For a group of students, giving back to alma mater isn’t waiting
until after graduation. They are using the knowledge they are
gaining today to invest in the education of others by playing the
market.
With their hands-on experience researching, investing in and
managing a stock portfolio that supports the Student Managed
Investment Fund, established in 2001, some business majors are
responsible for the awarding of more than 30 scholarships through a
portion of the profits they earned. To participate, potential
investors must be accepted into the undergraduate courses Managing
Investment Funds I and II or the graduate class Asset Management
offered through The Peter J. Tobin College of Business (TCB).
Competition is fierce, but once accepted, select students engage in
research and analysis and make recommendations to buy or sell
securities based on their findings. Those recommendations are then
presented to the University’s Investment Committee, made up of
faculty, administrators, alumni and market professionals, for
approval on transactions before they are executed.
Participants are able to work with real currency thanks to
generous seed grants from James Riley ’74CBA, ’75MBA, ’03HON,
retired managing director and partner at Goldman, Sachs & Co.,
who conceived the program, and Thomas McInerney ’64UC, ‘01HON,
general partner at Welsh, Carson, Anderson and Stowe. Riley says
that participating in class has far-reaching effects beyond
knowledge and practice. “This not only gives students real-life
experience managing money, but there is the added benefit of
helping other students,” he says. With the undergraduate fund
growing to more than $1.4 million and the graduate portion to more
than $300,000, and with five percent of the average market value
being available for student aid annually, it means a great deal to
those receiving financial assistance. Since the inception of the
program, over $180,000 has been awarded through scholarships.
McInerney says that the educational value of the program is far
more important than the amount of money they make. “This is not
some theory class,” he says. “It’s an experience that enhances the
education of a student in a very demonstrative way. These are
students who will clearly be ready to move into the business world
because they will have already learned the process.”
Some of the sound investments have included the purchase of
stocks like Dell, E-bay and Gillette. Kristopher Gobo ’05TCB is a
student in the undergraduate class and says he and the others take
the responsibility of picking and choosing the right stock very
seriously. “It’s like going to work everyday,” Gobo says. “We learn
a lot from Prof. [Keith] Moore but we also have to do a great deal
on our own.” Adding to the research skills they learn is the
advantage of having senior executives visit the classroom to offer
advice and share their experiences. “These are market professionals
who have years of experience and are more than willing to come in
and share that wealth of knowledge with the students,” says
Professor Keith Moore. “The students can ask questions and gain
direction from them.”
Such interaction with successful business people may also
provide valuable networking opportunities. Riley points out that
the sophistication of the program and its success has opened doors
for many former students. “It also works as a resume builder for
those working on the fund,” Riley says. “One of the interesting
things we found is that it gives them a conversation starter with
potential employers when something like this is on their resume.”
That was the experience of Michael Menken ’02TCB, ’04MBA who is
currently working as a senior specialist for Merrill Lynch. “Since
the program is fairly new, people were intrigued by it when they
saw it listed on my resume,” he remembers. “In business, it taught
me so many things about looking at the market in general. But there
is the greater good in that it goes towards an endowment for a
student, and for that reason, you have to be even more protective
of those investments you make.”
Omar Ansari ’06TCB, a finance major, is just one of the students
who is benefiting from the protective nature of the investors.
Originally from Pakistan and now living in Bayside, NY, Ansari
heard about the scholarship in class but became even more impressed
when he learned how it was made possible. “If I didn’t get this
financial aid, I wouldn’t be able to attend college,” he says.
“It’s an honor to receive the scholarship and it’s a great idea to
offer insight to students by allowing them to invest. The fact that
it helps other students is even better.”
K. Thomas Liaw, chairman and professor of economics and finance
at TCB, teaches the graduate class and says that there are hopes of
attracting even more alums to volunteer their time and resources.
“It means everything to the students to know that they have the
support of the University community,” he says. “And we have heard
so many positive things from those outside of the program who are
impressed with how well the students have done and how they are
helping their fellow students.” In March, the St. John’s Investment
Management Conference was organized where more than 100
participants from as far away as Colorado attended at the Manhattan
campus to hear speakers from several organizations including the
American Stock Exchange, Goldman Sachs and Morgan Stanley. That
same month a reunion of current and former investors of the Student
Investment Fund was held to network and celebrate the success of
the program.