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t h e A l u m n i M a g a z i n e o f N Y U S t e r n

STERNbusiness

Integrating Both Risk and Opportunity Could Help

Cushion the Downside

S O F T L A N D I N G

a l e t t e r f r o m t h e deanAs the new academic

year gets under way, we atNYU Stern are fullyengaged in driving thedialogue between businessand society. Our vigorousfaculty, our ambitious stu-dent body, and the manyhigh-profile business and

government leaders who participate in our eventsmake for a rich intellectual life. The past six monthswere no exception.

Alan Greenspan (BS ’48, MA ’50, PhD ’77, Hon.’05), Paul Volcker (Hon. ’83), and Henry Kaufman(BA ’48, PhD ’58) stopped by in May to fête ourown Dr. Bob Kavesh (BS ’49), whose long and dis-tinguished service is being honored with an endowedchair, the Robert Kavesh Professorship in Economics(page 52).

A few hundred alumni, faculty, and administra-tors spent an evening uptown at the Plaza Hotel topresent The Honorable John W. Snow, chairman ofCerberus Capital Management and former USTreasury Secretary, with the Charles Waldo HaskinsAward, bestowed on an outstanding individualwhose career has been characterized by the highestlevel of achievement in business and public service,and to celebrate the success of the Campaign forNYU Stern (page 3). Back at our Washington Squarecampus, Amazon.com CEO Jeffrey Bezos describedhimself as a “change junkie,” and Colgate-PalmoliveChairman Reuben Mark and Marty Lipton, foundingpartner of Wachtell Lipton, talked about pressuresin the boardroom during uncertain times (page 5).

Uncertainty in various markets was a theme ofmany of our distinguished speakers and panelists,and it appears throughout this issue. RichardBernstein (MBA ’87), chief investment strategist forMerrill Lynch, answered some pointed questions onvolatility in the equity market (page 11). JohnHofmeister, former CEO of Shell Oil, discussed the

vicissitudes of the energy market (page 20). At theAlumni Business Conference in May, themed “ALook to the Future,” some 300 graduates heard animpressive roster of faculty and business leaders dis-cuss the emergence of social networks, but also theuncertainty in global credit markets (page 17).

Similarly, our cover story takes on the theme ofdealing with uncertainty. Two finance professors,Ingo Walter, newly appointed vice dean of faculty,and Aswath Damodaran, our valuation guru, give alot of thought to re-evaluating risk and its manage-ment – and though they come at it from differentdirections, both believe that a broader understand-ing of risk management is needed, and thus also itsfunction within an organization (page 12).

We are proud of our faculty, of a student bodythat is focused on achievement on the global stage,and of our accomplished graduates. Our leadershipposition has attracted impressive new faculty thisacademic year, and we welcome them to our com-munity (page 22).

One of the functions of a university is to give itsscholars room to push the limits of knowledge, andour faculty is most prolific in this regard. In thisissue, we mark the third anniversary of HurricaneKatrina with some important research into the inter-play of hierarchy and communications during thedisaster’s aftermath, led by management professorsFrances Milliken and Joe Magee. They used thosewell-documented events to parse the nuances of howthe hierarchical power of the various players whoresponded to the disaster may have affected theircommunications and hence the response (page 24).

In our many activities, we are fortunate to havean involved body of alumni, and we are, as ever,grateful for your continued interest, participation,and support.

Thomas F. CooleyDean

2 Public OfferingsEconomists and other experts discuss how to shore up confidence in credit markets; The Haskins Award goes to former Treasury chief John Snow; Amazon CEO Jeffrey Bezos talks strategy; advice for board members during volatile times; Nathan Myhrvold’s deepthink on competitive industries for the long term; the economic health of Asian nations;IBM’s Joe Dzaluk and leading academics dissect global outsourcing; Moody’s Chairman Raymond McDaniel holds forth on the credit crisis

7 Stern in the City7 CEO Theresa Bischoff’s American Red Cross serves nine million New Yorkers,

By Rika Nazem9 Former Knicks forward Cal Ramsey now plays for the larger New York

community, By Jenny Owen

11 Keep Your Seat Belts Fastened, the Ride’s Not Over8 questions for Richard Bernstein

12 Cover Story – It’s Time for a Broader View of RiskTwo NYU Stern professors say that the strategic consideration of risk –and the risk management function – demand re-evaluation in the wake of the past 18 months, By Marilyn Harris

17 Special Feature – “A Look to the Future”Some 300 alumni gathered in New York for the 2008 Alumni Business Conference, with provocative panels led by NYU Stern faculty and alumni and a first-class collection of thought leaders, By Marilyn Harris

20 Leading IndicatorsStern’s CEO Series: John Hofmeister, recently retired president of Shell Oil, debunks some myths about oil supplies and the energy business

22 ProspectusNew faculty appointments, noteworthy papers, awards, and honors

Office Hours – Faculty Research 24 After Hurricane Katrina

The response to the disaster may have been shaped by the amount of power of thevarious players, and what that could mean to you, By Frances J. Milliken, Joe C. Magee, Nancy Lam, and Daniel Menezes

28 The Home Court AdvantageWhy investors still weight their portfolios to local equities in a boundary-less market, By Stijn Van Nieuwerburgh and Laura Veldkamp

32 Think AgainGoing with your first instinct? You may be proceeding under a faulty assumption, By Derrick Wirtz, Justin Kruger, Dale T. Miller, and Pragya Mathur

36 Peer to PeerStudent Life in Washington Square and Beyond: Studying in Shanghai, the “mentee” experience, talking new media to executives of the Tribeca FilmFestival, the global study tour goes Latino

38 Alumni AffairsAlumni News and Events: Linking in with LinkedIn, hotel discounts, reunion celebrations, the 2009 Global Alumni Conference in Barcelona

42 Class Notes

52 Past PerformanceDr. Robert Kavesh, beloved teacher of generations of Stern students, is honored with an endowed professorship in his name, By Marilyn Harris

STERNbusinessA publication of New York UniversityStern School of Business

President, New York UniversityJohn E. Sexton

Dean, Stern School of BusinessThomas F. Cooley

Vice Dean and Dean of theUndergraduate CollegeSally Blount-Lyon

Chairman, Board of OverseersWilliam R. Berkley

Chairman Emeritus, Board of Overseers Henry Kaufman

Associate Dean, Marketingand External RelationsJoanne Hvala

Editor, STERNbusinessMarilyn Harris

Managing Editors, STERNbusinessRika Nazem and Jenny Owen

Contributing WritersShana Carroll, Randy Cohen,Lisette Coviello, Kelly Freidenfelds,Keith Layton, Jessica Neville,Angela Parks, and Carolyn Ritter

Contributing PhotographersGreg Gilbert, Guido Mannucci,Don Pollard, and Anne Marie Poyo Furlong

IllustrationsMichael Caswell, Bryan LeisterKen Orvidas, Gordon Studer,and Christophe Vorlet

DesignAnne Sliwinski

Letters to the Editor may be sent to:NYU Stern School of BusinessOffice of Public Affairs44 West Fourth Street, Suite 10-160New York, NY 10012www.stern.nyu.edu

sternbiz@stern.nyu.edu

contents F A L L / W I N T E R 2 0 0 8

super-regulator,” reminding the audience that theBritish Financial Services Authority failed dismallywith its first stress test, Northern Rock. Without amandate for intervention, he said, the Bank ofEngland wasn’t in a position to take the reins.

According to Lucas, the Federal Reserve’s dra-matic rate cuts mark an overreaction and conflictwith Chairman Bernanke’s earlier promised infla-tion-targeting strategy. He felt that one of themost serious issues is that we take for granted thatit’s the Fed’s job to resolve the issues of the finan-cial system. He is concerned about introducingnew regulations designed to solve old problems.

Roubini predicted a long, deep U-shaped reces-sion as a result of what he labeled a systemicfinancial crisis, involving the worst housing reces-sion since the Great Depression, credit losses thatcould top $1 trillion, record oil prices, a creditcrunch, and plummeting consumer confidence.The key lesson, he said, is that non-banks are sub-ject to the same risks as banks and are systemical-ly important, suggesting the need for similar regu-latory oversight.

Last spring, with housingprices plummeting, oil climbingtoward $120 a barrel, and theglobal financial system in sham-bles, industry, media, and aca-demic leaders convened at anNYU Stern breakfast forum todiscuss how to restore confi-dence in credit markets and theeconomy. The event was part ofStern’s Market Pulse Series,introduced by Dean Thomas F.Cooley to tackle pressing globalissues affecting business andsociety. The event, “EconomicMeltdown: RestoringConfidence in Credit Markets,”was co-presented by Stern’s Alumni CouncilFinance Committee and the Salomon Center forResearch in Financial Institutions and Markets andattended by alumni, students, and the press.

Moderated by David Backus, Stern’s Heinz RiehlProfessor of International Economics and Finance,the panel included Lionel Barber, editor of theFinancial Times; Robert Litterman, chairman of theQuantitative Investment Strategies group ofGoldman Sachs Asset Management; Nobel LaureateRobert E. Lucas Jr., an economist at University ofChicago; and Nouriel Roubini, Stern professor ofeconomics and international business.

Litterman noted that financial models are show-ing a relatively short recession with a strong recov-ery at the end of 2008 but warned that the currentspike in inflation could easily lead to a prolongedinflationary period, as it did in the 1970s.

Barber suggested that the scale of the crisis rep-resents excessive risk-taking, causing a crisis of val-uation that warrants a re-examination of the US’sregulatory framework. However, he cautionedagainst adopting the British model of “financial

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EXPERTS CONVENE AT NYUSTERN TO DISCUSSRESTORING CONFIDENCE INTHE CREDIT MARKETS

(From left to right, top row) Dean Thomas F. Cooley, Robert Litterman, David Backus, (bottom row) Lionel Barber, NourielRoubini, and Robert Lucas suggested ways to restore confidence in the US economy.

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NYU STERN HONORS JOHN SNOW ANDCELEBRATES DONORS AT THE 2008 HASKINSDINNER

On April 1, NYU Stern alumni and friendsgathered for the 2008 Haskins Award Dinner atNew York’s Plaza Hotel. The gathering, whichincluded Stern’s most dedicated and generousalumni, faculty, and friends, celebrated a record$180 million raised over the last five years duringthe Campaign for NYU Stern, surpassing its goalby $30 million at the time.

At this event each year, the School bestows theCharles Waldo Haskins Award on an outstandingindividual whose career has been characterized bythe highest level of achievement in business andpublic service. This year’s recipient was theHonorable John W. Snow, chairman, CerberusCapital Management LP, and former US TreasurySecretary. In his acceptance speech, Snow provided alively and optimistic perspective on the current eco-nomic situation, which he deemed in a healthy processof readjustment. “America will get out of this,” heasserted. “We always do.”

William R. Berkley (BS ’66), chairman of the NYUStern Board of Overseers, spoke of the importance ofproviding stability in uncertain times through educa-tion – which he called the great equalizer andbuilder of dreams. In such times, he urged, it’s moreimportant than ever to provide a strong education tofuture generations.

Ed Barr (BS ’57), chairman of Stern’s CampaignSteering Committee, noted that while Campaigndonors comprised a cadre of long-term supporters,many new donors emerged in the last five years. Healso talked about the 40 new research, community-building, and curricular initiatives the School

launched through the support of the Campaign.Rebecca Cohl, a second-year MBA student and

recipient of the Harvey Becker Scholarship with aMoral Contract, announced that 125 new scholarshipswere made possible by the generous support of donorsover the last five years. Adam Brandenberger, J.P.Valles Professor of Business Economics and Strategy,underlined the importance of creating the right envi-ronment for ideas to flourish and told donors they hadfunded 23 professorships and 10 faculty fellowships.Sally Blount-Lyon, vice dean and dean of theUndergraduate College, thanked donors for the morethan 40 generous gifts that will help transform Stern’sphysical environment. Finally, Carl Greene (MBA ’60)announced a 150 percent increase in Stern Fund dol-lars, describing these as the School’s lifeblood. TheCampaign closed in August with a total of $185 mil-lion, but there remain new opportunities to give backto Stern as the need for gifts continues.

Dean Thomas F. Cooley (left) and William R. Berkley (right) honor John Snow with the 2008 CharlesWaldo Haskins Award at a celebratory dinner in April.

Dr. Ifzal Ali, chief economist for the AsianDevelopment Bank, presented the Bank’s 2007annual report on the economic health of Asiannations to Stern students and faculty at an NYUStern Japan-US Center event held in early April.

Introduced by Edward Lincoln, director, Centerfor Japan-US Business and Economic Studies, Alidiscussed the surging growth of several Asianeconomies. China led the group with the highest

growth in 13 years, at 11.4 percent. The Philippinesgrew at 7.3 percent, a 30-year high, while Indiagrew at 8.7 percent, marginally lower than the pre-vious year. Ali predicted that the current economicslowdown in the US, Europe, and Japan, risingenergy and food prices, and the credit crisis in theglobal markets would slow but not stop growth in2008. He also predicted that inflation will reachdecade-long highs in Asia this year.

CHIEF ECONOMIST OF THE ASIAN DEVELOPMENT BANK SPEAKS AT JAPAN-US CENTER

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NYU Stern’s Salomon Center and Moody’sCorporation convened leading academics andindustry practitioners in May to discuss recentadvances in risk management within the contextof lessons learned from the credit crisis.

Matthew Richardson, Charles Simon Professorof Applied Financial Economics and SidneyHomer Director of the Salomon Center at Stern,introduced Moody’s Chairman and CEO RaymondMcDaniel, who cited the multiple factors that con-tributed to the credit crisis, including rising lever-age, the overextension of housing credit, the dete-rioration of underlying assets and due diligence,and the complexity and opacity of products,which, combined, led to a loss of confidence in themarkets. McDaniel acknowledged that, in theabsence of asset transparency, the role of the rat-ings agencies had shifted from that of an informa-tion intermediary between lenders and borrowersto an incentive intermediary that markets reliedon too much for recommendations. With this inmind, McDaniel argued for more availability ofinformation in the public domain so that theopportunity for greater independent analysis iswidely available.

Stern Professor of Finance Stephen Figlewskipresented new research that explained the effecton credit risk of macroeconomic conditions suchas inflation and real GDP, as well as economic

N E W D I R E C T I O N S I N A C R E D I T C R I S I S E N V I R O N M E N T: T H E F I F T H A N N U A L C R E D I T R I S K C O N F E R E N C E

growth andfinancial mar-ket conditions.He based hisconclusions, inpart, on ananalysis of

defaults and ratings change data in Moody’sCorporate Bond Default Database between 1981and 2002.

Edward Altman, Max L. Heine Professor ofFinance at Stern, discussed his research on theimpact of credit markets on the overall economy,noting that when default is high, recovery rates –which he defined as the average price of bondsfollowing a default – are low. He predicted thatrecovery rates will fall dramatically from the pastfew years.

(Above, from left to right)Matthew Richardson,Stephen Figlewski,Edward Altman, andRaymond McDaniel (left)discussed the currentcredit crisis and recentadvances in risk manag-ment at the annual CreditRisk Conference held atNYU Stern in May.

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SIXTH ANNUAL NYU DIRECTORS' INSTITUTE FOCUSESON BOARDS DURING UNCERTAIN TIMES

The NYU Pollack Center for Law & Business, ajoint initiative between NYU Stern and NYU Schoolof Law, in May hosted its sixth annual Directors’Institute, “Service in the Boardroom duringUncertain Times.” Panelists represented the USSecurities and Exchange Commission, the DelawareCourt of Chancery, and the NYU Pollack Center forLaw and Business, as well as directors of GoldmanSachs Group Inc., Campbell Soup Co., and Schering-Plough Co.

Joseph S. Tracy, executive vice president anddirector of research at the Federal Reserve Bank ofNew York, discussing the economy, predicted a rela-tively short and shallow downturn due to aggressive

policy response. Reuben Mark, chairman of Colgate-Palmolive Co., the keynote speaker, described thestrong relationship between corporate culture andgovernance at Colgate-Palmolive. William T. Allen,director of the NYU Pollack Center and NusbaumProfessor of Law and Business, endorsed the legiti-macy and importance of the poison pill strategy indefending against hostile takeovers and suggestedthat boards not preclude it from their arsenal, despiteobjections from institutional shareholders. MartinLipton, senior partner at Wachtell, Lipton, Rosen &Katz and chairman of the NYU Board of Trustees,discussed corporate governance, and Krishna G.Palepu, Ross Graham Walker Professor of BusinessAdministration at Harvard Business School, empha-sized that strategy was a useful framework for allboard responsibilities.

(From left to right) Joseph S. Tracey; William T. Allen; Doug Conant,president and CEO of Campbell's Soup Co.; Richard J. Kogan, retiredpresident and CEO of Schering-Plough Co.; and Reuben Mark

AMAZON.COM CEO JEFFREY BEZOS SHARESHIS BUSINESS STRATEGY WITH STERNALUMNI AND STUDENTS

In April, in partnership with Condé Nast Portfolio, NYUStern hosted the magazine’s signature interview series, C-Circuit, which brought Kevin Maney, contributing editor, andJeffrey Bezos, CEO of Amazon.com, together on campus tospeak to alumni, students, and guests. A self-described “changejunkie,” Bezos explained that having investors who focus on thelong term has enabled Amazon to pioneer controversial productsand strategies.

Jeffrey Bezos (left) and Kevin Maney discussed Amazon’s ability to innovate.

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Academics, business practitioners, and government offi-cials convened for the inaugural Society for FinancialEconometrics (SoFiE) Conference at NYU Stern in June toexplore the ballooning field of financial econometrics.

Sponsored by Stern’s Salomon Center and Beyondbond,Inc., the three-day event featured keynote speaker CharlesI. Plosser, president and CEO of the Federal Reserve Bankof Philadelphia, as well as leading researchers from morethan 15 universities, including NYU Stern, MIT, PrincetonUniversity, Stanford University, University of Oxford, and

University of Pennsylvania. “Having Philly Fed President Plosser and a number of

distinguished scholars on campus demonstrates how theStern School and SoFiE are leading the dialogue on finan-cial econometrics,” said Nobel Laureate Robert Engle,SoFiE’s co-president and founder and Michael ArmellinoProfessor of Finance at Stern. “The cutting-edge researchdiscussed at SoFiE’s conference will inform future publicpolicies and influence financial markets around theworld.”

PHILLY FED CHIEF PLOSSER ADDRESSES INAUGURAL SOFIE CONFERENCE

Leading information systems academics, doctoralstudents, and IBM researchers gathered at NYU Sternfor the Global Delivery of Professional ServicesConference in May. Hosted by Stern’s Center for DigitalEconomy Research (CeDER) and sponsored by IBM, theconference featured keynote speaker Joe Dzaluk, vicepresident of global infrastructure and resource manage-ment at IBM, and seven panel discussions with expertsfrom more than 30 academic institutions from aroundthe world, including NYU Stern, HEC Montréal, MIT,and University of Texas at Austin.

Panelists discussed risks and payoffs in outsourcing,sourcing models, enabling agility in sourcing, sharingknowledge for innovation, and the IT workforce. Theycompared the performance of globally distributed teamsto collocated teams, discussed the impact a large num-

ber of vendors might have on innovation in knowledge-intensive activities, and described when to open a whol-ly owned subsidiary offshore. IBM’s Dzaluk focused onthe computer giant’s operations in India, which, with anintegrated workforce of 73,000, is its second largesthub worldwide, and the opportunities and challengesawaiting the company in China.

One session focused on MBA courses on globalsourcing – an area where NYU Stern leads. Said SternProfessor Natalia Levina, conference organizer andglobal sourcing expert: “We have been offering thiscourse since 2004. Given how new and critical this areais for businesses worldwide, it is important to developand share good teaching resources such as cases, proj-ects, and in-class exercises, and the conference providedus with that opportunity.”

THE WORLD OF GLOBAL PROFESSIONAL SERVICES TAKES THE STAGE AT CEDER CONFERENCE

NYU STERN'S NET INSTITUTE CONFERENCEEXPLORES THE “EXPONENTIAL ECONOMY”

In April, the Networks, Electronic Commerce, andTelecommunications (NET) Institute and Stern’s Entertainment,Media, and Technology Program co-sponsored the NETInstitute Conference at NYU Stern. The conference featurednew research on theoretical models of competition in networkmarkets, Internet search, and issues in network industries pre-sented by thought leaders from New York University, Harvard University, LondonSchool of Economics and Political Science, Stanford University, University ofPennsylvania, and Yale University, among others. Dean Thomas F. Cooley kickedoff the day-long event with opening remarks.

Nathan Myhrvold, founder and CEO of Intellectual Ventures, a companyfocused on the funding, development, manufacturing, and marketing of inven-tions, delivered the keynote speech, “The Exponential Economy.” He grouped

technologies into three categories accordingto their rate of growth – exponential, ordi-nary/logistic, and mature – and highlightedthe emergence of long-term exponentialindustries, such as personal computing andcommunications, emphasizing their influ-

ence in shaping the 21st-century global economy and guiding future researchand development policies.

Nicholas Economides, executive director of the NET Institute and Sternprofessor of economics, commented that the conference “demonstrates howStern and the NET Institute encourage thought leadership and remain on theforefront of research that influences business development in network indus-tries and informs today’s public policy.”

Nathan Myhrvold highlighted the emergence and influence of long-term exponential industries during his keynote address at the NET InstituteConference in April.

By Rika Nazem

“Public firms focus on maxi-mizing shareholder value; theAmerican Red Cross in GreaterNew York focuses on maximiz-ing community value,” said theorganization’s CEO, TheresaBischoff (MBA ’91). Named in2004 by the New York DailyNews as one of the 100 mostinfluential women in New YorkCity, Bischoff leads a smallcommunity herself: 200 paidstaff and 4,000 volunteers whoserve about nine million peoplein metropolitan New York.

While most people recognizethe American Red Cross logo,the extent of the organization’sactivities may be less well-known. Bischoff explained: “TheRed Cross provides humanitari-an support to people who areimpacted by disaster – everything from terrorist attacks,natural disasters, building fires, and water main breaks.My area deals with anywhere from eight to 10 incidentsper day. It means finding homes for people who may havelost theirs, or working with a city agency after a flood, oraiding in completing paperwork. It may not sound like abig deal when, for example, a fire rips through neighbor-hood homes, but it is a big deal to the people who have tobe relocated. That is where we come in.”

