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10/28/10

So I read this article a few minutes ago, and I wanted to share it with you guys (as well as some quotes below).
http://poetsandquants.com/2010/10/04/why-josh-kauf...

* Kaufman believes that MBA programs "teach many worthless, outdated, even outright damaging concepts and practices."

* "Business schools don't create successful people," insists Kaufman. "They simply accept them, then take credit for their success. With heavy debt loads and questionable returns, MBA programs simply aren't a good investment--they're a trap for the unwary."

* Instead of paying up to $350,000 in tuition and forgone earnings to go to Harvard, Stanford or Wharton, Kaufman says a better way to learn business is to open the pages of classic business texts and learn on your own.

* Much of Kaufman's argument rests on a study published eight years ago by Stanford Business School professor Jeffrey Pfeffer of Stanford University and Christina T. Fong of the University of Washington. The pair analyzed 40 years of data and studies and came up with a provocative and startling conclusion: "There is scant evidence that the MBA credential, particularly from non-elite schools, or the grades earned in business courses are related to either salary or the attainment of higher level positions in organizations."

* "Unless you want to be a consultant or an I-banker (where a top MBA is nothing but a screen for admission)," Godin wrote, "it's hard for me to understand why this is a better use of time and money than actual experience combined with a dedicated reading of 30 or 40 books."

* "If you want to work in an industry that uses the MBA as a screen, you are effectively buying yourself a $150,000 interview," he contends. "If you want to do anything else in business, if you want to start your own company, get a job in another field, you don't have to have an MBA. It's better if you don't because of the debt."

* And even for consulting, investment banking or Fortune 50 positions, Kaufman says, the benefit is ephemeral. "The effect (of the degree) is strongest immediately after graduation," he says, "then largely wears out within three to five years. After that, you're on your own. Hiring managers no longer care so much about where you went to school. They care more about what you've accomplished since then."

* Kaufman estimates that all of these firms combined, from Goldman Sachs to McKinsey & Co., probably hire no more than 5,000 to 10,000 MBAs a year out of the more than 200,000 people who are getting MBAs around the world. The other 190,000 to 195,000 are getting MBAs they don't really need.

* "Going to Harvard all told can cost you about $350,000. That is mortgage level debt. Put that through an amortization schedule at a 6.8% rate of interest. It's a $2,200 monthly payment over 30 years. You are spending $821,000 when you account for the interest. The cost is enormous."

Comments (85)

10/29/10

Here is the thing. Until there is an industry accepted alternative to the brand and experience an MBA offers people will still demand it. It is commonly accepted that you go to get a different name on a piece of paper and network with other amazing people. Right now there is nothing else to replace it.

Side note, I met some John Hopkins MSRE guys last night. They had great things to say about the program and said they had zero intention of getting an MBA.

Accepted.com In reply to Buyside CFA
10/29/10

Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&amp;c=cart&amp;aff=44880&amp;ejc=2&amp;cl=175031 rel=nofollow>CFA</a>:
To all the MBA-Bashers:

Have you guys ever seen a Wharton resume book? There are some pretty incredible people in top MBA programs. As long as top MBA programs are populated by 100s of ex bankers, PE analysts, fighter pilots, consultants, entrepreneurs, Olympians with math degrees, special forces officers, engineers and so forth, recruiters for major employers will continue to flock to them.

Exactly. Those guys were successful BEFORE Wharton, not because of Wharton. Those guys will get the LEAST benefit from Wharton.

Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&amp;c=cart&amp;aff=44880&amp;ejc=2&amp;cl=175031 rel=nofollow>CFA</a>:
I'm trying to shift to a different industry AND change to a different geographic region - a region with very few alumni from my school. This task is looking harder and harder now that I'm a few years into my career. Barring some cold-calling luck, this change won't happen without an MBA

And there is always the probability that it won't do what you want it to do for you, especially if you are trying to switch careers. You still want to sink that 150K?

I'm not trying to tell you to not do the MBA. That's all you.

