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<p>Good for you. btw, I thought you were done.</p>
<p>I changed my mind, because I’ve decided you are arrogant. I will respond to those who are arrogant. </p>
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<p>I don’t even think Warren Buffet will claim he made “considerable” money last year.</p>
<p>Warren Buffet even offers free advice. But you don’t.</p>
<p>So as I said, arrogant. You consider your opinion even more valuable than Warren Buffet does his.</p>
<p>BTW - I don’t really believe you made money last year.</p>
<p>armstrong101, please stick with the discussion at hand and do not hijack this thread with your bickering.</p>
<p>it serves absolutely ZERO purpose except wasting space.</p>
<p>Are you willing to concede that this thread wasn’t hijacked until you claimed I was asking childish questions, then subsequently used a word typically found on elementary school playgrounds.</p>
<p>Or are you too arrogant to admit what the evidence, your posts, clearly shows?</p>
<p>What arrogance.</p>
<p>armstrong101, please stick with the discussion at hand and do not hijack this thread with your bickering.</p>
<p>it serves absolutely ZERO purpose except wasting space.</p>
<p>where can i find undergrad institutions represented in hbs for the most recent class?</p>
<p>I think sakky posted some data in a recent thread, but he appears to be avoiding this one after getting kicked around (again) about the cross-yields and Revealed Preferences. If you can bring him out of hiding he might drop some science about the HBS matriculants’ schools of origin.</p>
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<p>Uh, wrong again. It is you that still seem not to have understood p. 42 of the paper, or, frankly, that entire section of the paper. Again, the authors have shown that, given somebody’s taste for non-technical disciplines, Caltech’s ranking conspiciously drops, which then clearly indicates that Caltech’s high model ranking is due to a strong taste effect. </p>
<p>Or perhaps you just can’t understand the math? If you do understand it, then perhaps you could explain what is wrong with it? </p>
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<p>Oh really? So now you’re admitting that you’re disagreeing with the authors themselves, is it? Hey, that’s perfectly fine, there are papers within the literature that I disagree with too. But then perhaps you stop citing a paper that you actually disagree with. I find it odd indeed that you would first cite a paper as supposedly a supporting reference and then actually disagree with the author’s interpretation of the results. </p>
<p>Please, siserune, you’re kicking nobody around. If anything, you’re the one who is being kicked, for now you’re publicly stating that now you’re choosing to disagree with a paper that you originally brought up as supporting literature. If you don’t like the RP study, then fine, don’t bring it up.</p>
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<p>Citi and AIG are now basically Merton call options. I completely agree with you - they are highly risky, but also unbelievable upside if things get better. Note, things don’t have to go well. They just have to get better. </p>
<p>Put another way. In just the last 6 weeks, Citigroup has tripled in value. Sure, it was from $1 to $3. But hey, that’s still 3x. </p>
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<p>I would argue, again, that this is nothing more than risk preferences. You said it yourself - Microsoft is the safer choice than certainly Citigroup and even Google, as Google is more likely to go down than will Microsoft, a notion that is also supported by the fact that Google’s beta is higher than Microsoft’s. Granted, maybe you would choose Google, based on your personal risk preference. But surely you would agree that more risk-averse people are probably better off with Microsoft.</p>
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<p>Hmmm, I’m actually not sure whether that bodes well or ill for Google. I recently read an interesting study that showed that financial crashes can be predicted when too many Harvard MBA’s enter the financial sector. Granted, the paper never claimed causation, as the obvious counterargument would be that Harvard MBA’s happen to pile into industries whenever they’re overheated and hence prone to crash. But still, I’m not sure that Google’s future is bright just because lots of Harvard MBA’s want in. </p>
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<p>But this gets to our original bone of contention. You don’t choose to invest in a company because of its business prospects. You choose to invest in company because of its stockprospects, which inherently boils down to valuation. A company with terrible business prospects can nonetheless be a great investment if the stock is undervalued. Similarly, a company with great business prospects can nonetheless be a terrible investment if the stock is overvalued. </p>
