A look at the lives of the Forbes 400 implies that the most important attribute is the ability to sift through ambiguity. Contradictions abound, meaning that shades of gray hold the answer to your burning desire for riches. Should you go to a great school? Well, yes ... but only if you're going for an MBA and plan to work for a major financial firm. But, you can still go to an Ivy League school if you're not studying finance but join Skull and Bones. Of course, dropping out of Harvard can be a great way to launch a career in the technology field.

It's tricky. There are no easy answers. But, the road to billions is littered with the corpses of aspiring magnates who thought it wouldn't be difficult. So, don't just read the seven attributes after the jump. Understand them. Read them twice. Then, your future financial situation will be assured.

Or, you can just do one of those chain e-mails and wish for wealth.

[Thanks, Forbes and MSNBC]

Continue reading Seven characteristics of the rich and famous: A blueprint to uber-wealth

Seven characteristics of the rich and famous: A blueprint to uber-wealth originally appeared on BloggingStocks on Mon, 05 Oct 2009 17:00:00 EST. Please see our terms for use of feeds.

Once upon a time, a law degree from the likes of Harvard meant not only that the job offers would come but that they would be substantial. A big check from a prestigious firm, of course, is a great way to start a career, as that name stays on your resume for the rest of your life. A decline in demand for legal services, however, has left the major law firms rethinking their campus hiring volume. As a result, even students from the top law schools are likely to have trouble landing their dream 90-hour-a-week jobs.

Skadden, Arps, Slate, Meagher & Flom, the top law firm in the United States by revenue, forecasted a 50% drop in summer hiring for next year, recruiting partner Howard Ellin told Bloomberg News. In 2009, Skadden brought in 225 students for the summer. Next year, only half that amount is expected.

Continue reading Bigger crowds following ambulances as law firms not hiring

Bigger crowds following ambulances as law firms not hiring originally appeared on BloggingStocks on Wed, 23 Sep 2009 15:45:00 EST. Please see our terms for use of feeds.

Before celebrating, though, remember that depressed housing prices and constrained financial markets make it tougher to dip into home equity to pay for school (a favorite strategy of the past few years), and layoffs are putting an obvious strain on household finances. So, the bargain in all this may be hard to find, even with financial aid increases of 9.2%.

Continue reading Recession: something (finally) strong enough to slow tuition hikes

Recession: something (finally) strong enough to slow tuition hikes originally appeared on BloggingStocks on Mon, 29 Jun 2009 15:00:00 EST. Please see our terms for use of feeds.

With its value plunging along with the rest of the market, Harvard's endowment is laying off a full 25% of its staff -- 50 people.

Harvard's endowment has an unusually large staff because, unlike most colleges, it manages a significant portion of its money in-house. At most colleges, the endowment managers main task is to select outside managers for the funds.

Harvard's endowment managers have come under some fire lately for the seven-figure pay packages they often receive. According to The Wall Street Journal (subscription required), "For the most-recent academic year, HMC paid its top six managers $26.8 million."

By laying off a quarter of its staff to reflect a decline of around 25% -- probably a bit more -- in the endowment's value. Harvard is preventing its costs from growing to a higher percentage of its asset value. Lower bonuses for fund managers will also help the endowment control its costs.

Harvard endowment lays off workers originally appeared on BloggingStocks on Sun, 08 Feb 2009 08:40:00 EST. Please see our terms for use of feeds.

Harvard's business school (HBS) has been celebrating its 100th anniversary this year. And it looks to be at the peak of its power. That's unfortunate because five of its most powerful graduates have made significant contributions to absolutely wrecking the global economy. HBS admits people who are natural leaders. Unfortunately, many of the most powerful of these leaders have followed the path of destruction.

Here are five Harvard MBAs who wrecked the economy:

• George W. Bush ('75). The best thing I can say about Bush is that he said he was sorry for all the problems that occurred while he was in the White House. Unfortunately, he seems to believe he was a victim of events outside his control. One of his HBS professors said of Bush "He showed pathological lying habits and was in denial when challenged on his prejudices and biases. He would even deny saying something he just said 30 seconds ago."
• Hank Paulson ('70). As Treasury Secretary Paulson has consistently ignored the severity of the financial crisis -- In June 2006 he gave a speech at HBS in which he said, "this is by far the best global economy that I have seen in my career" -- but this September he was able to sell Congress on an ineffective plan to fix what he finally realized was an imploding economy -- a plan has kept changing. The economy has continued to crash despite his bone-headed efforts to save it.

Continue reading Five Harvard MBAs who wrecked the global economy

Five Harvard MBAs who wrecked the global economy originally appeared on BloggingStocks on Sun, 07 Dec 2008 13:40:00 EST. Please see our terms for use of feeds.