But that’s just the beginning. In addition to itshumanitarian efforts, the Red Cross provides communityprograms to educate the populace on disaster prepared-ness, from kits to evacuation techniques, and trains vol-unteers. “Our volunteers are passionate about what theydo and are committed to our organization. We rely on

our volunteers as the benchstrength, in addition to commu-nity and government support,”she said. Volunteers have partici-pated in relief efforts relating tothe summer floods in theMidwest and the cyclone inMyanmar. “We work with organi-zations here and abroad to helppeople during a crisis. We wishwe could reduce the number ofincidents; unfortunately, we can-not. But what we can do is pre-pare people for disaster and givehope to those who find them-selves affected by it.” As of May31, 2008, the staff and volun-teers of the American Red Crossin Greater New York haveresponded to more than 1,200fires, building collapses, black-outs, and other emergencies, andhave assisted nearly 6,000 adultsand children with food, shelter,

and/or counseling following a disaster. Bischoff said that while each day is different at the Red

Cross, she uses her finance skills, which she gained fromStern while a student in the Langone Part-time MBA pro-gram, every day. While attending the Langone program atnight, she began working at Squibb Corp., and then spentnearly 20 years at New York University Hospital Center,the last five years as president. There she experienced theultimate in crisis management. “September 11th hap-pened, and the proximity of the hospital and the medicalexaminer’s office to downtown Manhattan drew a lot ofvictims and families there,” she explained.

Aside from her work at the American Red Cross,Bischoff is known as one of the country’s most effectiveand articulate advocates for academic medicine. “I recog-

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Theresa Bischoff heads the American Red Cross in Greater New York.

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nized the value of good healthcare when myparents became ill, and have a passion forhelping people in this way,” she said. Shehas played important leadership roles,championing hospitals and medical schoolson the local and national level. She has heldmany prominent positions in the industry,including chair of the Greater New YorkHospital Association and the Association ofAmerican Medical Colleges, which represents525 accredited medical schools and majorteaching hospitals.

She is involved with NYU’s School ofMedicine, Wagner School of Public Health,and Stern, where she regularly speaks atevents. Bischoff said she is especiallyimpressed with Stern’s program in socialresponsibility. “I think it’s important thatbusiness students understand that becoming involvedin the community creates a better environment foreveryone,” she added.

Bischoff said that leading an organization that isfocused on service and the community has beenrewarding. “I am passionate about waking up to workwith people who are so committed to our mission. Ourvolunteers are amazing people and allow us to do greatthings.” Sheadded: “I amfortunate tofind myself atthe intersectionof what I amgood at andwhat I like.And that is myadvice to peo-ple startingout. Find away to do whatyou’re passion-ate about andwhat you dowell.” �

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(Top) A Red Cross volunteer in theGreater New York Chapter staffs an emer-gency response vehicle during the May2007 crane collapse in New York City.

(Middle) Volunteers set up disaster oper-ations after a Bronx fire.

(Left) Members of the community attenda Red Cross Preparedness Event.

Former NBA forward CalvinRamsey (BS ’59) is a New York fixtureand one of the City’s home-grownheroes. Because of his long devotion topublic service and to the New YorkKnicks, his community has dubbedhim the Mayor of Harlem.

As director of special projects andcommunity relations representative forthe Knicks, he’s a goodwill ambassadorfor the team and its affiliated NewYork Liberty women’s basketball team,working with them on a host of community outreachefforts, including their Garden of Dreams programs,Read to Achieve program, Knicks Summer BasketballCamp, and Junior Knicks League.

Ramsey has been involved with the Knicks sinceplaying for them in 1959 and 1960 after a handful ofgames with the St. Louis Hawks, who drafted him in1959 following his graduation from NYU’s School ofCommerce, Accounts, and Finance, as Stern was thenknown. He averaged 11 points and seven rebounds pergame, but the next year he was released and joined theSyracuse Nationals. “At the time, there was a quota sys-tem on African-American athletes in the NBA,” heexplained. “If you weren’t a great player like WiltChamberlain or Oscar Robertson, you had a smallchance of making the team. Remember, in those days,there were only eight teams in the NBA and 10 playerson the team, so there were only 80 jobs. Now there are30 teams with 15 players, so there are a lot more jobs. Iwasn’t great, but I was good.”

After a short stint with Syracuse, Ramsey joined theEastern League in Pennsylvania – now known as theContinental Basketball Association. But during a game,he tore his knee. “When I came out of surgery, my doc-tor said to me, ‘Cal, it’s a good thing that you were agood student and that you graduated college and thatpeople like you, because you’ll never play basketballagain.’ My knee was that damaged.”

The injury “forced me to change careers,” said

Hoop Hero with a HeartBy Jenny Owen

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Ramsey. His NYU Stern degree and skill in typingenabled him to become a teacher in the South Bronx,where he taught for about seven years. He also brieflyserved as dean and acting assistant principal at aHarlem public school and ran educational programs forthe Urban Coalition and the New York Urban League,where he worked to reduce the size of schools.

Ramsey then took up basketball again, this time as astatistician for William “Red” Holzman, the longtimeKnicks coach. Later, he began 10 years as a color com-mentator for the Knicks, and, in 1986, New York’sthen-Mayor Ed Koch appointed him chairman of theNew York City Sports Commission. In 1991, he wasappointed community relations director by then-KnicksPresident Dave Checketts, “who had a strong belief inworking with the youngsters in the New York area.”

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(Left) Cal Ramsey played forward for the New York Knicks in 1959 and 1960. Today (above)he serves as the Knicks’ director of special projects and community relations representative.

Ramsey’s passion for the Knicks began when heplayed for NYU, a Division I team that played its homegames at Madison Square Garden, the Knicks’ homecourt. He cherishes his Knicks experiences: “The firstbasket I made playing for the Knicks, when I had ajump shot over Elgin Baylor, and playing against theDetroit Pistons at the Garden and making 15 points and15 rebounds are moments I’ll never forget.”

The NBA has changed significantly since Ramsey’stenure. “I signed my first contract for $7,000 and nowthey’re signing contracts for $49 million. Players withmy stats today would probably be guaranteed at least $3million or $4 million,” he asserted. As for Ramsey’s NYUstats, he set 17 records, some of which still stand. Heaveraged a record 19.6 rebounds per game in his sopho-more year – 17.4 for his career – and, in one game,grabbed 34 rebounds. He was inducted into the NYUAthletics Hall of Fame in 1978, and subsequently intothe NYC Sports Hall of Fame, Brooklyn USA Hall ofFame, Basketball Old Timers of America Hall of Fame,and Holcombe Rucker Basketball Hall of Fame.

Ramsey remains deeply involved with his alma mater.He helps recruit, has been an assistant basketball coachfor almost three decades, worked with the University’sAlumni Relations Office for two decades, and serves onthe advisory board of The Preston Robert Tisch Centerfor NYU’s School of Continuing and Professional Studies.He received the NYU President’s Alumni AchievementAward in 2004, and he was honored by NYU’s TischCenter for Hospitality, Tourism, and Sports Managementas the namesake of the Cal Ramsey DistinguishedLecturer Series, an annual event inaugurated by NBACommissioner David Stern in spring 2001. Ramseycame to NYU on the advice of his high school coach,who said: “‘(1) it’s a great academic institution; (2)they have a very strong alumni network, which will helpyou in the future; and (3) they play their games at theGarden,’” Ramsey explained. “All of those thingsproved to be very prophetic.”

Ramsey is also a constant presence among the city’s

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Did you know?As one of the Big Apple’sbest-known and most-respected sports figures,Cal Ramsey was featured ina segment of “The CosbyShow” in October 1997.

youngsters, encouraging them to stay in school. “Iadvise kids to develop their own skills and to applythemselves and to do the best that they can,” he said.“I always tell them, ‘If you like sports, you play hard –as hard as you can – but then you study a little bitharder.’” He is a member of the board of the Children’sAid Society, the advisory board of YES (YouthEducation through Sports), and the Frank McGuireFoundation, which honors high school coaches in thetristate area, and he has been heavily involved withSpecial Olympics, among many other organizations.

He credits community agencies, such as the YMCA,and after-school programs in his neighborhood forinstilling in him the importance of education as ayoungster. “Those programs were very important in mydevelopment – they’re where I went after school whenmy mom was at work,” said Ramsey. “That’s where Ilearned to play basketball and baseball.”

His love for New York City – “You couldn’t get meoutta here with a gettin’ out machine” – and his appre-ciation for the value of education drive Ramsey’s com-mitment to serving his community. And despite hismany honors, which include nearly 100 public serviceawards, Ramsey considers his biggest professionalaccomplishment his ability to “give back to the kinds oforganizations that made a difference in my youth.” �

(Left) Cal Ramsey scores a basketin the NYU Violets’ game againstCincinnati in 1958. Photo: courtesyof New York University Archives,Photograph Collection.

(Below) Ramsey (center) works with the Knicks’ Read to Achieveprogram – one of the many com-munity outreach efforts he supports.

Sternbusiness 11

Merrill Lynch is one of the world’s leading wealth management,capital markets, and advisory companies, with offices in 40countries and territories and total client assets of approximately$1.6 trillion. Merrill’s star investment strategist (and multiyearmember of Institutional Investor’s All-America research team),Richard Bernstein has a carefully considered opinion that’sheard and respected around the world. This fall he adds a stintas an adjunct professor at NYU Stern, teaching a class oninvestment strategies.

1. You address many constituencies. To name a few: You arethe public voice of the firm on the stock market; you counselinstitutional investors; you guide individuals and institutionson what sectors to buy; you call turns in the market. What doyou feel is your most important job?

My most important job is stewardship. Merrill is the biggest bro-kerage firm in the world, so a lot of people follow my advice.Because this position is so visible, people’s livelihoods depend onwhat I say, both within the firm and externally. I take the notionof being a steward of people’s futures very seriously – being ableto benefit their lives is what is most fulfilling about my job. Youcan’t ask for anything more.

2. You’re known for being a contrarian, and an exceptionallyaccurate one. How did you get that way?

I tend to be a contrarian because that’s the way to make moneyover the long term – as opposed to being a momentum investor.Even prior to going to business school, which I did part-timewhile working, I believed valuation was very important. Peoplethink you just want to buy cheap stocks, but that’s not the reason.There’s an economic reason why that works, and this is one of thethings I took away from NYU Stern – that the links between theeconomic world and the financial world are tighter and morenumerous than people realize. I often preface remarks with “Asthey taught us in business school…”. I don’t think people realizehow tied in academe is to the real world.

3. You use various quantitative models to guide you. Whichones are most useful?Funny enough, the model I find most useful is something Ilearned in my operations research class in business school: con-trol theory. In manufacturing you use control theory for qualitycontrol purposes. I was playing around one day with the theory,when I was attending Stern and working at EF Hutton, and itturned out to be a great stock market timing model for the S&P500, in terms of asset allocation, not for any short-term purposes.

4. We’re talking in July, and stocks have been disappointingrecently. What’s the outlook for the end of this year?Our big theme for 2008 is that the underlying trend for marketvolatility won’t change. The credit bubble is not just a US event,it has impact globally on growth, and people will see how broadit is into 2009. Over the next 12 months, we believe we’ll belooking at mid-single-digit returns.

5. What is a reasonable time frame for an investment to payoff? Does it vary based on the economic cycle?There are three very easy ways to build wealth: Extend yourtime horizon; compound dividends; and diversify. Researchshows the longer your horizon, the better. Day trading is basical-ly luck. I don’t believe this varies based on the economic cycle.You should review your portfolio based on time (quarterly, semi-annually, annually), not on events.

6. You were an early fan of the energy sector when others werecaptivated by technology. What do you think of energy and oilnow? What do you think of technology now?We’re bigger fans at this point of older tech stocks – the large-cap technology companies. They remain undervalued versus theS&P 500. Regarding the energy sector, we’re still long-term bull-ish, but the group has gotten a little ahead of itself, and since it’straditionally a lagging sector, we think oil will probably comedown in the next six to 12 months and energy stocks will under-perform.

7. How has your job evolved over the years?In November, I’ll have been at Merrill 20 years. I started as asenior quantitative analyst in the equity strategy group. Therewere three of us at the time. Roughly three years ago, I wasappointed chief investment strategist, with about 40 people inmy department. As my interests have expanded over the years,the issues I get to deal with are proportionately broader, which isgreat. In my current position, the number of constituencies hasincreased. At first, equities accounted for 90 percent of thedemands. Now I get demands from fixed income, trading, pri-vate client, and investment banking as well, and equitiesaccount for maybe 50 percent.

8. How has your education at NYU Stern influenced yourcareer?Attending business school part-time while working was diffi-cult, but I found what I was learning could be completely inte-grated into my job. In fact, I wrote a journal article that incor-porated what I was learning in my bond math class into a wayof valuing equities.

8QuestionsRICHARD BERNSTEIN (MBA ’87), chief investment strategist, Merrill Lynch & Co., Inc.

12 Sternbusiness

t’s 2015. The subprime mortgage crisis, creditcrunch, liquidity drought, and plunging stockmarket that began in 2007 are all bad memories.Wall Street recovered its appetite for risk a fewyears back. The latest fad: an innovative Chinesebank has packaged the debt of grassroots alter-native energy collectives around the world and is

marketing it aggressively. But the leading investmentbanks politely decline to partake. They’ve beefed up theirrisk management functions after losing billions in the lastbig crisis and kept them that way, and their CROs, or chiefrisk officers – they of the long memories and even longerstatistical models – say nix.

Realistic? Perhaps. The right decision? Perhaps not.If the past is any indication, it seems unlikely that civ-

ilization will proceed in a measured, cadenced manner.Boom and bust go together like yin and yang. So if youneed a boom to move ahead, then you have to accept therisk that you may instead get a bust. How to manage thatrisk has, in the wake of the past 18 months, become topicA in the financial community. NYU Stern’s valuationexpert Aswath Damodaran, professor of finance andDavid Margolis Teaching Fellow, put it bluntly: “It’s timefor new thinking on risk.”

Both Damodaran and Stern’s Vice Dean of Faculty IngoWalter, Seymour Milstein Professor of Finance, Corporate

Governance and Ethics, have been pondering thesequestions, and each has produced results that move thediscussion ahead. Walter has designed one of the firstExecutive MBA programs designed to produce a newbreed of empowered risk management professionals,launching in April 2009, in partnership with theAmsterdam Institute of Finance. Damodaran has writtena book, Strategic Risk Taking: A Framework for RiskManagement, published in August 2007.

Both professors agree: Traditionally, the way to man-age risk has been to hedge it. Risk management prod-ucts, such as options and derivatives, are risk hedgingproducts – defensive moves to cover the downside. Thedangers fall into six interrelated categories: country risk,or the exposure that comes with investing in and lendingto sovereign or business entities abroad; credit and coun-terparty risk, whether retail or wholesale; market risk,associated with the movement of prices; liquidity risk,commonly measured in the world of finance by thespread between bid and offer prices; operational risk, thepossibility that transactions or operations will breakdown; and reputational risk, whether a particular eventhas done serious damage to the franchise and enterprisevalue of a firm. Key dimensions of these risk domainsderive from the specific strategies and tactics of businessfirms, and they are interlinked in ways that are resistant

Soft Landing

Integrating Both Risk andOpportunity Could HelpCushion the Downside

By Marilyn Harris

I

Sternbusiness 13

to modeling and often very difficult to understand. Ascurrent events show, nobody has all the answers, but someseem to do better than others.

Managing risk is traditionally a backward-lookingoperation involving the creation of models of statisticalprobability based on the steadily accumulating data thathistory provides. However, said Walter, “Once you have areasonably workable risk management infrastructure inplace, it still doesn’t mean you do the right thing. After all,the business of business is taking risk. The objective is notto eliminate risk, but to get appropriately rewarded forassuming risk exposures.”

Finding risk exposures that will produce an attractivereward is, of course, the rub. For some time prior to thecurrent debacle, risk management professionals at theinvestment banks, mortgage giants, and hedge funds thatgot clobbered almost certainly had been uneasy, and tothe extent they warned management about their unease,most seem to have been ignored or rolled over by highlycompensated revenue-producers – much as the chief ofFreddie Mac reportedly dismissed the explicit warning ofhis chief risk officer, according to The New York Times.When things are going swimmingly, cautionary notes arerarely welcome. After the full extent of the losses in sub-prime became known, several leading banks even senttheir risk management guys packing. But it’s not unlikely,

said Damodoran and Walter, that the investment deci-sions were made prior to any thorough assessment of theassociated risk, with the prospect of great gains drivingthe deals – with certain exceptions, such as at GoldmanSachs, where risk management advice was apparentlytaken on board in a much more balanced way than atsome of the firm’s competitors, resulting in appropriate(albeit expensive) hedging mechanisms being put inplace.

ore generally, the promise – and even theinitial realization – of great gain had cer-tainly not justified the billions invested incollateralized debt obligations (CDOs) andrelated structured instruments, according

to Damodaran, because they represented the wrong typeof risk and, ultimately, were not priced appropriately forthe amount of risk they presented. Furthermore, theexpertise for understanding these particular investmentsat the ground level – a sine qua non, in Damodaran’s view– was lacking. “What did investment banks bring to thetable that would have enabled them to take advantage ofdefault risk at the household level?” he said. “The biggestweakness of the current risk management system is thatit rewards trading success even if that success is the resultof poor risk taking. You must reward those who take theright kinds of risk even if they lose money, and punish

M

those who take the wrong type, even if it makes money.” That is a provocative notion. Damodaran has nothing

against risk taking, believing it a cornerstone of humannature: “It doesn’t matter whether it’s tulip bulbs or CDOsbased on subprime mortgages, people will take risks. Thekey is that they are exposed to the right kinds of risk.”

hat is needed, according to Damodaran, isa more balanced approach than hebelieves is currently being practiced. “Themore complete view of risk managementencompasses both risk hedging at one end

and strategic risk taking on the other,” he said. Identifyingthe exposure should go hand in hand with identifying theopportunities an enterprise might pursue. Accomplishingthis would require flexible organizations with better infor-mation and quicker decision making, small teams of peo-ple with greater freedom to make decisions, and a flatterstructure that includes a generalist who can manage theportfolio of teams. It is a vision distinctly at odds with silo-ing. “The sequence now is that the strategy guys and rev-enue producers select an opportunity, the operations guys

determine how to execute, and after that, the finance guysare asked to measure the risk,” Damodaran said. “Theseactivities should be concurrent.”

Along those lines, Walter points out that Goldman’s“strong traditional partnership mentality” may – eventhough it has been a public company since 1999 – haveenabled a concurrence of decision making by the firm’svarious constituencies on how to prudently and prof-itably manage CDO-related business opportunities. Thismeant originating, structuring, and selling the variousinstruments to “sophisticated” investors to whom thefirm had limited fiduciary responsibility, while avoidingwarehousing those same instruments and hedging anyresidual risk exposure. In contrast, the rule at most banksseems to have been a structure that has systematicallyfavored the offense over the defense, as against a morebalanced approach to risks and returns. “I am trying tobe optimistic that we will see a lasting change in thestrategic role of risk officers, toward greater integrationinto key decision processes,” he said. “Risk doesn’t comein neat buckets, and sometimes the buckets we think we

14 Sternbusiness

“Because the world deserves better risk management” –that’s the tag line of the marketing initiative for an innovative newexecutive master’s degree being offered by NYU Stern in part-nership with the Amsterdam Institute of Finance (AIF), startingin spring 2009.

NYU Stern teaches the tools of risk manage-ment – financial hedges, foreign exchangemanagement, the use and misuseof derivatives – in many of itsundergraduate and MBAcourses, and it has offered aselection of risk-oriented elec-tives since the 1970s, a timewhen Vice Dean Ingo Walter,Seymour Milstein Professor of Finance,Corporate Governance and Ethics, launched a mini-courseon sovereign risk a couple of years before the decade-longLatin American banking crisis that surfaced in 1982. Now, it isexpected that current events in financial markets will propel aspike in the demand for more risk management education, andthe School is ready.

This past May, more than two dozen Stern alumni from thebanking, brokerage, and industrial sectors attended anintensive, two-day seminar on risk management. A similaropen-enrollment session, expanded to three days, is

planned for next May.In the current academic year, Stern’s finance department is

offering two courses, Risk Management in Financial Institutionsand Topics in International Finance, both focusing on financialrisk control, as well as courses in global banking and bank-

ruptcy and reorganization, both of which encompassa good dose of risk management. As of next

spring, a new course, Credit Risk, getsunder way, specifically focusing on

modelling and analysis oflending and counterparty risksand credit-related instrumentssuch as debt and credit

derivatives. In the Information, Operations, and

Management Sciences department, the School is offeringtwo risk-oriented courses: Risk Management Systems, con-

sidering how large-scale risk systems need to be evaluated,acquired, structured, and managed and identifying the busi-ness and technical issues, regulatory requirements, and tech-niques to measure and report risk across an organization ormarket; and Operational Risk, a new branch of risk manage-ment that assesses and mitigates the risk of operationalerrors to affect the profitability, or even the existence, offinancial and non-financial firms.

Never More T imely : NYU Stern Has R isk Management Covered

W

“The aim is to develop leaders, not followers, and to

set a new standard for risk management education.”

understand pretty well are tied together in ways that arereally hard to predict.”

Change often germinates in the ferment of universities.At NYU Stern, a re-evaluation of the study of risk isalready starting (see box below), albeit in an evolutionary, ratherthan revolutionary, way. Many of the traditional risk man-agement tools are taught within the various finance cours-es, but a number of new risk-related electives are beingoffered, and the faculty expects student interest in theseelectives to grow, based on recent events. More new coursedesign is being considered, focusing on what Walter wouldlike to see as a “holistic” risk course that is driven by ashareholders’ perspective – after all, not every risk needsto be managed when shareholders can use portfolioadjustments to do it themselves better and cheaper. Anintensive mini-course aimed at alumni was offered inMay, and will be expanded in both content and enroll-ment in May 2009. Integrating case-oriented teaching,along with lectures and technical exercises, the mini-course is intended to balance the appropriate use of riskmodeling with a good dose of common sense. And the

executive risk management masters program thatWalter helped design for the European market couldmove the dial a little closer to a new vision of what riskreally means, with its aim of creating a career track forbright young professionals and encouraging a new gen-eration of senior management with a broad under-standing of risk exposure and its core role in buildingthe value of the business franchise.

If Professors Damodaran and Walter are right, thediscipline of risk management looks to be in for a seachange, with a new generation of risk managers com-pensated as well for things that don’t happen as the rev-enue producers are compensated for things that do hap-pen. As any good football coach knows, this is a winningformula that requires consistent and persistent attention.So come 2015, it’s entirely possible that the debt of theworldwide alternative energy collectives could well bejudged a worthwhile investment. And civilization couldlurch ahead a bit, fueled by visionaries who took theright kind of risks. �

Sternbusiness 15

The headliner, though, is the new executive master’s degree

in risk management (EMRM), to be administered and taught

jointly by Stern and AIF. Designed as a fast-paced, rigorous

international master’s degree program, possibly the only one of

its kind, it is aimed at professionals in the banking and financial

services sector, financial risk-management functions in non-

financial firms, and regulatory authorities. Candidates will take

11 courses over the span of one calendar year, split between

six three-day modules in Amsterdam and a two-week session in

New York. The courses in Amsterdam will be taught by a wide

variety of European faculty, along with Stern’s Richard Levich,

professor of finance and international business. The New York

team will include finance professors Anthony Saunders, Edward

I. Altman, Marti G. Subrahmanyam, Viral V. Acharya (PhD ’01);

and Walter. The degree will be conferred by NYU Stern, and

participants will become Stern alumni.