<p>In the case of Google, I would argue that the company’s strong business prospects are already priced into the stock. Sure, I agree, Google will probably grow faster than Microsoft. But it needs to grow faster. Keep in mind that Google’s and Microsoft’s cap-ex are almost the same (Microsoft’s is only ~30% higher). Google’s P/E ratio is nearly 3x that of Microsoft. Google also doesn’t pay any dividend, whereas Microsoft pays out with a (current) yield of 2.7%. Microsoft enjoys higher profit margins, return on assets, and return on equity. Microsoft earns almost as much in net income as Google earns in gross revenue. </p>
<p>What that ultimately means is that the market expects Google to grow much faster than Microsoft and has therefore already priced that expectation into the stock. That may mean that Google is a poor financial prospects, even if it does have strong business prospects. The point is not whether it will grow quickly and develop new businesses. The point is whether it will be able to meet expectations. </p>
<p>Similarly, the Detroit Red Wings may go far in the playoffs, but everybody expects that to happen. For the Wings, only winning the Cup will do, for otherwise, they didn’t have a successful season (according to their standards). On the other hand, if you’re the LA Kings (the Citigroup of hockey) then just making the playoffs at all would mean that you’ve exceeded expectations.</p>
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<p>Well yes and no. There are a number of factors we are overlooking for the sake of simplification / expediency. Things like risk preferences (which you have referred to) but also investment horizon (which I keep referring to). In other words, to take an extreme example to illuminate the point, if your trading horizon is extremely short – say, 1 month or even 1 week, then, yes, a stock’s technical factors are probably more important than the company’s BUSINESS fundamentals (let’s face it, a company’s business fundamentals aren’t changing that radically from Monday to next Friday) –> however, the market as a whole might be doing a lot of things during that time –> things like where it is trading vs. comps. vs. historical basis, is there an “event” going on pressuring or buoying the stock? are earnings coming out? etc.</p>
<p>But longer term, say over the course of 1-5 or even 10 years, a stock’s technicals (while still important) take a back seat to the business prospects of the company in question. Is it competitive? Business model? Is it in an attractive industry? Is it well positioned vs. competitors (future competitors)? Strong / sound management? Financial management (Cash Flow, B/S, P&L)? etc… Because many of these factors will help mitigate future uncertainty (things like strong management, strong brand name, strong customer base, financial strength, etc.)</p>
<p>I still have to disagree, for the fact is, long-term stock picking is not simply a matter of assessing only business prospects. You have to analyze those prospects in conjunction with valuation. Like I said, even a company with the best prospects can be a bad investment if the price is simply too high, and even a terrible company can nonetheless be a great investment if the price is cheap. </p>
<p>As a case in point, Cisco is undoubtedly a stronger company today than it was in 2000, with far larger revenue, profits, a stronger balance sheet, and a few broader product line. Yet buying Cisco in 2000 would have been a terrible investment, for that was when Cisco was (briefly) the most highly valued public company in the world, with a market cap topping $500bn. It is highly questionable as to whether Cisco will ever exceed that market cap ever again in the rest of its lifetime. Right now, Cisco is worth about $100 bn, hence those who invested at the peak in 2000 would have lost 80% of their money. </p>
<p>Taking it back to the Google example, again, I agree, Google has great business prospects. The problem is that Google is also highly valued. If you could get Google at its first-day IPO valuation of ~$25 bn, then sure, that would be a no-brainer. But that’s not on the table. Right now, Google is valued at $120bn. That ain’t cheap.</p>
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You’ve been challenged several times to simultaneously display (1) a statement from the paper, (2) a statement of mine, and (3) a contradiction between the two. It is odd to keep claiming that such a contradiction exists without being able to specify what it is.</p>
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<p>Which is irrelevant, since the question at hand was not about Caltech’s high ranking, but whether there is reason to believe that Caltech and MIT (in the RP data set used to calculate the ranking) were a concrete illustration of the logical fallacy in your posting about HBS vs Stanford cross-yield. i.e. was Caltech, in the observed matriculation battles, outperforming all lower-ranked schools except its direct rival, MIT.</p>
<p>Let me point out that neither you nor the paper suggest a concrete interpretation of what “taste-specificity” means in terms of what the list of matriculation battles could have looked like (talking about exp(theta’s) isn’t enough, for a variety of reasons).