---
man made the money, money never made the man

10/29/10

Yeah, I think that is something never talked about. Suppose the tech guy quits his job and drops 300K or whatever on a top MBA because he wants to be an associate. What happens if that doesn't happen. Every year there has to be some people who don't break in or who get jobs that might only pay 20-30K more than their previous job. Not taking anything away from a top program, just saying that no everyone walks away making money off a Harvard MBA.

In reply to Yung Gekko
10/29/10

Yung Gekko:
Anthony .:
For non finance people it is a great exposure to overall business. Your classmates also add a lot to the equation. The network you build, the second chance at a career, etc are all tangible benefits.

I think you could get all these things for free, but that would require a lot of outside the box thinking.MBAs off a prepackaged experience.

Did your classmates at Syracuse add a lot to the equation?

Beat it, loser. You're a waste of internet bandwidth.

---
man made the money, money never made the man

In reply to TNA
10/29/10

Anthony .:
Yeah, I think that is something never talked about. Suppose the tech guy quits his job and drops 300K or whatever on a top MBA because he wants to be an associate. What happens if that doesn't happen. Every year there has to be some people who don't break in or who get jobs that might only pay 20-30K more than their previous job. Not taking anything away from a top program, just saying that no everyone walks away making money off a Harvard MBA.

There you go. The majority of candidates don't break into hi paying fields, even if they are from HBS/CBS/Wharton. They just have a better chance than guys like me. And they paid 150K for that chance.

---
man made the money, money never made the man

In reply to shorttheworld
10/29/10

shorttheworld:
mr1234:
rufiolove:
Current consensus is that they want to see that you've got a power MBA name to be a player in many cases... don't like it, then network your ass off and prove 'em wrong...

I have actually been interviewing for post-MBA jobs in CRE, on the basis that I have all the required skill sets without the MBA salary price tag. This might not be the case for some other hi-paying fields, but I think the current paradigm should (and probably will) change.

not wall street finance which this board is concerned with and the focus of the talk.

Maybe I wasn't clear the first time, so I will repeat so you can understand.

The current trend in CRE is that the MBA is not very valuable. I think that mentality will shift over to the financial industry. And that is relevant to this board.

---
man made the money, money never made the man

In reply to mr1234
10/29/10

mr1234:
I could buy 2 nice BMWs for 150K. Or buy a small business if I had 150K in my back-pocket. There is SO much I could do with 150K that would give me much greater utility than an MBA, and this should be true for a VAST majority of people who get their MBA.

I think this opportunity cost argument is the main reason I question the value of the MBA. I hate to think that when I'm 40, I could have saved much more money if I wasn't paying off MBA loans, and as a result don't have the same ability to start my own business, invest wisely, or take a huge pay-cut and work for some startup with ridiculous upside.

In reply to TNA
10/29/10

Anthony .:
Yeah, I think that is something never talked about. Suppose the tech guy quits his job and drops 300K or whatever on a top MBA because he wants to be an associate. What happens if that doesn't happen. Every year there has to be some people who don't break in or who get jobs that might only pay 20-30K more than their previous job. Not taking anything away from a top program, just saying that no everyone walks away making money off a Harvard MBA.

This is just an anecdote, and maybe not that meaningful, but my "MBA-friend" was telling me about this as well (just to be clear, he went to a program ranked between 15-20, and graduated in 2009 which was obviously a bad job market). He basically said that most people trying to switch careers weren't able to, and many of them had to take relatively shitty jobs. And he was a career changer who got a pretty good job offer. He also doesn't buy the salary statistics posted on MBA websites (thinks they're biased upward), but that's another story.

10/29/10

Go to www.quantnet.com and check out some of their discussions on MFE programs. You see a huge lack of transparency in a lot of programs pertaining to placement and salary. Schools really do not want to tell the full truth. Buyer beware!

In reply to Buyside CFA
10/29/10

Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&amp;c=cart&amp;aff=44880&amp;ejc=2&amp;cl=175031 rel=nofollow>CFA</a>:

I have my doubts about getting an MBA but I consider it foolish to make blanket statements about the worth of the degree. I cringe when I hear someone say, "Well my Uncle Lou got an MBA from Northern Illinois Fuckface State 27 year ago and HE says MBAs are a waste of time."