Harvard reports that the value of its endowment has declined $8 billion between the end of June 2008 through October 2008. That would make Harvard's endowment worth 22% less than at the end of June, or $26.9 billion -- but it probably has further to fall thanks to illiquid assets like private equity interests. Meanwhile, Harvard and its peers could be in trouble because fewer people will be able to afford college given the market crash. That will mean college administrators are facing some tough choices.

Harvard is responding to the decline in its endowment by taking a "hard look" at staffing levels and compensation. It is forecasting a 30% drop for its endowment ending in June 2009, which would bring it to $25.8 billion, down another $1 billion. While this strikes me as optimistic, it does suggest the extent of the damage and the challenges Harvard and its peers face.

The options for universities are dwindling. A study suggests that tuition has risen 439% since 1982 while median family incomes have increased only 137% during that period. If tuition continues to rise at that rate, few families will be able to afford college. With the student loan market in dire straits and incomes likely to fall further due to layoffs, the only way for colleges to attract top students who can't pay will be to cut tuition even more on the lower income families while making up the difference by raising tuition for the wealthiest ones.

Continue reading Harvard endowment loses $8 billion - how will colleges survive?

Harvard endowment loses $8 billion - how will colleges survive? originally appeared on BloggingStocks on Wed, 03 Dec 2008 12:00:00 EST. Please see our terms for use of feeds.

Harvard is an easy target for the woes of our economy. Its business school produced George W. Bush, the fellow who's presided over the current economic catastrophe, and Rick Wagoner, the CEO of the largest automobile maker who's led its stock down 95% in the last eight years and now wants $25 billion worth of taxpayer money to keep the millions rolling into his bank account. But Harvard had these folks for just two years, so it's tough to blame the school for the current predicament.

However, with $36.9 billion in assets (as of June 30), Harvard also has the largest endowment of any university. And thanks to its big exposure to very illiquid interests in venture capital (VC) and private equity (PE) firms, Harvard leads a growing list of limited partners (LPs) which are selling stocks and those very illiquid interests in order to come up with the cash needed to fulfill their capital calls to these partnerships.

This requires some explaining. VC firms raise money from limited partners such as wealthy individuals, foundations, pension funds, and endowments. But the LPs don't write checks up front -- instead they hold onto their cash and must write a check when the VC calls and asks for the money when the VC is on the verge of making an investment. The problem for many LPs like Harvard is that much of their stock portfolio is locked up in hedge funds and these illiquid VC and PE interests.

Continue reading Is Harvard's endowment crushing stocks?

Is Harvard's endowment crushing stocks? originally appeared on BloggingStocks on Wed, 19 Nov 2008 13:10:00 EST. Please see our terms for use of feeds.

The Dow lost 385 points this week with a 315 point election day rally on Tuesday, two consecutive days which totaled 929 points down, and a Friday rally of 248 points. Did the market rise on hopes of a McCain upset only to fall due to disappointment that Obama won? Did the market rally Friday because the 6.5% unemployment rate was not as bad as expected? It could be, but I doubt it.

More likely, the markets are moving because of the trading behavior of endowments, pension funds, and hedge funds. They make decisions for very different reasons. But some reporting on daily market movements looks like a joke -- nobody knows why the market goes up or down, but commenters use price movements as a daily barometer of the national mood. So how do endowments, pension funds, and hedge funds move the markets? Here's how:

• Endowments. Big university endowments, such as Harvard's, are desperately trying to unload billions of dollars worth of illiquid interests in venture capital and private equity firms. Harvard is reportedly trying to dump $1.5 billion worth of such interests into a market where there is likely to be very little interest. Not only that, these private equity firms are demanding that endowments fork over the money they committed to them so they can make new investments. And with the S&P 500 down 36.6% so far this year, many endowments are selling anything liquid to meet these commitments and to pay shorter-term obligations -- such as paying professors and keeping the lights on.

Continue reading Why did the Dow fall 385 points this week?

Why did the Dow fall 385 points this week? originally appeared on BloggingStocks on Sun, 09 Nov 2008 08:16:00 EST. Please see our terms for use of feeds.

Your 401(k) and ROTH IRA might be down, and shares of student lender Sallie Mae (NYSE: SLM) have gone from $50 to $15 since October, over concerns about the student loan market.

But you'll be happy to know that the endowment for Harvard is chugging right along, up in the 7-9% range for its fiscal year ended in June, according to The Wall Street Journal (subscription required).

In the current market malaise, that's enough to make it the best-performing major endowment, according to experts. That's especially impressive given the fund's massive size: $35 billion.