The substance of the AIF program will be brought into the

context of current and prospective regulatory environments

encompassing each of the main functional dimensions of

finance. The courses will focus on traditional and innovative

ways of modeling risk, how firms’ strategy and business drive

risk exposure profiles, such less tractable risk domains as rep-

utational risk, and what risk management is all about from the

shareholders’ point of view – including corporate finance views

on optimal hedging.

“Clearly, the events of the past 18 months have demonstrat-

ed a continuing need for the expanded training of professionals

in the field of risk management,” said Walter, who helped design

the new executive degree program with his colleague, Professor

Theo Vermaelen, and AIF’s managing director, Brenda Childers

(MBA ’90). “We thought risk was a topical issue in which we

could build a strong competitive franchise in Europe,” he

added.

Graduates of the new program are intended to be capable

of playing critical strategic roles on senior management teams –

and compensated accordingly. The aim is to develop leaders,

not followers, and to set a new standard for risk management

education. “We’re hoping the timing is right and that the hypoth-

esis that we can elevate risk management as a function within

organizations will be durable,” said Walter.

Overall, Stern’s finance faculty, since long before the current

crisis, has maintained a strong interest in both refining and

strengthening the discipline of risk management within its MBA

program. Research into understanding and modeling a range of

risk issues has been ongoing, and the case method has been

successfully integrated with lectures to inject real-world situa-

tions into the classroom. Ultimately, said Walter, “I’d like to see

the School continue to strengthen its research and teaching

efforts in risk management. We have plenty of talent and a solid

track record. It would be great to build on that in a sensible way

going forward.”

130 scholarships created

24 professorships endowed

11 faculty fellowships established

43 research, community-building, and curricular initiatives launched

44 gifts to transform our physical environment

150% increase in Stern Fund dollars

The Campaign for NYU Stern

Thank you to the nearly 25,000 alumni, friends, faculty,

and corporate sponsors for their commitment to our success

during the Campaign for NYU Stern.

Your generosity raised $185,000,000.

Sternbusiness 17

Alumni Meet the

Future Head-On

At NYU Stern’s 2008 Alumni Business Conference,

distinguished professors and business leaders anticipate trends asthe School’s profile continues to rise.

By Marilyn Harris

18 Sternbusiness

ew subjects are more timely than thepresent, but the turbulence of the cur-rent present and recent past makes aconference about what’s to come in glob-al markets possibly even timelier. And soit was at the New York 2008 AlumniBusiness Conference, aptly titled “ALook to the Future.” The first-ever

alumni conference held at NYU Stern’s home campus, inNew York, the one-day event in May, co-presented byCondé Nast Portfolio and sponsored by MBT Shoes andMicrosoft, attracted more than 300 attendees with a slateof speakers extraordinarily well qualified to observe, ana-lyze, and prognosticate.

Alumni and guests traveled from around the countryand the world to hear from industry leaders and scholarson current market issues on financial risk, investing, entre-preneurship, marketing, digital media, and social network-ing. Dean Thomas F. Cooley and Aswath Damodaran, pro-fessor of finance and David Margolis Teaching Fellow, pro-vided keynote remarks, while Edward I. Altman, Max L.Heine Professor of Finance, and Mark Tercek, adjunct pro-fessor at NYU Stern and, at the time, director of GoldmanSachs’s Environmental Markets Initiative, among others,offered their expertise in the breakout sessions.

In his welcoming remarks, “Future Shock: Dealing withUncertainty,” valuation guru Damodoran, a perennialfavorite professor, struck the appropriate tone with his dis-course on risk, which he defined as a combination of dan-ger and opportunity. He observed that investors, particu-larly banks and hedge funds, are fixated on models, whichis unfortunate in that the complexity of models cannotkeep up with the complexity of the assets they are valuing;complex models require more data inputs, and hence moreerrors; and complex models create a more complex output.“Where there is an upside, there is a downside,” he remind-ed the audience. “Risk is always relevant. Risk is every-where.”

Suitably advised, if not chastened, the crowd broke outinto three different sessions. Frances Milliken, Stern pro-fessor of management and organizations and Peter DruckerFaculty Fellow, moderated “The Future of Green as aBusiness Strategy.” Panelists included Steven Sturm (MBA’75), group vice president of Americas Strategic Researchand Planning and Corporate Communications for Toyota

Motor North America Inc.; Tercek; and Brian Dumaine,editorial director of Fortune Small Business. The panelistsagreed that companies are increasingly exploring andimplementing environmentally friendly practices to gener-ate revenue and build good will.

Current conditions in global credit markets were thesubject of another session, wherein Altman providedhis annual forecast on default and recovery rates. Heexplained that the credit markets lead the real economy,noting that the last three recessions, including the currentone, “were motivated and caused by issues in the creditmarkets.” His advice to investors: Hold off three to sixmonths before investing in distressed debt.

As befits a session on social networking – an appropri-ate lead-in to the lunch break – a full complement of fivepanelists took on “The Digital Future: What SocialNetworking and Marketing Tools Mean for Businesses andEntrepreneurs.” Arun Sundararajan, associate professorof information, operations, and management sciences andNEC Faculty Fellow at Stern, led the lively group,which included Douglas Atkin, partner and chief com-munity officer of Meet-up Inc.; Bant Breen, president ofInterpublic Futures Marketing Group; Rob Master, direc-tor of media North America for Unilever; Kenny Miller, VPand creative director for MTV Networks Global DigitalMedia; and Marc Sirkin, lead social network strategist forMicrosoft.

Along with a panel discussion on the need for defensivebrand management on social networking sites,Sundararajan summarized the group’s insights with sever-al observations: social media needs a simple, elegant, andportable reputation system, much like eBay’s; productreviews do not comprise a representative sample of “peo-ple like me”; and investments in social networking need tobe quantified to justify their inclusion in advertisingbudgets.

Lunch provided an opportunity to connect the old-fashioned way – in person. The keynote address, by DeanCooley and Dean of the Undergraduate College SallyBlount-Lyon, brought a recounting of milestones reachedand those in the making. Alumni support, Dean Cooleysaid, helped make Stern, with one of the largest businessschool faculties in the world, “a hot place to do research.”He reported that admissions to Stern remain strong, withmore than 5,000 applications for 415 full-time MBA spots

F

and 900 applications for 22 PhD spots. With gratitude to alumni, Dean Cooley announced that

the Campaign for NYU Stern had raised to date a record$180 million over the past five years, helping the Schoolestablish 23 new faculty chairs, 10 new faculty researchfellowships, 125 new scholarships, and $40 million ininfrastructure improvements. He also described how theCampaign has made it possible for the School to offer anew joint MBA/MFA degree with NYU Tisch School of theArts, an MBA/MS in Mathematics and Finance with NYUCourant Institute of Mathematical Sciences, an MS degreewith Hong Kong University of Science and Technology, anincreased portfolio of non-degree executive education pro-grams, and new programs in the Undergraduate College,as well as the opportunity to offer the Langone Part-timeMBA Program in Westchester, NY.

ooking ahead, Dean Cooley stressed the impor-tance of disseminating the School’s rich intel-lectual resources and increasing its visibility inthe media. He also discussed Stern’s plans forglobal engagement, such as partnerships with

the government and top companies in India, joint pro-grams with schools in Western Europe, and study andresearch opportunities in China.

Dean Blount-Lyon stated that undergraduate admis-sions to Stern remain strong with more than 7,000 appli-cations for 500 freshman spots, and that the quality of theapplications is high, with GPAs in the top percentile andaverage SAT scores around 1440. She explained that theacademic programs are increasingly organized around aglobal perspective: as of this year, 50 percent of studentswill have spent at least one semester abroad, and theSchool has launched a world studies track and a BS inbusiness and political economy. In addition, Stern nowrequires a four-course sequence in social impact that spansall four years of study.

Postprandial breakout panels focused on the future ofinnovation and how that affects brands; investing in avolatile marketplace; and venture capital in a digital mediaworld. In the first, moderated by David Carey, group pres-ident of Condé Nast Publications; Stern’s Scott Galloway,clinical associate professor of marketing; and Peter Golder,associate professor of marketing, engaged in a provocativedebate on whether innovation helps or hurts brands.“The next breakthrough,” said Golder, “is already on the

market and sold by a company that will not benefit fromthe market breakthrough.” Though Galloway acknowl-edged that a strong brand can shield a product, he assert-ed, “Perfection is the enemy of innovation.”

As for the challenges of investing in today’s and tomor-row’s volatile marketplaces, there was an easy consensusamong moderator Mary C. Farrell (MBA ’76), a financialservices consultant; and panelists Madelyn Antoncic(MPhil ’81, PhD ’83), managing director and global headof financial markets policy relations at Lehman Brothers;Audrey McNiff (MBA ’89), managing director at GoldmanSachs; and Jessica Reif Cohen (BS ’77, MBA ’79), manag-ing director at Merrill Lynch. Unsurprisingly, even thepros are finding areas of opportunity scarce. Reif Cohen, amedia specialist, focused on select cable content providers;Antoncic advised looking at sectors that have alreadytaken a hit; and McNiff suggested distressed assets andhedge funds that can short and build a portfolio.

One recent investment that has paid its backers hand-somely is Facebook, and the panel on venture capital inthe digital world offered a candid look at how technologiesand trends in media consumption are making such non-traditional business models attractive to venture players.Said panelist Alan Patricof, the founder and managingpartner of Greycroft LLC: “Every big media company hasits own venture fund because of the ‘Facebook syndrome.’They’d rather lose tens of millions of dollars than missout on deals like Facebook.” The discussion was led byCharles C. Koones, CEO of Rockmore Media LLP. Otherpanelists were Dennis Miller, general partner of SparkCapital, and Stephen Baker, chief revenue officer ofEveryZing.

The riveting plenary session featured Andrew Zolli, afuturist and global trends consultant with Z+ Partners,whose multimedia presentation drew heavily on demogra-phy to forecast trends. Massive population shifts over thenext several decades, caused by varied rates of growth anddecline, will result in increased urbanization, he said, butin newly prominent cities rather than the current majorones. These shifts will drive change across many indus-tries, and, as always, the race will be to the swift.“Innovation,” Zolli said, “is the creation of new forms ofvalue in anticipation of future demand.”

Clearly, Deans Cooley and Blount-Lyon, charged withsteering an ascendant NYU Stern, would agree. �

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Sternbusiness 19

20 Sternbusiness

Vijay Vaitheeswaran: You have beenon an energy policy discussion tour of theUS, trying to take the pulse of the country.What motivated you to visit 50 cities?John Hofmeister: After HurricanesKatrina and Rita, refinery production in theGulf of Mexico and on shore was shutdown, the nation lost 25 percent of itssupply of daily oil and gas, and some 90platforms just disappeared. The nationwas struggling, and, because the marketrations oil and gas according to supplyversus demand, the price went up. Wewere being pummeled as villains. I hadjust gotten a letter from a customer thatwas just a drawing of yours truly hangingfrom the branch of a tall tree by the neck. Isaid, “We can continue living in a bunker,or we can go out and meet the people whoare so upset.” We decided we would dotown halls across the country, which forus meant 100 people in a room and 10chairs, a real town hall where we stoodshoulder to shoulder, eyeball to eyeball,myself and ultimately 250 other executiveswho joined me from coast to coast. Wecalled it a “National Dialogue on EnergySecurity.”

VV: What did you learn that surprisedyou?JH: We learned that there are some seri-ous myths in people’s minds about energy– for instance, that we are running out ofoil. Another myth is that we control theprice of crude oil. When a company likeShell produces about 3 percent of thedaily global production, it’s hard to havean impact. When you add up Exxon, Shell,BP, Chevron, Conoco, and Total, you don’teven get to 15 percent of daily production.So how in the world do these five or sixcompanies control prices? Another mythis that there is a silver bullet just awaitingtechnical research that will solve all ourenergy needs.

VV: Tell us why you think that Hubbert’s“peak oil” theory – that is, that global

production could max out and the worldcould run out of oil – is not the right wayto look at the problem.JH: If we just start with the US, the scarci-ty of crude oil in the US is purely a resultof public policy. Believe it or not, there hasbeen a 30-year moratorium on East orWest Coast drilling or Eastern Gulf ofMexico drilling. For 30 years, the publicpolicy has been “don’t drill here, go some-where else.” That policy was formed whenoil was about $7 a barrel. But technologyhas moved on and the price has movedup, and now it is a public absurdity todeny drilling to the nation that needs it themost – the US.

VV: So, your argument is that as far asthe US is concerned, regulation is a majorimpediment to the resources that exist?JH: Yes, for conventional oil and gas. Thetheory that there will be oil scarcity ispredicated on a set of narrow assumptionsthat never imagined deep water explorationor public policy constraints. It was predi-cated on what was known at the time interms of the geophysics of oil back in the1950s. The fact that it happened to be cor-rect – about US production peakingbetween 1965 and 1970 – was coinciden-tal. I believe we are still adding to theresource base of the world by new discov-eries, finds, and exploration. I think wewill only peak because we will prefer otherforms of energy and, therefore, will notdemand as much oil.

VV: If the regulations were removed oreased, is there enough oil on US soil oroffshore to eliminate the needs forimports?JH: Probably not. The US today producesabout 7 million barrels, and we consume21 million.

VV: So, doesn’t this argue for an energyinterdependence – rather than independ-ence – model?JH: I think energy independence is a

John D. Hofmeister has been president of Houston-based Shell Oil

Co. since March 2005.* He joined Shell in 1997 as director of human

resources for the Shell Group, based in The Hague, after having

worked for nearly 25 years in marketing and human relations func-

tions at General Electric, Allied Signal, and Northern Telecom.

During his tenure as president, Hofmeister steered the company

through the aftermath of Hurricanes Rita and Katrina, which not only

affected thousands of employees and their families, but also threat-

ened the US energy supply. Hofmeister has contributed greatly to

helping the public understand the energy industry, launching a

“National Dialogue on Energy Security” amid public frustration over

rising gasoline prices. Hofmeister, who has bachelor’s and master's

degrees in political science from Kansas State University, is chair-

man of the National Urban League and former chairman of the

Greater Houston Partnership, one of the largest economic develop-

ment organizations in the country.

John Hofmeister was interviewed on April 8, 2008, by VijayVaitheeswaran, an award-winning correspondent for The Economist.Vaitheeswaran is the author of a book called Zoom: the Global Race toFuel the Car of the Future, which was published last October and wasselected as one of the five finalists for the Financial Times and GoldmanSachs 2007 Business Book of the Year. He is also a lecturer at NYUStern, teaching a popular course on energy and the environment.

*Hofmeister was president of Shell when he visited Stern in April. He retired the following month.

LeadingIndicators

John Hofmeisterpresident*

Shell Oil Co.

lon, less emissions, less CO2 in theatmosphere in Europe with the dieseliza-tion of the European fleet. On the otherhand, some of the innovation in technolo-gy, the deep water work that we do, reallystarted in the US.

AUDIENCE QUESTIONSQ: Any major executive of an oil compa-ny acknowledging the “peak oil” conceptimmediately drives up all the costs ofproduction for his company and, mostimportant, the costs of any acquisitiontarget, thereby hurting his shareholders,including widows and orphans. Yet not toacknowledge “peak oil” also causes thecountry and the world as a whole to lookat policy prescriptions that may be radi-cally different from what is really required.I was wondering how you would resolvethis dilemma.JH: We don’t advocate at Shell that thereis “peak oil” at this stage. We believethere will be at some point, but we believethere are enough resources that weshould be out producing those resources.There is more than enough financial capa-bility but not enough human capability onearth to over-produce, which is keepingthe price up. We can’t build infrastructurefast enough to exceed global demandunless demand falls enough to enable usto catch up.

Q: To what extent is the desire for well-functioning global markets affecting USforeign policy, especially in regard toSaudi Arabia and Iraq? JH: I do think that because US publicpolicy has been so flawed, the US hasadded to international tension by havingsuch a heavy dependence on imports.Whether that is deliberate or whether thatis an outcome of just avoiding ourdomestic problem of trying to producemore oil, the consequence is that we con-tribute to geopolitical tension.

Q: Regarding the US cap on CO2 emis-sions, one of the interesting componentsof that is that legislation rewards earlyactors in terms of the proposed regula-tion. Was Shell a part of crafting that partof the agreement?JH: Absolutely. First mover is always anice place to be.

crock. The world is interdependent. Tothink that we somehow as the UnitedStates of America can declare energy inde-pendence is nothing but pandering forvotes, and I have said that to many electedofficials. We want interdependencebecause it’s a check on the global system.We want to have some voice in what hap-pens elsewhere in the world. That is part ofinternational trading. Another aspect is thatwe can flip this oil price on its head if the

US could say to the world that we are goingto open access to more areas – not 100 per-cent access, but how about half of the 85percent of the outer continental shelf in thelower 48 states that’s off limits?

VV: Can we really drill our way to a solu-tion? Department of Energy figures sug-gest that the US has less than 5 percent ofthe world’s remaining reserves of conven-tional oil. The Persian Gulf has almosttwo-thirds.JH: Think of the next 10 or 20 years. Fivepercent is a lot. It will take a long time toproduce 100 billion barrels.

VV: It’s not the most economic oil,though. It’s cheaper in other parts of the world.

JH: All of the off-limits oil could proba-bly be produced for less than $50 a bar-rel. Think about what it would say to theworld trading system if America put aplan together to produce three millionmore barrels per day, taking our seven-plus million barrels up to 10-plus millionbarrels – over half the US supply. Withbiofuel and other alternative fuels, wecould say to the OPEC cartel, “We don’tneed you as much as we did before.”

That would immediately reduce a lot ofthe speculation. It would ease the geopo-litical tension, which is inflating the priceas we speak.

VV: Is relatively expensive domestic oilreally a contender compared to the alter-natives that are being developed? JH: The answer will be a multiplicity ofenergy sources, including the somewhatmore expensive American-produced oil.If this nation created a comprehensivenational energy security strategy thatdealt simultaneously with the supplyside, via the technology to produce moreoil and clean coal, for example, and alsodealt with the demand side, via increasedefficiency and use of clean energy oralternative energy, and if we dealt with the

CO2 issue, we could enhance oil recoveryin many abandoned or existing fields thatwould produce more domestic oil at afairly reasonable cost. Affordable, cleanerenergy should be the goal. Let’s face it:Alternative energy, whether wind farms,solar, hydrogen, or coal gasification, isnot cheap.

VV: Are we in an era of permanentlyhigher oil prices? JH: I think it’s still cyclical. The currentcycle of high energy costs is unprece-dented. But also, today’s technologiesdemand hydrocarbon infrastructure. Wedon’t have many mobility choices.Detroit is tired of having 99 percent ofits product based on hydrocarbon.

VV: Shell is a member of the US ClimateAction Partnership, an association to pro-mote federal legislation on capping CO2emissions in this country and using atrading system to provide incentives tofind new technologies and ways of doingthings to reduce CO2. Why join an organ-ization that lobbies government for a reg-ulation that would potentially imposecosts on you and reduce your sales? JH: We believe man-made greenhousegases are not good for the world and thatwe, as a major producer of greenhousegases, have a social responsibility to dosomething about it. We have reducedour own carbon footprint to below 1990levels.

VV: If you do this as a company voluntar-ily acting out of corporate social respon-sibility or to be a first mover, why do youneed a government mandate? JH: Because it will keep the playing fieldlevel.

VV: You are a division of a British-Dutchcompany, Royal Dutch Shell. Does yourbeing an international player influencehow you look at the world, compared tosome American oil companies that arevery much American in their roots? JH: There are influences that affect howwe see the US. For instance, we wouldwelcome more diesel engines in the US.We are part of the European changeprocess where we see more miles per gal-

“Think about what it would say to the world tradingsystem if America put a plan together to produce

three million more barrels per day, taking our seven-plus million barrels up to 10-plus million barrels –over half the US supply. With biofuel and other alterna-

tive fuels, we could say to the OPEC cartel, ‘We don’t need you as much as we did before.’”

John Hofmeister is interviewed by Vijay Vaitheeswaran at a CEO Series event held at NYUStern in April.

Sternbusiness 21

Prospectus is an applied economist with interests in industrial organization, contracting,and capital investment. Formerly, he was at Yale’s School of Management andon the research staff of the Cowles Foundation. He earned his PhD in eco-nomics from New York University.

Priya Raghubir (PhD ’94) joined the marketing department from theHaas School where she taught undergraduate and graduate courses in the US,China, and India. Her research interests are in the areas of consumer psychol-ogy, and include psychological aspects of prices and money; risk perceptions;and visual information processing. Joining the marketing department as anassistant professor is Sam Hui, who received his PhD from the WhartonSchool. His research centers on the interaction between marketing and statis-tics, the entertainment industry, and Internet retailing.

JP Eggers joined the management and organizations department as anassistant professor. He studies technological change, decision-making underuncertainty, and new product development, and earned his PhD in manage-ment from the Wharton School. Prior to joining Stern, Gabriel Natividadserved as a strategy consultant. His research focuses primarily on how a firm’sstrategic and financial decisions are intertwined, especially in multidivisionalcompanies. Natividad earned his PhD in management from UCLA.

Prasanna Tambe comes to Stern from the Wharton School, where heearned his PhD in managerial science and applied economics. As an assistantprofessor of information, operations, and management sciences, Tambe’sresearch centers on how IT-related organizational change affects labor marketsand human resource management.

In April, Stern welcomed as research professor Ralph Gomory, whoserved as president of the Alfred P. Sloan Foundation from 1989 to 2007. Priorto that, he had a 30-year career at IBM as head of its Research Division andthen as Senior Vice President for Science and Technology. During his tenure,the firm’s researchers invented RISC architecture and developed the concept,theory, and first prototype of relational databases, which resulted in two suc-cessive Nobel Prizes in Physics. Gomory earned his PhD in mathematics fromPrinceton University.

NYU Stern Boosts Faculty Roster

Building its research and teaching faculty, NYU Stern added a dozen newprofessors to its fall roster and, last spring, welcomed as a research professorRalph Gomory, whose 30-year tenure in research at IBM will enhance theSchool’s information systems research.

Joining the finance department is Viral Acharya (PhD ’01), who comesfrom London Business School, where he was professor of finance and academicdirector of the Private Equity Institute, a research affiliate of the Center forEconomic Policy Research. An academic advisor to the Bank of England, he wasappointed Senior Houblon-Normal Research Fellow there to study the efficiencyof the inter-bank lending markets. His research focuses on regulation of banksand financial institutions, corporate finance, credit risk and valuation of corpo-rate debt, and asset pricing with an emphasis on liquidity risk.