I cringe when misinformed dipshits such as yourself fall into the whole "iBanking = Finance" (and by this I mean the only thing in finance is investment banking) mindset and seemingly believe that an MBA is your ticket to success in this sector of business.

Sorry, both my father and my uncle are highly educated, intelligent and accomplished professionals at firms dealing in what everyone in this board is busting their ass to try and get into. They both make millions and live more than comfortable lives. And to paraphrase Gekko, "I'm not talking about the $400,000 a year wall street schmuck, flying first class, being comfortable."

Am I saying that an MBA from a t10 MBA school like Harvard will not help you at all? Nope. The connections you stand to make from graduating from one of those schools are invaluable and the main reason you are going there, not for the education. What are the chances of everyone on WSO actually getting into a t10 MBA program? I am guessing at or below 50%

I am simply relaying the information given to me from accomplished financial professionals to the rest of WSO. If you don't like it, then don't listen to it. But those are the words from guys that have gone through it already and are accomplished.

You can mock my uncle's NIU MBA all you want, but he has made it. You are commenting on an internet forum TRYING to make it.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.

10/29/10

Josh Kaufman...isn't he the guy that's always trying to steal Vinnie Chase from Ari Gold?

In reply to Midas Mulligan Magoo
10/29/10

Midas Mulligan Magoo:
Josh Kaufman...isn't he the guy that's always trying to steal Vinnie Chase from Ari Gold?

That would be Josh Weinstein

10/29/10

Nefarious said "I cringe when misinformed..."

Calm down, Hoss. I don't want to fight you or Uncle Lou and I didn't mean to knock anyone's school. I'm just a bit confused....

In your initial post you said:
"Both have told me the same thing throughout the years: "An MBA is a waste of time and money""

In your last post your said:
"Am I saying that an MBA from a t10 MBA school like Harvard will not help you at all? Nope."

My point was this: A variety of factors determine whether an MBA is worthwhile. You initially just parroted the advice you heard many years ago without doing any of our own research or understanding the complexity of the decision.

Now that's enough. I won't argue with an 19 yr old who thinks BUYSIDE refers to an investment bank...

10/29/10

everyone's saying it's "so expensive"...wtf? I thought you RECEIVED a ton of money in the NBA, not the other way around.

Accepted.com
10/29/10

ahhh shit, my bad. I misread that. nevermind.

In reply to Buyside CFA
10/30/10

Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&amp;c=cart&amp;aff=44880&amp;ejc=2&amp;cl=175031 rel=nofollow>CFA</a>:
Nefarious said "I cringe when misinformed..."

Calm down, Hoss. I don't want to fight you or Uncle Lou and I didn't mean to knock anyone's school. I'm just a bit confused....

In your initial post you said:
"Both have told me the same thing throughout the years: "An MBA is a waste of time and money""

In your last post your said:
"Am I saying that an MBA from a t10 MBA school like Harvard will not help you at all? Nope."

My point was this: A variety of factors determine whether an MBA is worthwhile. You initially just parroted the advice you heard many years ago without doing any of our own research or understanding the complexity of the decision.

Now that's enough. I won't argue with an 19 yr old who thinks BUYSIDE refers to an investment bank...

Congratulations, you're the dumbest fucking person I have run into on WSO thus far. I am not 19, nor am I still in college. The advice that I heard "many years ago" was just recently retold to me a week ago. This isn't some bullshit I heard when I was 12 and ran with it.

Them telling me that an MBA is worthless and me seeing that there is value in getting an MBA from a t10 school are two completely different ideas entirely. I am sorry your minuscule mind is flipping trying to grasp that intricate concept.

I am not going to argue with you anymore because it is apparent that you not only know about finance and business, but you ARE finance and business. This has to be the case, I mean both "buy side" and "CFA" are right in your username.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.