That is, what could the matriculation decisions have looked like given that the known cross-admit data and the Common Data Sets show MIT trouncing Caltech in all obvious preference-revealing measures such as yield, cross-yield, applications per seat, and the number and fraction of students accepting spots on the waitlist.</p>
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<p>What you don’t appear to understand is that the discussion on p.42, although flawed, does not and cannot have anything to do with whether the math is wrong. It’s not an exposition of the math; it’s a discussion of other matters, using pseudomathematical verbiage.</p>
<p>Anyway, their math “is what it is” for purposes of this discussion. I’m using the math to infer something about their data set, to the extent it can be understood from their rankings combined with other known information from outside the paper.</p>
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<p>I haven’t expressed any disagreement with their paper in this thread. I certainly have some criticisms, but nothing that strongly affects the Caltech-MIT question raised here. </p>
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<p>Maybe you don’t recall our previous RP discussions, where you made statement after overconfident statement that got debunked when the discussion became mathematically specific (explicit counterexamples!). For example, the statement that the paper “implicitly takes application decisions into account, through revealed preferences”. Since you abandoned the discussion at that point and are continuing the same act in this thread, it’s not clear whether you understood the refutations, much less the harder details of the math in the article.</p>
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<p>Sure. You disputed that Caltech’s ranking within the RP study was not an idiosyncratic measure of the methodology used by the study, and in particular, was not probably over-measured (and hence over-ranked). The authors themselves admitted this to be so. </p>
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<p>So you stand by your statement that you believe the paper to be flawed. That is precisely what I find so interesting, considering that you are the one who brought it up in the first place as supporting evidence. Why cite a study as support if you don’t agree with its methodology? Wouldn’t it have been better for you to have simply not mentioned the study at all? </p>
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<p>Uh, I thought you said above that the math was flawed. Is that not disagreement? </p>
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<p>Uh, I believe you are the one who has made statement after overconfident statement, not I. I never said claimed that the paper didn’t take into account admissions decisions. What I said is that the paper then uses such decisions as a basis for a simulation model, the structure of which you apparently do not disagree. It is entirely unclear as to whether you understand the paper at all, considering that you say the math is flawed without ever stating what exactly the flaw would be, and then even more bizarrely claim that you don’t disagree with the supposedly flawed paper. </p>
<p>I don’t know, siserune, I don’t know. Seems to me that we won’t agree. All I can say is that I will have to leave it to the readers to decide who is right and who is wrong, and in particular, why you even brought up Hoxby et al when you later contend that its mathematics is flawed, without ever saying how. That seems to be a most unusual argumentative tactic indeed on your part. I have never seen anybody attempt to argue their case with a paper that they don’t actually agree with.</p>
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<p>There’s a reason why I asked (and you have failed) to quote the actual text where any such comments were made.</p>
<p>I did not agree or disagree with Caltech’s ranking. I did mention the ranking.</p>
<p>I did not agree or disagree with the RP study’s method of producing rankings. I did discuss the RP data set and the likelihood that its Caltech subset is an illustration of your posted fallacy about cross-yields (re: HBS v Stanford).</p>
<p>If you continue to claim that RP contradicts my remarks about Caltech’s mutual-admit battles with MIT and other schools, just quote (do not paraphrase) one of my statements, one of their statements and indicate any discrepancy.</p>
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<p>I’m citing the study for what its data set presumably contains. The methodology (good or bad) is immaterial except insofar as understanding it permits some reverse-engineering of the data set. </p>
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<p>I said that the section you cited is pseudomathematical verbiage. However, that section is entirely about interpretation of the math’s output (the rankings), not the math itself (how to use nonlinear regression models and MCMC simulations to produce a ranking). </p>
