Key lessons from MBA – Sell Tesla stock!?!


The stuff that HBS loaded into my brain matrix-style...

The stuff that HBS loaded into my brain matrix-style…

I am now 60 days away from graduation. Time has come to look at what I have actually learned during the hundreds of class sessions I had over the last 2 years. Below summary does not intend to be an exhaustive overview of what is being taught at HBS – rather it is a listing of some stuff that got stuck with me. Find your free 2-year HBS MBA program summarized in a 5 minute read below. Enjoy!

Lesson 1 – Leverage it up baby!

Yep, that’s about the one thing I remember from my finance classes. Take on debt, take on more debt and just when you think you got enough, take on some more debt. Make sure your company generates enough cash to pay the interest payments on it – if not, buy some time using Chapter 11 (during which you do not have to pay the interest costs).

From the point of view of financial analysts, companies with low levels of debt are often considered to be ‘poorly managed’ and do not create enough value for shareholders – a lesson that seems to have been assimilated by a lot of individuals in the U.S. – not sure it pays off in the same way though.

Lesson 2 – E(Ri) = Rf + βi(E(Rm)-Rf)

The CAPM model (Capital asset pricing model) – the other thing I should have remembered from my finance classes. THE END.

Lesson 3 – Tesla success story will not last!

Tesla stock price evolution

Tesla stock price evolution

Tesla, the world’s leading manufacturer of electric cars, has seen an explosion in its sales and its stock price in recent years. As more and more Tesla cars are visible on the road (mostly in rich countries with a high focus on environmental issues), investors were eager to invest in this company. But according to a famous HBS theory, Tesla cars are not disruptive enough to become a long-term success – they don’t change the way we drive our cars, they don’t improve the use of cars and they event add limitations to drivers’ liberties due to their limited mileage per battery load. Only truly disruptive technologies will succeed – the ones that fundamentally change the way cars are being used. For those interested, find HBS professor Clay Christensen’s theories on disruption HERE. To those that bought Tesla stock at $50, I have one message – time to SELL SELL SELL!

Lesson 4 – Empathy is the key to success…

HBS offers a whole range of ‘soft’ courses on topics such as leadership. Those classes tend to be among my favorites. I was surprised to learn that a recurrent source of long-term success for managers seems to be linked to their ability of being empathetic – it is about fully understanding the drivers and behaviors of your customers/colleagues/superiors/competitors. The real question is – can empathy be learned? And does an HBS MBA contribute to behaving in that way?

Lesson 5 – Loss Aversion

HBS Blog - Loss AversionWhenever dealing or negotiating with other people, we should have in mind how the human brain works. Penalties tend to be more motivating than rewards. Tons of research have demonstrated that the risk of losing something will push people much more than the potential for winning something. Forget about the carrot and go straight to using the stick!

Lesson 6 – Big problems in society are a matter of trade-offs

Other ‘soft’ courses at HBS tend to focus on macro-economic and societal problems. I was intrigued by the trade-offs that societies have to make between equality and efficiency. As an example, the U.S. has chosen for a model that focuses mainly on efficiency. Most European countries have chosen to focus more on equality, losing efficiency in the process. Interesting insight when looking at some of the world’s biggest problems of today. Which one would you focus on?

Summary

For those that want more than just 6 key lessons on business, you’ll just have to apply to HBS! Or alternatively, apply to the newly launched HBX offering, the new online platform for HBS courses (find out more about HBX HERE). And definitely let me know if my summary was helpful in any way?!?

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3 responses to “Key lessons from MBA – Sell Tesla stock!?!

  1. Hey – this was an interesting post. I’m curious: any particular courses (or non-course resources) you’d recommend to incoming HBS students (I’m ’16) to sharpen soft-skills? I’m familiar with ALD but not sure what else is out there.

    • Hi AP, thanks for your comment. There are tons of resources to sharpen your soft-skills at HBS. My favorite soft-skill classes at HBS included ‘Power and Glory in Turbulent times’ and ‘Entrepreneurship and Global Capitalism’ – courses in which leaders and their actions are analysed and discussed. But don’t worry, you’ll have plenty of time in the coming months to discover all of HBS’ resources. Enjoy!

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