Stanford MBA price tag hits $185K: Highest in the world

December 17, 2012

By John A. Byrne via Fortune   Article

“The total cost of the Stanford program includes two years worth of tuition, fees, books and supplies, mandatory medical insurance, the estimated costs to live and eat in Silicon Valley, and the $4,000 cost for a global study trip. Stanford says that its $23,391 estimate for rent, food, and personal expenses is for a “moderate lifestyle.”

But as often is the case, these estimated numbers by the business schools tend to be conservative. They rarely include the inevitable 3% to 5% increase in tuition during a student’s second year. And they tend to underestimate the “personal costs” of attending an elite MBA program, from expensive dinners out with friends to traveling to ski resorts over long weekends with new student friends.

The actual annual MBA tuition at Stanford is just $57,300, but all the additional costs add up quickly. According to Stanford, they include $2,184 a year in books and supplies, $1,710 a year in “instructional materials,” $963 for “transportation,” $3,600 for medical insurance, and an annual $537 “health fee.”

If a single student decides to live off-campus, Stanford says the cost of the MBA program will likely be $195,580 — another $10,500. For a married student living off-campus, the school says the cost will be a breathtaking $220,822. “Depending on marital status and other factors,” says Stanford, ‘you should budget an additional $30,000 to $47,000 per year for living costs, books, and other expenses.'”


Where are the Main Street-mom-and-pop equity investors?

August 27, 2012

By Barry Ritholtz in The Washington Post Business Section   Article

Where has the retail investor gone?

“Lots of folks are wondering what happened to the Main Street-mom-and-pop retail investors. They seem to have taken their ball and gone home. … We see evidence of this all over the place: The incredibly light volume of stock trading; the abysmal television ratings of CNBC; the closing of investing magazines such as Smart Money, whose final print issue is on newsstands as it transitions to a digital format; the dearth of stock chatter at cocktail parties. Why, it is almost as if America has fallen out of love with equities.

Given the events of the past decade and a half, this should come as no surprise. Average investors have seen not one but two equity collapses (2000 and 2008). They got caught in the real estate boom and bust. Accredited investors (i.e., the wealthier ones) also discovered that venture capital and private equity were no sure thing either. The Facebook IPO may have been the last straw.

What has driven the typical investor away from equities? ….”

“Errors that are inherent in our wetware”

July 16, 2012

By Barry Ritholtz   Article

Top 10 Investor Errors: Cognitive Error

“These are the errors that are inherent in our wetware – namely, the way your brain has evolved over the millenia. Suffice it to say that capital risk decision-making was not a big issue on the Serengeti plains. On the other hand, avoiding getting eaten by lions was.

Hence, Humans have a number of unfortunate tendencies as a result. These tend to  get in our way when it comes to investing:

• We see patterns where none exist;
• We have difficulty conceptualizing long arcs of time;
• We selectively perceive what agrees with our pre-existing expectations, and ignore things that disagree with our beliefs.
• We tend to forget our losers and over-emphasize our winners.
• Our inherent optimism bias turns out to be hard-wired as well — our brains are better at processing good news about the future than bad.
• We actually get a greater thrill from the anticipation of a financial reward than the actual reward itself. (Think what this means in terms of Buy the Rumor, Sell the News)
• We seek stimulus for the dopamine high — regardless of how. Whether you are a Gambler, Alcoholic, Sex Addict, Shopaholic, or Hyper-Active Trader — its all the same buzz.
Story-telling is how Humans evolved to share information (Pre-writing). Thus, we are vulnerable to anecdotes that mislead or present false conclusions unsupported by data.

In short, we simply are not wired for the required risk analysis inherent in investing.”

5 Ways To Double Your Investment

July 16, 2012

Investopedia   Article

“There’s something about the idea of doubling one’s money on an investment that intrigues most investors. It’s a badge of honor dragged out at cocktail parties, a promise made by over-zealous advisors, and a headline that frequents the cover of some of the most popular personal finance magazines. Where this fixation comes from is anyone’s guess.

Perhaps it comes from deep in our investor psychology – that risk-taking part of us that loves the quick buck. Or maybe it’s simply the aesthetic side of us that prefers round numbers – saying you’re “up 97%” doesn’t quite roll off the tongue like “I doubled my money.” Fortunately, doubling your money is both a realistic goal that investors should always be moving toward, as well as something that can lure many people into impulsive investing mistakes. Here we look at the right and wrong way to invest for big returns.”