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<p>Your claim, which I quoted, was about application decisions being implicitly accounted for by the RP study, through its analysis of matriculation decisions. This basic misunderstanding of the study was refuted with several counterexamples, some of them directly relevant to the Caltech data under discussion here.</p>
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<p>Then let me ask you a simple question. In post #50, you claimed:</p>
<p>"There’s a reason why I asked (and you have failed) to quote the actual text where any such comments were made.</p>
<p>I did not agree or disagree with Caltech’s ranking. I did mention the ranking.</p>
<p>I did not agree or disagree with the RP study’s method of producing rankings. I did discuss the RP data set and the likelihood that its Caltech subset is an illustration of your posted fallacy about cross-yields (re: HBS v Stanford).</p>
<p>Apparently I understood it better than either you or the authors, along with a number of other matters about the paper that were covered in earlier threads (such as whether the study implicitly models the preferences revealed by which schools receive applications).</p>
<p>Now, I find it to be quite an interesting tactic indeed to claim to understand a paper better than the authors of that paper do. But in any case, perhaps you could shed light on exactly parts of the paper you think you understand better than the authors do? I think that would illuminate exactly where you and the authors disagree. </p>
<p>But in any case, the bottom line is this. We know that HBS’s yield is higher than Stanford GSB’s, as the schools have published that information, and Businessweek has done the same. We do not yet have publishable evidence about the cross-yield data between the two. I believe I once saw the data, but I don’t know where it is, and I agree that I may have misremembered it. But in any case, in the absence of direct cross-yield data, we are left to interpret simple yield data as indicative that the cross-yield data is probably in favor of HBS, especially as the applicant pools almost certainly overlap. </p>
<p>Besides, let me put it to you this way. According to IPEDS, MIT has a yield of around 65%. Caltech’s is 35%. That is entirely consistent with the cross-yield data that strongly favors MIT over Caltech. The only confounding evidence, perhaps, is the RP study, which is why it is interesting that you brought it up, considering that you disagree with at least parts of it.</p>
<p>This is all very confusing. Could we get a simple recap of the major debate points?</p>
<p>Yes. Jar Jar Bin goes to Haas. Everyone in their right mind chooses HBS over Stanford (even Sakky…). Everyone who didn’t get into HBS but is awesome goes to Stanford. Some who got into HBS but prefer warm weather (or are not in their right mind or don’t like to work on Wednesdays) choose Stanford over Harvard, but they are the exception that proves the norm. Sakky and Siserune like to read and interpret useless studies.</p>
<p>That pretty much sums things up, I think.</p>
<p>my close friend who got into both HBS and Stanford had quite a story to tell. it seems that every year there are about 100 people that Stanford admits who don’t attend, and about 100 people who HBS admits and don’t attend, and most are cross-admits who choose the other place. (a very few choose Wharton for finance or Kellogg for marketing but those are rare) Based on his best estimates, the split between those who opt for HBS and those who opt for Stanford-GSB is usually about 50-50, with it never being more than 60-40 in either direction - according to both admissions directors, with whom he spoke personally at the admit weekends. </p>
<p>HBS’s admissions director remarked that it’s nice that their only real competition is from a school which is much smaller, 3000 miles away, and doesn’t rely so heavily on the case method - it’s very easy to counsel cross-admits into what fits them better. After talking to him, she actually told my friend to go to Stanford rather than HBS.</p>
<p>And he will. He just felt more like he was part of a true community at Stanford, preferred the atmosphere and the people. He’s also lived on the east coast all his life and wanted a change and has always loved SF. He was leaning HBS until he visited, and was so impressed that he wrote a check for his deposit before leaving for his flight. More interestingly, from what he told me, he coordinated a meeting of a bunch of cross-admits during a brief break in the admit weekend, just so that they could all talk to each other about what they felt (about the choice) and why. Although a small sample size, 20-25 or so, the split seemed very even to him and nearly everyone had at least some conflicts or doubts.</p>
<p>Anyway, just thought I’d toss in some inside information I happened to come across.</p>
<p>if i were a cross-admit, i’d choose GSB:</p>
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<li>similar prestige levels</li>
<li>better weather – much better</li>
<li>more exclusive</li>
<li>technology / entrepreneur angle</li>
<li>did i mention the better weather?</li>
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