Back in business school at Cornell, the most notable professor was a guy by the name of Hal Bierman. Hal taught finance. I had the unique experience of taking finance from Hal while his son was also taking finance. That’s a strange experience, but I’m sure it was more strange for both him and his son. Hal was a serious guy who tried hard to be pleasant and avuncular, but who always seemed more serious than anything. Some professors were outright friendly. Some were engaged and enthusiastic. Some were obtuse and confusing. Some were all about their writing careers. Some were writing to make research breakthroughs. Some were all about their real world experience and sharing that with the students. Hal was a well-respected academic writer, his big book at the time was about Capital Budgeting, a basic tenet of finance and connected to the whole CAPM (Capital Asset Pricing Model) launched by Harry Markowitz and most famously expounded on by William Sharpe. Just to put this into temporal perspective, Sharpe wrote his seminal treatise on CAPM in 1964 and I was learning the nuances of it from Hal in 1975. The world recognized Sharpe for his contributions with the 1990 Nobel Prize in Economics.
Hal’s work gets a lot of respect in the business school community for several reasons. Hal Bierman was primarily known for his contributions to capital budgeting and corporate finance, particularly around capital investment decisions and the application of discounted cash flow analysis. His main contributions was as a leading authority on capital budgeting techniques and he wrote extensively on how corporations should evaluate long-term investment projects. His work emphasized rigorous quantitative methods for investment decision-making. His textbook, which went through multiple editions, became a standard reference in corporate finance. It provided practical frameworks for evaluating investment opportunities using NPV (Net Present Value), IRR (Internal Rate of Return), and other techniques. His strength was in the implementation of financial theory. He contributed significantly to understanding how firms should determine their cost of capital and apply it to investment decisions. Unlike Sharpe and Markowitz and the other CAPM developers who were building foundational asset pricing theory, Bierman’s work was more applied and focused on how CFOs and financial managers should actually make capital allocation decisions in practice. His approach was very much in line with the practical, implementation-focused mindset we appreciated in risk management, where theoretical elegance matters less than whether the framework actually works in real-world decision-making. He focused on bridging the gap between theoretical finance and practical application in corporate settings, something all of us heading out into the real world cared a lot about. He was known for making complex financial concepts accessible to practitioners and students. I suppose that is what always made him seem so serious to me.
Many years later, when I started teaching the practicum at Cornell in 2008, Hal was still very much a presence at the school. He wasn’t really part of the active teaching crew by then, but as a tenured professor, he kept his office and was in it almost every day. I could almost always stop by to chat with him and find him deeply engaged in something. Nevertheless, he would always make time and listen intently…with a degree of seriousness that made you feel that what you were saying mattered. At that time, I operated out of a shared office where several emeritus professors kept desks. One of them, Bob Swieringa, who was a top accounting professor and prior Dean of the school, was in the office most days, but few of the others who kept desks there were ever in evidence. But Hal kept his office until our mutual friend, Joe Thomas (also one of my professors way back when and then the Dean of the school) convinced him to cede his office to some younger faculty member who’s needs and status were growing to the point of requiring a bigger space. At that point, Hal took up a desk in our emeritus office as he began his gradual fade into the woodwork of academic history.
Hal died in 2021 at the age of 96, having served on the faculty for 59 years. He taught me finance when he was approaching fifty years old and he tutored me in teaching when he was over 80 years old. But his life lessons never went away. I remember many things that Hal taught me about finance and for some reason, this morning, I remember the way he used to frame many of his Socratic inquiries to us students. He would ask us if we were happy or sad about a given outcome to a financial situation. It was his way of forcing us to think about things at a very basic level about whether things had worked out well or badly for us because of some decision we had made about a financial choice. Finance is all about choosing paths, just like life is about choosing paths. We can just shrug at outcomes and think that it is what it is and move on, or we can stop and assess how our decisions have affected us. We could probably all agree that regrets are futile and crying over spilt milk is a waste of time, but honest assessment has value and honing the ability to honestly assess whether some decision we made was good for us or bad for us has good learning value.
What made me think about all of this today was a combination of two things I read. In the NY Times there was a piece about desire paths. It was about how people sometimes forge their own routes rather than take prescribed paths as means to express their desires. It’s an interesting concept and an even more intriguing and evocative title for those paths. To desire something seems very passionate. It seems less about efficiency and more about freedom. I want to forge my own path rather than just get there quicker. It’s about self-determination rather than some search for truth.
The other piece I read was about our fact-based culture where we have created different “alternative facts” that underlie one perception of our national reality versus another. It would be hard to deny that those who insist on watching only Fox News or MSNOW (MSNBC) are more about choosing a path and listening to fact sets that validate that path. The freedom to choose one’s reality seems more important to those than having facts lead them to more accurate conclusions. Being happy or sad has more to do with wallowing in their chosen reality than absolute truth, which they may feel does not really exist anyway.
I am watching the national dialogue today about DHS and ICE. There is a clear shift underway in acknowledged facts and therefore a dawning new reality that video capture in particular forces upon all of us, such that “alternative facts” become outright lies. The events in Minnesota have turned the nation as a whole to a new path and a new understanding about what the forces of Trump/Miller/Noem/Homan/Lyons have created in terms of an unacceptable path for the American people. Whether its enough to unseat bad leaders, indict overzealous and criminally negligent agents, or even sway voters from voting Republican in the Mid-term elections later this year is to be determined. But it now seems clear that a majority of Americans realize that mistakes have been made at a very fundamental level in organizing and managing this immigration initiative which the populace seemed to want but did not want in the manner in which it has been delivered. It is now clear that changes need to be made. When Americans stop and think in the most instructive way about whether they are happy or sad about how things are going, the answer is now unavoidable. I think Hal figured out a basic rubric for human awareness that can serve us well on many fronts, not just finance. Am I happy or am I sad?