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The Economist : Don't do MBA

Andy Nguyen

Andy Nguyen

Joined
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Business schools have long sold the promise that, like an F1 driver zipping into the pits for fresh tyres, it just takes a short hiatus on an MBA programme and you will come roaring back into the career race primed to win. After all, it signals to companies that you were good enough to be accepted by a decent business school (so must be good enough for them); it plugs you into a network of fellow MBAs; and, to a much lesser extent, there’s the actual classroom education. Why not just pay the bill, sign here and reap the rewards?

The problem is that these days it doesn’t work like that. Rather, more and more students are finding the promise of business schools to be hollow. The return on investment on an MBA has gone the way of Greek public debt. If you have a decent job in your mid- to late- 20s, unless you have the backing of a corporate sponsor, leaving it to get an MBA is a higher risk than ever. If you are getting good business experience already, the best strategy is to keep on getting it, thereby making yourself ever more useful rather than groping for the evanescent brass rings of business school.

Which MBA? | Think twice
 
Interesting article. I wonder if this still applies to the top b-schools. Regardless, it makes me happier than ever that I chose MFE now over a potential MBA later!
 
Reminds me of Henry Mintzberg's pertinent book, Managers, not MBAs. My opinion of The Economist has just gone up.
 
I like this
They would look at the high cost, and note the tables which show that financial rewards are not evenly distributed among MBAs but tilt heavily to those from the very top programmes who tend to go into finance and consulting. Successful entrepreneurs are as rare among MBAs as they are in the general population.
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There are some unmistakable parallels between MFE and MBA programs here. You hear all the high salaries from top MFE programs but you don't hear a thing about the rest of the ever increasing number of MFE programs. University of Minnesota? University of Connecticut? Hawaii MFE? How are they doing?
 
Andy Nguyen said:
I like this

There are some unmistakable parallels between MFE and MBA programs here. You hear all the high salaries from top MFE programs but you don't hear a thing about the rest of the ever increasing number of MFE programs. University of Minnesota? University of Connecticut? Hawaii MFE? How are they doing?
Click to expand...

The U of Minnesota's MFM program is a complete joke. People on this forum who have criticised the Fordham program in past years would wet themselves silly if they saw the U of Minnesota's MFM program. There may be weaker or equally weak programs elsewhere but I don't know of any.
 
Honestly, I know all you quants are really smart and like to show-off but that's no reason to down an MBA. Actually, after reading a few forums over the years it seems as if everyone on here hates any other degree that's not financial mathematics...What you've failed to mention is the distribution of different MBA degrees. For example, an MBA in Statistics, Accounting, Information Systems are actually in big demand...
 
The whole idea that you can make an investment and get a high return with probability 1 is nonsense. Remember CAPM?

Many professional schools would have you believe that by making a huge investment in a professional degree you will be guaranteed a better life. Let's assume they are right. Then MBA/law degrees would essentially constitute an arbitrage opportunity. People from all backgrounds would line up to get those degrees, flood the market, and consequently bring the returns on those degrees more in line with those of other economic activities.

And that is precisely what is happening!!!

There is no free lunch.
 
Andy Nguyen said:
Business schools have long sold the promise that, like an F1 driver zipping into the pits for fresh tyres, it just takes a short hiatus on an MBA programme
Click to expand...

...and that is not all.


One more stone in the MBA garden from very famous investor Jim Rodgres
If You Want To Make A Fortune, Don`t Get An MBA.
http://jimrogers-investments.blogspot.com/2010/11/if-you-want-to-make-fortune-dont-get.html


I guess, the next trend will be: if you want to be well educated and beat the "chinese abitions", do not go study to US, go to Europe or Russia.
But the way, in my homeland in Eastern Europe we have so many Chinese students, and most of them from rich families.
 
Alex Krause said:
Interesting article. I wonder if this still applies to the top b-schools. Regardless, it makes me happier than ever that I chose MFE now over a potential MBA later!
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Alex, check this web-site... it has many anti-MFE articles.
:deadhorse:
 
Stuart Truax said:
The whole idea that you can make an investment and get a high return with probability 1 is nonsense. Remember CAPM?

Many professional schools would have you believe that by making a huge investment in a professional degree you will be guaranteed a better life.
Click to expand...

With probability 1 a.s. (almost surely). :)
 
Outside of a top 10-20 MBA or a key, regional school, the MBA is a waste of time and a joke. You learn zero. Might as well offer crayons and construction paper for most of the classes.
 
Anthony DeAngelis said:
Outside of a top 10-20 MBA or a key, regional school, the MBA is a waste of time and a joke. You learn zero. Might as well offer crayons and construction paper for most of the classes.
Click to expand...

The courses on financial accounting, cost/management accounting, and managerial policy/ organisational strategy (taught in the context of case studies) are all useful but they still leave an intellectually threadbare program that is filled with filler courses (marketing, ethics, management information systems, statistics for managers, etc.). And way too many MBAs are being churned out -- must be over a hundred thousand a year at the moment, only some of whom can find the jobs they think they're entitled to.

But then again, as Andy suggested, there are MFE/MFM programs that are equally meretricious. These joke programs have been set up by sinecured academics with no real world experience, with no understanding of what is even needed in the workplace, and designed merely to part students -- usually gullible Asians -- from their money.
 
Andy Nguyen said:
An admit from NYU Stern explains why he is not getting an MBA. MFE applicants can really use some similar analysis before deciding to get MFE
http://poetsandquants.com/2011/06/30/why-im-not-going-to-business-school/
Click to expand...

Why did the teal deer cross the road?
Because I didn't feel like seeing someone ramble on and on about this thing..

Here's the caveat emptor to an MFE:
You should normally pursue a higher degree of any sort if you're legitimately interested in a subject.
An MFE is effectively about taking some potentially interesting branches of mathematics (probability, statistics, optimization, etc...), and applying them to...shuffling money around. At heart, finance is about investors allocating their money to different ventures of varying risk to get different expectations of return. Financial engineering takes this to the limit of its logical existence, creating instruments that eventually, just become so much math because there's no other way of wrapping your mind about what they mean at all.

Now if you are so fascinated by the applications of math to these esoteric products, then be my guest. Also of note is that even if you decide to switch out of finance, the disciplines you learn from an MFE give you a very nice "in" into other industries, such as web analytics, market research, and so on.
 
Well said, well said llyaKEightSix,
You know I've been thinking the same myself, the use of applied mathematics to shuffling money around.

What I like about analytics it's the application for data mining, gives you a challenge to see an opportunity to be had that you can't see with your naked eye.
 
I believe an MBA program to be useful if you have already worked in the industry for atleast 3-5 years. when you come to these top schools to study mba, you will be interacting with many fortune 500 CEOs. so its a good newworking opportunity. obviously, the price you pay to network with them is expensive. but it pays dividends down the line i believe.
 
Well....Do what you believe in...Pursue your passion . You will do well in life!

'There is room for you to succeed in any field. Just be good at it (don't be happy with average).
 
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