🍋 To MBA or Not to MBA

Author

Short Squeez
October 13, 2022

Together With

“Investing is a business where you can look very silly for a long period of time before you are proven right.” — Bill Ackman

Good Morning! Markets have been on edge all week as investors await the CPI report, which comes out at 8:30am ET today. Wholesale prices rose 0.4% in September which was higher than expected. On the bright side, companies are hoarding workers which economists are hoping could prevent a recession. US is also doubling temporary visas for nonagricultural jobs as it addresses seasonal shortages.

Elon is finding creative ways to raise money to fund his Twitter acquisition. He sold 20,000 of his newly released Burnt Hair perfume in a couple of days ($2 million in sales) and appropriately changed his Twitter bio to Perfume Salesman.

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1. Story of the Day: To MBA or Not to MBA

The gap between salaries for those with a bachelor’s degree and a master’s degree shrunk for the fifth year in a row, calling into question whether an MBA or any master's degree is worth it.

Source: Bloomberg

Many master’s degree students justify the colossal loans for tuition - and b-school trips to Ibiza - because they typically earn higher salaries once they graduate. That said, a master’s student’s starting salary averaged only 22% more than their bachelor's degree counterparts last year.

Market dynamics are at play here. As firms look to cut costs, they are hiring more junior employees, driving up demand and as a result their wages. (Good news for all the non-target homies out there✊)

Takeaway: Whether or not to attend grad school is hardly a new debate. While the survey provides the national average salary, not every graduate degree is equal. For example, many master’s degree recipients go back into academia or education after graduation.

In more lucrative fields, post-MBA salary can be significantly higher than bachelor's only. Most going to grad school have a litany of other reasons and are looking beyond simply the financials. As tuition and interest rates rise, though, going back to school to become financially better off is hardly a slam dunk.

2. Markets Rundown

If you want access to Wall Street insider interviews, industry deep-dives, and investment ideas, check out our Insiders newsletter.

Stocks closed slightly lower ahead of yesterday’s losses as investors wait for CPI data.

Movers & Shakers

  • (+) KnowBe4 ($KNBE) +13% as Vista Equity finalizes its acquisition of the company.(+) Moderna ($MRNA) +8% after the company announced plans to develop a cancer vaccine.

  • (-) Philips ($PHG) -12% after the Dutch conglomerate took a $1 billion write-down on one of its businesses.

Private Dealmaking

  • Brookfield bought Primary Wave, a music-catalog and publishing company, for $2 billion

  • Providence Equity Partners bought automotive data firm A2Mac1 for $1.36 billion

  • Blackstone will invest $500 million in insurance company Resolution Life

  • Airwallex, an Australian fintech firm, raised $100 million 

  • Brave Health, a virtual mental healthcare startup, raised $40 million

  • Alkymi, a data workflow automation platform, raised $21 million

Top Reads

  • Cash is king again as money managers not embracing interest rate risk (CNBC)

  • Global wealth to decline more than 2% in 2022 (Axios)

  • How a Tweet launched an investigation into Tesla’s autopilot software (CNN)

  • Cities are cautiously optimistic with their finances (Axios)

  • U.S. mortgage interest rates reach highest level since 2006 (Reuters)

  • Amazon cutting costs after 25 years of pursuing growth over profit (CNBC)

  • Nasdaq falls into bear market after losing streak (MW)

  • The stock market’s ‘nightmare’ chart is already a reality (YF)

  • OECD says U.S. faces ‘larger-than-usual’ risks in inflation battle (Reuters)

  • Meta’s VR headset is impressive, but you probably won’t buy it (CNN)

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4. Book of the Day: So Damn Much Money

In So Damn Much Money, veteran Washington Post editor and correspondent Robert Kaiser gives a detailed account of how the boom in political lobbying since the 1970s has shaped American politics by empowering special interests, undermining effective legislation, and discouraging the country’s best citizens from serving in office.

Kaiser traces this dramatic change in our political system through the colorful story of Gerald S. J. Cassidy, one of Washington’s most successful lobbyists. Superbly told, it’s an illuminating dissection of a political system badly in need of reform.

“I'm running for president because I've had enough of the oil barons, the status-quo apologists, the special-interest lobbyists running amok.”

5. Short Squeez Picks

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6. Daily Visual: US Apartment Demand is Cratering

US Apartment Demand

Source: Axios

7. Daily Acumen

"About once a decade, people forget that bubbles form and burst about once a decade.

If something is impossible to know you are better off not being very smart, because smart people fool themselves into thinking they know while average people are more likely to shrug their shoulders and end up closer to reality.

You can’t believe in risk without also believing in luck because they are fundamentally the same thing—an acknowledgment that things outside of your control can have a bigger impact on outcomes than anything you do on your own.

Reality will pay you back in equal proportion to your delusion."

Source: Morgan Housel

8. Crypto Corner

9. Memes of the Day

 

 

 

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