The finance department also added three assistant professors: AshwiniAgrawal, Marcin Kacperczyk, and Philipp Schnabl. Having earned hisMBA in finance and PhD in economics from the University of Chicago, Agrawalstudies empirical corporate finance and labor economics. Kacperczyk, who hasa PhD in finance from the University of Michigan and taught at the University ofBritish Columbia, studies institutional investors, mutual funds, socially respon-sible investing, and behavioral finance. Before joining Stern, Schnabl consultedfor Boston Consulting Group in Europe, then earned his PhD in economicsfrom Harvard University. His research interests are corporate finance, financialintermediation, and banking.

Three assistant professors have also joined the economics department.Joyee Deb earned her PhD in economics from Northwestern University’sKellogg School and earlier was a consultant in Accenture’s strategy practice inIndia. Her research interests are microeconomic theory and game theory. KimRuhl joined Stern in 2006 as a visiting professor and has a PhD in economicsfrom the University of Minnesota. His research centers on international eco-nomics, models of firm heterogeneity, and national income accounting. He hasbeen awarded two National Science Foundation grants. Allessandro Gavazza

Professor ofEconomics andInternationalBusiness NourielRoubini was oneof 15 economistsselected byForeign PolicyMagazine for its“Top 100 Public Intellectuals” list.Roubini was also a panelist in Januaryat the World Economic Forum inDavos, and, in February, he testifiedon the economy before the House ofRepresentatives’ Financial ServicesCommittee.

Fellow, was recently appointed theToyota Motor Corporation TermProfessor. In June, he organizedthe largest scholarly conferenceever held at NYU Stern, the fifthNorth American ProductivityWorkshop, sponsored by Toyota.Three hundred researchers frommore than 30 countries attended.

Natalia Levina, associateprofessor of information systems,was a featured speaker in June atthe Financial Services OutsourcingAnnual Summit, in New York, dis-cussing leadership practices thatenable the effective collaborationof onshore IT practitioners whomanage offshore IT projects.

contribution to the mission of ISMS,which is to foster the development,dissemination, and implementationof knowledge, basic and appliedresearch, and science and technolo-gies that improve the understandingand practice of marketing. Winer iscurrently the executive director of theMarketing Science Institute (MSI),an academic organization dedicatedto bridging the gap between market-

ing science theo-ry and businesspractice.

WilliamGreene, profes-sor of economicsand Jules I.Backman Faculty

s h o r t t a k e s Edward I.Altman, Max L.Heine Professorof Finance, wasinducted into theinaugural class ofthe TurnaroundManagementAssociation’s Turnaround,Restructuring, and DistressedInvesting Industry Hall of Fame.

Russell Winer, WilliamJoyce Professor of Marketing andchair of Stern’s marketing depart-ment, was recently named an inau-gural fellow of the INFORMSSociety for Marketing Science(ISMS). The ISMS Fellow Awardrecognizes cumulative long-term

22 Sternbusiness

Sternbusiness 23

Nobel prize-winning economistRobert Engle, Michael ArmellinoProfessor of Financeand directorof the Centerfor FinancialEconometrics,wroteAnticipatingCorrelations: ANew Paradigm forRisk Management,to be published byPrinceton UniversityPress in January 2009.The book introduces amethod for estimating correlationsfor large systems of assets. In addi-tion, Engle was included in CondéNast Portfolio’s “Brilliant” list, whichnoted that his model for predictingrisk in a financial portfolio is usedvirtually everywhere on Wall Street.

William Baumol, Harold PriceProfessor of Entrepreneurship, aca-demic director of the Berkley Centerfor Entrepreneurial Studies, and pro-fessor of economics, co-authoredwith Carl Schramm and Robert Litanof the Kauffman Foundation, GoodCapitalism, Bad Capitalism, and theEconomics of Growth and Prosperity,which was named one of the top 10“Books that Drive the Debate 2008”by the National Chamber Foundation,a public policy think tank affiliatedwith the US Chamber of Commerce.Baumol was recently made an hon-orary professor of ZhejiangGongshang University (ZJGSU) andsenior adviser of ZJGSU’s WilliamBaumol Center for EntrepreneurshipResearch. Another entrepreneurshipresearch center in China was alsorecently named in his honor: theWuhan Baumol Center.

Research Techniques Forum for theirpaper, “The Effect of Exposure toFine versus Broad Survey Scales onSubsequent Decision Making,” co-authored with NYU Stern alumnusGulden Ulkumen (PhD ’07) of theUniversity of Southern California.

Professor of Marketing EitanMuller was the recipient of the2007 Best Paper Award of theEuropean Marketing Academy,International Journal of Research inMarketing, for his co-authored arti-cle, “The NPV of Bad News.” Mulleralso co-authored the paper, “TheRole of Within-Brand and Cross-Brand Communications inCompetitive Growth,” forthcomingin the Journal of Marketing.

Thomas Philippon, assistantprofessor of finance and CharlesSchaefer Family Fellow, and HeitorAlmeida, assistant professor offinance, published their co-authored paper, “The Risk-AdjustedCost of Financial Distress,” in theJournal of Finance in December2007 as the lead paper. The piecewas awarded the 2005-2006Honorable Mention for BestWorking Paper in Finance fromStern’s Glucksman Institute.

Assistant Professor ofAccounting Daniel Cohen’s co-authored paper, “Real and Accrual-Based Earnings Management in thePre- and Post-Sarbanes-OxleyPeriods,” was published in May inThe Accounting Review.

Anindya Ghose, assistantprofessor of information, opera-tions, and management sciences,co-authored the paper,“Competition between Local andElectronic Markets: How the Benefitof Buying Online Depends onWhere You Live,” forthcoming inMarketing Science.

Research inApril. Her co-

authored paper,“Leadership,

Coordination, andMission-Driven

Management,” won the2008 JP Morgan Prize

for the best paper at theUtah Winter Finance

Conference. In addition,two of her papers were

recently accepted for publication:“Information Immobility and theHome Bias Puzzle,” with Stijn VanNieuwerburgh, assistant profes-sor of finance and Charles SchaeferFamily Fellow, at the Journal ofFinance; and “Knowing What OthersKnow: Coordination Motives inInformation Acquisition,” withChristian Hellwig, at the Review ofEconomic Studies.

Robert Salomon, assistantprofessor of management andorganizations, received the IABS(International Association forBusiness and Society) Best ArticleAward for 2006 for his article,“Beyond Dichotomy: TheCurvilinear Relationship betweenSocial Responsibility and FinancialPerformance,” which was publishedin the Strategic ManagementJournal. Salomon also ran the firstdoctoral consortium at the 2008Israel Strategy Conference, a jointeffort of the three top Israeli univer-sities – Hebrew University, Tel AvivUniversity, and Technion University– to promote the field of strategicmanagement in Israel.

Research Professor ofMarketing Vicki Morwitz andAssociate Professor of MarketingAmitav Chakravarti were awardedthe Best Overall ConferencePresentation at the 2008 AmericanMarketing Association Advanced

Robert Wright,clinical associate pro-fessor of economics,published OneNation Under Debt:Hamilton,Jefferson, andthe History ofWhat We Owe in March withMcGraw-Hill. The bookexplores the untold historyof America’s national debt.Wright shows howAmerica’s financial sys-

tem supported the country’smeteoric growth while amassing astupendous level of debt.

A grant from the NationalScience Foundation was awardedto Marti Subrahmanyam,Charles E. Merrill Professor ofFinance, and Sridhar Seshadri,Toyota Motor Term Professor ofOperations Management andInformation Systems, for“Collaborative Research on RiskManagement in Supply ChainsUsing Market Information,” co-authored with Professor VishalGaur from Cornell University andXiuli Chao of the University ofMichigan. The grant will providefinancial support for three years. Inaddition, “Hedging Inventory Riskthrough Market Instruments,” bySeshadri and Cornell’s Gaur, wasawarded the best paper inManufacturing & ServiceOperations Management, the flag-ship journal of the Institute forOperations Research and theManagement Sciences.

Laura Veldkamp, assistantprofessor of economics, wasappointed a faculty research fellowat the National Bureau of Economic

r e s e a r c h r o u n d u p

24 Sternbusiness

After Hurricane

Katrina

Sternbusiness 25

ne of the most trou-bling aspects ofHurricane Katrinaand its aftermath wasthe seemingly con-

fused and slow response of govern-ment officials and of large nonprof-it relief organizations to the crisis. Itoften seemed as if there was a “dis-connect” between what was beingconveyed by some of the most pow-erful people in the country and whatwe were seeing on television. Thosewho watched the coverage mayremember the desperate calls to atelevision reporter from doctors andnurses stranded in a hospital in NewOrleans with no electricity. Millionsof people were aware of the worsen-ing plight of these healthcare work-ers and their patients, yet govern-ment aid did not arrive for daysafter the August 29, 2005, disaster.

Why was the government’sresponse to Hurricane Katrina soslow and seemingly uncoordinated?One possible explanation is that theofficials in charge thought aboutthe situation in a systematically dif-ferent way than the first respondersand victims did. These differencesin the interpretations of the situa-tion may have stemmed from actualdifferences in the amount of knowl-edge individuals had or from differ-

the loosely coordinated organizationthat was responsible for preservinglives and infrastructure sharedmany of the features of the tradi-tional, pyramid-like structure ofhierarchical organizations: a smallnumber of federal government offi-cials with a great deal of power atthe top, state and local officials andmilitary personnel in the middle,followed by an array of volunteerswith relatively little power, and,finally, thousands of powerless vic-tims.

Talk to MeResearch on communication in

hierarchies suggests that the trans-fer of information up and down theline is rarely smooth. Those at thetop not only have the power to affectthe outcomes of those at the bottom– thus creating incentives for thoselower down to communicate selec-tively based on what they thinkpower-holders want to hear – butthey also may have a different per-spective on the nature of the issuesbeing confronted. Interviews andtestimony suggest that communica-tion up and down the hierarchy inthe networked response toHurricane Katrina was deficient,and it is widely believed that thesuffering was significantly worse as

ences in the perspectives they hadabout the situation. In particular,the level of power they possessedmay have affected how theythought about the situation.

Previous laboratory research hassuggested that a person’s level ofpower can affect how he or she inter-prets events. Research suggests, forexample, that individuals withpower may tend to perceive prob-lems or crises as less threateningthan those with less power. If thiswere found to be true in the contextof a real situation, this could causehigh-level officials to respond to anemerging problem in a way that peo-ple with less power perceive to beinadequate.

In our analysis, we sought tobuild a bridge between research onorganizational decision making andresearch on the psychology of powerby showing empirically how power-holders may have differed fromthose with less power in their inter-pretations of a high-consequence,real-world event. The aftermath ofHurricane Katrina, during whichmultiple interdependent individu-als and organizations attempted towork together to respond to thestorm, was an ideal setting for usto explore.

In the case of Hurricane Katrina,

O

By Frances Milliken, Joe C. Magee, Nancy Lam, and Daniel Menezes

A n a n a l y s i s o f t h i s r e a l - w o r l d s i t u a t i o n s h o w s h o w t h e r e s p o n s e w a s s h a p e d b y t h e d i f f e r e n t l e v e l s o f p o w e r o f t h o s e i n v o l v e d .

The Effects of Hierarchy on Communication

in the Disaster’s Aftermath

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a result. Pinning down the exactcauses of miscommunication, how-ever, has been a topic of intensedebate.

We present a unique reason whythe response to Hurricane Katrinawas deficient. We argue that differ-ences in power among the peopleresponsible for coordinating anddelivering relief, and between thosepeople and the hurricane’s victimscontributed to differences in theirinterpretations of the event as it wasunfolding, which, in turn, impededeffective communications and acoordinated response.

In a crisis, those who anticipate,notice, or recognize problems mustcommunicate with the people whohave the power tomake decisions abouthow to solve them, sohow those problemsare interpreted bythe individuals whoare in charge is criti-cal. Further, thosewith the resources tosolve the problemsneed to develop solu-tions that are then implemented bythose in the field. Problem solvingin organizations thus almost alwaysinvolves information to be relayedup and down a hierarchy. If peopleat the top of a hierarchy tend tothink in reliably different waysabout issues, they may generate dif-ferent solutions than what thoselower down anticipated. Sometimesproblem solving is further compli-cated by involving multiple organi-zations that are themselves nestedin a hierarchy of power, as was thecase after Hurricane Katrina. Todevelop our hypotheses about howindividuals at different levels ofthis disaster relief hierarchy inter-preted the storm and its aftermathin systematically different ways, webuilt on psychological perspectivesof the effects of power on cogni-

how individuals interpret their envi-ronment. Hurricane Katrina couldbe described abstractly as “a viciousstorm wreaking havoc on anythingin its path” or more concretely as “alevel 4 hurricane that is forcing peo-ple to climb up to their roofs andwave white towels for help.” Peoplewho are very powerful may tend toconstrue their world in moreabstract terms than others. Thus,we hypothesized that there was apositive relationship between indi-viduals’ level of power and howabstractly they communicatedabout Katrina.

Power, also is associated with agreater sense of perceived controland certainty about the future.

Not surprisingly, high-power individuals per-ceive themselves as hav-ing more control thanpeople with lower levelsof power, which trans-lates into their havinggreater confidence inpredicting the outcomesof events. In addition,psychological distance

tends to increase this confidence,because specific details that mightpresent roadblocks are not a focus.This suggests power-holders hadincreased confidence during theKatrina crisis, and we investigatedthis hypothesis as well.

The MethodTo test our hypotheses, we ana-

lyzed the content of individuals’descriptions of the events during the10 days following the hurricane,examining direct quotations of peo-ple involved in relief and recovery.These included victims as well aspeople who were organizing andinforming the response.

To capture a range of media(e.g., local versus national; printversus radio and television), wechose The New York Times, The

tion and behavior.

Transformative PowerPower is an intriguing lens

through which to examine how peo-ple view the world. Our hypotheseswere based on two well-researchedtheoretical frameworks of howpower transforms individuals psy-chologically. The first proposes thatindividuals with greater power tendto focus more on the positive,rewarding aspects of their environ-ment rather than on negative,threatening aspects. Studies havefound, for example, that power ispositively associated with the antici-pation of positive outcomes in riskysituations and with the experience of

positive emotion. We hypothesized,therefore, that there would be a pos-itive relationship between individu-als’ level of power and the extent towhich their communication aboutHurricane Katrina tended to bemarked by the expression of positivethoughts. Similarly, high-powerindividuals faced with interpretingenvironmental threats or crises maytend to be more focused on thefuture in an effort to “find the posi-tive” in the situation. Thus, we pre-dicted that there would be a signifi-cant relationship between individu-als’ level of power and the likelihoodof being future-oriented in theircommunication.

A second framework that we usedto guide our research posits that anyform of psychological distance –such as differences in power – affects

26 Sternbusiness

“We argue that differences in power among the people responsible for coordinating and delivering relief,

and between those people and the hurricane’s victims, contributed to differences in their interpretations of

the event as it was unfolding, which, in turn, impeded effective communications and a coordinated response.”

Times-Picayune of New Orleans,CNN , and Nat iona l Pub l i cRadio. Our final sample consistedof 888 unique quotations by 272unique speakers. Federal officialsand governors had the most power,followed by lesser stateand local officials.Police, fire, and mili-tary personnel hadmore power than dis-aster responders andexperts. Victims had the least power.

Our FindingsWe found that the language that

our speakers used to communicateabout the hurricane varied as afunction of the amount of power thespeakers held. As expected, peoplewith more power tended to use moreabstract language. The data alsosuggested that people who hadpower were more likely to focus onthe future and to use positive lan-guage when they spoke about thesituation. Finally, those with themost power in this situation (thefederal officials) showed a tendencyto use language that reflected ahigher degree of certainty and confi-dence than that used by individualswith less power. Our findings, thus,provided strong support for ourhypotheses.

ur study contributes tothe literature on powerand on sense-makingand communication inorganizations by show-

ing that power appears to play acentral role in the sense-makingprocess, potentially producing a“sense-making gap” between high-and low-power individuals’ inter-pretations of events. Given thatmost, if not all, organizations arecharacterized by a hierarchy ofpower, understanding this gap isimportant to constructing a moreaccurate model of organizations asinformation-processing and sense-

making systems.One could argue that high-level

government officials, like other topmanagers, are supposed to “see theforest and not the trees.” Theyshould be thinking somewhat

abstractly and searching for com-mon features across situations so asto apply standardized solutions. Onecould also argue that it is useful forhigh-level managers to be positiveand future-oriented in their think-ing. But what if these ways of per-ceiving and interpreting events aresystematically different from thoseof their subordinates? If leadersrespond to a situation from a view-point that is misaligned with others’viewpoints, they could respond inways that subordinates find surpris-ing. For example, because high-power individuals are more likely tosee the positive in a negative situa-tion, they may be slower to respondto a crisis than their subordinatesthink they should be. They may alsorespond in ways that others lowerdown in the hierarchy perceive asinsufficient given the magnitude ofthe problem. Leaders could also losecredibility with subordinates if theyare perceived to not have a goodunderstanding of events on theground, which could damage com-munications within the hierarchy.Lower-level employees could thenelect to withhold critical informationabout problems from their bosses,believing that their managers onlywant to hear positive news and, per-haps, are not really interested insolving problems. Over time, thiscould cause leaders to become out oftouch with “the reality on theground.” If leaders are perceived tobe out of touch, their effectiveness

would eventually erode because theywould not, in fact, have a goodunderstanding of the complex issuesand problems facing the organiza-tion. Elected officials could bevoted out of office, and managers

who have lost support– or subordinates whodo not feel supportedby management –could quit.

ConclusionThe finding that powerful indi-

viduals interpret the world in verydifferent terms than those with littlepower might not surprise anyonefamiliar with organizations. But thatpsychological theories of power canexplain and predict this phenome-non in the context of a large-scaledisaster is remarkable. Power colorshow people perceive, interpret,and communicate about the situa-tions they encounter in ways thatare often not consciously recognizedor understood. Understanding moreabout these effects will be critical tohelping ensure effective communica-tion and coordination up and downorganizational hierarchies. �

FRANCES J. MILLIKEN is professor ofmanagement and organizations andPeter Drucker Faculty Fellow at NYUStern. JOE C. MAGEE is an affiliatedassistant professor of management andorganizations at NYU Stern and assistantprofessor of management at the NYURobert F. Wagner Graduate School ofPublic Service. NANCY LAM is a doctoralstudent in the management departmentat NYU Stern. DANIEL MENEZES grad-uated in May 2008 with a BA inMetropolitan Studies from the NYUDepartment of Social and CulturalAnalysis.

The authors thank the NYU Centerfor Catastrophe Preparedness andResponse for the grant that sup-ported this research.

“We found that the language that our speakers used to communicate about the hurricane varied as a function

of the amount of power the speaker held.”

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28 Sternbusiness

THE HOMECOURT

ADVANTAGE WHY INFORMATION-AGE

INVESTORS STILL KEEP THEIR MONEY LOCAL

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ersonal businessmagazines in theUS frequently hec-tor their readers toshift their invest-ments to the Next

Big Thing. One week it’s emergingmarkets, the next, Japan’s making acomeback, and a week later, don’tforget about Europe. No doubt, themagazines’ counterparts overseaspreach a similar story in reverse.Thing is, despite all the informationavailable in this Internet Age, mostinvestors tend to weight their portfo-lios toward their local equities. Doesthis make any sense? We set out tounderstand this phenomenon, andwhat we found revealed that gainingan information edge was the criticalfactor in deciding where to invest,and where better to gain that edgethan your own backyard?

The pattern persists even if you’rea relatively sophisticated, worldlyinvestor or portfolio manager withglobal access to information aboutinternational markets. Your portfoliois probably weighted toward domes-tic equities. Economists call thisphenomenon the “home bias.”Home bias is defined as a long posi-tion in the home asset that exceedswhat is prescribed by the standard

world market portfolio. We askedwhy global information access does-n’t eliminate this asymmetry.

Returns on national equity port-folios suggest there are substantialbenefits from international diversifi-cation, yet individuals and institu-tions in most countries hold modestamounts of foreign equity. Whilerestrictions on international capitalflows may have been a viable expla-nation for the home bias 30 yearsago, the free flow of investmentsglobally makes that explanationobsolete. An alternative hypothesiscontends that home investors havesuperior access to information aboutdomestic firms or economic condi-tions. This information-based theoryof the home bias assumes that homeinvestors cannot learn about foreignfirms. It replaces the old assumptionof capital immobility by the similarassumption of information immobil-ity. Our critique of this information-based theory of home bias was thatdomestic investors are free to learnabout foreign firms. It seemed logicalthat such cross-border informationflows could potentially underminethe home bias – that when investorscould choose which information tocollect, initial information advan-tages could disappear.

Most existing models of asymmet-ric information in financial marketsare silent on information choice. Asmall but growing literature studieshow much information investorsacquire about one risky asset ormodels a representative agent who,by definition, cannot have asymmet-ric information. However, instead ofasking how much investors learn, weasked which assets they learn about.To answer this question required amodel with three features: informa-tion choice, multiple risky assets tolearn about, and heterogeneousagents so that information asymme-try is possible.

Take your PickWe developed a two-country,

rational-expectations, general-equi-librium model where investors firstchose what home or foreign informa-tion to acquire, and then chose whatassets to hold. The prior informationhome investors had about each homeasset’s payoff was slightly more pre-cise than the prior information for-eigners had. The reverse was true forforeign assets. This prior informa-tion advantage may have reflectedwhat was incidentally observedfrom the local environment. Homeinvestors chose whether to acquire

By Stijn Van Nieuwerburgh and Laura Veldkamp

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long position in the home asset, notnecessarily a large one, and it arisesbecause home assets offer risk-adjusted expected excess returns toinformed home investors.

Information about the homeasset reduces the risk or uncertaintythat the asset poses without reduc-ing its return, hence the high risk-adjusted returns. How does infor-mation reduce uncertainty? Anasset’s payoff may be very volatile,high one period and low the next.But if an investor has informationthat tells him when the payoff is

high and when it is low, theasset payoff is not veryuncertain to that investor.Information drives a wedgebetween the conditionalstandard deviation (uncer-tainty or risk) and theunconditional standarddeviation (volatility) ofasset payoffs. While for-eign assets offer lower risk-adjusted returns to homeinvestors, they are still held

for diversification purposes. Theoptimal portfolio tilts the worldmarket portfolio toward homeassets.

Considering how learning affectsportfolio risk offers an alternativeway of understanding why investorswith an initial information advan-tage in home assets choose to learnmore about home assets. Because ofthe excess risk-adjusted returns, ahome investor with a small informa-tion advantage initially expects tohold slightly more home assets thana foreign investor would. This smallinitial difference is amplifiedbecause information has increasingreturns in the value of the asset itpertains to: As the investor decides

additional information about eitherhome or foreign asset payoffs. Theinteraction of the information deci-sion and the portfolio decisioncaused home investors to acquireinformation that magnifies theircomparative advantage in homeassets.