4 Behaviors That Sabotage Your Investment Goals

May 7, 2012

By Amy Fontinelle   Article

Paying Yourself Last
If you don’t make saving and investing a priority, your account balance will never grow. Paying yourself first means that once a month, or each time you get a paycheck, you set aside a portion of that money for your own savings before you pay any bills or buy anything. …

Not Maxing out Tax-Advantaged Accounts
Taxes take a significant chunk out of your investment gains when you invest through regular, taxable accounts. When you invest through tax-advantaged accounts like IRAs and 401(k)s, your gains grow tax free. …

Paying Too Many Investment Fees
… Here are two common places where fees could be eating into your returns:

  • 401(k) accounts – 401(k)s often have limited investment options and those options sometimes have higher fees than what you’d pay for a comparable investment, if you could shop around. …
  • Frequent trading – For many investments, you have to pay a commission each time you buy and each time you sell. … open an account with a brokerage, like Fidelity or Vanguard, that offers a wide range of investment options with no commissions and low fees. …

Buying High and Selling Low
… It’s incredibly tempting to buy an investment when it’s on the upswing and everyone is excited about how well it’s performing. … There are two good ways to counteract these emotional tendencies. One is to buy a diversified index fund or exchange-traded fund … periodically throughout the year, so that you’re not strongly affected by high and low points in the market. Another is to learn the art of value investing, … buying when a stock is trading at two-thirds or less of its fundamental value – in other words, when it’s unpopular, but the underlying company is still a good bet.”

The money paradox

January 9, 2012

By Martin Conrad   Article

It’s easier to talk contrarian than to be contrarian.

“Studies of investor behavior tell us some surprising things about the decisions they make. Two results are particularly striking. First, 85% of sell or exchange decisions are wrong — the investor would do better by doing nothing or going the other way that 85% of the time. Simple random decision making (with no investment knowledge) would have yielded about 50% good decisions.

The second result follows from the first one: In the 20 years ended 2008, a period that included the best decade of performance ever for stocks, the average stock-fund investor averaged only a 1.9% annual return (due to consistently poor buy and sell decisions) even though the average stock mutual fund returned 8.4% annually over the same period. With compounding, the difference was about ninefold (402% vs. 46%) over 20 years. This is a compelling demonstration of the illusion of control, the mistaken belief that better results come from more-direct, detailed control and using it to make lots of decisions and transactions. …

The economist and investor John Maynard Keynes emphasized that individual investment profits are largely determined by how investors behave at market tops and bottoms — which is where price volatility concentrates, where sudden spikes occur, where the big investment mistakes are made.

The huge losses from buying into popular asset manias near the top at high prices (with no safety margin in case of a decline) and the lost opportunities from selling temporarily unpopular but cheap assets at or near a bottom devastate long-term results because of the powerful effect of compounding, which multiplies the effect of large errors.”

I have no time to think

July 4, 2011

By Peter Bregman   Article

What to Do When You Have No Time to Think

“When we returned to his office after spending an hour together, he had received 138 new email messages. As we talked, the email dings kept ringing out. “How can I possibly keep up?” he asked me.

He can’t. Rajip has close to 10,000 employees in his group. “I have no time to think,” he complained to me.

I have no time to think. Possibly the six scariest words uttered by a leader. But they don’t scare us anymore because they are so commonplace. We don’t need 10,000 employees to feel too busy to think. Almost all of us feel the same way.

It’s not that we’re unproductive; we’re astoundingly productive. We produce deliverables. We make decisions. We create and spend budgets. We direct our teams. We write proposals.

Actually, in some ways, our productivity is the problem. Something’s lost in an environment of manic productivity: learning.

These busy days, we rarely analyze our experiences thoughtfully, contemplate the views of others carefully, or evaluate how the outcomes of our decisions should affect our future choices. Those things take time. They require us to slow down. And who has the time for that? So we reflect less and limit our growth.

Often, it’s only when our lives are forcibly disrupted that we slow down long enough to learn. An illness, a job loss, the death of a loved one — they all compel us to stop and think and evaluate things. But those are unwelcome disruptions and, hopefully, they don’t occur often.”