Friday, January 11, 2019

Back to Class: A Teaching Manifesto!

I am convinced that each of us is granted moments of grace, where, if we are open to the possibility, we find out what we are meant to do with our lives. For me, one of those moments occurred in the second year of my MBA program at UCLA, when, cash poor, I decided to be a teaching assistant for a quarter to earn some money. At the time I made that decision, my plans were typical of many of my MBA cohort, to get a job in consulting or investment banking, and to make my work up the corporate ladder, but the day that I walked in to teach my first session, I knew that I had found my calling. I was going to be a teacher, though I was not sure what I would be teaching, or to whom. As fate would have it, I found myself fascinated by finance, and I ended up as a finance professor at NYU's business school. I have never regretted that choice, but when asked to describe what I do, I still tell people that I am a teacher, not a professor, a researcher or an academic.

Back to the Classroom!
Starting in 1986, I have been teaching almost every semester at Stern, but I have had a break of almost a year and a half from my class room teaching, the first year representing a long-delayed sabbatical and the last half year reflecting a choice that I made to do all my teaching in one semester this academic year (2018-19). During that period, I continued to teach my short-term (2 to 3 day) classes in different parts of the globe, and while I have enjoyed these visits immensely, I have missed my regular classroom. I am therefore looking forward to a new semester and three new classes this spring, a corporate finance class that I teach, primarily to first year MBAs, a valuation class, an elective for mostly second year MBAs, and another valuation class for undergraduates in their sophomore, junior and senior years. If you are not at Stern, you will not be able to sit in the class  but through the wonders of technology, you can still take these classes. With no further ado, let me describe them and offer you the choices.

Corporate Finance (MBA)
If there is one class in finance that everyone, no matter what their paths in life or business may be, should take, it is corporate finance. Corporate finance is a class that covers the first principles that govern how a business should be run and its reach is complete. Every decision that a firm makes is ultimately a corporate finance decision, no matter which functional area (marketing, production, personnel) it originates from, and that is the perspective I take in the class. I teach the class around what I call my big picture page, where I classify business decisions into investing, finance and dividend groupings and frame how to make those decisions with an end objective of increasing the value of the business.
Class webpage
You will notice chapter numbers and sessions under each topic, with the chapters representing chapters in my Applied Corporate Finance book, a book that I loved writing but one that is so hopelessly over priced that I do not require it for my own class, and the sessions showing the sequence of the class through the 26 sessions that start on February 4, 2019 and end on May 13, 2019. The class meets every Monday and Wednesday during this period, barring the break week of May 16-23, and the syllabus for the class can be found at this link. If you cannot be in these classes in person, don't fret since the classes will be recorded and be available for you to watch, not in real time, but about 2-3 hours after each class is done. To follow along with the webcasts (each about 80 minutes long), you can also access the slides that I use for each class, as well as additional material. Finally, I demand a great deal of my class (weekly puzzles, add on videos, exams and a project) and if you want, you can also do the puzzles, take the exams and do the project, though you will have to grade yourself (with a template that I will put online). You can even read the emails I send my class, and I send about a hundred over the course of a semester, at this link. If you prefer your videos on YouTube, you can try the playlist for the class, and if your preference is for an iTunes U version, this link should take you to the site. The good news is that it will cost you nothing (other than your time and perhaps a few relationships) but the bad news is that you will not get any official certification, if that is what you are looking for.

Valuation (Undergraduate and MBA)
I have a fondness for this class, since I created and taught the first full-semester version of it, at any business school, in 1987.  I was told then that there was not enough "stuff" in valuation to fill a class, and while that might have been true at that time, I have found plenty to fill in the gaps since. As the title of the class indicates, this is a class about valuation. Valuing what, you might ask, and my answer would be "just about everything" from stocks to bitcoin to the Kardashians. The picture below captures the broad reach of the class:
Class webpage
As I teach it, this is a class that is not only about valuing assets but also pricing them (I am afraid that you have to sit in on the class to find out the difference) and it looks at valuation/pricing from a variety of perspectives (investors looking at a stock, managers using value to guide decision making and even accountants writing disclosure and accounting rules). As those of you who read my blog know, my fidelity is to intrinsic value, but I try to keep an open mind on different perspective and approaches in this class.

