Sunday, September 09, 2007

Two Nights Before...

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My course - Behavioral Finance and Business Valuation (BFBV) starts on 9/11. Two more nights to go. Been busy preparing a revised course outline (I like to change my course every year otherwise it gets too boring to put the same slides again and again).

I will have a total of 30 contact sessions with 70-odd students. I wish I could have more contact sessions - there is so much material to cover! Soon, the students will be tormented by an avalanche of mails and assignments etc from me :-)

I have prepared a list of topics I want to add and those I want to delete. There is a list of movies to show, stories to tell, video scenes to play. There is a list of appropriate quotes to insert at the right moment. Its like writing a screenplay!

I am increasing the scope of behavioral finance component this year and hopefully students will like that. I have also incorporated many changes triggered by Nassim Taleb and his influence on my thinking. His latest book- Black Swan - is very good and I can relate what he has written to a huge number of real-cases which would be suitable for classroom discussions.

The photo at the top was taken by my wife while I was deeply engrossed with my friends i.e. my books. Two more nights and miles to go before I sleep...

9 comments:

Nihar Dalal said...

Prof Bakshi:

You might want to check out a new release "Your Money & Your Brain. Written by Jason Zweig, who edited the revised "Intelligent Investor", the book is a good volume on behavioral finance.

Regards,

Nihar Dalal

Sanjay Bakshi said...

Thanks Nishar. Will check out this book. Jason Zewig has done a good job indeed in the footnotes of The Intelligent Investor.

Nihar Dalal said...

I agree about the footnotes in Intelligent Investor. In fact even in this new book there is a ton of information in the footnotes and Bibliography. I like to use a book's bibliography to explore connected fields and areas. For example Black Swan led me to "The Psychology of Judgement and Decision Making" by Scott Plous and "The Logic of Failure" by Dietrich Dorner (an absolute classic). Check it out.

Sanjay Bakshi said...

Nihar, please send write to me on sanjay@sanjaybakshi.net. If its ok with you, I'd love to invite you to be a member of my book club.

I agree with you that the bibliography, and particularly the notes are very fertile places to do more research. The notes at the end of Black Swan led me to Behavioral Finance by Montier, which I immediately ordered. Montier's updated edition is expected to be released later this year.

Thanks for the mention of other books which I will now check.

Also see notes in end of The Selfish Gene by Richard Dawkins. He led me to Alexrod, the guy who wrote on the evolution of co-operation and came up with the Tit for Tat strategy which Dawkins talked about in his book...

Anonymous said...

Hi Prof. Bakshi,
I was one of your students, and would like to wish you all the best for the new session.
I do have an exception though on Taleb and the course’s general decry on Efficient Market Theory.
Taleb attributes success in trading due to sheer randomness. I can accept that for day trading, but refuse to believe that a Buffet or a Soros are plain lucky. In fact Buffet’s clear influence over a few of business (Bear Stearns) and the subsequent rise in price shows that he never gave Randomness a chance.
Efficient Market Theory is a beautiful and elegant theory, which I feel has been tested through LTCM. Unlike Taleb I feel that Merton’s and JM’s LTCM precisely followed this theory and made money in its deviations. LTCM was definitely hit by a Black Swan event, but then the problem was amplified by the sudden disclosure of their positions. I also accept the facts that their risk control measures were not in place, and made a mistake.
I would have one suggestion to make, why don’t you look at an alternative history. Assume Buffet financed LTCM what would have happened. Two scenarios, one he did nothing to intervene and two he decided to take control.

Best Regards and Good Luck.

Sanjay Bakshi said...

Thanks. Just one comment - i don't think NNT said that Buffett has no skill. Rather, he said that we can't conclusively prove that he does. Moreover, Mr. Buffett has himself referred several times to the "ovarian lottery" i.e. how lucky he was to be "Born in the USA" than in Bangladesh.

Atul said...

Dear Sir

It is great to hear that one more batch of MDI will benefit from BFBV..I am sure that atleast a few of them would find it a enlightening and wonderful experience..just as I did 2 years ago..

Thanks for teaching so beautifully and goodluck for course ahead

Atul Tiwari
Batch of 2006

Sanjay Bakshi said...

Good to hear from you Atul. And thanks!

All the best...

Neeraj said...

Hello Sir,
My name is Neeraj Marathe. I have never really been your student, but have learnt a lot from you. One of my friends was a student of yours and he just cant stop talking about your course in MDI which has been a life-changing experience for him.
So, i have a request to make..can you PLEASE keep on posting about what you taught at MDI, the books and write-ups you recommended, the assignments you gave, the movies you showed to the students and stuff..

There will be one post per day for the entire duration of your course.

I totally understand that this will be extremely time consuming, specially during the duration of the course, where you have lots to teach and even more to research...
But the reason i am asking for this is that people like me would get a first-hand insight into your thought-process. (this cant be a substiture for being there in person, but would be amazing to at least get a feel of what all goes on in your course).
Sir i totally understand if time or professional constraints do not allow you to act upon my heart-felt request, but if you can, it would be just awesome.

Warm regards,
Neeraj Marathe