The Journal reports that "The endowment's staff pursued a strategy of shielding the fund from market downturns by purchasing credit-default swaps that helped protect it from wild market swings. Harvard also had a larger position than many endowments in plain-vanilla Treasury debt, which outperformed the stock market."

I have just one question: With a $35 billion endowment growing at 7% per year, why do they need to charge $45 thousand per yeah? To its credit, the school announced late last year that it would extend much more generous financial aid to middle-class families.

Harvard endowment zigs while market zags originally appeared on BloggingStocks on Sat, 09 Aug 2008 13:10:00 EST. Please see our terms for use of feeds.

Harvard has come out with a study that says the housing crisis will be prolonged. According to Reuters, the research says, "Record foreclosures and limited access to credit will make it harder than usual to rebound from this U.S. housing market slump."

It is comforting when some of the smartest people in the world come to the same conclusion that everyone else has already reached.

The Harvard work is based on the premise that a combination of high foreclosures and tight credit will keep housing down longer than in the past. That may be true.

The people at Harvard can afford houses. No one else can.

Douglas A. McIntyre is an editor at 247wallst.com.

The slow learners at Harvard discover housing crisis originally appeared on BloggingStocks on Mon, 23 Jun 2008 12:12:00 EST. Please see our terms for use of feeds.

Despite Fed Chair Ben Bernanke's comments this week about inflation, the dollar is dropping -- which is fueling higher oil prices. And the reason for that relates to the different strategies of the Fed and European central banks for fighting inflation.

The difference? The Fed talks about inflation but keeps its interest rate at 2%. If Bernanke was serious about fighting inflation, he'd raise rates. Meanwhile, the New York Times reports that two European central banks -- which set their rates at 4% (European Central Bank (ECB)) and 5% (Bank of England) -- are talking about raising the rates further because they're "alarmed by soaring prices for food and fuel." The ECB thinks May inflation was 3.6% and it expects a 3.4% price rise for all of 2008.

The dollar has lost 70% of its value since January 2001 -- it's dropped from 92 cents to the Euro down to $1.56. Now if you're an investor, would you rather get a 4% return or a 2% one? That's the simple choice faced by people trying to decide whether to buy Euros or Dollars. And with the ECB on track to raise interest rates next month, the dollar is likely to fall further behind unless Bernanke puts the Fed Funds rate where his mouth is.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Why the dollar is dropping originally appeared on BloggingStocks on Fri, 06 Jun 2008 09:48:00 EST. Please see our terms for use of feeds.

Yale grad takes over at Harvard's $35 billion endowment originally appeared on BloggingStocks on Fri, 28 Mar 2008 08:30:00 EST. Please see our terms for use of feeds.

Continue reading Cut your volatility with timber

Cut your volatility with timber originally appeared on BloggingStocks on Mon, 21 Jan 2008 15:20:00 EST. Please see our terms for use of feeds.

No doubt, Facebook is one of the internet's hottest startups. The company has raised gobs of venture capital, has deals with companies like Microsoft (NASDAQ: MSFT), and is often rumored to go public or be bought out.

The company's founder, Mark Zuckerberg, is just in his early twenties, fresh from Harvard. Over the past few months, several of his recent classmates have made claims that they are the real owners of the Facebook concept.

Such disputes are very common for early stage companies. And it's also common for these companies to be sloppy in protecting themselves from legal claims.

So what can be done?

Continue reading Entrepreneur's Journal: Facebook's lessons on intellectual property

Entrepreneur's Journal: Facebook's lessons on intellectual property originally appeared on BloggingStocks on Sun, 09 Sep 2007 13:10:00 EST. Please see our terms for use of feeds.

Continue reading Harvard endowment surges to nearly $35 billion

Harvard endowment surges to nearly $35 billion originally appeared on BloggingStocks on Wed, 22 Aug 2007 14:27:00 EST. Please see our terms for use of feeds.

Harvard's endowment takes a $350M hedge-fund hit originally appeared on BloggingStocks on Wed, 01 Aug 2007 15:35:00 EST. Please see our terms for use of feeds.

As sports columnist Blackie Sherrod once wrote "If you bet on a horse, that's gambling. If you bet you can make three spades, that's entertainment. If you bet cotton will go up three points, that's business. See the difference?"

Apparently the law sees a principled distinction between these three forms of betting, and poker enthusiasts and Harvard professors are doing research to try to prove that poker is a game of skill, in the hope that such a determination could lead to the legalization of online poker betting. According to the Wall Street Journal, our government categorizes games that are considered to be dominated by chance are gambling, while those that are mainly skill are not. Congressman Barney Frank has introduced a bill that would legalize online gambling, saying that gambling is a personal freedom issue.

