How to Succeed in the Introductory Finance Course (or any other one, for that matter)

I've probably taught the introductory finance course 25 or 30 times over my career, with well over 1000 students having passed through my classroom doors.  I would estimate that 20-30% of the students taking the class fail it each semester (and colleagues at other schools have a similar experience).  As a service to the students (and the profs who hate having to fail them), I thought I'd put down a few thoughts about what separates the successful students (the A and B ones) from the marginal ones (C students) and failing ones (the D and F students).  So, whether you're taking the course for the first time or the fifth, here are some "do's and don'ts."  It's important to stress that these aren't just strictly applicable to Intro Finance - they hold for a surprising number of courses.

1.  First off, know how your instructor tests.  I don't mean multiple choice or essay - I mean approximately what % of his exams are problems vs. concepts.  Then make your plan of study appropriately - if 25% of your exams will be on concepts, put around that percentage of time toward concepts.  I often see students get 80%-90% of the "problem points" and less than 50% of the "concept points".  A point is a point, so don't neglect either type.
2. Be active learners. 
• For problems, this means actually solving problems.  Poor students just read the solution in the end of the chapter and think they understand the problem.  Whatever the problem is, work it first without referring to notes and solutions.   Then, and ONLY then, check the solution.   Then put the solution aside and (after a break), see if you can solve the problem (or one similar to it) without referring to notes.
•  For concepts, this doesn't mean simply reading and rereading a chapter (or list of topics).  Give yourself quizzes (or have someone else give you quizzes).  Make up lists.  Put together a "Cheat sheet" from the chapter, and so on.
3. Talk your way through problems:  One of the differences between good students and poor ones is that good students can explain what they're doing as they move through a problem.  So get in the habit of "talking" your way through a problem - explain WHY you are taking each step.  If you can't do this, you don't understand the problem. And if the teacher makes even a small tweak to the problem, you'll get it wrong.
4. Use your professor's office hours.  When you work problems and get stumped, go see your prof during his office hours - and do it sooner rather than later.
5. Keep a list of problems and concepts you have trouble with.  Whether it's during a lecture, while reading the text, or while doing problems, if there's something you don't understand, write it down in a list.  After you've reviewed, go through the list and get answers - whether from a classmate, the prof, or a tutor. 
6. Don't try to second-guess the professor on exams. A lot of poor students end up in "will this be on the exam?" mode.  You're better off trying to figure out what the key concepts are, and make sure you can execute them.  To determine what these are, here are a few guidelines:
• most texts have a list of critical concepts at the beginning of each chapter.
• If a concept is mentioned in the margins of the text or highlighted (maybe in bold type), it's probably important.
• If a concept is mentioned in the summary at the end of the chapter, it's probably important.
• If your instructor says it's important, it probably is.
7. Work more problems
8. Start early - knowledge is usually cumulative.  So if you miss a concept early on, it will usually result in bigger problems later on.  So work on things regularly - an hour a day for 5 days is almost always better than 5 hours a the end in one sitting.  It's like the time value of money, but with studying - banking $100 a month for 10 years (120 payments) will give you a much bigger account balance than $12,000 because of the interest involved.  And the "time value of studying" is a lot greater than the time value of money.  

How Students Can Write Better Assignments

I'm finishing up the semester, and am in the middle of grading about 20 write-ups that my students had to do for a case we covered in class.   The case involved a venture capitalist offering an entrepreneur funds for what the entrepreneur thought was far too large a stake in his firm.  The students had to write a consultant's report advising the entrepreneur what to do with the offer. 

Once again, my students demonstrated that many (not all, but many) really don't understand how to write well.  So, I thought I'd do a service for students out there who have to do written assignments  (and for the faculty who have to read them) and give a few guideline on how to write better.

