As undergraduates, many students get their first taste of money management. Paying bills, balancing checkbooks, and controlling credit card debt are just a few of the personal-finance skills students need to develop.
Last week, economics and finance majors were recognized for their ability to go far beyond day-to-day budgeting and stretch their savings into a multimillion-dollar investment portfolio, at least hypothetically.
The competition includes more than 20 teams from across the Northeast. In the 17th week of competition, Buffalo State bested the likes of Ithaca College, Saunders College of Business at RIT, and Temple University and was the only team to earn weekly positive returns. The Buffalo State student team includes Eric Almeter, Christian Tejada, and Chelsea Costello.
"We are really happy to be number one out of the 21 colleges and universities, even if it just for this week," said Ted Byrley, associate professor of economics and finance and the team's co-adviser with Gene Chaas, lecturer. "This has been a three-year effort by our students, Gene, and myself that is starting to pay off. Our goal is to finish in the top five before this is all over."
Each team has a theoretical $1 million portfolio to manage for six months. At the beginning of the competition, the team is required to research five small-cap (defined as companies with market caps between $50 million and $3 billion) stock opportunities. Investments must come from different business sectors—such as technology, health care, consumer goods, or another category. The teams then allocate portions of their hypothetical start-up capital to invest into each stock.
"We do give the students a methodology to work from, which is essentially the work product of past teams," said Chaas. "The students keep building on the investment approach using, principally, technical indicators to winnow down their stock selections to those they have the highest confidence in, near term. This year's crew embraced the technical methodology and picked some gems. We couldn't be prouder of our students!"
The competition ends in early April and the winner is determined by the team portfolio with the highest return on initial investment.
"Being a bear market, we've really had to try hard to beat it and come out on top," said Costello, a senior. "We spent lots of time analyzing numerous stocks within our market cap and are pretty confident in the ones we have chosen. This competition has really been a fun learning experience and we're looking forward to see how we finish."
Along with gaining hands-on market experience of concepts taught in class, the team members develop know-how in line with Adirondack’s core beliefs—“research, patience and independent thinking.”
"Our success thus far derives from the analytical skills gained from the Economics and Finance Department," said Almeter, a senior. "I've taken courses with professors Chaas and Byrley before and have directly applied that material to this competition, and other personal investments, yielding positive results."
Here’s hoping the Buffalo State team continues to hit the jackpot!
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