Is an MBA worth it?

[dabuff]

Hello everyone,

 

I know this may be a contentious topic, but I'm wondering you all think is the value of an MBA for someone aiming to break into investment management.

 

I personally understand that for learning the art of investment itself, one must get his hands wet...actually investing.

 

And from what I can gather, the best value would be a degree from one of the top 5 B-schools. At the same time, it seems that much of the "value" is from a signaling effect from the school brand name/connections made at the school, rather than the learning therein).

 

For every Buffett with an MBA, there is a Munger without one, so I can see both sides of the argument.

 

Thanks for sharing your thoughts!

[jay21]

Discussed a little bit here: http://www.cornerofberkshireandfairfax.ca/forum/strategies/gmatmba/

[merkhet]

I would also note that, in addition to Scott's post, it's not altogether clear that education and/or additional education creates additional opportunities and/or wealth. This is because there is no natural experiment and/or control group. It's not altogether clear that someone qualified to go to college/grad school/professional school, etc. and didn't wouldn't also end up in a similar place than his or her alter ego who did end up getting said education.

 

And this is coming from someone who has two bachelor degrees, a JD and an MBA.

 

As a side note, most MBA programs will teach you nothing about investing correctly and possibly the exact wrong thing about investing. (Columbia is a notable exception.)

[Packer16]

The real question is will the MBA provide you the occupation you want? It is interesting that brought up Buffett and Munger.  Buffett was an start-up fund manager and Munger a lawyer.  Munger became a partner in a law firm and ran a fund and eventually partnered with Buffett.  Many here have other occupations outside fund management and use excess funds to invest.  That is what I do and is another alternative to jumping into money management for others.  The advantage of investing your own money is your constraints are less in terms of investments and gives you a chance to see if you like this type of work and have a continued source of income while you do.

 

Packer 

[ccap]

I think you first need to decided if you are going to work for yourself or someone else.  If you are working for someone else, how you look on paper is worth a lot... so an MBA may be good.  If you are going to work for yourself, what you know matters most.  Having said that, you can learn a lot trying to invest or start a business with the $50+k that business school would likely cost.

[DTEJD1997]

Hey all:

 

I work as an attorney in an affluent suburb of Detroit...

 

I am AMAZED at the number of satellite campuses for schools.  I am also amazed at the billboards & radio ads for schools, especially MBA programs. I also have to question how many of these are really needed.  It seems that every 10th person is going for a GRADUATE degree in this area.

 

It is literally a gold rush for the schools.  They are opening branches everywhere and taking any student who can sign the paperwork for the student loans. 

 

University of Michigan MBA?  OK, sounds good.  Lady of the Lakes night & weekend MBA?  Whut, whut?  Eastern Michigan at Schoolcraft college executive MBA on weekends?  Wayne State in Oakland county?  Who has heard of these schools?  Are these diplomas even worth the paper they are written on?

 

Maybe...maybe not.  One thing is clear.  The value of credentialed education is being tremendously debased.  The market is flooded.

 

The very top tier schools are probably worth it.  Every other skewl?  almost assuredly not.

[TwoCitiesCapital]

Hey all:

 

I work as an attorney in an affluent suburb of Detroit...

 

I am AMAZED at the number of satellite campuses for schools.  I am also amazed at the billboards & radio ads for schools, especially MBA programs. I also have to question how many of these are really needed.  It seems that every 10th person is going for a GRADUATE degree in this area.

 

It is literally a gold rush for the schools.  They are opening branches everywhere and taking any student who can sign the paperwork for the student loans. 

 

University of Michigan MBA?  OK, sounds good.  Lady of the Lakes night & weekend MBA?  Whut, whut?  Eastern Michigan at Schoolcraft college executive MBA on weekends?  Wayne State in Oakland county?  Who has heard of these schools?  Are these diplomas even worth the paper they are written on?

 

Maybe...maybe not.  One thing is clear.  The value of credentialed education is being tremendously debased.  The market is flooded.

 

The very top tier schools are probably worth it.  Every other skewl?  almost assuredly not.

 

This is how I feel. Also, as someone who lives in NYC, it seems that everyone I work with also has an MBA or is planning on going to B-school to get one. Now, most of these individuals did go to top programs so it may end better for them than for most, but generally I am hesitant to do the same thing that everyone else is doing. Maybe an MBA made sense 10 years ago. I question whether or not it will every approach the value of the cost of class as well as the opportunity cost of foregone wages.