In our model, if home investorschose to undo their informationasymmetry by learning about for-eign assets, they sacrificed excessreturns. When information indicat-ed that the foreign assets’ payoffswould be high, both home andforeign investors knewabout it, demandedmore of the foreignassets, and bid up theirprice. If home investorsinstead learned moreabout home assets thanthe average investor did,then when they observedinformation indicatinghigh home asset payoffs,home asset prices wouldnot fully reflect thisinformation. Prices reflected only asmuch as the average investor knew.The difference between prices andexpected payoffs generated homeinvestors’ expected excess return.

When choosing what to learn,investors made their informationset as different as possible fromthe average investor’s. To achievethe maximum difference, homeinvestors began with home assets,which they started out knowing rel-atively more about, and specializedin learning even more about them.One of the main results was thatinformation immobility persistednot because investors could notlearn what locals know, nor becauseit was expensive, but because they

chose not to. Specializing in whatthey already knew was a more prof-itable strategy.

The model’s key mechanism wasthe interaction between the informa-tion choice and the investmentchoice. To illustrate its importance,we shut down this interaction byforcing investors to take their portfo-lios as given, when they chose whatto learn. These investors minimizedinvestment risk by learning aboutassets that they were most uncertainabout. Our inquiry related to thetheory that if there is sufficient

capacity, learning can undo the ini-tial information advantage, andtherefore also home bias. Thus, thismodel embodied the logic that theasymmetric information criticismsare founded on.

Going Long We next showed that when

investors have rational expectationsabout their future optimal portfoliochoices, this logic was reversed.While acquiring information thatothers did not know increasedexpected portfolio returns, that alonedid not imply that home investorstook a long position in home assets,only that they took a large position.But home bias is a comparatively

30 Sternbusiness

“The standard asset pricing and portfolio choice models typically assume symmetric

information sets across agents. Our study shows that these models are

subject to an important criticism: Investors have an incentive to deviate

by learning information that others do not know.”

Sternbusiness 31

process his own information. Butpaying one portfolio manager tolearn for many investors is efficient.How might such a setting regen-erate a home bias? Because moni-toring information collection isdifficult, portfolio managers havean incentive to lie about howmuch research they do. Investorsmay want to occasionally assessthe portfolio manager’s perform-ance. Having a manager from thesame region, with similar initialinformation, is advantageousbecause evaluating his investmentchoices is easier. Portfolio managerswho want to maximize their risk-adjusted return and have the sameinitial information advantage astheir clients would form a home-biased portfolio, for the same reasonthat an individual investor would.Thus, even with delegated portfoliomanagement, home bias shouldemerge. Future work could use theframework in this model to build anequilibrium model of delegatedportfolio management that connectsa manager’s ability to acquire orprocess information to the size,style, and fees of his fund.

The broader message is thatinvestors choose to have differentinformation sets. The standard assetpricing and portfolio choice modelstypically assume symmetric infor-mation sets across agents. Our studyshows that these models are subjectto an important criticism: Investorshave an incentive to deviate bylearning information that others donot know. �

S T I J N VA N N I E U W E R B U R G H isassistant professor of finance andCharles Schaefer Family Fellow andL A U R A V E L D K A M P is associate pro-fessor of economics at NYU Stern.

to hold more of the asset, it becomesmore valuable to learn about. So,the investor chooses to learn moreand hold more of the asset, until allhis capacity to learn is exhausted onhis home asset.

Knowledge is PowerA numerical example showed

that learning can magnify the homebias considerably. When all homeinvestors received a small initialadvantage in all home assets, thehome bias ranged between 5 per-cent and 46 percent, depending onthe magnitude of investors’ learningcapacity. When each home investorreceived an initial informationadvantage that was concentrated inone local asset, the home bias wasamplified. It rose as high as the 76percent home bias in US portfoliodata, for a level of capacity that isconsistent with observed excessreturns on local asset portfolios.

A variety of evidence supportedthe model’s predictions, connectingthe theory to facts about analystforecasts, portfolio patterns, excessportfolio returns, cross-sectionalasset prices, as well as evidencethought to be incompatible with aninformation-based home bias expla-nation. In particular, the theoryoffered a unified explanation ofhome bias and local bias. While wecannot claim for any one of thesefacts that no other theory couldpossibly explain the same relation-ship, taken together, they consti-tuted a large body of evidence thatis consistent with one fully ade-quate theory.

ConclusionsOur model studied a common

criticism of information-based mod-

els of the home bias: If homeinvestors have less informationabout foreign stocks, why don’t theychoose to acquire foreign informa-tion, reduce their uncertainty aboutforeign payoffs, and undo their port-folio bias? The answer to this ques-tion required a model whereinvestors chose which risky assetpayoffs to learn about. We showedthat investors who did not accountfor the effect of learning on portfoliochoice chose to undo their initialadvantages. But, investors withrational expectations reinforcedinformational asymmetries.

e can conclude fromthis model thatinvestors learn moreabout risks theyhave an advantage

in because they want their informa-tion to be very different from whatothers know. Thus our main messageis that information asymmetryassumptions are defensible, but notfor the reason originally thought.We do not need cross-border infor-mation frictions. With sufficientcapacity to learn, small initial infor-mation advantages can lead to ahome bias of the magnitudeobserved in the data.

A problem that many asymmetricinformation theories face is thatunobservable information makesthem difficult to evaluate empiri-cally. While information cannot beobserved, it can be predicted. A sep-arate contribution of our study is toconnect the observed features ofassets to predictions about investors’information sets. This connectionprovides a new way to bring infor-mation-based theories to the data.

An important assumption in ourmodel is that every investor must

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32 Sternbusiness

By Derrick Wirtz, Justin Kruger, Dale T. Miller, and Pragya Mathur

Contrary to popular belief, whether you’re taking a test

or buying a stock, it may pay to rethink your choice.

Think AgainFirst Instincts Aren’t All They’re Cracked Up to Be

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hether you’re anindividual tryingto build a collegefund for yourfirst-born, a hedge

fund manager responsible for bil-lions of dollars, or just a visitor toLas Vegas, at some point you’regoing to wonder whether you shoulddo a tad more research or just plunkyour chip down on the red because,well, it feels right.

When it comes to decision-mak-ing dicta, going with one’s firstinstinct fits somewhere on a contin-uum from useful rule of thumb toguiding principle of life. A leaderwho “trusts his gut” is oftenadmired for his self-confidence anddecisiveness. That goes for CEOs,athletes, even presidents.

The common wisdom of goingwith one’s gut is parroted in adiverse range of situations, fromthose with potentially disastrousconsequences – say, going to war –to the life-changing – for instance,college entrance exams – to theperfectly mundane – having tochoose a checkout line at the localsupermarket.

Second-guessing is consideredan also-ran in many spheres.Psychologists have persistentlylinked self-doubt to a variety ofnegative outcomes, includingdiminished attention and self-esteem, excessive reassurance seek-ing, greater conformity under pres-sure, greater materialism, and poor-er performance in competitive situ-ations. Does confidence in oneself,then, mark the path to optimal deci-sion-making? Are first instinctstruly more accurate, insightful, or

aptitude, timed and untimed, com-puter-based, and paper-and-pencil).In a comprehensive review of theanswer-changing literature, not oneof 33 studies found that test takersfared worse because of changingtheir answers.

If sticking with one’s first instinctis such a demonstrably suboptimalstrategy – we call it the “first-instinct fallacy” – why is it sowidely accepted? Our hypothesiswas that it stems from the regret pro-duced when a test taker chooses anerroneous answer. As an analogy,consider the seemingly universalexperience of changing checkoutlines in the supermarket only to seeone’s original line speed ahead.People seem to remember this frus-trating experience far more oftenthan they remember having failed tochange lines when they should have.In much the same way, we argue thatchanging a correct answer to anincorrect answer is likely to be morefrustrating and memorable than fail-ing to change an incorrect answer tothe correct one. When a test takerthinks about the consequences ofpast answer changing, he is mostlikely to remember those instancesthat produced the greatest frustra-tion and self-recrimination, not theinstances where he changed ananswer appropriately or failed tochange what turned out to be awrong answer.

Setting the StageTo evaluate this theory, we con-

structed four steps. First, we askedtest takers about their belief in thefirst-instinct fallacy, and then com-pared their intuitions with objective

more likely to lead to optimal deci-sion-making? Or is it possible thatfirst instincts are often falseinstincts? We set out to answer thesequestions and to understand howthe common wisdom got that way.

Guessing GamesMultiple-choice test-taking offers

a paradigm in which to examine theeffect of second-guessing on objec-tive outcomes. Among the mostcommonly endorsed strategies forsuch situations is, of course, to “gowith your first instinct,” whichappears as a staple in the test-preparation industry. As Barron’sGRE guide admonishes: “Exercisegreat caution if you decide to changean answer. Experience indicates thatmany students who change answerschange to the wrong answer.”

Indeed, research shows thatroughly three out of four studentsbelieve that changing their answerswill result in lower test scores;instructors appear to hold thisbelief as well. In a survey of facultyat Texas A&M University, 55 per-cent responded that changing one’sfirst instinct to another answer waslikely to lower test scores; whereas, amere 16 percent thought that such achange would improve test scores.

The facts are to the contrary. Thevast majority of the evidence onanswer changing, we found, pointedto just the opposite: Answer chang-ing actually improves test scores. Inresearch spanning seven decades,most answer changes are from thewrong answer to the right answer,taking into consideration a widevariety of test formats (multiple-choice, true-false, achievement,

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34 Sternbusiness

outcomes by scrutinizing theiractual introductory psychologymidterm exams. Second, we exam-ined whether the regret and frustra-tion resulting from changing a cor-rect first instinct to anincorrect second guesswas greater than that pro-duced by failing tochange an incorrect firstinstinct to a correct alternative.Third, we investigated whether thisbias in regret produced a similarmemory bias. Finally, we tested thefull model to see whether the differ-ing levels of regret and how the sit-uation was remembered affected therelationship between answer chang-ing and belief in the first-instinctfallacy.

In our first step, independentcoders scrutinized the multiplechoice midterm exams of 1,561introductory psychology students atthe University of Illinois for evidenceof answer changing. Of the 3,291answer changes on the exams, 51percent were from wrong to right, 25percent from right to wrong, and 23percent from wrong to wrong. Inother words, answer changes weretwice as likely to result in correctanswers as incorrect ones.

id the very studentswho benefited fromchanging their answersrealize this fact?Clearly not. Test tak-

ers’ beliefs about the outcome ofanswer changing were consistentwith the first-instinct fallacy. Theybelieved that the most likely out-come of answer changing was anincorrect response, that answerchanging would overall hurt testtakers, and that in situations ofuncertainty between two answers,the first answer was likely to be cor-

rect. In reality, the outcome of answerchanging was exactly the opposite:the most likely consequence was acorrect answer; more people werehelped than hurt by answer chang-

ing; and the willingness to doubtone’s first instinct, when anotheranswer seems better, leads to objec-tively better results.

Je Ne Regrette RienWhy does belief in the veracity of

first instincts persist in the face ofconsiderable empirical evidence tothe contrary? We hypothesized thatthe regret and frustration that followsfrom switching a correct first instinctto an incorrect alternative (an action)is more intense than the regret andfrustration that follows from notswitching an incorrect first instinct toa correct alternative (an inaction), asprior research has demonstrated thatactions are more easily imaginedthan inactions.

To find out whether switching acorrect first instinct to an incorrectsecond guess is more memorable thanfailing to switch an incorrect firstinstinct to a correct second guess, weasked a group of undergraduate par-ticipants to imagine a scenarioinvolving a very important multiple-choice exam. The results confirmedour prediction. By a wide margin,participants clearly viewed changinga correct first instinct to an incorrectalternative as a more regrettable,foolish, and avoidable error than the(objectively) equally poor decision tostick with a first instinct when one’ssecond guess would have been right.

Our model posits that belief in the

first-instinct fallacy stems not fromanticipated (or experienced) regretdirectly, but rather from salientmemories of regrettable and frustrat-ing actions. To examine the actual

and remembered outcomesof going with one’s firstinstinct versus switching to asecond guess, we recreated atypical test-taking situation:

a group of participants was given a30-minute portion of the ScholasticAptitude Test (SAT) or GraduateRecord Exam (GRE), in which theyattempted to answer a series of diffi-cult multiple-choice questions. Theywere told that if they were unsure ofthe correct answer to a question, theycould select two answers. In suchinstances, participants were thenasked to indicate which of the twoselected answers was based on theirfirst instinct.

Our initial analysis focused on theactual outcomes of sticking withone’s first instinct in these instances.As expected, we found that partici-pants were more likely to answer aquestion incorrectly if they stuckwith their first instinct than ifthey switched answers. Next, wecompared the actual outcomes ofsticking versus switching with theoutcomes participants remembered.

Overall, test takers rememberedthe outcome of sticking with theirfirst instincts as relatively positiveand the outcome of switchinganswers as relatively negative.Whereas the actual outcome of theexam was such that second guessesled to fewer wrong answers than firstinstincts, participants rememberedexactly the opposite.

Final Answer?When second-guessing oneself

turns out poorly, the outcome is both

“Answer changes were twice as likely to result in correct answers as incorrect ones.”

D

regrettable and memorable. Is it thecase, as our model proposes, thatthe resulting disproportionate regretand memory account for faith in thefirst-instinct fallacy? To find out,we created a mock game show pat-terned after television’s “WhoWants to Be a Millionaire?”

We found that participants weremore frustrated when the contest-ant repeatedly switched from a cor-rect first instinct to an incorrectsecond guess than when the con-testant repeatedly stuck with anincorrect first instinct.

Con f i rm ing ourhypothesis, partici-pants remembered thecontestant as havingbeen helped more bypursuing a strategy ofsticking with his or herfirst instinct than byalways second-guessingthat instinct, eventhough we designed theexperiment so that bothstrategies led to exactly the samenumber of right and wrong answers.Also, participants in the “stick”condition rated the contestant’sstrategy more favorably than par-ticipants in the “switch” condition –again, despite equivalent outcomes.

Our data enabled us also todetermine that going against one’sfirst instinct (versus sticking with it)led to greater frustration; that frus-tration, in turn, led to a memorybias for the negative consequencesof switching; and that the memorybias reinforced participants’ beliefin “going with your first instinct” asan effective test-taking strategy.When the contestant pursued astrategy of switching answers,greater frustration resulted. In addi-tion, the more frustrated partici-

pants felt, the more they rememberedthe contestant’s strategy as hurting,versus helping. Of critical interest,the more participants rememberedthe contestant’s strategy as hurtingthem, for example, the more poorlythey evaluated the strategy overalland confirmed their belief in thefirst-instinct fallacy.

A Pinch of Self-DoubtAs might be expected, the reti-

cence to go against one’s first instinctis not unique to test-taking. For

instance, in follow-up research, wehave observed a similar tendencyamong investors. The effect of self-doubt, in general, on a variety ofbehaviors has been widely studied.Social psychological literature exploresthe fact that personal uncertainty isnot only psychologically uncomfort-able and must be managed or resolved,but also leads to such maladaptivebehavior as an inability to act.

Our research on the first-instinctfallacy seems to suggest that contraryto conventional wisdom, self-doubtmay, in some circumstances, beworth listening to. If more test takersor stock choosers were willing to sec-ond-guess their first instincts, ourresearch makes clear that the out-comes of their choices would likely beobjectively better. The hypothesis

that individuals prone to doubtthemselves would be more willing tosecond-guess a first instinct is intu-itively appealing, but whether chron-ic high self-doubters would be morelikely to attain objectively betteroutcomes than low self-doubtersremains an open question.

It is not our contention that oneshould always second-guess oneselfor that first instincts are alwayswrong. In many cases, a first instinctis correct – such as when one simplyknows the answer to a test question.

Rather, we advocatethe careful weighingof decisional alter-natives, accompa-nied by a strategy ofrevising one’s firstinstinct when onecomes to doubt it infavor of a betteralternative. Thisstrategy is not oneof generalized self-doubt, but of the

willingness to consider that an optionthat one suspects may be correct onsecond, third, or fourth look is no lesslikely to be accurate just because itcame after an initial decision. �

DERRICK WIRTZ is assistant professorof psychology at East Carolina University.JUSTIN KRUGER is associate professorof marketing at NYU Stern. DALE T.MILLER is the Morgridge Professor ofOrganizational Behavior at the StanfordGraduate School of Business, professor ofpsychology at Stanford University, co-director of the Strategic Uses ofInformation Technology Executive Program,and director of the Center for SocialInnovation. PRAGYA MATHUR graduat-ed in May 2008 with a PhD in marketingfrom NYU Stern.

This article is forthcoming in the book,The Uncertain Self: A Handbook ofPerspectives from Social and PersonalityPsychology.

Sternbusiness 35

“Overall, test takers remembered the outcome of sticking with their first instincts as relatively

positive and the outcome of switching answers as relatively negative. Whereas the actual outcome of the exam was such that second guesses led to

fewer wrong answers than first instincts, participants remembered exactly the opposite.”

36 Sternbusiness

Stern Junior Hears the Roar of the Chinese Dragon

Nicole Fencel (BS ’10) had listened long enough to news ofChina’s explosive expansion. She was more than ready to experi-ence it herself. “Every day we hear in the classroom and the mediaabout China’s rapidly growing economy and the possibility itcould overtake the US as the world’s foremost economic power. Iknew I would be remiss if I didn’t seize the opportunity to exploreChinese culture firsthand and understand how its growth affects America,”explained the Stern junior, who spent last spring studying abroad in Shanghai,China’s largest city and most important financial center. A finance and interna-tional business major, Fencel is among the growing number of Stern studentsseeking Asian experience.

“As China and India become increasingly critical markets in the world econ-omy, business students are expressing greater interest in being exposed to thesecountries as a way to understand the interplay of forces moving them forward,”explained Carmen Johnson, head of international programs at Stern’sUndergraduate College. The number of Stern students who studied at NYU’sShanghai campus last spring jumped to nearly fifty, compared with just threewhen the site launched in 2006. “Thirty-six percent of all Stern students whowent abroad to an NYU campus in spring 2008 went to Shanghai, versus 11 per-cent in spring 2007,” Johnson added.

In response, Stern is developing new programs in Asia as well as leveragingexisting relationships. Recent initiatives include the Indian Leadership ExchangeProgram, launching in 2009, and a new IBEX (International Business Exchange)partner school in Beijing. Shanghai, where Fencel studied, is an integral site in

NYU’s network of global campuses and an increasingly popular option with Sternstudents. “I was able to concentrate on my business studies, but approach topicsfrom a different angle,” said Fencel. “My professors there honed in on the Chineseperspective to really deepen our understanding of the culture.” This includedweekly guest lecturers as well as visits to Chinese companies. Some studentsgained hands-on experience with internships.

Fencel also participated in NYU’s social and cultural offerings in China. Herfondest memory is of a day spent racing dragon boats and barbequing with localuniversity students. “Bonding with the students and hearing their perspective onAmerica really changed my worldview and opened my eyes to the vast cultural dif-ferences between us,” she said.

Since her return, Fencel has decided to minor in East Asian studies andhopes to one day work overseas, particularly in China. “Earning experience thereand gaining knowledge of international business customs will definitely give mean edge with prospective employers, especially those abroad,” she said. “My timein Shanghai was an unforgettable, once-in-a-lifetime experience that took me outof my comfort zone and has helped me understand the role of Asia’s emergingeconomies in the global marketplace.”

Peer to Peer

Undergraduates AdviseTribeca Film Festival Execson the Digital Revolution

Lights… camera… digital conver-gence? That’s the new “action” for SternUndergraduate College students, 25 ofwhom were selected for enrollment in anew partnership course, Convergence andCinema at the Tribeca Film Festival, that

was launched last spring with the Tribeca Film Festival. From February throughMay, students studied the impact on filmmaking of such multimedia as mobileplatforms and new distribution channels.

“We grew up with new media – Facebook, texting, watching videos on ourphone,” said Samuel Baumel (BS ’09), a Stern senior and co-president of theStern Tisch Entertainment Business Association. “This is our native language. Foreveryone older than us, it’s a second language they need to learn.”

Gaining access to native new-media linguists was of particular interest toFestival management. “While film festivals are known as the discovery zone foremerging new filmmakers, we are thrilled to be scouting for a different kind of tal-ent: business students,” said Craig Hatkoff, Festival co-founder. “We are eager to

hear their advice and ideas on the changing media industry landscape and howthose changes may affect our Festival.”

In the course, students were divided into five groups, each one dedicated toa particular aspect of new media, including mobile platforms, the digital revolu-tion, the cable industry, the independent film sector, and the Internet. As thecourse capstone, each team researched and presented recommendations toFestival management on how best to leverage the digital revolution.

“We’re teaching students about the business side of filmmaking, how torepurpose content, generate new revenue streams,and reach new markets,” said Al Lieberman, exec-utive director of Stern’s Entertainment, Media, andTechnology program, who plays a dual role as thevisionary behind the course and its professor.

Baumel and his team advised adding a socialnetworking platform to enable film enthusiasts and filmmakers to engage withone another and personalize connections based on genre preferences. “A socialnetworking function would allow Tribeca to really target its marketing efforts atthe niches that drive tastes,” said Baumel in a New York Sun feature story on thenew course.

What’s in store for the future? Reflected Baumel: "The digital landscape isstill largely unregulated and unsaturated. It’s like the Wild West, and there’s agold rush ahead."

Student Life in Washington Square and Beyond

Nicole Fencel (above: front row, right; on right: right) learned firsthand the role of Asia’s emerging economies afterspending her spring semester studying abroad in Shanghai.

Samuel Baumel (right) was a student ina new course that partners with TribecaFilm Festival executives such as co-founder Craig Hatkoff (left).

RSternbusiness 37

for anything happening more than two years out. They just do not trust the futureof their economy or believe that they’ll still have jobs.”

Reflecting on the most striking cultural difference he noticed in SouthAmerica, first-year EMBA student and entrepreneur David Fiore (MBA ’09) point-ed to the prevalence of poverty in São Paulo. “It was a sobering experience tosee so much poverty on our way in from the airport. We saw so many peoplestruggling,” he said. “Even though São Paulo is one of the largest cities in theworld with 20 million people living in the metropolitan area, the averageAmerican knows little about it.”