But here's what I don't understand: How can you possibly argue that day-trading Pink Sheets stocks is a game of skill, but poker is a game of chance? Does anyone honestly think that?

You could possibly argue that day-trading is legal because it serves an economic purpose -- the liquidity that trading provides encourages investment. Without the ability to sell shares, people would be less likely to invest in American businesses.

But online poker can serve an economic function as well: By legitimizing the games, the government could collect tax revenue. And with record deficits and a soaring national debt, doesn't the government have better things to do than battle the imaginary dragon of online poker? Maybe they could start by getting rid of the The Lottery.

Is poker a game of skill? Is investing? originally appeared on BloggingStocks on Thu, 03 May 2007 19:21:00 EST. Please see our terms for use of feeds.

Harvard, Stanford, Notre Dame, and MIT have all received permission from the IRS to allow donors to invest in their endowments (WSJ, registration required). By structuring investments as charitable trusts, donors receive a regular distribution until death, and then the money goes to the school.

The returns earned by endowments at schools such as Harvard and Yale are impressive. The Harvard endowment has returned 15.2% per year for the past 10 years, crushing the S&P 500's return of 8.3%. In addition to their strong performance, endowments are diversified across so many different asset classes that they often bear a very low correlation to the stock market. While investing in endowments is often inefficient in terms of taxes, the historically higher returns some have earned has more than made up for it.

If tax rules loosen up and allow endowment investors to keep a greater share of their gains, we could see endowments become a popular vehicle for retirement planning. Instead of watching the Final Four basketball games, investors could keep a close eye on which school is earning the highest returns.

I wonder how much correlation there would be between the prestige of a school and the performance of its endowment. As Warren Buffett has said, "Success in investing doesn't correlate with IQ once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."

Retirement planning that sends you to Harvard originally appeared on BloggingStocks on Sun, 25 Mar 2007 14:40:00 EST. Please see our terms for use of feeds.

Volatility Index S&P 500 Options-VIX up 0.24 to 13.53

Advanced Micro Devices Inc. (NYSE:AMD) calls (quoted in Pennies) busy on chatter of private equity cash infusion. AMD is recently up $0.46 to $13.87. AMD has been frequently subject to LBO chatter; today chatter is circulating that a friendly private equity-strategic partner could surface to make cash infusion. Speculation is that AMD could announce a deal similar to the deal Sun Microsystems Inc. (NASDAQ:SUNW) announced on 1/23/07, when it received a $700 million dollar private placement from KKR. AMD call option volume of 73,560 contracts compares to put volume of 9,747 contracts. AMD April option implied volatility of 41 is below its 26-week average of 45 according to Track Data, suggesting decreasing price risks.

eBay Inc. (NASDAQ:EBAY) implied volatility is low. Meg Whitman enters ninth-year working as eBay CEO. EBAY is recently up $0.23 to $31.72. Meg Whitman has an estimated net worth of $1.2 billion according to Forbes, much of it in EBAY stock. Years ago, Whitman said she would leave EBAY after eight to ten years. Whitman joined EBAY in 1998. EBAY has a market cap of $43 billion. Microsoft Corp. (NASDAQ:MSFT) has a market cap of $270 billion. EBAY overall option implied volatility of 34 is below its 26-week average of 37 according to Track Data, indicating decreasing risks.

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Daily option update - March 21, 2007 originally appeared on BloggingStocks on Wed, 21 Mar 2007 13:16:00 EST. Please see our terms for use of feeds.

Kiplinger's Personal Finance magazine just published its ranking of the "best values" in private colleges. The rankings featured two lists: one for the top liberal arts colleges, which offer mostly undergraduate programs, and the other for universities, which also offer graduate degrees.

As a sophomore of Amherst College, I was not surprised to see Swarthmore, Williams, and Amherst round out the top three colleges. Cal Tech, Yale, and Harvard topped the list for the top three universities.

Like many private institutions across the nation, Swarthmore uses its own calculation, in addition to the federal government's formula, to determine who qualifies for need-based aid. "We really want to know your situation and give a fair assessment," says James Bock, the financial aid director at Swarthmore college. The result can be surprising. "People can qualify for aid with incomes of $140,000 and above."

Not only does Swarthmore and these highly competitive liberal arts colleges offer a great education and financial aid packages, but they seem also to come with a degree of social conscience, e.g., the capacity to "change the world energy." Scott Storm, chose Swarthmore because he "wanted a place that was going to be very aware of social and civic responsibilities. One example that was noted was that Swarthmore sent "Swatties" to New Orleans to gut houses and to China to work in Aids clinics.

Continue reading Best value in private colleges

Best value in private colleges originally appeared on BloggingStocks on Fri, 16 Mar 2007 17:21:00 EST. Please see our terms for use of feeds.