 

Then again, when I express these doubts to co-workers, I'm told that it's worth the "experience"....sounds like fuzzy math to me. I imagine it will work out for many. I also imagine it won't workout for many. I don't know which group I'd be in, so I think I'll likely find something else to do with my time and money.

[JayGatsby]

I agree with the prior comments here. From people I've seen, the primary benefit of the MBA is the career services department and the job they can help you get immediately after school. If there is a job you want and they can help you get it then it can pay off very easily. If that position is available to you other ways, the ROI becomes much more nebulous. Once at that first job the second job will come from what you accomplished at the first job, not as a student.  As others have said, that's really specific to the individual.  Where I've seen it be beneficial is for people who are in industry A and want to be in industry B.

[bookie71]

Part of the problem is that the value of a BS degree has been watered down so much it is like a high school degree used to be.  By making the BS easier to get, it doesn't make it better.

jmho

[Munger_Disciple]

Like many others on this board, my own background was in engineering (prior to becoming an investor). I recently met and chatted with a money manager who got his MBA from Columbia. I asked him whether he thought getting MBA was useful. His answer was that it was just a "Union Card". In terms of its use in investing, he thought it was a total waste of time. If the MBA is not from top five  schools, my impression (after talking to him) is that it has no use whatsoever even as a "Union Card".

[Shane]

I tend to agree with Munger_Disciple.  You need to meet the qualification for the job which you want, if that is to work for a hedge fund... a top MBA can certainly help a lot.  Don't necessarily expect the returns from your stock picks to improve after the MBA though.

[Morgan]

Like many others on this board, my own background was in engineering (prior to becoming an investor). I recently met and chatted with a money manager who got his MBA from Columbia. I asked him whether he thought getting MBA was useful. His answer was that it was just a "Union Card". In terms of its use in investing, he thought it was a total waste of time. If the MBA is not from top five  schools, my impression (after talking to him) is that it has no use whatsoever even as a "Union Card".

 

This is also what I have heard from talking to people who have MBAs from Columbia and Harvard. It's great for building a solid network, credibility, etc, but they weren't sure they learned a huge amount that was really as useful as self-study/work experience. Also, they said unless you go to a top five school, it's very likely not worth it.

 

I'm planning on trying to get an MBA myself so all of these threads are interesting to read over. 

[Uccmal]

It would help if the OP told us his present occupation and background (student/working).  I contemplated doing an MBA at various times but:

1) Over time I discovered I could way outperform the markets and 99% of mutual and hedge funds.

2) Doing an MBA would have meant forgoing two years pay that I used for investing and the upfront costs.  Maybe $250,000

3) I was battle fatigued on education from doing an undergrad in Geography and an MHSc in Industrial hygiene (google it).  Nothing directly related to investing in there at all - sometimes it shows but it doesn't seem to impede my results. 

4) I saved and lived below my means alot in my early/mid 30s transferring excess cash into investing.  I stopped putting from my salary 10 years ago (we bought a house/kids etc.).  All the investments grew from the money invested to that point. 

5) Now I live off my investments.  My wife still works but we could easily get her retired - she likes her job and is very conservative and independent.  We each contribute equally to the household (more or less - my investment money has helped buy some real estate)

6) Some luck, some skill - during the last 10 yrs money has been insanely cheap - I locked in the mortgage 4 years ago expecting rates to go up. 

 

A friend of mine whom I met via this board had an undergrad business degree, taught himself to value invest, worked at a couple of mutual funds, before he applied and got a job at a value shop.  The job wasn't listed.  He got hired on the basis of a few value analysis he did as a demo for them. 

 

I am a strong believer that where there is a will, there is a way.  Sometimes my will is lacking or is impeded by fear of the unknown. 

[ccplz]

Complete and utter waste of time.

 

The true value of a brand name MBA (i.e. the brand and connections/network) can be obtained through other means.

[Palantir]

MBA is the best way of getting into investment management especially if you're not in the industry. Of course, I am only referring to top tier MBAs.....:)

 

Just go online, and look at the profiles of the people who are working in the jobs you want to work in. What do they look like?