10/30/10

Yo Nef, Buyside's comments throughout the thread have been pretty moderate. He is also legit. Might want to ease off on the insults and hate considering you are rather new here.

10/30/10

First and foremost my question is who the fuck is Josh Kaufman and why should anyone care what he thinks?

This is a largely stupid article.

One of the first points he makes is how expensive MBA's have gotten these days and consequently un-worth-it, partially as a result of that ever increasing price tag. That in and of itself eliminates any shred of credibility. Personally, the $150K price tag is not the major (economic) consideration. The real thing I struggle with is losing 2 years of income, which is several times a multiple of the 2 years MBA expenses. If I go to b-school I'll idealy (and on currently on track to) leave a $250-350K a year income on the table for 2 years. Opportunity costs, tuition, room & board = $600-800K. So even if MBA programs have jacked up their tuitions 50% in the last 4 years, that $50K is a less than 10% increment to my existing cost of an MBA. 300K lost comp x 2 years + 100K tuition = 700K total cost, 50K increase in tuition 50K/700K = 7% increase. So right off the bat, his cost argument is moot. The increasing tuition cost has a minimal impact on the big picture 2 year economic cost of an MBA.

Second, this idiot proposes that because he read a bunch of textbooks he is equivalent to a Harvard/Standford MBA. Time after time, I've heard the same thing: people who go to (elite) business school tend to keep going and continue to excel and torpedo through their careers while their non-MBA-getting counterparts tend to stall out and hit a cieling of sorts. This is what I've heard Jamie Dimon say. This is what I've heard Steven Schwarzman say. And when I hear them say something, I don't have to ask "Who the fuck is Steve Schwarzman and why should I give a shit about what he says?"

Third, he bases most of his argument on this stupid fuckin academic study. I've done an academic study as well and I'll have you know there is very little difference between an academic white paper and a pitch book valuation, other than the formatting. I came up with my conclusion first (its human nature) and the data just happened to support my presumptions. For every study telling me one thing, I can find 10 more telling me the other.

Forth, am I the only one seeing this, he worked at P&G for a number of years, alongside well-educated professionals, and now is launching a brand of his own. If he had worked alongside a bunch of SUNY Oneonta communication majors would he have the same knowledge and insight he has now? Probably not.

So in sum, this douch is sophmoric and pretty immature in my personal opinion. He fails to acknowledge that 90% of what he knows he learned from working alongside harvard and wharton MBA's, and not from reading textbooks. He seems to think that the sole cost of an MBA is the $'s spent, and the sole benefit is the textbooks lessons taught. He doesn't recognize that one of the primary reasons and benefits of an Elite MBA is the fraternity and professional network you develop, the team work and management skills taught, and all the past experiences all your peers bring with them and share collectively.

Lastly, this article is making this kid out to be some sort of deeply innovative, cutting edge entrepreneur. Since when was a self-taught MBA cirriculum groundbreaking? The article says if Josh Kaufman would have pursued an MBA, he likely would have gone to Harvard or Stanford. Did he get admitted to either of those institutions? Because admission is a little known requisite to getting an MBA. I didn't read the entire article so I could have missed that he did in fact get into Harvard and Stanford. I've probably shared this before, but throughout college my college experience and even after it (non-target) it was very challenging to get into IBD. It was an uphill battle and one I started with a handful of friends and classmates. Only a few of us had the drive, luck and persiverience to crack our way in. The ones that fell by the wayside still to this day insist they see no value in a banking job, as if they had the option of accepting one. They'd just as soon quit trying because they're intropectively defeated and don't think they're good enough (and Im not saying there is such a thing as not being good/smart enough for banking), than acknowledge externally that failed, often under the guise of "I dont want it."

Truth be told, I may or may not get an MBA. And I've heard several people tell me that "You need to seriously consider the benefit it will offer you, because everyone is different and it very well may not be of much value to you while it may be very valuable to someone else." But almost all of these people are significantly older and are themselves graduates of MBA programs I'd be interested in attending. So I value their opinions. I have absolutely no interest in listening to a 28 year old with a undergrad from cinncinati U (not that theres anything wrong with that) who runs a web site telling me the merits of not getting an MBA. Shame on that web site for presenting him as if he's some sort of oracle on all things MBA.. and primarily promoting his product, which is all he's doing.