A highlight – and a more uplifting moment – was meeting the Meninos doMorumbi Band, said both Chadalavada and Fiore. Meninos do Morumbi is anafter-school program for nearly 5,000 children from poverty-stricken areas ofSão Paolo that introduces kids to music, dance, sports, and education as a wayto keep them off the streets. “Part of getting a well-rounded experience abroad islearning, not just about business, but also about culture in these countries,”noted Fiore. “We drummed and danced with the Meninos do Morumbi, and thattaught us about Brazilian music and dancing.” But more remarkable, Fiore said,was witnessing the impact that efforts such as this have on the lives of thesechildren and on the outlook for São Paolo: “People like founder Flavio Pimentagive us all a reason to be optimistic about the future.”

A Win/Win for IMIParticipants

Daniel Fisher (MBA ’09) spent mostof his career working with nonprofitmicrofinance organizations, helpingclients solve their business problems.So it’s no surprise that when he decidedto transition to management consulting,his past experience was a boon.

But to better make that move, Fisherapplied for the Industry MentoringInitiative (IMI), available to all first-year,full-time MBA students. IMI is a highlyselective, yearlong program that isgeared towards career switchers, offeringan in-depth look, including specificindustry information and career advice,at one of five different career tracks. “Mycareer with small nonprofits offered memany things, but insight into manage-ment consulting in a corporate environ-ment was not one of them,” Fisher said.“IMI provides me an opportunity to getpast the recruiting sales pitch and hear

“The IMI program strengthens Stern’sreputation among top-tier businessschools and can be a prime source oftalent for the IMI-track industries,” notedKasegrande. “Students gain from havingmentors available to assist them throughfirst-year recruiting, and, as alumni, webenefit from growing our network ofStern graduates in the industry.”

Through Deloitte’s partnership withStern, we are assisting students innavigating the MBA program whilehelping them to prepare for a consult-ing career.”

Through IMI and with the supportof the Deloitte corporate partners,Fisher landed a summer internship ata top global management consultingfirm. “Our mentors helped me seerecruiting from a firm’s perspectiveand identify skills and characteristics Ineeded to highlight to demonstrate mypotential as a consultant,” he said.“The opportunity to hone my inter-viewing skills with industry profes-sionals not only provided valuabletips, but gave me an added measure ofconfidence heading into my internshipinterviews. IMI helped confirm thatconsulting was the right field for meand gave me the tools that helped mebreak into the field.”

Both students and mentors havebenefited from the IMI experience.

balanced accounts of day-to-day workexperiences in the field.”

Each IMI track group, which areconsulting, media and entertainment,investment banking, marketing, andsales and trading, is given access tocorporate partners, usually Stern alum-ni, who work in the business sectorsand serve as mentors for the studentsthroughout the academic year. RobertKasegrande (MBA ’04), a manager inDeloitte’s strategy and operations con-sulting practice, serves as a mentor tothe consulting track students. “Deloitteprofessionals meet with students everyfew weeks and offer advice on how tobest transition into a consulting career.We generally cover identifying transfer-able skills, advice on handling informa-tional interviews, résumé and cover let-ter review, and, most important, mockcase interviews,” he explained.“Between coursework, extracurricularactivities, and career planning, the firstyear at Stern can be overwhelming.

If you are an alumnus/ainterested in learning moreabout the Industry MentorInitiative, contact the NewYork Initiatives office at initiatives@stern.nyu.edu

Stepping Off Campus to a Latin Beat

This spring, first-year NYU Stern Executive MBA(EMBA) students stepped off campus and into SouthAmerica to expand their global business acumen and cul-tural well-roundedness.

Students traveled to Argentina and Brazil as part of aGlobal Study Tour (GST) course taught by Anat Lechner,clinical associate professor of management and organiza-tions. GST courses, reflecting the curriculum’s global per-spective on business, are required for each of the students’ two years of EMBAstudy. The course culminates in a one-week trip abroad during which studentsparticipate in meetings with leaders of industry, financial institutions, and gov-ernment organizations. Past GSTs have traveled to Chile, China, India, Russia,and Turkey, among others.

Over the course of the week, students visited BOVESPA, the São Paulo StockExchange – the only stock trading center in Brazil and Latin America’s largeststock exchange – and discussed the exchange’s transformation into an electronicmarketplace. They also met with leaders from The Votorantim Group, one of thelargest private industrial conglomerates from Latin America, and from Tenaris, aglobal tube supplier for the energy industry, to learn about the latest in biofuels.Additionally, students spoke with representatives of the Central Bank of Argentinaabout the socioeconomic issues facing South America.

After studying Brazil and Argentina’s economic, political, and social charac-teristics in class, many of the students found visiting the countries and speakingwith the movers and shakers an eye-opening experience. First-year EMBA stu-dent and stem-cell biologist Dr. Raj Chadalavada (MBA ’09) explained: “We talkabout inflation every day in America and how it’s topping out at 5 percent, butthen you go to Buenos Aires, where they’re facing 25 percent inflation, and itreally puts your life into perspective. The Argentine people do not seem to plan

(Above) Executive MBA students played drums and danced with theMeninos do Morumbi Band (left) during their spring Global StudyTour to Argentina and Brazil.

38 Sternbusiness

Alumni News & EventsALUMNI AFFAIRS1. Alumni enjoyed a special presentation by Andrew Zolli on “A Brilliant Future.”

2. Professor Aswath Damodaran addressed valuation in uncertain markets.

3. Dean Thomas F. Cooley delivered a luncheon keynote presentation on “The Future of Stern.”

4. Sally Blount-Lyon, Vice Dean and Dean of the Undergraduate College, offered her thoughts on the future of the Undergraduate College.

5. Panelists Bant Breen (left) and Professor Arun Sundararajan discussed social networking and marketing.

6. Allan Boomer (MBA ’04) (center), Chair of the Alumni Council; Susan Jurevics (MBA ’96), Chair of the EMT Committee and former Chair of the AlumniCouncil; and Emmanuel Fordjour (MBA ’03) reconnected at the cocktail reception.

7. (From left to right) Jessica Reif Cohen (BS ’77, MBA ’79), Audrey McNiff(MBA ’89), Mary C. Farrell (MBA ’76), and Madelyn Antoncic (MPhil ’81, PhD’83) spoke on the panel about investing in a volatile marketplace.

8. Joan Bloom (MBA ’66) (second from left), Alumni Council member, caught up with fellow alumnae at the breakfast keynote presentation.

9 & 10. Alumni from around the world came together to reunite, network, andhear business forecasts on timely topics.1

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NEW YORK 2008: ALUMNI BUSINESS CONFERENCE

Sternbusiness 39

Catching Up With… the NYU Stern Barcelona2009 Host Committee

The Barcelona 2009 Global Alumni Conference Host Committee is delighted towelcome all alumni to Spain next June for Barcelona 2009: Global AlumniConference. As Host Committee members, these alumni are serving as ambassadorsfor the School, actively engaging alumni in support of the Conference. In addition,the Host Committee is advising and assisting the administration on topics for theConference program, helping to obtain high-level speakers, and strengthening thecommunity between alumni and the School.

Juan Antonio Samaranch Salisachs, Jr. (MBA ’86), Founding Partner andManaging Director of GBS Finanzas, S.A. and Regional Leader for the NYU SternAlumni in Spain Regional Group, is working closely with the other members of theHost Committee in the planning of the Conference. Members of the Committee also

include Claudio Boada Pallerés (NYU Stern Parent ’09), Chairman, Circulo deEmpresarios; Fabio Canè (MBA ’90), Head of Investment Banking, Intesasanpaolo,Milan; José M. Concejo Diez (MBA ’97) of Allianz, Madrid; and Maria Pierdicchi(MBA ’88), Managing Director, Standard & Poor’s, Milan.

Barcelona 2009: Global Alumni Conference, the School’s biennial internationalsymposium, was developed by the Alumni Council, in conjunction with the Office ofAlumni Relations & Development, to offer exclusive educational, cultural, and socialopportunities to the global alumni community. The Conference will feature industryleaders and scholars discussing a range of current and future market issues.

To learn more about the Global Alumni Conference Host Committee, regionalprograms, or other ways to get involved with the School, visit the website atwww.stern.nyu.edu/alumni. For more information about Barcelona 2009: GlobalAlumni Conference, visit www.stern.nyu.edu/barcelona2009.

More than 300 alumni, students, faculty, and friends from around the worldreunited in May for New York 2008: Alumni Business Conference, Stern’s first cam-pus-based conference. At the Conference, industry leaders and scholars providedbusiness forecasts and discussed current market issues on financial risk, investing,

entrepreneurship, marketing, digital media, and social networking (see pages 17-19). We thank all of you who were able to attend. For webcasts of the panels,

photo galleries, and other information from the Conference, visitwww.stern.nyu.edu/alumni/newyork2008.

NYU Stern Hosts First New York-Based Alumni Business Conference

www.stern.nyu.edu/barcelona2009

SAVE THE DATE ~ JUNE 11-13, 2009

40 Sternbusiness

The Classes of 1998 and 2003Celebrate their Reunions

Thousands of NYU alumni gathered on Washington Square inMay for NYU Alumni Day and the NYU Stern five- and 10-yearreunion receptions to reconnect and network with former class-mates over cocktails and hors d’oeuvres. The Reunion Committeescelebrated the commitment of those alumni who fulfilled theirLegacy pledges and the members of the class that contributedfinancially to Stern over the past five years. Overall, more than2,000 alumni and friends traveled from around the country and theworld to join in the annual two-day celebration, making this year’scelebration the biggest yet.

LinkedIn Provides Alumni with MoreOpportunities to Reconnect

There is a new way to stay connected to your Stern friends and to the School.We are now working in partnership with LinkedIn, an online professional network-ing site, to help you identify and leverage professional opportunities with mem-bers of the Stern alumni community. The NYU Stern Alumni LinkedIn Network,which currently has more than 1,700 alumni subscribed, allows you to networkand post or view online job listings with other Stern alumni.

Along with SWAP, the Stern online alumni community, LinkedIn is a great wayto stay connected to your fellow Stern graduates. To join, visit LinkedIn atwww.linkedin.com and search for the NYU Stern group.

Note that the NYU Stern LinkedIn group operates independently of SWAP. Thetwo systems do not transfer data or share information. To keep your contact infor-mation up-to-date with the School, activate your e-mail forwarding for life, accessexclusive career resources, and learn about upcoming alumni events, please visitSWAP at www.alumnionline.stern.nyu.edu.

Take advantage of the opportunity to expand your network and enhance yourcareer – join the NYU Stern Alumni LinkedIn Network today.

Benefits for Alumni:Hotel Discounts

NYU Stern offers special discountedhotel rates to our alumni at select hotelsthroughout the United States and Europe.The discounts are offered at a variety ofhotels ranging from Club Quarters and theHoliday Inn Downtown, to the SohoGrand Hotel and the Tribeca Grand Hotel.

For information on how to takeadvantage of this benefit and to make

reservations, please visit the University Development and Alumni Relations websiteat www.nyu.edu/alumni/benefits or call (212) 998-6912. Discounts changethroughout the year, so check the website often for current offerings.

1. The MBA Class of 2003 reunited over an evening that included cocktails and hors d’oeuvres.

2. Friends from the MBA Class of 1998 celebrated their reunion.

3. Alumnae from the Undergraduate Class of 2003 re-enacted Grad Alley.

4. Lise Bardin Berenger (MBA ’98) (second from left), Reunion Committeemember, traveled from Paris to reminisce with members of her class.

5. Gary Fraser (MBA ’92) (left), Dean of Students and Associate Dean, MBA Student Affairs, reconnected with Peter Gallagher (MBA ’03) and Poupak Sepehri (MBA ’03).

6. Olivia Fu (BS ’03) (right), Reunion Committee member, caught up withfellow alumna Sung-Shim Kim (BS ’03).

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Alumni BallE I G H T H A N N U A L S T E R N

S A T U R D AY, D E C E M B E R 6 , 2 0 0 88:00 PM - Midnight

Rose Center of Earth and Space at the American Museum of Natural History 81st Street between Central Park West and Columbus Avenue

Join fellow NYU Stern alumni in celebration of the holiday season at one of New York City’s most spectacular landmarks. Enjoy a private viewing of the Museum’s Rose Center of Earth and Space,

including the Big Bang Theater, Heilbrunn Cosmic Pathway, Gottesman Hall of Planet Earth, and the Cullman Hall of the Universe. Mix and mingle with both your former classmates and fellowgraduates during a night filled with music, dancing, a buffet, and cocktails. In addition to the festive

atmosphere, there will be quiet spots perfect for conversation with your friends new and old.

General Ticket Price:Alumni from the classes of 2003 and prior (and their guests): $175 per person ($225 after November 3)

Recent alumni from the classes of 2004 - 2008 (and their guests): $125 per person ($175 after November 3) At the door (alumni and guests): $300 per person

Visit the Alumni Ball website at www.stern.nyu.edu/alumniball for registration and event information. While you’re there, browse through photo galleries from previous Balls and read testimonials from fellow alumni.

Call the Office of Alumni Relations & Development at (212) 998-4040 for additional information.

Museum Photo by D. Finnin © American Museum of Natural History

42 Sternbusiness

1930sStanley Strand (BS ’38), of FlorhamPark, NJ, serves as a feature story writerin the Florham Park Eagle. Strand writes acolumn on seniors titled, “Strand onSeniors.”

Helen Steiglitz Weinstein (BS ’38),of Wyncote, PA, received accolades inJune 2008 by Governor Edward G. Rendellas a business teacher at Germantown HighSchool in Philadelphia, PA. Weinsteincontinues to substitute teach at 90 yearsold.

1950sMorris Shulman (BS ’50), of WestOrange, NJ, was honored by the NewJersey Department of Military andVeterans with two Bronze Stars and theFrench Legion of Merit for his combatservice in World War II.

1960sKenneth G. Langone (MBA ’60), ofSands Point, NY, was named to the Boardof Directors at TI Automotive, a supplier ofautomotive fuel storage and delivery sys-tems. Langone is Chairman and CEO ofInvemed Associates, LLC, Vice Chairmanof the NYU Stern Board of Overseers, andVice Chairman of the NYU Board ofTrustees.

Eugene I. Zuriff (BS ’60, LAW ’63),of New York, NY, has joined PBS RealEstate, a New York-based commercial realestate firm specializing in representinghigh-end office and retail tenants, as itsVice Chairman.

George J. Delaney (MBA ’63), ofBriarcliff, NY, was honored with theDistinguished Leadership Award from theWestchester Chapter of the AmericanDiabetes Association. Delaney is thePresident of Summit Resources Inc., aconsulting firm that works with CEOs tosolve corporate problems.

Robert F. Johnston (MBA ’64), ofPrinceton, NJ, has been appointedExecutive Chairman of the PharmosCorporation’s Board of Directors.Johnston, a venture capitalist, isPresident of Johnston Associates.

Robert M. Donnelly (BS ’65), ofHackensack, NJ, is currently Editor of amonthly online column called “TheEntrepreneurial CEO” for ChiefExecutive Magazine.

Stanley A. Glassman (BS ’66), ofSeattle, WA, has been appointed CEO ofMetroPlus Health Plan, Inc., an operat-ing entity of the New York City Healthand Hospitals Corporation (HHC).

Michael Berke (BS ’67), ofWoodbury, NY, has published his firstnovel, Hot Cole. Berke, now retired,spent 35 years in equipment financingand leasing.

Max Leifer (BS ’68), of New York,NY, opened CRAVE On 42ND, a bistrofeaturing Bravo’s “Top Chef” finalistDave Martin as Executive Chef. Leifer, acivil litigator, also owns Brandy Libraryin TriBeCa.

Robert M. Beall (MBA ’69), ofBradenton, FL, received the Universityof Florida Distinguished AlumnusAward. Beall is the Executive Chairmanof Bealls Inc., the parent company ofBealls Department Stores, Inc., operat-ing in Florida, and Bealls Outlet Stores,Inc., operating in Florida, Georgia, andArizona. The company was founded byhis grandfather in 1922.

Steven Sonberg, Esq. (BS ’69), ofBoca Raton, FL, has been electedManaging Partner at Holland & Knight.Sonberg has been a partner at the firmfor 15 years.

1970sFred S. Zeidman (MBA ’70), ofHouston, TX, has been appointed InterimPresident of Nova Biosource Fuels, Inc.Zeidman is Managing Director of the lawfirm Greenberg Traurig and Chairman ofthe Board of Corporate Strategies Inc., aconsulting firm. He is also the Chairmanof the US Holocaust Memorial Council.

Leonardo LoCascio (BS ’71),received a Lifetime Achievement Awardfrom the National Italian AmericanFoundation (NIAF). He is the founder,CEO, and President of Winebow, Inc., awine importing and distribution compa-ny operating in New York and NewJersey that deals in more than 3,000wines from around the world.

Thomas G. Cigarran (MBA ’72), ofNashville, TN, is a member of the newly-formed Executive Board of Cressey &Company LP, a private investment firmthat builds healthcare companies in part-nership with executives. Cigarran is afounder of Healthways, a provider ofcomprehensive care enhancement andhealth support services, where he hasbeen Chairman since 1988 and Directorsince 1981.

Thomas F. O’Neill (BS ’72), ofHalesite, NY, has been appointed to theBoard of Directors for The NASDAQOMX Group, Inc. O’Neill is a foundingpartner of Sandler O’Neill & Partners L.P.

Linda B. Strumpf (MBA ’72), ofSands Point, NY, has been re-elected tothe Board of Trustees of PennsylvaniaState University. Strumpf is VicePresident and Chief Investment Officer ofthe Ford Foundation, a nonprofit philan-thropic organization.

Geraldine A. Michalik (MBA ’73),of New Canaan, CT, received the Loyaltyto Alma Mater Award from St. Peter’sCollege. She shares this award withother members of her family affiliated

with the school. Currently, she is theCOO and Director of Credit Research forRyan Labs, a fixed-income portfolio man-agement company.

Robert N. Dangremond (MBA ’75),of New York, NY, received the NationalHuman Relations Award from theAmerican Jewish Committee.Dangremond is Managing Director ofAlixPartners LLP, a global businessadvisory firm.

Steven J. Bensinger (BS ’76), ofNew York, NY, has been appointed ViceChairman of Financial Services of AIG,an international insurance organization.He has served as AIG’s Executive VicePresident and CFO since 2005, and hasbeen with the company in a variety ofroles since 2002. Bensinger has recentlyjoined NYU Stern’s Board of Overseers.

Mary C. Farrell (MBA ’76), ofMadison, CT, has been elected to theBoard of Directors of Yale New HavenHealth System. Farrell has more than 35years of experience as an investmentanalyst and strategist and is a consultantin the financial services industry.

Peter Krause (MBA ’76), of New York,NY, has been appointed Executive VicePresident of Merrill Lynch; he will alsocontinue to serve as a member of itsmanagement committee. Most recently,Krause was with Goldman Sachs, wherehe was Co-head of the InvestmentManagement Division (IMD), Head offirmwide strategy, and a member of themanagement committee.

Robert L. Steele (MBA ’76), of NewCity, NY, has joined Rosen SeymourShapss Martin & Company LLP, certifiedpublic accountants and profitability con-sultants, as a tax manager.

Steven J. Heyer (MBA ’77), ofAltanta, GA, has been appointed to theBoard of Directors of Omnicare, Inc., aprovider of pharmaceutical care for the

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Sternbusiness 43

elderly. Heyer is the Co-chairman andCEO of Fathom Studios.

Frederic Golchan (MBA ’78), ofLos Angeles, CA, produced “ChaosTheory,” a film distributed by WarnerBros. Pictures.

Richard Khaleel (MBA ’78), ofNew York, NY, has been appointed asan independent board member to JadeArt Group Inc., a seller and distributorof raw jade sourced from China. From2004 to 2007, he served as ExecutiveVice President and Chief MarketingOfficer for The Bank of New York.

Frank J. Skuthan (MBA ’78), ofRidgewood, NJ, has been appointedCOO at Hudson Valley Bank, where hehas been since 2000.

Arthur R. Williams (MBA ’78), ofSyosset, NY, has been appointed ChiefAccounting Officer at HamptonsLuxury Homes, Inc. Prior to joiningHamptons Luxury Homes, Williamswas co-founder of A&A Williams LLP,a certified public accounting practiceon Shelter Island.

Gerald L. Hassell (MBA ’79), ofChappaqua, NY, has been elected tothe Board of Directors at The NationalSeptember 11 Memorial & Museum.Hassell is the President of Bank ofNew York Mellon.

William J. Marshall (BS ’79), ofStamford, CT, has been appointedPresident and CEO of Green EarthTechnologies, Inc., a manufacturer andmarketer of environmentally friendlyconsumer products. Marshall mostrecently served as Managing Partnerof CRT Private Equity.

Peter B. White (MBA ’79), of Rye,NH, has been appointed CFO atNascent Wine Co. Inc. Prior to joiningNascent, White served as ManagingDirector of Armillaire Advisors, a con-sulting practice he co-founded in Juneof 2005.

1980sSteve M. Cohen (MBA ’80), ofNew York, NY, has been appointedChief Marketing Officer at J.H. Cohn.He had been Senior Director ofMarketing at RSM McGladrey.

Richard J. D’Anna (MBA ’80), ofFreeland, MD, has been appointedDirector of the Securities andExchange Commission’s newly creat-ed Office of Collections andDistributions. Prior to joining the SECstaff, D’Anna was Senior VicePresident at First BridgehouseSecurities.

Kenneth C. Johnson (MBA ’80),of New York, NY, has been appointedto the Board of Directors for JadeMountain Corporation. Johnson, aCPA, has served as Senior VicePresident and CFO of Fairfax/MFX, aninsurance and financial conglomerate.

Neil D. Getter (MBA ’81), ofHuntington, NY, has been appointedExecutive Vice President to the USaerospace practice of Willis GroupHoldings Limited.

Ronald J. Kramer (MBA ’81), ofNew York, NY, has been appointedCEO at Griffon Corporation. Kramerpreviously served as President andDirector of Wynn Resorts, Ltd.

Badhia C. Soubra (MBA ’81,PhD ’85), has been appointed SeniorAdvisor for Transactions atMerchantBridge, an equities houseinvesting in the Middle East.Previously, he was General Managerfor product development at QatariIslamic Bank Masraf Al Rayan.

Raymond J. Quinlan (MBA ’82),of Fairfield, CT, has been appointed tothe Board of Directors of DoralFinancial Corporation, a diversifiedfinancial services company. Quinlan isthe founder and CEO of CiticorpInvestment Services.

Gretchen E. Shugart (MBA ’82),of Pelham, NY, is CEO of

A lifelong New Yorker, Scott Berriestill remembers the thrill of watchingKing Kong on the big screen at theZiegfeld Theater on New Year’s Eve of1976. It’s no surprise, then, that his lat-est venture is a film company, ImpulseCreative Productions, which he foundedin 2008 to produce thought-provokingindependent films. “I want the audienceto leave feeling challenged,” he said. “Iwant them to be in a different place thanwhen they began watching the movie.”

