<p>Stanford, Berkeley and MIT are expected to send grads to Silicon Valley because the orientation of their grads are going towards the field of technology, IT, sciences, engineering. I guess nobody here will question that those schools are the top 3 schools for such fields. On the otherhand, the top 3 feeder schools to Wall Street are Harvard/Penn/Columbia.</p>
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Harvard and the like would be more expensive than State Us, in general.
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<p>Actually, that is pretty typical for those with relatively low family incomes. The wealthy elites have long provided generous financial aid to such people, so that the cost of attending is lower than state college with much lower tuition. Right now these elites are in an arms race to further cut the cost to low and now middle income families. Many have eliminated loans as part of their financial aid packages (so if you qualify for aid at all, all of the aid is in the form of grant), or have done so for families with incomes as high as the national median, or even higher. In this way, the rich elites are making it impossible for the less wealthy elites to compete for this group of students.</p>
<p>also consider that HYP and MIT are the only universities (there are also two other LACs) that offer need blind admissions for all applicants (not to mention the other Ivies that offer need blind / full need)</p>
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Stanford, Berkeley and MIT are expected to send grads to Silicon Valley because the orientation of their grads are going towards the field of technology, IT, sciences, engineering. I guess nobody here will question that those schools are the top 3 schools for such fields. On the otherhand, the top 3 feeder schools to Wall Street are Harvard/Penn/Columbia.
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<p>But having lived on both coasts and worked with people who went to all these schools and who worked in finance and others who worked in tech, I can tell you that the truth underlying this article is that in many more of the higher echelons of the economic hierarchy on the East Coast -- e.g. the world of finance -- on a much more regular basis people will ask you where you went to school, and will put you in a pecking order accordingly (why else would they ask?). This is much greater preoccupation of folks (on CC as well as those from) the East Coast. In Sili Valley, as a general rule, it's much less part of what people care about or focus on. And for that reason, I'd say it's less clubby and more of a meritocracy. What is your personal track record is the focus much more than are you a fellow Crimson, Quaker, Columbian, MITer, Bear or Cardinal (I don't know all the mascots, apologies). And the difference in culture is reflected to a great extent in the meat of this article. I myself suggested perhaps Stanford-Berkeley-MIT is the Ivy League of Sili Valley, but I would not say there is an equivalence with respect to how the clubbiness of certain industries on the East Coast translates to concentrations of graduates at the upper echelon of those industries...</p>
<p>Harvard - Crimson
Yale - Bulldogs
Princeton - Tigers
Brown - Bears
Columbia - Lions
Cornell - Big Red
Dartmouth - Big Green
UPenn - Quakers</p>
<p>Stanford - Cardinal
Cal - California Golden Bears
CIT - Beaver
MIT - Engineers (mascot is also a Beaver; athletic teams are known as Engineers)</p>
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Absolutely disagree. If we agree that the alternative investment class is here to stay (for institutional investors) then the volatility in the market would suggest that the fee structure for the most successful / well known managers will remain. There will be a "flight to quality" -- and in such an event, the elite hedge fund managers will be in demand more than ever. This coupled with the fact that we are now inundated with a huge number of funds would only strengthen this thesis.
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<p>I agree with this. My only objection is what is meant by an 'elite' hedge fund manager in this context. Elite seems to tautologically mean a guy who is able to generate a lot of investor interest, which is not necessarily the same as a guy who is actually able to generate high returns. In other words, what matters is perceived ability - not actual ability - to generate high returns that ultimately matters. Due to the long-term nature and lack of liquidity of any individual fund, by the time investors figure out that they are not going to earn high returns, the fund managers have already been paid very comfortable management fees. </p>
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what the study really shows is that the prestige factor of where one went to school is largely irrelevant at least in Silicon Valley, particularly where one went to undergrad.
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<p>Well, actually, speaking of Silicon Valley, it is rather astounding to find the number of venture capital GP's who have ties to Harvard and Stanford, and to some extent Wharton, MIT and Yale. </p>
<p>But more to the point, while I agree that the prestige factor * per se* probably matters less in Silicon Valley, what matters more is the social networking aspect of a particular school. Let's face it. Silicon Valley main advantage is that of social capital. There's a big reason why so many innovations come out of Stanford, and it's not directly because of Stanford's prestige. It's really because dynamic, entrepreneurial people are able to meet other dynamic, entrepreneurial people at Stanford. Now, that's somewhat related to the prestige of Stanford in the sense that the Stanford brand name draws in top people, and then those people are able to meet each other and devise new business ideas. But it's really the social networking that is the true value-add.</p>
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I agree with this. My only objection is what is meant by an 'elite' hedge fund manager in this context. Elite seems to tautologically mean a guy who is able to generate a lot of investor interest, which is not necessarily the same as a guy who is actually able to generate high returns. In other words, what matters is perceived ability - not actual ability - to generate high returns that ultimately matters. Due to the long-term nature and lack of liquidity of any individual fund, by the time investors figure out that they are not going to earn high returns, the fund managers have already been paid very comfortable management fees.