In reply to Marcus_Halberstram
10/30/10

Marcus_Halberstram:
First and foremost my question is who the fuck is Josh Kaufman and why should anyone care what he thinks?

This is a largely stupid article.

One of the first points he makes is how expensive MBA's have gotten these days and consequently un-worth-it, partially as a result of that ever increasing price tag. That in and of itself eliminates any shred of credibility. Personally, the $150K price tag is not the major (economic) consideration. The real thing I struggle with is losing 2 years of income, which is several times a multiple of the 2 years MBA expenses. If I go to b-school I'll idealy (and on currently on track to) leave a $250-350K a year income on the table for 2 years. Opportunity costs, tuition, room & board = $600-800K. So even if MBA programs have jacked up their tuitions 50% in the last 4 years, that $50K is a less than 10% increment to my existing cost of an MBA. 300K lost comp x 2 years + 100K tuition = 700K total cost, 50K increase in tuition 50K/700K = 7% increase. So right off the bat, his cost argument is moot. The increasing tuition cost has a minimal impact on the big picture 2 year economic cost of an MBA.

Second, this idiot proposes that because he read a bunch of textbooks he is equivalent to a Harvard/Standford MBA. Time after time, I've heard the same thing: people who go to (elite) business school tend to keep going and continue to excel and torpedo through their careers while their non-MBA-getting counterparts tend to stall out and hit a cieling of sorts. This is what I've heard Jamie Dimon say. This is what I've heard Steven Schwarzman say. And when I hear them say something, I don't have to ask "Who the fuck is Steve Schwarzman and why should I give a shit about what he says?"

Third, he bases most of his argument on this stupid fuckin academic study. I've done an academic study as well and I'll have you know there is very little difference between an academic white paper and a pitch book valuation, other than the formatting. I came up with my conclusion first (its human nature) and the data just happened to support my presumptions. For every study telling me one thing, I can find 10 more telling me the other.

Forth, am I the only one seeing this, he worked at P&G for a number of years, alongside well-educated professionals, and now is launching a brand of his own. If he had worked alongside a bunch of SUNY Oneonta communication majors would he have the same knowledge and insight he has now? Probably not.

So in sum, this douch is sophmoric and pretty immature in my personal opinion. He fails to acknowledge that 90% of what he knows he learned from working alongside harvard and wharton MBA's, and not from reading textbooks. He seems to think that the sole cost of an MBA is the $'s spent, and the sole benefit is the textbooks lessons taught. He doesn't recognize that one of the primary reasons and benefits of an Elite MBA is the fraternity and professional network you develop, the team work and management skills taught, and all the past experiences all your peers bring with them and share collectively.

Lastly, this article is making this kid out to be some sort of deeply innovative, cutting edge entrepreneur. Since when was a self-taught MBA cirriculum groundbreaking? The article says if Josh Kaufman would have pursued an MBA, he likely would have gone to Harvard or Stanford. Did he get admitted to either of those institutions? Because admission is a little known requisite to getting an MBA. I didn't read the entire article so I could have missed that he did in fact get into Harvard and Stanford. I've probably shared this before, but throughout college my college experience and even after it (non-target) it was very challenging to get into IBD. It was an uphill battle and one I started with a handful of friends and classmates. Only a few of us had the drive, luck and persiverience to crack our way in. The ones that fell by the wayside still to this day insist they see no value in a banking job, as if they had the option of accepting one. They'd just as soon quit trying because they're intropectively defeated and don't think they're good enough (and Im not saying there is such a thing as not being good/smart enough for banking), than acknowledge externally that failed, often under the guise of "I dont want it."

