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Business School Question - HBS vs. Columbia Value Investing Program


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Here is a question for the overall community. 

 

Recognizing that b-school is no automatic ticket into the investment management world and that I will still have to hustle, network, and above all perform when it matters.  I was wondering what the community thought of HBS vs. Columbia's Value Investing Program.

 

HBS has the better general brand and a stronger network.  But Columbia's Value Investing Program has a tremendous brand in the investment management world (although its not guaranteed that you can get into the program even after being admitted into Columbia Business School). 

 

I already have a buyside background (albeit more on the private / vc side of the market), and post graduation I want to work in investment management focusing on publicly traded securities.  Ideally I would like to work for a hedge fund or mutual fund after graduation.

 

I would appreciate any thoughts / color.

 

Thanks.

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Personally, I think it would be extremely foolish to go to Columbia with the sole hope of admittance to the value investing program.  Not many of the people who apply gain acceptance into the program, therefore I would choose whichever school you think is best ignoring the value program.  Since Harvard grads are at pretty much every top end fund with large AUM, Harvard is almost surely the best bet, given the choice.  That being said, Columbia is obviously highly respected, so you should choose based on which school you think is best.

 

Just don't bet the farm on getting access to the value program.

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Here is a question for the overall community. 

 

Recognizing that b-school is no automatic ticket into the investment management world and that I will still have to hustle, network, and above all perform when it matters.  I was wondering what the community thought of HBS vs. Columbia's Value Investing Program.

 

HBS has the better general brand and a stronger network.  But Columbia's Value Investing Program has a tremendous brand in the investment management world (although its not guaranteed that you can get into the program even after being admitted into Columbia Business School). 

 

I already have a buyside background (albeit more on the private / vc side of the market), and post graduation I want to work in investment management focusing on publicly traded securities.  Ideally I would like to work for a hedge fund or mutual fund after graduation.

 

I would appreciate any thoughts / color.

 

Thanks.

 

Congratulations, you have 2 great choices.  Assuming money is no object and/or scholarships, etc are taking care of tuition, think of it this way.  You are looking at 2 houses to buy.  Both are roughly the same size and beautiful homes.  The first one sits on a hill with an open view of the ocean and private access to the beach.  The second one is in a nice neighborhood on a tree lined street, but it has a feature that you love that the first home does not.  Maybe that feature is a wine cellar or a pool or whatever would be something you really like.  You're drawn to that feature.  However, what one needs to keep in mind is that an ocean view with beach access is always valuable and will never lack for demand.  You can always add a wine cellar or a pool to the first home.  First home = Harvard; second home = Columbia.  Both are great choices, but going to Harvard provides intangibles and will open doors that no other school can get you.  At the end of the day though you have to live with the choice and should go where you feel comfortable.

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Both of them will allow you to get interviews at all the top investment management firms and hedge funds. It is extremely hard to find talent and the most obvious places to look are at the top business schools, particularly Harvard (brand name), Columbia and Wharton (both known for the finance/investing focus). You will get the interviews regardless of whether you choose Harvard or Columbia.

 

I think if you are dead serious about doing investment management, what matters most is that you learn the curriculum before you go to business school. You should try to be like Warren Buffett when he read Security Analysis nine times and memorized it before taking his first course with Ben Graham at Columbia. My brother graduated from HBS last year, and he said the internship interviews start about a month or two into the first year. You literally have no time to learn anything and you are looking for your job already. Ideally, you get into the firm you intend to work at as a intern and then get a job offer from them by the end of the summer or beginning of your second year. If you fail to get an internship at a buyside firm (and I'm assuming you don't have buyside job experience, which is why you are thinking about business school), it will be far harder to get a full-time offer in your second year.

 

The true value of business school is networking and the prestige of the degree that will automatically open doors. Harvard is probably better for the networking, but both will open all the doors in the investment management world. If I were accepted into both and I had to choose between the two, I would choose HBS because there is no guarantee that you can get into Columbia's value investing program, and it would suck to go to Columbia and not be in that program if that is your intended career path (you would be better off going to HBS).

 

Columbia's value investing curriculum is probably far superior to HBS's curriculum which is far more general as it doesn't have the focused program. But the investing curriculum is fluff anyways. You can easily learn it yourself by picking up a book and reading it. I might be a little biased because I went to MIT and started off as a rocket scientist before switching to investment management, so I find all the math in finance to be trivial. But keep in mind that Buffett says that investing should be easy and Munger openly mocks most business school curriculums.

 

My recommendation is to learn how to invest first. Read Intelligent Investor, Security Analysis, and the relevant books. Read some 10-Ks. Reverse engineer some of the investment theses of the gurus. And actually invest your money. According to my brother, you'd be surprised how many kids going to HBS who want to go into investment management never touched Security Analysis or a 10-K. The number one thing you can do in a job interview is to say "I invest my own money, I am currently invested in XYZ because ...," and you can't do that at the end of your first month of business school when recruiting begins if you haven't done it already well before business school.