Meeting challenges has been a themethroughout Berrie’s career. Before founding Impulse, Berrie wasalready a successful entrepreneur. The spark for his first startup waslit in Stern’s Executive MBA program, which he started while work-ing his way up in his family’s toy company, Russ Berrie. In one sem-inar, Professor Zenas Block asked each class member to come upwith an idea for a company and then had the class vote for the bestone. Most students, caught up in the 1990s’ dot-com boom, pro-posed businesses centered on software and technology. WhenBerrie’s turn came, he announced that he wanted to create a com-pany with the mission of bringing up-close vision to everyone. Whenit came to the final show of hands at the end of class, he recalledwith a laugh, “Not a single classmate voted for my idea!”Nevertheless, his idea spawned his first company.

Scojo New York LLC, which Berrie began with a business partnerin 1999, designs and distributes fashionable and affordable readingglasses worldwide, including to such developing countries asBangladesh and Ghana. The experience validated his vision that busi-nesses can combine the interests of the public good and the private sec-tor. He also discovered his own philosophy of business: as a founder,he wanted to create projects that motivated people, build sustainablebusinesses, and then move on. Scojo New York thrived under his lead-ership, and, in 2007, Berrie sold it and began his new film venture.

Berrie’s motivations were socially-minded long before he enteredthe business world. Early in his career, he pursued his passion tobring peace to the Middle East, serving in the Israeli Defense Forcesand earning a master’s degree in Middle Eastern studies fromColumbia University. His switch to business “took some convinc-ing,” he recalled, “of my family members and of myself.” But ulti-mately, he found that business allowed him to be creative and prac-tical at the same time, and to be committed to public service as wellas the bottom line.

Outside of his business ventures, Berrie remains active philan-thropically. He serves as vice president of the Russell BerrieFoundation, which invests in innovative ideas designed to promoteJewish life and to foster religious understanding and pluralism,among other causes. He also enjoys spending time with his wife andthree children, and in his spare moments – that would be pre-dawn– he trains for triathlons. In July, he will compete as a member of theUnited States triathlon team at the World Maccabiah Games in Israel.For Berrie, life is all about finding the challenges that matter, andmeeting them.

M e e t i n g C h a l l e n g e s

Scott Berrie (MBA ’99)

Mark Lilling is passionate aboutauditing. For more than 30 years,Lilling has worked to convey theimportance of the role of auditors inthe business world, believing thatfair financial reporting, and publicand investor confidence in it, is criti-cal to any corporation’s effectiveness.

Lilling began his career at a largeaccounting firm that eventuallybecame Deloitte & Touche. Beyondthe work itself, he learned there the

importance of building relationships. “One of my mentors, a verysuccessful businessman, told me the contacts I made in my twen-ties would turn into lifelong business relationships,” he recalled.“They did.”

In 1984, moved by an entrepreneurial spirit, he left to foundhis own company, Lilling & Company LLP, a public accountingfirm specializing in auditing. In particular, his company per-forms peer reviews of certified public accounting firms. “I iden-tified an opportunity,” he said. “We didn’t just do what everyoneelse did.” In short order, his firm was performing the most peerreviews of CPA firms per year in New York State, as it has everyyear since it began.

One of the biggest career challenges for Lilling has been tofigure out how to promote his small, local firm of professionalsin the face of larger competition. He credits his experience atNYU Stern and at larger companies with teaching him how tocommunicate his firm’s abilities. He has also helped promotedialogue in the financial community about the importance ofaudit quality by collaborating with Stern Clinical Professor ofAccounting Seymour Jones and by endowing an annual forum onaccounting at Stern’s Ross Institute. Most recently, Lilling’s book,Advantage Audit, was academically peer-reviewed by ProfessorJones.

“I’m a big fan of Stern,” he said. “There I had teachers whotaught me how to think.” He found that Stern was different fromother business schools in that it gave him a theoretical educationthat extended far beyond vocational training in accounting. Hisexperience at the School of Commerce – as Stern was thenknown – made a big impact on the way he approached business.“I agree with Dean Cooley that the role of a business school is toteach the next group of business professionals to think andevolve as leaders,” he said.

Lilling enjoys the small firm environment, which has givenhim the freedom to explore his interests, take on new projects,and spend time with his family. For much of the year now, heworks four days a week so that he can spend time at his vacationhouse and enjoy hobbies such as music and exercise with his wifeof 34 years. They met at NYU, where she was studying at theSchool of Education. For all that he has accomplished in hiscareer, Lilling said, “Meeting my wife was the highlight of myNYU experience.”

P l a y i n g b y t h e R u l e s

Mark Lilling (BS ’72)

44 Sternbusiness

Risk’s structured finance consultancy.

Alexander P. Moon (MBA ’85), ofNew York, NY, joined Pillsbury WinthropShaw Pittman as Partner. He was previ-ously Partner at Duane Morris.

Christianna Wood (MBA ’85), ofSacramento, CA, joined Capital Z AssetManagement as CEO. Previously, Woodserved as Senior Investment Officer atCalPERS.

Donald Correll (MBA ’86), of FranklinLakes, NJ, has been elected to the Boardof Directors of New Jersey Resources(NJR), a company that provides retail andwholesale energy services primarily inNew Jersey. Correll is President and CEOat American Water, the largest water serv-ices provider in North America.

John T. Gaffney (MBA ’86), of WestOrange, NJ, has joined First Solar inPhoenix, AZ, as Executive Vice Presidentand General Counsel. Gaffney was previ-ously Partner at Cravath, Swaine &Moore LLP.

Robert L. Hershey (MBA ’86), ofBronxville, NY, has been appointed VicePresident and SAP Consulting PraticeLeader for EDS Americas and AsiaPacific. Prior to joining EDS, Hersheywas Senior Vice President and GlobalEnterprise Solutions Practice Leader atBearingPoint.

Marti Murray (MBA ’86), of NewYork, NY, has announced that her invest-ment advising firm, Murray CapitalManagement, Inc. (MCM), has beenacquired by Babson Capital ManagementLLC. Prior to forming MCM in 1995,Murray spent five years at Furman SelzInc., a research, brokerage, and invest-ment banking firm that is now part ofXerox Financial Services Inc.

Joseph D. Stecher (MBA ’86), ofNew York, NY, has been appointedManaging Director and Chief InvestmentOfficer at Morgan Stanley InvestmentManagement. Prior to joining MorganStanley, Stecher managed a global pro-gram of real estate funds at GoldmanSachs.

TheaterMania.com after serving as anadvisor to the company through herposition as President of eMediaCapitalLLC, an investment bank advisory firmspecializing in the media and Internetindustries.

Fazel Fazelbhoy (BS ’83), of Dubai,United Arab Emirates, has been appoint-ed CEO of Dubai-based Topaz, one ofthe UAE’s largest oil and gas servicecompanies. Since 2002, Fazelbhoy hadbeen heading the group’s ship repairbusiness, NICO International.

George A. Gulla (BS ’83), of NewYork, NY, has been appointed VicePresident of Publications at TheAmerican National Standards Institute(ANSI). Gulla was previously withStandard & Poor’s.

Max P. Trescott (MBA ’83), ofMountain View, CA, was named the2008 National Certificated FlightInstructor of the Year by the GeneralAviation Awards Program. Trescott isknown for his Max Trescott’s G1000Glass Cockpit Handbook and is aMaster Certified Flight Instructor andMaster Ground Instructor.

Scott L. Kauffman (MBA ’84), ofPalo Alto, CA, has been appointed tothe Board of Directors of Ubiquisys Ltd.,a developer of mobile broadbanddevices. In 2006, Kauffman was namedPresident and COO of BlueLithium, aperformance marketing company.

Maureen Tart-Bezer (MBA ’84), ofNorth Caldwell, NJ, has been elected tothe Board of Foster Wheeler Ltd., aglobal company that offers, through itssubsidiaries, a broad range of engineer-ing, procurement, construction, manu-facturing, project development, manage-ment, research, and plant operationservices. Tart-Bezer most recentlyserved as Executive Vice President andCFO of Virgin Mobile USA.

Bruce T. Miller (MBA ’85), ofPlandome, NY, has joined Digital Risk,LLC, a New York-based risk mitigationsolutions firm. Miller will lead Digital

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Michael J. Christenson (MBA ’87), ofSummit, NJ, has been named President ofComputer Associates. He will continue toserve as the company’s COO.

Robert Greifeld (MBA ’87), ofWestfield, NJ, has been appointed to theBoard of Directors of Dubai InternationalFinancial Exchange Ltd. Greifeld is cur-rently CEO of NASDAQ OMX Group.

David A. Handler (BS ’87, MBA ’90),of New York, NY, has joined CenterviewPartners as Partner. Centerview Partners isa financial advisory firm that operates aninvestment banking advisory practice anda private equity business. Handler is for-mer Managing Director at UBS.

Martin Katz (MBA ’87), of Scarsdale,NY, has been named an independentdirector of Global Capacity, a telecommu-nications logistics company. Since 1985,Katz has served as the CFO of four publiccompanies. He has also served as a con-sultant and assisted early stage companiesin the initial public offering process.

Michael R. Albert (MBA ’88), of WhitePlains, NY, has published a new book, AnArtist’s America, featuring his cereal boxmosaics. The founder of Sir Real organicfruit juices, Albert’s art weaves pop iconsinto eye-grabbing works bursting withtiny, brightly colored pieces, an artisticstyle he has dubbed “cerealism.”

Edward C. Eppler (MBA ’88), of NewCanaan, CT, has joined the investmentbanking firm Moelis & Company asManaging Director. Eppler was previouslyHead of the Aerospace and DefenseFinance Group at CIBC World Markets.

Robert Graham (MBA ’88), of SouthOrange, NJ, has been appointed ExecutiveDirector of the Virgin Islands HousingAuthority (VIHA) by the US Department ofHousing & Urban Development (HUD). In2006, he consulted for the HUD recoveryteam on housing management. Graham iscurrently serving as Principal of APMProperty Management, Development, andConsulting Services.

Khaled T. Haram (MBA ’88), ofRochester, MI, has been promoted toSenior Vice President and CFO atHandleman Company. Haram was pre-viously Senior Vice President andChief Information Officer atHandleman.

James Holzer (MBA ’88), of Rye,NY, has joined Brown BrothersHarriman as Head of Software andTechnology-enabled Services. Holzerwas previously Managing Director atBerkery Noyes.

David A. Pizzo (MBA ’88), of PonteVedra Beach, FL, has been appointedMarket President of the West Floridaregion with Blue Cross and Blue Shieldof Florida (BCBSF). Most recently,Pizzo was BCBSF’s Vice President forAdvertising, Brand Management, andMarket Communications.

Mark D. Alexander (MBA ’89), ofUpper Saddle River, NJ, has joined theDepository Trust & ClearingCorporation’s Board of Directors.Alexander is Managing Director andHead of Global Operations for MerrillLynch.

Kathleen A. Corbet (MBA ’89), ofNew Canaan, CT, has been appointedto the Board of Directors atMassachusetts Mutual Life InsuranceCompany. Corbet is the formerPresident of Standard & Poor’s.

James L. Dunleavy (MBA ’89), ofChatham, NJ, has joined ORIX Financeas Director of its media finance prac-tice. ORIX Finance is a provider ofstructured finance credit products andselect equity co-investments.Previously, Dunleavy worked at MerrillLynch Capital, where he formed themedia finance team.

Jeffrey M. Fischer (MBA ’89), ofMamaroneck, NY, has been namedDirector of the MBA CareerManagement Center at the University ofNorth Carolina at Chapel Hill’s Kenan-Flagler Business School. He was mostrecently co-founder and Managing

Partner of a registered investment advi-sory firm specializing in hedge funds.

Michael S. Geltzeiler (MBA ’89),of Ridgefield, CT, has been appointedCFO and group Executive VicePresident of NYSE Euronext, a family ofglobal stock exchanges that includesthe New York Stock Exchange, Euronext,Liffe, and NYSE Arca Options.

Lars E. Holmquist (MBA ’89), ofAlpharetta, GA, has been appointedChief Marketing Officer at VesdiaCorporation, a provider of marketingservices. He was formerly President ofTSYS Loyalty, a marketing firm.

Scott J. Levy (MBA ’89), of ShortHills, NJ, founded Corporate Edge, Inc.,a major national distributor of promo-tional products, in 1990. CorporateEdge has grown to more than 140employees and was acquired in 2007 byInnerWorkings, Inc., a leading provider

of managed print solutions for corporateclients.

Sanford R. Rich (MBA ’89), of Darien,CT, has been elected to the Board ofDirectors at BenefitStreet, Inc. Rich isPrincipal and Senior Vice President forGEM Capital Management.

John S. Santaguida (MBA ’89), ofBridgewater, NJ, has been appointed CEOat investment management firmMcMorgan & Company. Prior to becomingCEO, Sataguida was Managing Directorand Head of McMorgan’s client services,sales, and marketing teams.

Nels Wangensteen (MBA ’89), ofArmonk, NY, has joined Integre Advisors,an asset management firm, as Principaland Portfolio Manager. Wangensteen waspreviously Managing Director andPortfolio Manager at Neuberger Berman.

Leverage YourNetwork.

Advance Your Career.

In this rapidly changing labor market, we’re here to help. For more than five years,the Career Center for Working Professionals

(CCWP) has partnered with thousands of Sternalumni to provide customized career support.Add the CCWP to your career resources.

Visit www.stern.nyu.edu/alumni/careerCall the CCWP: (212) 998-0235Log on to SWAP: www.stern.nyu.edu/alumni(and click on the “Career” tab)

c l a s s n o t e s

46 Sternbusiness

1990sScott C. Butera (MBA ’90), of LasVegas, NV, has been appointed Presidentof Tropicana Entertainment. Butera hasbeen COO of the Cosmopolitan Resortand Casino in Las Vegas since January2007.

Rajiv Dalal (MBA ’90), of Princeton,NJ, has joined Datamatics, a globalinformation technology solution andservices company, as Senior VicePresident of Global Sales and Chief

Marketing Officer. Most recently, Dalalwas Senior Vice President and Head ofGlobal Sales at Kale Consultants Ltd.

John F. Furth (MBA ’90), of NewYork, NY, has been appointed ManagingVice President of Business StrategiesServices at Hitachi Consulting. Prior tojoining Hitachi Consulting, Furth builtand managed the US business for RolandBerger Strategy Consultants.

Clyde R. Hosein (MBA ’90), ofMorgan Hill, CA, has been appointed

Over the last few years, as the finance industry has comeunder intense scrutiny, and risk management in particular,Yasmine Anavi has risen to the challenge as Managing Directorand Chief Administrative Officer for Citi Risk Management. Shehas more than 20 years of extensive experience in risk manage-ment across a broad array of consumer and commercial creditproducts, markets, channels, and customer risk profiles.

“Anytime you face a difficult challenge in business, youshould see it as an opportunity to make an impact,” sheexplained. “Managing through difficult times is a great chanceto demonstrate your leadership ability and to make a significantcontribution to your firm.” She credits weathering the storms ofher decades-long career in finance for her success in business.

Anavi has held numerous positions of successive responsibil-ity in her 10 years at Citi, including Chief Risk Officer of thecompany’s Global Consumer operations, where she led a risk management organization ofmore than 2,200 professionals in 50 countries. Prior to joining Citi, Anavi was a senior vicepresident and group credit executive at Chase, where she was responsible for risk manage-ment for the company’s national consumer loan portfolio. She began her career at one ofChase’s predecessor companies, Chemical Bank.

“I always knew I wanted to go into banking,” Anavi recalled. “And the analytical, logical,quantitative nature of risk management appealed to me.” Her ascent has been bolstered by astrong work ethic, resiliency, and an ability to tough it out regardless of how daunting the sit-uation might seem. Anavi faced another challenge as a woman starting out in the financeindustry in the early 1980s. “As a woman in business, your commitment to your career isalways questioned, and even today I feel the pressure to continually prove myself,” she said.Because of this pressure, Anavi said she “over-corrected,” working twice as hard to prove herdedication and devotion to her chosen career – a habit that won’t quit.

Yet, despite her demanding career, Anavi also makes time for her two “fabulous” sons anda husband with whom she routinely works on weekend projects that have included renovat-ing a loft and building their dream home.

“Taking a concept of how one wants to live, translating that to lines on a sheet of paper,seeing it materialize, and then actually living in that space has been so rewarding,” Anaviexplained. Beaming with pride as she talks about her family, she has, it is clear, managed tofind that much sought-after balance between work and family.

N o S m a l l F e a t : M a n a g i n g R i s k , a C a r e e r, a n d F a m i l y L i f e

Yasmine Anavi (MBA ’83)

CFO with Marvell Technology GroupLtd., a company that provides storage,communications, and consumer siliconsolutions.

Nuruz Z. Rahman (BS ’90), ofWestbury, NY, has been promoted fromSenior Manager to Partner at MargolinWiner & Evens. MWE is one of thelargest accounting and business adviso-ry firms in the Northeast.

Gregory D. Simon (MBA ’90), ofStamford, CT, has been appointed

Senior Vice President of the Strategiesand Solutions Group at Van WagnerSports and Entertainment. Prior to joiningVan Wagner Sports and Entertainment,Simon led new business efforts for theconsulting divisions at sports marketingfirms IMG and Octagon.

Alan R. Streiter (MBA ’90), ofWestport, CT, has been named ManagingDirector and will head the new convert-ible securities unit at Morgan Joseph &Co., Inc., an investment banking firm.Streiter was formerly Senior ManagingDirector and Head of Investment Bankingat McMahan Securities Co. L.P.

Richard Vogel (MBA ’90), ofStamford, CT, has been appointed to theBoard of Directors at Loeb Enterprises.Vogel is a founding partner of LoebEnterprises and has served as the compa-ny’s COO since its inception in 2005.

Steven A. Weil (MBA ’90), of LosAngeles, CA, has been named as theExecutive Vice President of the OrthodoxUnion, an educational, outreach, andsocial service organization that serves asan umbrella organization for OrthodoxJewish congregations in the US. Weil isthe Rabbi of the Beth Jacob Congregationin Beverly Hills, CA, the largest Orthodoxsynagogue in the US outside the NewYork area.

Joe S. Eberhardt (MBA ’91), of WestBloomfield, MI, has been appointed ChiefMarketing Officer at the LexisNexisGroup. Eberhardt was previouslyExecutive Vice President of Global Sales,Marketing, and Service atDaimlerChrysler.

Eric M. Leeds (MBA ’91), of NewYork, NY, has been appointed Senior VicePresident and Head of Global InvestorRelations at Mylan Inc. Leeds mostrecently served as Senior Vice Presidentand Head of Investor Relations ofPrimedia, Inc.

David Naggar (MBA ’91), of NewYork, NY, has joined iAmplify.com asPresident. Naggar was previouslyPresident of Random House Audio,

Sternbusiness 47

Diversified, Information, and TravelPublishing Groups.

Elizabeth R. Thornton (MBA ’91), ofNewark, DE, has been appointed ChiefDiversity Officer at Babson College.Thornton was also appointed to theMassachusetts Workforce InvestmentBoard by Governor Deval Patrick. She isfounder and CEO of the training andconsulting firm, EntrepreneurshipAdvantage, Inc.

Gerald S. Cantini (MBA ’92), of NewYork, NY, has been appointed to the posi-tion of CFO for Best Practice InsuranceServices, LLC, a provider of underwrit-ing, medical risk management, claimsmanagement oversight, and distributionservices.

Yau D. Chiang (BS ’92), of Brooklyn,NY, has been elected to the Board ofFuda Faucet Works, a Chinese companythat manufactures and distributesEuropean-style brass faucets, spouts,and fittings to international markets.Chiang will also serve on the audit andcompensation committees. He is current-ly Managing Director in the investmentbanking division of Northeast Securities,Inc.

Hillary N. Latos (BS ’92), of NewYork, NY, has signed a letter of intentwith Real American Brands, Inc. todesign a line of women’s purses andbags.

Gregg T. Michaelson (MBA ’92), ofSkillman, NJ, has been promoted toExecutive Vice President, CustomerMarketing, at Rodale, a company thatproduces media properties, trade books,subscription online properties, and inte-grated marketing solutions relating tohealth, fitness, and wellness.

Patrick Philbin (MBA ’92), of Naples,FL, has been appointed Executive VicePresident and COO of Royal Palm Bankin Naples. Philbin previously held thesame position at Community Bank ofNaples.

Mark E. Ross (MBA ’92), of Beaver,PA, has been appointed ChiefInformation Officer at Sun LifeFinancial. Ross will oversee the compa-ny’s IT functions in Asia.

Jonathon E. Gold (BS ’93, MBA’95), of New York, NY, has been pro-moted to Portfolio Manager withFederated Investors, Inc., an investmentmanagement company. Gold joinedFederated Kaufmann in 2004 as a sen-ior investment analyst.

Bruce W. King (MBA ’93), ofNovato, CA, has been appointed CFO atSolarCraft. King was most recently theCFO and COO at the Coaches TrainingInstitute.

Wisdom Lu (MBA ’93), of LosAngeles, CA, has been appointed CFOat Liberman Broadcasting, Inc. Mostrecently, Lu served as Treasurer andChief Investment Officer at Health Net,Inc.

Matthew J. Maslow (MBA ’93), ofBedford, NY, joined Victoire FinanceCapital, LLC as President. Prior to join-ing Victoire Capital, Maslow worked foreight years at Goldman Sachs.

Maureen Morrin (MPhil ’93, PhD’94), of Bala Cynwyd, PA, is a recipientof the 2008 Rutgers University-CamdenProvost’s Award for TeachingExcellence. Morrin is AssociateProfessor of Marketing at the RutgersSchool of Business-Camden andrecently completed a multi-year NASDFoundation grant that supported herresearch on how women select 401(k)funds.

Philip Shawe (MBA ’93), of BeverlyHills, CA, was named to Crain’s “40Under 40” list. Shawe is the co-founderof TransPerfect, a language servicescompany he started in his NYU dormroom with fellow Stern alumnaElizabeth Elting (MBA ’92).

Bryan C. Spielman (MBA ’93), ofNew York, NY, has joined Centerview

Partners as Partner. Previously,Spielman was Managing Director inUBS’ Global Technology Group and wasprimarily responsible for covering thecommunications technology sector.

Seth S. Appel (MBA ’94), ofArmonk, NY, has been appointedDirector at investment banking firmMorgan Joseph & Co. Appel was previ-ously Director with McMahan SecuritiesCo.

Frank W. Baier (MBA ’94), ofSummit, NJ, has been appointed CFOand Chief Administrative Officer of theSecurities Industry and FinancialMarkets Association.

Michael G. Parham (MBA ’94), ofIrvine, CA, has been promoted toManaging Director at RSM EquiCoCapital Markets LLC, a global invest-ment bank. Previously, Parham wasSVP and led RSM’s energy team.