Truth be told, I may or may not get an MBA. And I've heard several people tell me that "You need to seriously consider the benefit it will offer you, because everyone is different and it very well may not be of much value to you while it may be very valuable to someone else." But almost all of these people are significantly older and are themselves graduates of MBA programs I'd be interested in attending. So I value their opinions. I have absolutely no interest in listening to a 28 year old with a undergrad from cinncinati U (not that theres anything wrong with that) who runs a web site telling me the merits of not getting an MBA. Shame on that web site for presenting him as if he's some sort of oracle on all things MBA.. and primarily promoting his product, which is all he's doing.

Well said. I'd like to append that I think T10 MBA's appeal to certain people more than others. T10 MBA's are big part of "the track". Getting paid in finance is great, but I think it's well established that anyone who's been successful in the field was/has been driven by something other than greed. My dream school is Wharton, not because I might make me and extra $2M in my lifetime or whatever, but because it'll look baller as shit on my resume and limit said glass ceilings.

I think people look at MBA programs all wrong. I think it should be viewed as an opportunity in your career to take your work & academic experiences so far and retool/analyze your skill-set with similar (in accomplishment) individuals in an academic environment; and possibly to creep on some undergrad co-eds/get wasted every night for one last time.

10/30/10

Wow, looks like I missed out on a lot. Seems there are some valid points on both sides.

I think the KEY here is that it is a very PERSONAL decision and one that needs to be evaluated in detail based on your specific circumstances and goals (note: Marcus is looking at it the right way). Having recently graduated from Wharton I'll try to give an unbiased opinion and some personal issues I considered when deciding if the MBA was right for me:

1) Timing: I had worked in banking for 2 years and MM PE for ~ 4 years...I needed to step back and reevaluate. What did i really want to do...could I make WSO a real business? If I got into a top 5 MBA, would the cost be worth it if I was going to start my own business anyways? Isn't that just an expensive insurance policy? Would the entrepreneurial programs at Wharton/MIT/ or HBS really help me? Definitely questions I considered.

2) Perception: I could have stayed at the PE fund, but a lot of the senior guys at my MM PE fund looked only to hire VPs with MBAs (maybe bc they all had Tuck+Wharton+HBS degrees)...if I was going to stay in PE, would not having an MBA limit me down the road?

Here is what I found:

1) The timing was great and the network is simply awesome. When I left my job in June, I made the decision to chase WSO full time as hard as I could for 2 years to see if it was viable / realistic. If it didn't work out, I could always go back into PE or join a start-up (I assumed having Wharton on my resume would make this easier, and I think that is hard to argue against). Sure, I would have spent a shitload of money (if I had not received a fellowship) but I also would have had an incredible network and I was set on going (for me, the opportunity cost was also offset by some of the major benefits of going back to school: time to think, time to chase my business, building a very strong network, etc).

Fast forward and I was lucky enough to be admitted to the Venture Initiation Program, won the Wharton Venture Award so I could work on WSO full time over the summer ($10k) and Social Innovation Award at PennVention ($2.5k) for RecWave.com (which flopped...lets hope jdOasis.com does better). Point is, I was given a ton of support $ wise AND very valuable advice.

In a world of "who you know", I think the $500k-$1 million in opportunity cost for smart / driven individuals is going to be minor speed bump for the majority of the students. Some will undoubtedly not ever recover the full cost of the MBA, and others will be closer to break even, but I would argue that is the minority. What % exactly that is...who knows... On a personal level, I can tell you that WSO would not be anywhere near what it is today without the help of my classmates. They were all super supportive and gave me some great ideas.

But NONE of that matters for you - do you need an MBA to be successful, hell no. Does it sharpen your critical thinking abilities? I say yes, but it depends on where you are in your career, your maturity level and what your goals are. Again, it is a very personal decision. I know some of my classmates that were thrilled and others that were disappointed since they couldn't get the job they wanted straight out of Wharton (horrible market in 2010) -- but I honestly think the majority of them would agree it is a positive NPV decision.

2) I disagree with the notion that the degree loses significant value with time because i would argue the majority of the value is from the close network you build. I would bet the majority of my classmates will be kicking some major ass in 5-10 years, and I can say anyone from my cohort and another 200+ people from my class would help me in a second if I asked for it, even 10 years down the line (not to mention the huge alumni network). THAT is major value.