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<p>Agreed....</p>
<p>This is precisely why someone like John Meriwether (even after the LTCM fiasco) can come back to the market and launch a quarter of a billion dollar hedge fund (which is now about $3bn). But let's make no mistake. These guys truly are brilliant -- the best in the business. That is what they are getting paid for -- out of the box thinking -- capitalizing on opportunities that others don't see.</p>
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The first iteration of Google was a Stanford research project that was handed to them by one of their advisors. If they had never gone to Stanford, they wouldn't be be billionaires right now.
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<p>Yes, but it's graduate school, not undergraduate.</p>
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got into both their flagship state school and Harvard, and actually found out that Harvard would be cheaper than the state school, once financial aid was factored in (as these guys came from relatively poor backgrounds).
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<p>Not if you don't qualify for aid. Lots of people don't.</p>
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Well, actually, speaking of Silicon Valley, it is rather astounding to find the number of venture capital GP's who have ties to Harvard and Stanford, and to some extent Wharton, MIT and Yale.
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<p>Yeah, I noted this earlier about Stanford and Harvard. However, when I did a non-systematic search (Sequoia and Kleiner, Perkins; hardly a vast sample), I was actually surprised at how few had ties to those schools given the reputation of the industry. A marked difference, for instance with the very Ivied Venrock, an important and old East Coast venture firm with very few non-Ivy staff. So, even amongst the very clubby venture community, the Valley still seems to be significantly less clubby at least than East Coast venture firms.</p>
<p>I hate articles like these that promote mediocrity. Why can't we just encourage people to aim high? BTW, a better comparison would be the average salary of ivy league grads versus the that of a state school grad. I remember reading somewhere that the average salary of Wharton undergrads is 400K 20 years after they graduate.</p>
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I hate articles like these that promote mediocrity.
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<p>Actually, rather than promoting mediocrity this article is celebrating meritocracy. Where did you get the notion this article was aimed at creating a ranking based on comparisons of the sort you are suggesting which grads on an apples-to-apples basis do better? I think you brought that to the table, though you probably understandably mislead by the headline and the lead-in. If you read the article and looked at the data, all it does is show that the Valley has an incredible variety of sources of talent beyond the usual suspects Stanford, Berkeley, MIT, and some states and Ivies. And what matters is you on-the-job performance. If you think this promotes mediocrity, you live in a very narrow world, IMO.</p>
<p>This thread is stupid. First, why are we talking about hedge funds. Fascinating... :) </p>
<p>Second, anyone who thinks you can't succeed if you go to a state school is blinded by prestige and ignorant to the fact that it is you what makes your education what it is. There are great professors everywhere; there are brilliant people everywhere. </p>
<p>The difference is this: </p>
<p>The difference is the concentration of smart people
The difference is the number and availability of interesting classes
The difference is the attitiude of your peers
The difference is the attention you get at a small private (or state!) school<br>
versus a larger one
The difference is how hard you have to to work to seek out that great
education, attention from professors, and academic-minded peers. </p>
<p>In short, the difference is often the experience, and not just the results. </p>
<p>Let's also not forget that it's just state vs. ivy league. There are other extremely prestigious private schools that give the ivies a run for their money. And there is a big difference between Oregon State and Cal. </p>
<p>And that many small private schools devote many professor resources to large grad programs, that some prestigious private schools are very large, and that many small state schools do exist.</p>
<p>Afan -- about financial aid. That is true if you have an extremely low income (sub 30 or 40k, with dependents). Otherwise in state is usually cheaper. If you are talking out of state, which many people must travel to in order to get anywhere good in the public system, then yes, you are right. </p>
<p>I know princeton doesn't offer loans. Who else does this?</p>
<p>We also need to look at the percentage of those extremely low income families that actually send their kids to Princeton.</p>
<p>the prestige -- many more schools offer need blind and full need met.</p>
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anyone who thinks you can't succeed if you go to a state school is blinded by prestige and ignorant to the fact that it is you what makes your education what it is
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<p>To my knowledge no one in the history of CC ever made such a statement, but people love to post this on every thread that happens to mention "prestige" or the Ivy League.</p>
<p>Man, do people need to get a new Strawman... this one is worn down to the last, er, straw... <em>yawn</em></p>
<p>That's what this thread is suggesting people think. Don't worry about Ivies! You'll be okay at a state school too! As if people don't know that is the case.</p>
<p>Or rather, as if people should know that is the case.</p>
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Yeah, I noted this earlier about Stanford and Harvard. However, when I did a non-systematic search (Sequoia and Kleiner, Perkins; hardly a vast sample), I was actually surprised at how few had ties to those schools given the reputation of the industry
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<p>And you may be even more surprised to find how even fewer have ties to any particular public school.</p>
<p>You talk about Kleiner Perkins, so let's talk about it. The full name is Kleiner Perkins Caufield & Byers. Of those 4 guys, 2 of them (Perkins and Caufield) are Harvard MBA's and Byers has a Stanford MBA. In fact, among the degrees of those 4 founders, only 2 public schools are represented: Brook Byers has a bachelor's from Georgia Tech and Frank Caufield has a bachelor's from West Point (which is obviously a highly atypical public school). </p>
<p>Now, when you look at the GP's of Kleiner, you will find a variety of schools (although Harvard and Stanford keep popping up). What I find rather disturbing is that not even once did I find Berkeley mentioned, not even once. Maybe I missed something and maybe one of those partners really did come from Berkeley. But if not (and it looks like not), then that's just sad. Kleiner is arguably the premier VC firm in Silicon Valley if not the world, and Berkeley is a huge school that is local to Silicon Valley, and yet Berkeley can't even get one representative? </p>
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This is precisely why someone like John Meriwether (even after the LTCM fiasco) can come back to the market and launch a quarter of a billion dollar hedge fund (which is now about $3bn). But let's make no mistake. These guys truly are brilliant -- the best in the business. That is what they are getting paid for -- out of the box thinking -- capitalizing on opportunities that others don't see.
