New computer helps student stockbrokers take on market and win
Jeremia Schrock/Sun Star Reporter
Oct. 18, 2011
Students in the UAF School of Management call it a Bloomberg Terminal. It’s a large, multi-screened database that allows users to view and analyze the ups and downs of global stock markets in real time. Although it’s used to view stocks and bonds, it looks like a Transformer, as if the right password could turn its four flickering screens and biometric keyboard into a giant robot. While the terminal isn’t a Transformer, it does help shape students’ understanding of international finance and investment and helps them manage more than half a million dollars in investments.
Anchorage-based investment firm McKinley Capital Management donated the terminal. The firm also uses Bloomberg Terminals, which are standard in the finance industry. While it was donated to the school in mid-September, it has already seen ample use by student analysts of the Student Investment Fund (SIF), according to Craig Wisen. Wisen oversees the fund and is also an associate professor of business administration.
On Oct. 7, Wisen had eight students step out of their morning International Economics class to help outline what the terminal is for and how they use it. One of these students is Jeff Bue, an undergraduate in business administration. Bue uses the machine to discover what analysts have said about a particular company and whether it would make a good buy or a better sell.
As part of the SIF program, students research companies they believe the fund should either invest in or sell, before presenting their findings to peers and professors. While SIF students do not have physical control over the organization’s funds, they do have a hand in recommending what stocks are purchased or sold.
For the students and faculty involved in SIF, the pressure is always on. While Bue was explaining what the Bloomberg Terminal does, Wisen asked him to check up on a stock the fund was interested in buying. “Would you pull up that price chart?” Wisen asked Bue. “Let us know if we should be executing that order now, or wait.”
Bue typed into the terminal, bringing up a page full of numbers and graphs. “[It’s] come down since yesterday.” Bue replied.
“We’re wise in waiting then,” Wisen said.
Since SIF uses real funds to buy real stocks, the students take their research seriously, Wisen explained. Usually they meet on Tuesdays to discuss the fund’s portfolio, but if a stock is on the move they won’t hesitate to respond, regardless of what day it is.
It’s this mix of pressure and risk that attracts many of the students to the organization. “It’s one of the few programs that allows you to get real risk exposure,” Brennen Chamberlain said. “It allows you to have real-world experience without being in the real world.” Chamberlain, a master’s student studying business administration, is confident that the knowledge he has gained working as part of SIF will guarantee him a job after graduation, he said.
When asked if worrying about the fund’s portfolio kept them up at night, the whole group nodded and laughed. “It’s not uncommon that the day before a sell or a buy you’ll come by [and see people on the Bloomberg Terminal],” Chamberlain said. “People will be here nearly 24 hours a day just monitoring and watching.”
What used to take the class hours now only takes minutes on the terminal, Chamberlain said. “You spend less time doing busy work and spend more time focusing on the fundamentals of the company [you’re researching],” he said. “It really opens up the amount of information we have and makes it easier to get to.”
Wisen stresses that while the students in SIF are not risking their own money, they’re risking student funds. SIF provides UAF students with scholarships. “While we’re not involved, as a class, in determining who gets scholarships, it’s our job to manage the money prudently,” Wisen said.
Brian Rogers (now UAF’s chancellor) and Joe Beedle (current president of Northrim Bank) donated the original $100,000 that started the fund in 1991. The fund’s holdings include more than 40 different stocks worth more than $580,000. That total does not include the money that has been taken out during the past 20 years to pay for various scholarships.
While SIF investments are down roughly four percent year-to-date , the market as a whole is down at least seven percent, Wisen said. “We’re beating the market, but it doesn’t feel good,” he said.
Wisen tells his students that if they have to choose between working smarter or harder, always go with smarts, Wisen said. “But, if you’re going to do both, work smart and work hard, you need the Bloomberg.”