 

Also, if you went to a good undergraduate school (you probably did if you are thinking about HBS or Columbia), consider skipping business school all together and trying to get into buyside firm directly. Use your alumni network and the career offices at your alma mater. I almost went to business school because I thought that nobody would hire an engineer/programmer with no academic finance background. However, I managed to get some interviews, some of them at elite firms like Bridgewater, because I was able to convince people that I knew how to invest. That is worth more than having a degree. I raised eyebrows by pointing out that, at the time, the former Merrill Lynch preferred trusts were trading at a 25% discount to Bank of America preferred trusts even though according to both prospectuses, they were pretty much the same thing after the merger. If you have a pretty good undergraduate background, and you say something like that, how can they ignore you? You would stand out more than the business school students.

 

EDIT: I Just saw your previous post indicating that you were accepted to both and not just curious about the difference between the schools. Congratulations! I would recommend that you start preparing for your interviews right now, because recruiting season will start in the Fall as soon as you start school. You want to get an internship at a place that you would be happy to work for after you graduate. That would be the smoothest road in.

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Guest deepValue

It is extremely hard to find talent

 

There is an overabundance of "talent" in the hedge fund world. The supply of capable analysts is only going to get larger as ibanks continue to shed employees. The only way to get a job is through connections or luck.

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I'll be contrarian and say you shouldn't go to either. Careerists are sickening people, generally, and you should focus on your true passion. Considering that investing can be learned without a formal education, you may as well save yourself the cash.

 

The idea that a formal education is useful is true because people believe it is true. It is, in that way, a rational astrology. Do not give in to something that doesn't make sense when you look beyond the superficial - this world needs more drop outs.

 

That said, if you want to be a careerist, you'll be fine at either one of those schools.

 

Scott

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It is extremely hard to find talent

 

There is an overabundance of "talent" in the hedge fund world. The supply of capable analysts is only going to get larger as ibanks continue to shed employees. The only way to get a job is through connections or luck.

 

Then they are not really that "talented."

 

Why?

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I'll be contrarian and say you shouldn't go to either. Careerists are sickening people, generally, and you should focus on your true passion. Considering that investing can be learned without a formal education, you may as well save yourself the cash.

 

The idea that a formal education is useful is true because people believe it is true. It is, in that way, a rational astrology. Do not give in to something that doesn't make sense when you look beyond the superficial - this world needs more drop outs.

 

 

Not necessarily. A top tier MBA like this could be a "catalyst" that helps the OP realize his intrinsic value so to speak. He can learn investing w/o going to HBS, but HBS will give him a good opportunity to land a desirable job. I don't see any harm in going to HBS.

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It is extremely hard to find talent

 

There is an overabundance of "talent" in the hedge fund world. The supply of capable analysts is only going to get larger as ibanks continue to shed employees. The only way to get a job is through connections or luck.

 

Then they are not really that "talented."

 

Why?

 

Lots of analysts are good (maybe good enough) but very few are actually great at what they do.  I just think if they are as good as they think they are then they shouldn't have a problem finding a job. Companies are always looking for good people even in tough times. If the company can Trade up and probably pay a lower wage than before, why wouldn't the company do it?

 

 

all my opinion of course.  but i observed some of this happening at my company during the crisis. im at a large mutual fund company.

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I'll be contrarian and say you shouldn't go to either. Careerists are sickening people, generally, and you should focus on your true passion. Considering that investing can be learned without a formal education, you may as well save yourself the cash.

 

The idea that a formal education is useful is true because people believe it is true. It is, in that way, a rational astrology. Do not give in to something that doesn't make sense when you look beyond the superficial - this world needs more drop outs.

 

 

Not necessarily. A top tier MBA like this could be a "catalyst" that helps the OP realize his intrinsic value so to speak. He can learn investing w/o going to HBS, but HBS will give him a good opportunity to land a desirable job. I don't see any harm in going to HBS.

 

I have no disagreements with anything you just said, so long as he is a careerist.

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Unfortunately I don't see finance community accommodating of dropouts or convectional people. Even though, there are successful ones but the finance community continues to turn away from them. I wish there was more embracing of them but the more crafty firms will get them.

 

I would disagree, investing unlike anything else is based on performance, real tangible performance.  Have an Art History degree and can compound money at 25% a year? You will find a job anywhere you want.  Worked as a line man at a telephone company but are a good investor (Chou) you can have your own fund.

 

I find it interesting how many "great" investors don't have a conventional background.  I haven't seen many interviews where a guru says "I graduated top of my class, then I went to HBS, then I worked as a sell-side analyst for two years, then buyside and worked my way up."  Sure there might be some, but usually the story is more along the lines of "I don't have a typical story.."

 

Top performers can do whatever they want without a formal pedigree.  I don't work in finance, but my company specializes in hiring the top people in my field and less than 10% of employees have a degree that relates to what they excel in.  Most have unconventional backgrounds, but often those backgrounds shape them.

 

The scary thing about this is there is no certainty like taking a well formed career path.  If you are truly excellent you might start in finance and end up owning and running a fleet of container ships.