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<p>See, that, the_prestige, I'm still not entirely comfortable with. Specifically, I am not comfortable about calling them 'brilliant' or 'the best in the business'. Now, granted, they are obviously 'brilliant' in terms of actually obtaining lots of investor capital, so in that sense, they are capitalizing on opportunities that others don't see (or more aptly, that others don't have). I guess if you want to call that 'brilliant' or 'the best in the business', you could call it that. </p>
<p>But what I would call 'brilliant' or 'best in the business' has to do with those who can consistently produce risk-adjusted above-market returns once management fees have been subtracted out. What I can tell you is that the academic literature that has looked into this issue reveals a highly mixed picture. For example, the evidence strongly indicates that the vast majority of private equity and VC firms do not generate above-market returns sans fees (adjusted for risk). One rather prominent academic's work suggests that 75% of VC/PE actually generate below-market returns (after subtracting fees), and another has actually questioned that, believing the figure is more like 90%. Hedge funds too, also reveal a rather mixed picture. </p>
<p>So, is that really 'brilliant'? I guess in some sense, you could say that it's brilliant that you can continue to earn high management fees for yourself even though you don't actually produce high returns. I would say it's more about being sly and cunning than brilliant.</p>
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See, that, the_prestige, I'm still not entirely comfortable with. Specifically, I am not comfortable about calling them 'brilliant' or 'the best in the business'. Now, granted, they are obviously 'brilliant' in terms of actually obtaining lots of investor capital, so in that sense, they are capitalizing on opportunities that others don't see (or more aptly, that others don't have). I guess if you want to call that 'brilliant' or 'the best in the business', you could call it that.</p>
<p>But what I would call 'brilliant' or 'best in the business' has to do with those who can consistently produce risk-adjusted above-market returns once management fees have been subtracted out. What I can tell you is that the academic literature that has looked into this issue reveals a highly mixed picture. For example, the evidence strongly indicates that the vast majority of private equity and VC firms do not generate above-market returns sans fees (adjusted for risk). One rather prominent academic's work suggests that 75% of VC/PE actually generate below-market returns (after subtracting fees), and another has actually questioned that, believing the figure is more like 90%. Hedge funds too, also reveal a rather mixed picture.</p>
<p>So, is that really 'brilliant'? I guess in some sense, you could say that it's brilliant that you can continue to earn high management fees for yourself even though you don't actually produce high returns. I would say it's more about being sly and cunning than brilliant.
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<p>Well, while I stated that they were "brilliant" and some of the "best" in the business --> you'll note that I didn't say that this necessarily means that their performance is going to be the "best" or "brilliant" (hence bringing up the LTCM fiasco).</p>
<p>Sticking with LTCM for a moment, take a quick gander at that team which included Nobel Prize winners Myron Scholes (of Black Scholes fame) --> basically one of the "Godfathers" of derivatives / options theory... or LTCM co-founder Robert C. Merton --> now check out this guys CV: B.S. in Engineering from Columbia, PhD in Applied Math (started at Caltech and finished at MIT and went onto join MIT Sloan's faculty and is now a professor at HBS). I mean the point is that their "brilliance" / "intelligence" cannot be questioned... they simply are the best minds in the business... literally rocket scientists in many cases.</p>
<p>As to their "performance", well, that's another story. I am generally skeptical about any person's ability to consistently beat the market. Much like the theory espoused by Princeton economist, Burton Malkiel, in his famous book, "A Random Walk Down Wall Street" (which introduced the infamous "dart board" method to compare / contrast performance vs. actively / professionally managed funds). Simply put, the markets are fairly efficient and its very difficult (for even the best) to consistently beat the market... in fact its so rare, we know those rare individuals' names by heart: the Warren Buffetts and George Soroses of the world are very few and far between.</p>
<p>But that said, If my retirement money counted on it, give me the Nobel Prize level minds vs. some random schmoe any day of the week. Some say its just blind luck that certain hedge funds succeed (and there may be some measure of truth to that), but on the flip side to that view, I'm a firm believer that "luck is a residue of design"... and its clear that smarter minds build better mousetraps... and judging by the amount of money that keeps getting raised by these guys, I'm not the only one who thinks so.</p>