the scary part was how much stuff he just assumed people understood without any explanation:
Time value of money
Depreciation of Capital
Demand and Supply Curves
Price Elasticity and inelasticity
The relationship of capital to labor and wages
Thats a lot of basic concepts that I can't imagine everyone knew. There had to be some engineers in there or people not from the business world who just wouldn't have had that exposure to some of those concepts. If this class was an indication of what you are expected to know coming in, or of how fast most classes move, that's a bit scary. Even with an economics background.
So what was good about it? He was funny. A good professor and pretty hilarious. He asked someone to define capital and they answered "anything you buy" (actually not a terrible answer really but...) so the professor says "is a strawberry capital?" "how about a haircut?" "If it is, then when your hair grows back, I guess that's depreciation?" (which frankly, was really funny when he said it). He also did a really good job of showing us how what you think might make sense is actually the exact opposite of what you should do. He talked at length about how they teach you to think - they don't focus on fads, but rather on core fundamentals that will allow you to solve any problem in the future.
So what about all the other good stuff from this weekend?
The admits are awesome people. I got along with all of them. The students I met and the DSAC people I met were all incredibly nice. I got to talk to senior staff for almost an hour about all sorts of stuff, met a couple really interesting professors. Was pleasantly suprised that the admits weren't all dorks (in fact, none of them seemd to be) and generally had a great time drinking and eating myself into a stupor two nights in a row. I left last night at 2am, and the party was going strong.
I was impressed by how well the students said they managed to balance their life there - they didnt come to campus 5 days a week, and they all went out frequently. They all had impressive internships lined up, and I was pretty blown away by some of what they had to say about the GSB.
I was also really impressed by the people at Polsky, they had their sales pitch DOWN, and they knew how to sell it. Similarly, the entire support structure at the GSB seemed very very polished. Career svcs, student group support, etc, everything was incredibly well organized and orchistrated. You definetly got the impression that the school was on top of it's game in EVERYTHING not just in one area. They knew where they were going, they knew what they were going to do, and they knew how to get there. I don't really know how to explain it - everything just seemed like it was supported - there was no missing leg.
This is probably especially true with the careeer services part. I was really impressed. They have winter mock interviews (winterview's) and mocktails (teach you how to handle cocktail receptions), video and audio taping equipment to see yourself in mocks, a huge library full of information on companies, interview reports etc, competitive knowledge, strategy, lists of alumni, support staff for external searches, I mean you name it, these guys had it. Everything seemed to have been thought of.
A bit more about the professors I met. If you ever want to feel completely retarded, go talk to one of these guys. They excuded intelligence in a way that I can't even begin to describe.
Speaking of which, all this business of forced curves came up and I was happy to hear from students that basically, it's impossible to get a C. That is, just about everyone gets a B. Getting an A is hard, but getting a C is too. They said the exams were tough and low scores are the norm. The mean on some guys regression final was like 31%. Thats pretty low. In other words, don't stress about the classes, everyone does OK, and with GND, you don't have to worry very much.
So to summarize:
The pros:
* The people
* The culture
* The support network and staff seem absotutely top notch - just WOW
* The faculty seem insanely intelligent
The cons:
* Class looks like it might be pretty hard if you don't brush up or learn fast.
* Not enough one on one first/second year student interaction with admits
Jun 10
24 Feb 2007, 05:45
