Friday, April 9, 2010

The Acumen

I've been exceptionally busy the last few weeks. Even though I've decided to place a moratorium on competitions, I’ve still found myself overwhelmed with the MBA and the CFA Level II material. One thing I’ve been trying to keep track of in my posts is the absolutely brilliant ideas I’m encountering, whether in the Rotman MBA or CFA Level II.

But lately, my ability to post and get work done has drastically dropped off. And I would like to think it’s not because I’ve gotten lazy, but rather because there is so much brilliant and interesting stuff going on that I can’t post it all.

And I think that is exactly the case. Example? ITP, a course that had many of us scratching our heads in the beginning has suddenly burst forth with ‘light bulbs’. For example, not too long ago, I was complaining about how “past performance does [NOT] predict future behaviour” in some cases but not others. For example, individuals (as social science will tell you) are predictable (past performance DOES predict future behavior) but this is not so in finance and capital market instruments (good luck buying a stock based on it’s past behaviour hoping for gains).

And ITP has taken this exact point and, in our latest team assignment, asked us to investigate why this is. How “predictable” individuals (with their behaviour well defined) in a group produce slightly unexpected results. And the effect this has on our perception of what we learn in finance classes as it relates to theoretical concepts (CAPM comes to mind at the top of this list, but is closely accompanied by the idea of bubbles and crashes in the stock market, a very timely topic).

You can imagine that I am very excited. Suddenly, I am being given the vocabulary to describe in practical terms what we’ve been taught in textbooks. One of the reasons why I came to the MBA program was to help me structure my thoughts so that I could package them and deliver them to someone in a more digestible format.

While I was fortunate to have known many brilliant minds at McMaster Engineering, in my work life, I felt like I wanted to further develop my business skills to speak the same language as my colleagues and be able to use descriptors outside of the Engineering dictionary so we could understand each other, work together and accomplish amazing things. It was one of my goals coming into Rotman: I thought I was pretty clever. But I wanted to develop my business acumen.

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