[jay21]

Complete and utter waste of time.

 

The true value of a brand name MBA (i.e. the brand and connections/network) can be obtained through other means.

 

Not that I disagree but no one has the data to support this. For every networking/blogger/pitch success story, how many failures are there?

 

MBA guarantees a switch with 1-3 years effort with the drawback of a steep price tag. If you want to do big name IB or PE, gl getting it through alternate means.

[SharperDingaan]

If you already have a lot of business experience, the MBA will not teach you anything new.

It will however give you some structure to what you were already doing intuitively. It is worth something - but not the 100K stuff.

 

If you are early in your career, buying the name plate may be worth the cost. Depends on what you plan to with it, but treat it as a limited life union card. If you didn't go with a big 6 school; 5 years out - what you did with your MBA will count for a lot more than where you got it from.

 

Ordinary mortals are far better served going the project versus courses route, doing the whole thing on-line versus taking time out, doing it later in life - not earlier, & using the opportunity to do a deep dive into the emerging technologies. If you intend to work through to the new retirement age of 72, you really need to be retooling by around age 50. But this time - with 25 years of experience to back your new tech, you haven't come to tickle the world's cohunes; you're there to squeeze!

 

So far ... Rod Stewart has had 8 kids by 5 different women - & will probably have a few more before he finally croaks out.

This is just a cheaper version of the same thing.

 

SD

 

[Palantir]

...Unless he wants to apply for a job that requires "Top tier MBA, 5 years experience in IB/PE/HF".

[Uccmal]

If you already have a lot of business experience, the MBA will not teach you anything new.

It will however give you some structure to what you were already doing intuitively. It is worth something - but not the 100K stuff.

 

If you are early in your career, buying the name plate may be worth the cost. Depends on what you plan to with it, but treat it as a limited life union card. If you didn't go with a big 6 school; 5 years out - what you did with your MBA will count for a lot more than where you got it from.

 

Ordinary mortals are far better served going the project versus courses route, doing the whole thing on-line versus taking time out, doing it later in life - not earlier, & using the opportunity to do a deep dive into the emerging technologies. If you intend to work through to the new retirement age of 72, you really need to be retooling by around age 50. But this time - with 25 years of experience to back your new tech, you haven't come to tickle the world's cohunes; you're there to squeeze!

 

So far ... Rod Stewart has had 8 kids by 5 different women - & will probably have a few more before he finally croaks out.

This is just a cheaper version of the same thing.

 

SD

 

Jeez, Sharper... Have you actually tried going to school at 50?  It is not in any way similar to attending school at 25 or 30. 

[boilermaker75]

If you already have a lot of business experience, the MBA will not teach you anything new.

It will however give you some structure to what you were already doing intuitively. It is worth something - but not the 100K stuff.

 

If you are early in your career, buying the name plate may be worth the cost. Depends on what you plan to with it, but treat it as a limited life union card. If you didn't go with a big 6 school; 5 years out - what you did with your MBA will count for a lot more than where you got it from.

 

Ordinary mortals are far better served going the project versus courses route, doing the whole thing on-line versus taking time out, doing it later in life - not earlier, & using the opportunity to do a deep dive into the emerging technologies. If you intend to work through to the new retirement age of 72, you really need to be retooling by around age 50. But this time - with 25 years of experience to back your new tech, you haven't come to tickle the world's cohunes; you're there to squeeze!

 

So far ... Rod Stewart has had 8 kids by 5 different women - & will probably have a few more before he finally croaks out.

This is just a cheaper version of the same thing.

 

SD

 

Jeez, Sharper... Have you actually tried going to school at 50?  It is not in any way similar to attending school at 25 or 30.

 

Rod Stewart would probably have a lot of fun going back to school!

 

Rod, It's late September (OK early October) you better get on back to school!

[Jurgis]

Jeez, Sharper... Have you actually tried going to school at 50?  It is not in any way similar to attending school at 25 or 30.

 

You think so?

http://www.imdb.com/title/tt0090685/?ref_=nv_sr_1

 

8)

[SharperDingaan]

DBA from McMaster ... currently in progress. 

 

Just did the thesis abstract on a block chain_smart contract_derivative application - to manage the financial risk attached to long-term inventory in the whisky & bourbon industries. When its done, I'll build my own Oracle ;D

 

SD