Yes, and it was fun as hell.

Patrick
(clearly I have no ability to organize my thoughts since I numbered certain paragraphs / points with no real rhyme or reason - enjoy)

In reply to WallStreetOasis.com
10/31/10

Thanks Patrick, I was hoping you would chime in.

WallStreetOasis.com:
I disagree with the notion that the degree loses significant value with time because i would argue the majority of the value is from the close network you build. I would bet the majority of my classmates will be kicking some major ass in 5-10 years, and I can say anyone from my cohort and another 200+ people from my class would help me in a second if I asked for it, even 10 years down the line (not to mention the huge alumni network). THAT is major value.

In regards to the network value, does that value significantly drop when you get outside of the top 10? Or do programs even in the 20-30 range still have pretty good networks (even if just regionally)?

10/31/10

hey econ, honestly I can only speak for Wharton+ a few others since I only applied to 3 schools.

10/31/10

Getting an MBA is a really personal decision as Patrick says. I can only give personal experience which dosent apply to most here because I have always wanted to manage money at a hedge fund and thats it. I will say that I worked a job for 3 years during a time when I could've gotten an MBA that was considered menial...most people on this board would have mocked it. However, I actually learned about markets and how the business of managing money works as opposed to an MBA where I might have done a couple of case studies on it. Now I do manage money at a hedge fund and I can honestly say that I have had every job in this business from reconciling the books to being a desk assistant to being an analyst to running hundreds of millions of dollars as a PM. None of that would have been possible if I'd gotten an MBA.

I also stand by my earlier post that most MBAs are total tools who think they know everything and actually know nothing. I think this is a function of the culture at top business schools which may make the graduates prepared for some things but makes them totally unprepared to work for me.

11/1/10

@Patrick, I find it interesting that getting even a Wharton MBA needs to be justified; questioning the value of a Wharton MBA wouldn't even have been a discussion just 5 years ago. I believe this will be the trend going forward (not that a Wharton MBA will be perceived as useless, just that it will be valued less). I also find it interesting that people who go through with the MBA cite intangibles (like network, taking time to find yourself, other PERSONAL reasons, fun etc etc) as a major reason for going. Maybe I am naive, but I feel that the MBA (or any grad program) should be about academics FIRST.

You say $500k-1MM opportunity cost is minor for a majority of students. That might be true at top MBA programs, but there is a big MBA world outside of the top 10. I would say that a majority of ALL MBA grads don't get what they pay for. I know I wouldn't.

@Bondarb, Your career track is basically the same route I am taking. I think that is the way to go for a VAST majority of guys who are already in a business-related field that they like. Experience FTW.

So, to summarize:

*Who benefits and how much from an MBA program varies from person to person, obviously.
*In today's job market, the value of an MBA has decreased, and will probably decline even more into the future.
*When factoring cost of attendance and opportunity cost, the risk/reward profile looks pretty pathetic.

I don't care what some of you say, Josh Kaufman does a pretty decent job of explaining why the MBA is not as valuable as some would think, especially considering most of you couldn't offer up any good reasons for the value of an MBA.

---
man made the money, money never made the man

11/1/10

@ mr1234 -- wasn't the whole purpose of this thread to justify an MBA? you clearly are extremely biased against the degree for whatever reason. To answer some of your questions:

If you think that your "network" is an intangible, yes that is naive.

Maybe I am naive, but I feel that the MBA (or any grad program) should be about academics FIRST.
Yes, this is also naive. How many jobs searches have you gone through?

Just because you've decided NOT to go does not mean that it isn't a great choice for some people. I don't agree that a top MBA has dropped in value "in today's job market" which is all I think I can comment on (I didn't go to another school so I don't know what the experience was like there).

Where does the hatred for this degree come from? Why, when you have no first-hand experience yourself do you find it necessary to speak in extremes and absolutes? Are you second-guessing your decision or trying to make yourself feel better about not going?