As with the corporate finance class, we will meet every Monday and Wednesday for 14 (15) weeks, starting February 4 (January 28) for my MBA (undergraduate) class. If you are wondering which version to follow, I will save you the trouble, since the classes are identical in content and delivery, since I don't believe that there is any reason why I should challenge a bright 21-year old less than a bright 28-year old; age and work experience can give the latter more perspective but this is often offset by the extra energy and curiosity that youth brings to the table. The links that you can use to follow the class are in the table below for both versions of the class:

Webcast pageYouTube PlaylistiTunes U classStartsEnds# Sessions
MBA Valuation
Undergraduate Valuation

With both versions of the valuation class, I will also be posting what I call my valuation of the week, a company that I will value, with links to the excel spreadsheet and the story behind the value. I encourage you, if you are taking the class, officially or unofficially, to take my valuation and make it your own, changing the story and the inputs, and then recording your valuation in a shared Google spreadsheet. In a world where crowds decide what movies are successes (Rotten Tomatoes) and which restaurants we eat at (Yelp reviews), we can create our version of crowd valuations. It is an optional exercise, but the more people who participate, the more fun that we can have.

Other Options
I am under no illusions that you are sitting around, wherever you are in the world, with nothing better to do than watching two long sessions each week from February through May. Watching long lecture videos on my tablet is not my idea of fun and while some of you will start with the objective of sitting in on the class, life will get in the way. There are three options that you can consider, depending upon your constraints:
  1. If time is your constraint: One of the advantages of taking the class or classes online is that you do not have to do finish the class in May 2019. In fact, the webcasts for the class will stay on for at least another year after the class ends. So, if you like the long class format, you can stretch the class out for longer, if all you need is more time.
  2. If format is your concern: If you find your attention lagging or your brain decomposing because the lectures are too long, I have created online versions of both classes (plus a third one on investment philosophies), where I have compressed my 80 minute sessions into 12-15 minutes each. Without giving away any trade secrets, and at the risk of discounting the value of an MBA, it was not difficult to do. As with the regular classes, these are still free, still come with slides and post class quizzes but offer no official certification.
  3. If you want accreditation: Even if you take my classes online religiously, mastering every nook and cranny of the topic, and acing every quiz, I do not have the bandwidth or the authority to hand out accreditation or certificates. Three years ago, I remedied this, with the help of NYU, by creating certificate versions of the online classes (with shorter duration videos). The pluses are that the videos are more polished than the ones I created for the free version, there is more administrative support and an active message board where you can chat with others taking the class and you will get a certificate at the end of the class. I will also, at least for the foreseeable future, also do live hourly WebEx sessions once every two weeks and grade your  projects.  The minus is that NYU does not give away certificates for free and if you get sticker shock, please don't make me your target. The decision on whether the certificate is worth the fee is yours to make, and the links to both the free and the NYU certificate versions are below.

Online classNYU Certificate Online class
Corporate Finance
Investment Philosophy

Finally, you are always welcome to pick the parts of each class that interest you and ignore the rest. The end game is learning, and what interests me may not interest you.

Bottom Line
I know that there are some who say that those who can, do, and those who cannot, teach, and I have been told that or variants of it multiple times. I don't mind the insult, since I have a thick skin, but I know that there is nothing else in the world I would rather do. I answer to no one (other than my wife), pick when or where I work (for the most part), get a chance to change how people think and make a decent living. If your desire is to manage other people's money, be an equity research analyst or investment banker, or to start and run your own company, I wish you the very best, but I am lucky to be doing what I love, and I would be foolish to trade it in for more money or prestige. At the risk of recycling a cliche, I have only one life to live!

YouTube Video

Class Links
a. Full Semester Classes (Spring 2019) (Free)
  1. MBA Corporate Finance Class (Spring 2019) (Free)
  2. MBA Valuation Class (Spring 2019) (Free)
  3. Undergraduate Valuation Class (Spring 2019) (Free)
b. Online Classes (Free)
  1. Online Corporate Finance Class (Free)
  2. Online Valuation Class (Free)
  3. Online Investment Philosophies Class (Free)
c. NYU Online Certificate Classes (Not free!)

  1. NYU Online Corporate Finance Certificate Class
  2. NYU Online Valuation Certificate Class


David Goodman said...

I too miss your teaching ...
MBA ‘88

Thiyagarajan Maruthavanan (Rajan) said...

Thank you for putting this out. Enjoyed all the past course materials. One of my most favourite book is stories and numbers. Look forward to going through this course again.

Ken Wang said...

First, thank you for taking the time to teach anybody willing to learn. I was hoping you could clarify something for me. The valuation of a large but still minority voting interest frequently has a significant minority interest discount to reflect the concept that a share may he worth less because it does not have a controlling interest. Why is a 40 percent interest discounted some large percentage but a .00004 single share interest valuation rarely seems to reflect this same concept? Once again, thank you for always being willing to teach.

Corrado B. said...

I wish more professors were like you . Following you since 2007 . Long life Professor . Corrado from Italy