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I think having good performance is not good enough to find a job in money management because of the game they play.  I think most out performance is from people doing what others will not and thus the game most money managers will not play.  Berkowitz, Chou, Pabrai and McElvaine are outperformers and are all independent investors (they do not work for MM firms).  I think the one thing you need to ask is do you want to play the MM game as you will be influenced by rules of the MM game (diversification and index huging) or do your own thing. 

 

Packer   

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Lots of analysts are good (maybe good enough) but very few are actually great at what they do.  I just think if they are as good as they think they are then they shouldn't have a problem finding a job. Companies are always looking for good people even in tough times. If the company can Trade up and probably pay a lower wage than before, why wouldn't the company do it?

 

Do you believe security markets are efficient? Being a value investor, you likely do not. Then why would labor markets, with far more restrictions, behavioral biases, transaction costs, asymmetrical information, and minimal feedback mechanisms be efficient?

 

I am biased in the other direction as I see people with little or no innate talent constantly get jobs based on solid resumes which further burnish their credentials. Employers want experienced candidates who can operate quickly with minimal oversight. Talent in my opinion is of little importance in getting a job, but it can help you excel there. You can call me disgruntled, but my opinion stands. I have had interviews with good investment firms and they are all like, "I like the way you think...but uh you don't really have much experience doing this". O well.

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I find it interesting how many "great" investors don't have a conventional background.  I haven't seen many interviews where a guru says "I graduated top of my class, then I went to HBS, then I worked as a sell-side analyst for two years, then buyside and worked my way up."  Sure there might be some, but usually the story is more along the lines of "I don't have a typical story.."

 

 

I disagree, I think this is very much the most common story. The "unusual cases" are sticking out in your mind precisely because they are unusual.

 

You can be an undrafted player or a 6th round draft pick and become a superstar quarterback. It is easy to think of Tom Brady or Kurt Warner but most NFL QB's are high draft picks who were highly touted college players.

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Lots of analysts are good (maybe good enough) but very few are actually great at what they do.  I just think if they are as good as they think they are then they shouldn't have a problem finding a job. Companies are always looking for good people even in tough times. If the company can Trade up and probably pay a lower wage than before, why wouldn't the company do it?

 

Do you believe security markets are efficient? Being a value investor, you likely do not. Then why would labor markets, with far more restrictions, behavioral biases, transaction costs, asymmetrical information, and minimal feedback mechanisms be efficient?

 

I am biased in the other direction as I see people with little or no innate talent constantly get jobs based on solid resumes which further burnish their credentials. Employers want experienced candidates who can operate quickly with minimal oversight. Talent in my opinion is of little importance in getting a job, but it can help you excel there. You can call me disgruntled, but my opinion stands. I have had interviews with good investment firms and they are all like, "I like the way you think...but uh you don't really have much experience doing this". O well.

 

 

I completely agree with you.  It's nearly impossible to get into the industry without experience, the "right" background, and incredible connections.  I understand your frustration.

 

My post relates to deepValue's comments about analysts coming out of the investment banks due to layoffs. Most of the time, these employees are from the "right" school and have some experience so if they are really are actually good then they are more likely able to find a comparable job on the buyside...

 

 

There is an overabundance of "talent" in the hedge fund world. The supply of capable analysts is only going to get larger as ibanks continue to shed employees. The only way to get a job is through connections or luck.

 

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I'll be contrarian and say you shouldn't go to either. Careerists are sickening people, generally, and you should focus on your true passion. Considering that investing can be learned without a formal education, you may as well save yourself the cash.

 

The idea that a formal education is useful is true because people believe it is true. It is, in that way, a rational astrology. Do not give in to something that doesn't make sense when you look beyond the superficial - this world needs more drop outs.

 

 

Not necessarily. A top tier MBA like this could be a "catalyst" that helps the OP realize his intrinsic value so to speak.

 

Totally agree with this.  As long as we're dropping credentials, I went to a top five engineering school in my specialty.  Because I went to that school, I was offered some pretty sweet jobs fresh out of school.  The recruiters came to us.

 

I was better than most when I left college, but then I started working with people who were insanely good at what they did.  Like genius good.

 

I still pale, grossly, in comparison to those guys, skills-wise.  But being around them for just a few years made me much, much better at what I do.  If you can jump start your investing career by getting a job with geniuses, do it.

 

And on HBS vs. Columbia.. Well let's say that as Columbia is to HBS, the school I went to for engineering is to MIT or Stanford.  *In my specific profession*, if I apply to a job I *always* get an interview.  People know what it is.

 

However, I have a friend from my school who's trying to switch careers.  He has a 3.8+ GPA, and multiple degrees from this school, all of which he got an undergraduate.  Insane credentials.

 

Now that he's trying to switch careers, no one *outside his specialty* is familiar with the school, or they think it's a much lower ranked school than it actually is.  So instead of getting *every* interview, he's having to fight for them.

 

If you go to Columbia, and you ever want to do something besides value investing, this same thing could happen to you.

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