I am DYING to hear what people have to say about this, but I have a feeling most will be mum because what this guy is saying is so true despite what most people on this forum believe. In fact, this thread should be put on the front page blog. Are you hearing me, Mr. Moderator?

You found an article that agreed with your viewpoint and almost crapped your pants. Yes, the decision is personal - so why are you so adamantly trying to paint a broad shit-stained brush on the whole degree? Either way, I found the discussion interesting, so thanks.

-Patrick

11/1/10

mr1234 i find it ironic a few posts ago you were trying to ask for help deciding on whether to get an MBA and then you turn into a nazi-tastic basher of the degree. and yes the majority of the MBA degrees are crap, from st marys in texas to northern idaho state (if that even exists) but for some people they are a necessity for a change of geographic region, purpose, or just plain skillset or they want to take a look back at things

11/1/10

It's not like I have any "hatred" for the MBA programs, not at all. And my bias is justified in my opinion.

In my profession, my network stems from my professional relationships, not so much from people from my school. I don't see the value in paying a shit-load of money for the privilege of a professional network that you can cultivate on the job while getting paid and getting experience. Again, maybe I am being naive.

mr1234:

*Who benefits and how much from an MBA program varies from person to person, obviously.
*In today's job market, the value of an MBA has decreased, and will probably decline even more into the future.
*When factoring cost of attendance and opportunity cost, the risk/reward profile looks pretty pathetic.

^Not speaking in terms of absolutes and extremes here, am I?

WallStreetOasis.com:

Just because you've decided NOT to go does not mean that it isn't a great choice for some people.

^I agree.

WallStreetOasis.com:

I don't agree that a top MBA has dropped in value "in today's job market"

It's obvious the post-MBA job market is worse today than pre-2007, agree? Lower probability in getting a hi-paying post-MBA job + rising cost of getting an MBA = drop in value of an MBA. The job market sucked in 2008, 2009, and 2010. Things don't look great for 2011. So I don't see the value of an MBA appreciating any time soon.

WallStreetOasis.com:

How many jobs searches have you gone through?

Enough to know that an MBA wouldn't help me and may even hurt me because my industry values relevant experience over an MBA. Outside of IB, MC and jobs that specifically recruit only MBA's, I would assume this is true across the board for other industries. But hey, I realize this a finance focused website.

WallStreetOasis.com:

Are you second-guessing your decision or trying to make yourself feel better about not going?

After participating in this discussion, I am sure I wont be getting my MBA any time soon.

---
man made the money, money never made the man

11/1/10

@shorttheworld:

Yes, I did come here for advice, didn't really learn anything new that I didn't already know before, and then made a PERSONAL decision not to pursue it because of pretty much the same reasons that this Josh Kaufman guy highlighted.

---
man made the money, money never made the man

11/1/10

Let me just say I think most of the bullshit that we have to do in this world is useless and fucked up. Welcome to society where people make decisions based on brand, upbringing, skin color, grammar, clothes, etc. The MBA is not a huge jump in knowledge, but unfortunately right now it is the main way into certain jobs and careers. I think it is bullshit, but oh well, pissing in the wind.

In RE and in sales fields, I think performance and network are what really matters. In banking it is about pieces of paper and bullshit work. C'est la vie.

In reply to Marcus_Halberstram
11/1/10

Marcus_Halberstram:
Time after time, I've heard the same thing: people who go to (elite) business school tend to keep going and continue to excel and torpedo through their careers while their non-MBA-getting counterparts tend to stall out and hit a cieling of sorts. This is what I've heard Jamie Dimon say. This is what I've heard Steven Schwarzman say. And when I hear them say something, I don't have to ask "Who the fuck is Steve Schwarzman and why should I give a shit about what he says?"

That's a fair point. Coincidentally, I was just reading the book "Market Wizards" by Jack Schwager, and on page 312 while he is interviewing Jim Rogers, Rogers says the following: "Columbia is right here and the Dean kept pestering me to teach a course. I told him, 'I don't think people should go to business school.' I thought that, for many people, business school was a waste of time. I still think so."

11/1/10

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