1. Know what the mission is before you start: Are you writing an advisory memo? Are you listing the issues involved in a valuation?  Are you giving a recommendation?   In other words, all good writing (just like a good presentation) has a goal in mind.   Don't start writing until you're sure what it is.
2. Organize BEFORE you start writing:  Back in the dark ages before computers (and before the meteor hid that destroyed all in my village), changing your writing was extremely difficult once it was down on paper.  So, to avoid that, we had to get very organized before we wrote.   Dierdre McCloskey (who's done a lot of work on how to write more effectively in economics) said, "90% of empirical work is getting your data straight, and 90% of good writing is getting your thoughts straight".  So, your best friend is a VERY thorough outline.  Start with a simple "high level" outline and then flesh it out in increasingly finer points.  Then make it even more detailed.  This makes sure that your writing stays "on point".  If you have a detailed outline, the writing is easy - you're just executing the idea.   
3. Don't use flowery language or big words trying to impress me: All through elementary and high school, teachers tell us that good writing means being more expressive and using more evocative words.   So, the message comes across that using bigger words means that your writing will be better received (you sound smarter, you're more impressive, women (or men) will fall at your feet and so on).  In general, this doesn't work with business writing.   Be simple, direct, and to the point.  Don't use a longer word where a shorter one will do.
4. Eliminate unnecessary words and phrases: Phrases like "the fact that..." and "basically" are the written equivalent of saying "ummmmm."  They add nothing and disrupt the flow.  A former teacher of mine once suggested I write a first draft and then eliminate at least one word from every sentence.  So try to write using the minimum number of words that will do the job. 
5. Edit, Edit, Edit: I've only met one person in all my years who could consistently write a first draft that was perfect.  Most people (and I include myself in this group) only get it about half-right the first time around.   For me, it usually takes about 4 rewrites before I'm even minimally satisfied with my writing.
6. Give your work to your harshest critic: We all have a tendency to think that what we write is all good.  But the test of good writing is how OTHER people take it.  So, aim to have at least one person critique your work before taking it public.  And when you choose people to read it, choose the toughest (and pickiest) critics you can find.  The person who says "everything looks great" is not the critic you want - you want the pickiest, nastiest critic you can get.
7. Give yourself Time: All the above steps take time.  So if you have an assignment due on Friday the 13th, you should aim to have a first draft done at least a day or two before.  Good writing takes time, and usually involves multiple revisions.   So start early and give yourself time for revisions.

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Labels: Academia

Student Loans Are Diving Underwater

The student loan market has a lot of factors that seem to say "Stay the heck away!": they're relatively easy to qualify for, college costs have increased far more rapidly than general consumer prices, we now seem to feel that EVERYONE SHOULD HAVE A COLLEGE EDUCATION. ELEVENTY!!!, and most importantly, the job outlook for many (most?) college grads is to put it mildly, pathetic.  

This graph from the Washington Post piece points out some evidence that we might be seeing the beginning of the next "bubble pop".  Although they're a fairly small part of the overall consumer loan market, student loans are more likely to be 90+ days past due than any other loan class.  And the percentage is growing pretty rapidly. 
 

Luckily, the Unknown Daughter gets free tuition at Unknown University.   We still have a half-dozen years until we have to shell out for college, but it'll take a lot to justify her going somewhere other than to my (fairly low-cost) school. 

But I'm Not Dead

It's been almost a year since I last posted.  And a lot has happened at Unknown University since then.   I'm waiting to hear from the University P&T Committee and the Provost on my tenure case (I've made it past all the other hurdles - department, college peers, college P&T committee, and dean).  So I've been keeping a low profile since then regarding the blogosphere and trying to get stuff done.

Since the last post, the Unknown Baby Boy (a.k.a. KnuckleHead) has turned 4.  He is a lunatic, and a great deal of fun (despite the occasional head butt to the package).   The Unknown Daughter (a.k.a. Future Ruler of the Universe) is finishing up 6th grade.  She's planning on going to a 1-week computer camp to learn HTML this summer, so the blog might actually end up looking good.  On the down side, she just let slip that she's sweet on a young man, so it starts.  Looks like I'll have to buy a large knife to sharpen with e demented grin when he comes a-callin.
 
Oh, and I had a minor heart attack just before Christmas - no damage to the heart muscle, and I've been back riding since about 2 weeks after.
 
I'll resume regular posting once the tenure stuff is resolved.  Lots of stuff to catch up on. 

I the meanwhile, here's something completely unrelated to academia (I just found it funny).  It's John Cleese's remarks at Graham Chapman's funeral.  Now THAT is a eulogy.

Cat Abuse and Technology - Be Still, My Heart

A Dutch artist named Bart Hansen recently decided to memorialize his dead cat (Orville) in an unusual way - by turning it into a remote-controlled helicopter. Jansen said that Oville always loved birds, and now he can fly with them.


Unfortunately, he forgot the laser beams.  Amateur!

Department of "What Were They Thinking?"

I'm back.

