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For Master of Finance Grads, Five Traits For Career and Life

Rigorous finance training offers five traits that are also useful in everyday life, said MIT Sloan professor Deborah Lucas. The best investors:

  • See the world as it is, rather than as they want it to be.
  • Understand that risk must be managed, and cannot be ignored.
  • Learn from opposing points of view and a variety of perspectives.
  • Look beyond conventional wisdom.
  • Reverse their positions, if proven wrong.

“Looking back, those are the lessons that make me feel so personally lucky for [being] in finance,” Lucas told the 114 graduates of the Master of Finance Class of 2017 at a convocation ceremony in Cambridge, MA, on June 8.

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Finance at Sloan – A Note for Prospective Students

Growing up in central China, I always held a deep passion for infrastructure projects. It was the transportation and telecommunication facilities that allowed me to see and to continuously explore the unknown world. This motivated me to study Civil Engineering during my undergraduate and graduate studies and to join a construction firm afterwards.

With experience, I realized that even the best engineering knowledge was not enough to get projects done. Bridges and roads could not be built with an empty pocket. Therefore, I applied to Sloan with an aim of studying finance.

With very limited finance knowledge, I started my exploration at Sloan. I joined the Finance Track because I did not know where and how to start. The Track provided an effective way to channel my interest in finance and the needed guidance for a finance-novice like me to start off on the right path. The core classes, together with the Track’s required curriculum, provided a strong foundation. Afterwards, the varieties of advanced finance courses such as Corporate Finance and Entrepreneurial Finance allowed me to deepen studies based on my own interests. Meanwhile, student clubs such as Finance Club and Finance & Policy Club, helped me to connect with classmates with similar interests and to broaden my networks in relevant industry. MIT Golub Center for Finance and Policy provided a platform for me to research the impact of government regulations on financial institutions.

Through the two years of study, what I learned went far deeper than the discount cash model and the basics. I had the opportunity to learn about various applications of finance theories such as the valuations in M&As and start-ups. Most importantly, I got to know the history of modern finance at Sloan. The birth place of modern finance, MIT Sloan is home to many finance legacy theories such as Black-Scholes-Merton Option Pricing Model and Modigliani-Miller (MM) Theorems.

If you’re interested in learning more, please join us on May 13th at the Focus on Finance Symposium.  This link will give you more details about the event and a registration form.

Look forward to seeing you at Sloan!

Weiyuan (Wendy) Yuwen is an MBA Candidate in the MIT Sloan School of Management Class of 2017. She is involved in Finance&Policy Club, Finance Club, Sloan Board Fellowship and Graduate Student Leadership Fellowship. Prior to Sloan, Wendy worked as a civil engineer and pursues a career in infrastructure investment to serve developing communities.

Rethinking How the Housing Crisis Happened

New research casts into doubt the central storyline of 2008—that this was ever a subprime crisis to begin with.

“In 2006, Robert and Julia Tanner borrowed $30,000 to put an enclosed patio on their home that they had somehow managed to live without for 25 years. Why don’t you ask them about that when they’re spitting in your face while you walk them to the curb? Why don’t you ask the bank what the hell they were thinking giving these people an adjustable rate mortgage? And then you can go to the government and ask them why they listed every other regulation … You, Tanners, the banks, Washington, every other homeowner and investor from here to China turned my life into evictions.”

So Florida businessman Rick Carver lectures a young protégé in “99 Homes,” a 2014 film that casts the late-2000s housing collapse as a morality play. Carver, loaded with unforgiving moral certitude by the actor Michael Shannon, orders the Tanners’ eviction while standing in an empty McMansion. He’s living there part time after evicting the tenants when their mortgage went underwater.

“99 Homes” is littered with ruin. Nobody—the poor, the Tanners, the McMansion dwellers—escapes, or escapes blame for, the crisis. Now research from MIT Sloan finance professor Antoinette Schoar finds this picture more true than is commonly accepted. In fact, Schoar argues, it was middle-class borrowers with good credit who drove the largest number of dollars in default.

“A lot of the narrative of the financial crisis has been that this [loan] origination process was broken and therefore a lot of marginal and unsustainable borrowers got access to funding,” Schoar said in September at the MIT Golub Center for Finance and Policy’s annual conference. “In our opinion, the facts don’t line up with this narrative … Calling this crisis a subprime crisis is a misnomer. In fact, it was a prime crisis.”

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