Eric P. Richter (MBA ’94), ofLittleton, CO, has been appointedPortfolio Manager with LuminentMortgage Capital, Inc. Previously,Richter was Vice President and PortfolioManager for HarbourView AssetManagement & Oppenheimer FundsInc.

Katherine A. Binns (MBA ’95), ofNew York, NY, has been named SeniorVice President of Client Service forKnowledge Networks, a consumer infor-mation company that works with clientsin business, government, and academiato facilitate consumer-brand connec-tions, marketing and advertising, publicpolicies, and social science research.

Jorge L. Figueredo (MBA ’95), ofMahwah, NJ, has joined McKessonCorporation as Executive Vice Presidentof Human Resources. Figueredo mostrecently served as Senior Vice Presidentof Human Resources at Dow Jones, Inc.

Richard S. Foemmel (MBA ’95), ofNashua, NH, has been named a trusteeof Rivier College. He is a director of

DecImmune Therapeutics Inc., a Boston-based early-stage drug discovery compa-ny, where he previously served asPresident and CEO. Before joiningDecImmune, he founded CytoLogixCorporation, a medical products company.

Dorothy Price Hill (MBA ’95), ofManhasset, NY, is the Director of InvestorRelations and Business Development at SVInvestment Partners LLC, a private equityinvestment firm that specializes in buyoutsand buildups of business services compa-nies.

Thomas L. Monahan, III (MBA ’95),of Chevy Chase, MD, has been appointedto the Board of Directors at ConvergysCorporation. Monahan is Chairman andCEO of the Corporate Executive Board.

Daniel A. Parisi (MBA ’95), of SanFrancisco, CA, has been named one of the“10 Top Young Trainers” in the US for2008 by Training magazine. Parisi isExecutive Vice President for BTS, a com-pany that produces business simulationsand other discovery-based learning solu-tions for corporate clients. He is alsoPartner and Managing Director of BTS’San Francisco office.

Sandip Gupta (MBA ’96), of Fremont,CA, has been named President atNetMagic Solutions, an India-based man-aged IT service provider. Previously, Guptawas President and CEO of EnsimCorporation, a provider of managementsoftware.

Colleen M. King-Rinaldi (BS ’96), ofLake Worth, FL, owns and operates theSabal Palm House Bread and BreakfastInn, which has recently been awarded FourDiamonds from AAA.

Praveen Kumar (MBA ’96), has beenappointed to Chief Information Officer atBabson Capital Management LLC.Previously, he was Director of EnterpriseSystems at Wellington Management inBoston and Head of the US TechnologyApplication Development Group atJPMorgan Private Bank in New York.

c l a s s n o t e s

48 Sternbusiness

James M. Marsh (MBA ’96), of NewCanaan, CT, has been hired as SeniorResearch Analyst for Piper Jaffray. Mostrecently, Marsh was a co-portfolio man-ager with Hanover Square CapitalManagement. He has also worked for SGCowen, Robertson Stephens, PrudentialSecurities, and UBS.

Glenn M. Saldanha (MBA ’96), ofMumbai, India, is the CEO of GlenmarkPharmaceuticals, a drug research anddevelopment company loacted inMumbai. Glenmark is ranked in the topfour of Indian companies conducting druginnovation research.

Xinyue J. Geffner (MBA ’97), of GreatNeck, NY, has been appointed CFO atChina Architectural Engineering, Inc.Geffner previously headed the China deskat HSBC.

Steven G. Raich (MBA ’97), ofStamford, CT, has been appointedManaging Director of Littlejohn & Co., aprivate investment firm that applies anoperational approach to building middle-market companies. Raich has been anemployee of Littlejohn & Co. since 2000.

Dave D. Whitmore (MBA ’97), ofLincroft, NJ, has been hired by GenesisSecurities LLC, a trading technologydeveloper, to be President of SogoTrade, aretail brokerage division. Whitmore mostrecently worked for TD Ameritrade.

Wendy E. Burke (MBA ’98), ofHouston, TX, has been selected fromamong 273 nominees as a winner inBuilding Design & Constructionmagazine’s third annual “40 under 40”competition. Burke is Vice President ofClient Development at Linbeck, a nationalprofessional services company headquar-tered in Houston.

Benjamin L. Daitch (MBA ’98), ofDallas, TX, has been appointed SeniorVice President and CFO of CanoPetroleum Inc., an independent Texas-based energy producer.

Elena B. Gretch (BS ’98), of NewYork, NY, has launched her own pet train-

ing company, It’s a Dog’s Life, whichwas recently featured in AM NY’sBusiness section. Previously, she spenteight years at the New York StockExchange trading derivatives.

David M. Hinsley (MBA ’98), ofLondon, England, has been appointed asthe Co-head of Latin American CapitalMarkets and Institutional Sales forDeutsche Bank, where he will assumeresponsibility for derivatives and struc-tured products marketing for LatinAmerican corporations and institutions.Hinsley has been with Deutsche Banksince 1999.

Adrienne Johnson-Guider (MBA’98), of New York, NY, has been pro-moted to Senior Vice President andHead of the Strategic Initiatives Group atAXA Equitable Life Insurance Co. Priorto her promotion, Johnson-Guiderserved as Vice President and Chief ofStaff in the office of the CEO.

William A. King (MBA ’98), of OldGreenwich, CT, has joined CitadelInvestment Group, L.L.C., a global finan-cial institution focused on alternativeinvestment strategies and services, asSenior Managing Director and Head ofSecuritized Products. King previouslyserved as Global Co-head of SecuritizedProducts at JPMorgan.

Matthew S. Miksic (MBA ’98), ofNew York, NY, has been hired as SeniorResearch Analyst by Piper Jaffray.Previously, Miksic was Senior ResearchAnalyst at Morgan Stanley.

Glen M. Petraglia (MBA ’98), ofNew York, NY, has been appointedSenior Vice President of Standard LifeInvestments, a global investment man-agement company. Petraglia was previ-ously a US equity analyst at CitigroupInvestment Research.

Duncan Still (MBA ’98), of New York,NY, has been appointed ChiefCommerical Officer of Rail Europe. Stilljoined Rail Europe in 1997 as VicePresident of Human Resources, LegalAffairs, and Administration, and, in

Vivek C. Kamath (MBA ’00), ofEdison, NJ, has been promoted toDirector at Berkery Noyes, an investmentbank providing mergers and acquisitionsservices to the global information, media,and technology industries.

Laura P. Kiernan (MBA ’00), ofLarchmont, NY, has been appointed toDirector, Investor Relations, of TerexCorporation, a diversified global manufac-turer of construction, mining, and road-building equipment. Previously, Kiernanwas the Vice President of InvestorRelations at Playtex Products, Inc.

Louisa Hall Quarto (MBA ’00), ofUpper Saddle River, NJ, has beenappointed Senior Vice President ofAmerican Realty Capital Advisors. Quartowas most recently Executive Director andChief Management Officer of CareyFinancial, LLC.

Peter Connolly (MBA ’01), of Boston,MA, has been promoted to Principal ofSummit Partners, a private equity andventure capital firm. Connolly joinedSummit Partners in 2004 and previouslyheld the position of Vice President.

Steven P. Huang (MBA ’01), of PortWashington, NY, has joined the Board ofDirectors of italki.com, a social network-ing website for language learning. Huangis Vice President at Shipston GroupLimited, an international private equityfirm.

John C. Mitchell (MBA ’01), ofBedford, MA, has authored the article “IsVOC Killing Innovation?” that was pub-lished in the January/February 2008 issueof iSixSigma magazine. Mitchell is cur-rently Principal of Applied MarketingScience.

Eric S. Nonacs (MBA ’01), ofVancouver, British Columbia, Canada, isthe Managing Director of Global Affairs atEndeavour Financial, Ltd. He is also asenior advisor to the William J. ClintonFoundation. From June 2002 until August2007, he was the Foreign Policy Advisorto President Bill Clinton and the ClintonFoundation.

2003, was appointed CFO.

Superna Kalle (MBA ’99), ofManhattan Beach, CA, has been pro-moted to Senior Vice President at SonyPictures Television International’s(SPTI) Networks Group. Prior to herpromotion, Kalle was SPTI’s VicePresident of International Networks.

Josephine Lee (MBA ’99), ofMamaroneck, NY, has published herfirst book titled, New York City’sChinese Community.

Karim Rozwadowski (BS ’99), ofGreat Neck, NY, has been promoted toSenior Analyst with the N.I.R. Group,LLC, an investment fund managementcompany. He is the co-author of“Buyout Competition: The Emergence ofHedge Funds in a World of PrivateEquity,” published in the Journal ofPrivate Equity.

Lee Solomon (MBA ’99), ofHartsdale, NY, has been named COO ofThe Weinstein Company, a multi-mediacompany. Solomon previously servedas Principal at Grosvenor Park, aprovider of equity, debt, and tax-basedfinancing in the motion picture industry.

2000sChristopher Claps (MBA ’00), ofShrewsbury, NJ, has been named VicePresident of Quantitative Analysis atContemporary Healthcare Capital, aleading provider of senior mortgage,mezzanine debt, and equity to health-care service companies.

Anthony A. Dertouzos (MBA ’00),of Oakland, NJ, has joined the NewYork office of Private Banking USA.Previously, Dertouzos was ManagingDirector of the relationship managementteam with Citigroup Global WealthManagement.

Jessica A. Dowd (BS ’00), ofGarden City, NY, and her husband wel-comed their first child, Brendan PatrickWilde, in October of 2007.

Sternbusiness 49

It happened at 30,000 feet up. Aboard a plane severalyears ago, an idea crystallized for Smiti Kanodia, one thathad been just an inkling during her graduate studies atthe London College of Printing: starting a media firm inher homeland of India, with Time Out, one of her favoritemagazines, as the flagship publication. On her return toMumbai following graduation, Smiti made it happen. Shefounded Paprika Media in 2004, the first foray into thepublishing industry for her family’s business, the EssarGroup, one of India’s largest corporations, with interestsspanning the manufacturing and service sectors.

“Having being born and raised in Mumbai, I knew thepotential of the city,” explained Smiti, Paprika Media’sChairperson. “The crisp, colorful, and informative medi-

um of providing honest entertainment news was what Mumbai needed.” Prior to entering publishing, Smiti worked as a mergers and acquisitions analyst in

the telecommunications sector at Lehman Brothers in New York, a dream job for mostfinance majors. But for Smiti, something was missing. She believed she needed “theright mix of creativity and finance,” which, after having interned at a start-up maga-zine in SoHo, she felt she could find in publishing.

Entering what she described as an unorganized industry in India, with problems indistribution, a lack of international English language-focused publications, and ques-tionable integrity in reportage across some publications, Smiti had her work cut out. Shehas made great progress in four years and credits her success to surrounding herself withsmart, experienced colleagues and her own perseverance. “When you commit to a prod-uct or an enterprise, go all the way with it,” Smiti said. “Believe in it and back it 200percent. Along the way, you will encounter hurdles, but stay focused and absorb each ofthese as vital points on your learning curve.”

When asked what her biggest challenge has been as a young entrepreneur, sheanswered honestly: “Myself. But, I am aware that if I have confidence in my work anddelivery, then I will be taken seriously.” To other young entrepreneurs, Smiti advised,“Believe in yourself and enjoy every moment of the journey.”

Paprika Media, through its dynamic team of 120 people, puts out both consumer andcustom-published magazines. The flagships of a partnership with the UK-based TimeOut Group, Time Out Mumbai and Time Out Delhi have become integral parts of thearts, entertainment, and lifestyle-related reading in Mumbai, Delhi, and Bengalaru.

Read A l l Abou t I t : S t e rn A lumna Conque rs I nd i an Med ia Marke t

Smiti Kanodia (BS ’01)

Matthew R. Cook (MBA ’03), ofPhiladelphia, PA, has been elected toPrincipal at The Chartis Group, a health-care advisory services firm. Cook joinedThe Chartis Group in 2004 as SeniorAccountant.

Peter A. Lyons (MBA ’03), of NewYork, NY, has been promoted fromPrincipal to Managing Director at LeedsEquity Partners. Lyons joined LeedsEquity in 1999 as CFO and as an invest-ment professional.

Einar O. Olafsson (MBA ’03), ofReykavik, Iceland, has been appointed tothe Executive Management Board ofGlitner Bank. Olafsson holds the positionof Executive Vice President of InvestmentBanking Iceland.

Itay Barzilay (MBA ’04), of Givataim,Israel, has been appointed CFO of MINDCTI Ltd., a provider of billing and cus-tomer care solutions for voice, data,video, and content services. Previously,he held financial management positionsat Avaya, a telecommunications company,and also served as a consultant for thecorporate finance group at Ernst & Youngin Tel Aviv, Israel.

Howard Stevenson (MBA ’04), ofGreenwood Village, CO, has beenappointed to the Board of Directors ofEaglecrest Explorations Ltd., a goldexploration company.

Victor T. Cohen (MBA ’05), of NewYork, NY, has joined Vestar CapitalPartners, an international private equityfirm, as Principal.

Sara L. Pesek (BS ’05), ofHyderabad, India, has been hired to openNew Energy Finance’s office inHyderabad. NEF is a provider of researchand analysis in clean enery, biofuels, andcarbon markets.

David Wertheimer (MBA ’05), of NewYork, NY, has been appointed to Directorof Strategy at Alexander Interactive, an e-commerce strategy, design, and develop-ment agency. Previously, Wertheimer

served as Director of Internet Marketingfor Clarins Groupe USA.

Brian D. Finkelstein (MBA ’06), ofNew York, NY, has been promoted toSenior Associate at Fifth StreetManagement, an investment adviser toFifth Street Finance Corp.

Katherine E. Burton (MBA ’07), ofNew York, NY, has joined Big ArrowGroup as Account Supervisor. BigArrow Group is a New York-based full-service strategic consulting and com-munications firm.

Mark McLaren (MBA ’07), of NewYork, NY, has joined MediamarkResearch & Intelligence as SeniorResearch Associate, New Ventures.Previously, McLaren served as MusicDirector/Conductor for Broadway andtouring musicals including CATS, ThePhantom of the Opera, and Titanic,

c l a s s n o t e s

50 Sternbusiness

Archie Avidon (BS ’27)

Philip Z. Feldman (BS ’34)

Julian E. Hirschfeld (BS ’36)

Heath Wakelee (MBA ’42)

Adrian K. Compa (BS ’46)

Donald J. Greene (BS ’47)

Charles Sciara (BS ’48)

Edward P. Harvey (MBA ’50)

Jacob N. Yecies (BS ’51)

Jerome H. Teitelbaum (BS ’52)

Lawrence J. Banks (BS ’55)

Louis M. Spadaro (PhD ’55)

Francoise A. Clarens (MBA ’57)

Henry E. Christofferson (MBA ’58)

William Korchak (MBA ’62)

Seymour Barcun (MBA ’69, PhD ’77)

Brian L. Silvert (BS ’99)

Robert Hawkins (Professor)

Michael Keenan (Professor)

David Liebeskind (Professor)

In Memoriam

To access the contact information of your fellow alumni and to update yourown, log on to SWAP, Stern’s online alumni community, atwww.stern.nyu.edu/alumni.

and, most recently, was AssistantConductor for the Broadway production ofChitty Chitty Bang Bang.

Nicolas Peyret (MBA ’07), of Senas,France, has been appointed to TechnologyAnalyst at ITI Life Sciences in Dundee,Scotland. Prior to ITI Life Sciences, Peyretworked at Applied Biosystems in the USas a senior scientist and project manager.

Manoj Chouthai (MBA ’08), of JerseyCity, NJ, was named “CIO of the Year” bythe New Jersey Technology Council for hiswork as Chief Information Officer of PublicService Enterprise Group, a publicly-trad-ed energy and energy services companybased in New Jersey. Chouthai also serveson the Board of the Mental HealthAssociation of Essex County.

Randi Kirtman (MBA ’08), of NewYork, NY, was recently married to LorenForrest, Jr. Kirtman works for AmericanExpress as a manager in the financegroup.

Alejandro Sinisterra (MBA ’08), ofNew York, NY, was recently promoted toCorporate Audit Manager, Americas,Unilever. Previously, he served asAssociate Manager, Brand Finance, for thecompany.

Marc Stephens (MBA ’08), ofBergenfield, NJ, joined Bayer HealthCareas Assistant Brand Manager. He previous-ly served as Media Supervisor at MPG(Media Planning Group).

NEWSSEND US YOUR NEWSDo you have a new job or promotion? An award, honor, or achievement toshare? How about a marriage, new baby, or adoption? Let other alumni knowabout the things happening in your life.Send us your news online through Class Notes in SWAP – the Stern WorldwideAlumni Platform – at www.stern.nyu.edu/alumni, or mail in the followingform, and we may publish it in an upcoming issue of STERNbusiness.

Name

Class Year(s) and Degree(s) from NYU Stern

Degree from Other Institutions

Job Title

Company Name

Business Address

Home Address

Work Phone Home Phone

Preferred E-mail Address

News to Share with NYU Stern Classmates

Please send or fax this form to: Office of Alumni Relations & DevelopmentNYU Stern School of Business44 West Fourth Street, Suite 10-160New York, NY 10012-1126Fax: 212-995-4515

Sternbusiness 51

An Update on Our ProgressThe Concourse Project, Stern’s most significant physical renovation since the consolidation

of the undergraduate and graduate programs at Washington Square 20 years ago, is well

underway. Check out our progress below and in future issues, as well as on our website,

www.stern.nyu.edu/concourse.

$35,000,000

$24,000,000

The generous support of our alumni,corporate partners, and friends movesus closer to our goal.

open for Business

By reclaiming previously unusable space in Shimkin Hall, we relocat-

ed and renovated our IT Command Center (right), reserving its former

home for a student lounge. This Center provides critical technical

innovation and support to our more than 200 faculty and 5,000-plus

students year-round.

Work in ProgressWith construction in Tisch Hall in full swing, a temporary and protec-tive façade gives visitors a “sneak preview” of Tisch’s forthcominglight-filled lobby (below). Demolition of Tisch’s Lower Concoursestarted this past May to renovate classrooms and lounge space, aswell as create the Ernst & Young Learning Center, which will open inSpring 2009.

CONCOURSE PROJECT

52 Sternbusiness

By Marilyn Harris

Mr. Chips had nothing on Dr. RobertKavesh (BS ’49). You know the type:The much-beloved poetry-quotingteacher who inspires his studentsthrough nearly five decades of economicand political turmoil, and who, as a stu-dent himself – and here the similaritiesend – argued economics and baseball,hummed Mozart, and ogled girls inpost-war Washington Square Park withhis NYU schoolmate (and, later, thesisadvisee) Alan Greenspan (BS ’48, MA’50, PhD ’77, Hon.’05).

Mr. Chips, of course, was just thefictional protagonist of a cherished1934 novel. Dr. Bob is the real deal. Hetaught more than 15,000 students overhis career, and their tributes, piling upon NYU Stern’s special website(www.stern.nyu.edu/kavesh), prove it:“spellbinding,” “inspiring,” “mentor,”“intellect,” “warmth,” “perspective,”“ingenious,” “supportive.” For a profes-sor with a passion for his subject, hisprofession, and the fullness of life, itdoesn’t get much better than that.

Marcus Nadler Professor of Financeand Economics Emeritus, Kavesh haslong been a leader at the School. Hisscholarship on inflation and deflation,interest rates, and the stock market con-tinues to be influential, and he is widelyknown for his work as a forecaster andanalyst of economic and financial devel-opments. He has served on numerousboards, has testified before Congress oneconomic issues, and has served on theEconomic Advisory Board of the USDepartment of Commerce.

Equally, if not more, important arethe relationships and careers he fosteredduring his own long career. Some 200Kavesh fans attended a reception inMay to honor Dr. Bob Kavesh that washosted by two former chairmen of theFederal Reserve Bank, Greenspan andPaul A. Volcker (Hon. ’83), and WallStreet sage Henry Kaufman (BA ’48,PhD ’58). They reminisced about their

perpetuity. Income from the fund willsupport a top faculty member in hisor her research and teaching. Specialdistinction is attached to such aca-demic posts, which are supported bytheir own funds. Kavesh Professors willlead the School’s economics depart-ment to even greater excellence. In acompetitive market, endowed profes-sorships are crucial to enabling Sternto attract this sort of visionary scholar,who possesses the kind of qualities thathave made Dr. Bob a legend.

As one of his former students, AlanLevenson (MBA ’84, PhD ’87), chiefeconomist at T. Rowe Price, wrote inappreciation: “Great teachers moldstudents as subject experts and as par-ticipants in larger human endeavors; Iam privileged to be able to count Dr.Kavesh among my teachers.” �

MARILYN HARRIS is editor of STERNbusiness.

long associations with Kavesh, as stu-dents, friends, and comrades in thefield of economics. Volcker, a self-described pessimist, praised the sunnieroutlook affirmed in one of Dr. Bob’spoems, “The World Belongs to Optimists”(above right).

With such a devoted following, it’sno surprise that under Kavesh’s earlyleadership and continued contribution,Stern’s economics department hasbecome one of the top programs in thecountry. In recognition, the School isestablishing the Robert KaveshProfessorship in Economics to supportthe next generation of leadership in thedepartment. The prestigious RobertKavesh Professorship will attract thenext generation of top scholars whopossess the energy and vision to buildupon his distinguished legacy.

Gifts to the Kavesh Professorshipwill be placed in a fund invested bythe University, designed to exist in

PastPerformance

The World Belongs to Optimists

(Above) Bob Kavesh speaks at anevent in May celebrating the estab-lishment of a professorship in hisname at NYU Stern.

(Right) Kavesh is honored by co-hosts (from left to right) HenryKaufman, Paul A. Volcker, and AlanGreenspan with NYU Stern DeanThomas F. Cooley.

The World Belongs to OptimistsBy Dr. Robert Kavesh

"The world belongs to optimists."That’s all you have to say.Just keep your eyes on those blue skiesAnd you will find the way...

To climb the mountain of success-Now here’s the magic key:That while you earn, you have to learnTo help humanity.

From a single drop,mighty rivers flow.And from your individual alumni contribution to theStern Fund, the vitality of your business school willbe strengthened.

Stern has great momentum.

We’re ranked among the top business schools in thecountry. We’re attracting the highest quality facultyand students. And we continue to be a launch padfor the future leadership of global business.

Just as Stern helped ensure your future success, weneed your help to ensure ours. Your annual supportof the Stern Fund is critical to our ongoing success.

Be part of our momentum.

Your generosity enables us to offer more scholarships,continue to attract and support top quality facultyand students, fund technological enhancements, and develop many other momentum-sustaininginitiatives.

To make a gift to the Stern Fund, return thebusiness reply envelope found in STERNbusiness ordonate online at www.stern.nyu.edu/giving. For more information, contact us at 212-998-0496 or at giving@stern.nyu.edu.

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