Unknown University has a new initiative.  They want to encourage more "interdisciplinary" research.  So, they're trying to hire in groups centered around "big" topics.   So what do they call this approach?

"Cluster Hires"

It's too easy.   I'm not going there.  

The 7 Habits of Spectactularly Unsuccessful Executives (and Deans)

Just came across this article (The 7 habits of Spectacularly Unsuccessful Executives) in Forbes. It seems like the same characteristics can be applied to Deans (and College Presidents), since they're just executives of a different type. Read the whole thing, but here's the 7 habits (in some cases, I've edited them a bit)

1. They see themselves (and their organizations) dominating their environment
2. They identify so completely with the organization that there is no clear boundary between their personal interests and their corporation’s interests
3. They think they have all the answers
4. They ruthlessly eliminate anyone who isn’t completely behind them
5. They are consummate spokespersons, obsessed with the company image
6. They underestimate obstacles
7. They stubbornly rely on what worked for them in the past
   

I've known deans that embody 2, 3, 4, and 6. How about you?





http://www.forbes.com/sites/ericjackson/2012/01/02/the-seven-habits-of-spectacularly-unsuccessful-executives/

Someone Need an A$$ Whoopin?

This reminded me of my childhood. My father's "weapon of choice" was his slipper. That may sound funny, but he could really whip that thing. Different times.

I swear, one time he made that thing go around two corners.

HT: Adam Yore

Fly Away, Little One. Be Free!

It's been a good couple of days:

• Yesterday, we just got a very good sized check from the IRS (we'd let some things slide when the Unknown Son was sick, and finally got things straightened out a few months ago.
• about a half-hour ago, I submitted a paper to a journal (not a top-tier one, but a decent one). It's been about 4 years since we started it. So now, it's off my desk.
• I just got an email that my new 43-inch flat-panel TV is available for pickup from Best Buy.
  

All in all, a nice way to close out the year. Now I just have to get the TV set up in time to watch the Lesnar/Overeem MMA fight on Friday.

The Semester Goes Out Not With a Bang, But With a Whimper

I was just commenting to the Unknown Wife how this semester was ending going so well compared to previous ones - my student managed investment fund presentation was done a day earlier than usual, my principles class was ahead of schedule, and my exams were at the beginning of exam period rather than near the end.

I should have known - never say things like that. Even in jest.

It angers Academia - the patron goddess of all professors (also known as "she who makes professors' work go pear-shaped at the worst possible time")

So, what happens? I was cutting and pasting items from the grades spreadsheet for my principles class (it has four components, all on separate tabs of the worksheet). Somehow, I not only deleted the grades for all three exams, I copied the sheet to a file name that overwrote the backup (I always save the spreadsheet to a new file name after each update). After searching for over an hour, I finally found an email backup copy I'd made that had everything but the final exam grades.

The morals of the story:

1. Make multiple backups of your grading spreadsheet (and anything else of critical importance) every time you change it.
2. Never, ever say "things are going well this semester". It angers Academia (and she is a vindictive "rhymes with witch").
   

On a more pleasant note, a couple of bright spots this week:

1. looks like I'll have a paper submitted within a couple of days. It won't get looked at by the journal editor for a couple of weeks due to the holiday, but it'll be off my desk. Since (as my coauthor says) "if we don't submit this one soon, we'd better start saving for its college education", that's a good feeling.
2. A coauthor informed me that she had a revise and resubmit that requires her to do some tests that she could do herself, but would rather outsource. Since I can easily do it with a week's work or so, she asked me to be a coauthor. So, for a bit of work, it looks like I will likely have another hit.
3. We've been making do at the Unknown Household with a seven-year old TV (an old cathode-ray model). We just got our new TV stand (a very nice corner model) and will shortly be getting a new 46 inch flat panel model. Ah, the Kingdom of Thingdom has a new subject.
   

In any event, here's wishing a Merry Christmas (or whatever else you choose to celebrate this time of year) to all my readers (all three of them).

It's finally feeling like Christmas in the Unknown Household - we've got Christmas songs playing on the radio, Winnie the Pooh (the Unknown Son's (a.k.a. Knucklehead's) recent fascination) on TV, and I'm in the middle of making up a quadruple batch of pumpkin soup on the stove A double batch will be for our neighborhood party tonight and another is for the big family get-together at our place on Christmas Day. So the place sounds and smells like Christmas.







mythe Goddess made me save my grade spreadsheet to the wrong name