ost students spend Saturday nights doing the usual - drinking, schmoozing, relaxing. But Craig Kennison is not your average bear. In fact, he's pretty good at turning bears into bulls. He spends his time analyzing bonds and mortgage-backed securities to invest his school's millions.
Kennison is one of 12 MBA candidates in the Applied Securities Analysis Program at the U. of Wisconsin charged with investing $10 million of the school's endowment. "We must develop an investment strategy, sell that product to the client, execute our process, and remain accountable to UW for the decisions we make," Kennison says. "Unlike professional managers, many of us have a few classes on the side."
Business schools, long criticized for being isolated from the marketplace, have rallied as strongly as the current bull market to offer learning opportunities that mimic the investment world and provide the financial community with well-trained grads. And students, looking to gain experience and make their resumes stand out, are banking on returns from the late nights and weekends these programs demand.
Mark Fedenia, an associate professor of finance and director of Wisconsin's program, says market fluctuations are unpredictable, and students are graded on how well they execute their investment plan. Meanwhile, as Fedenia points out, university people and programs depend on the income. "There are consequences to managing a real portfolio. The pressure is much greater not to make a mistake," he explains.
But Wisconsin doesn't have a corner on the student investment market. Students at Tulane U., the U. of Dayton and the U. of Idaho also dabble in the stock market with the help of university dollars.
Each week, about 100 Tulane MBA students visit and review small- to mid-sized regional companies that are too small to be tracked by Wall Street analysts. The students then analyze the companies and make investment recommendations in the school's annual finanial newsletter, which is distributed to over 1,500 investors. Last year, stock prices rose an average of 50 percent for 12 of the 31 companies tracked by the students.
Scott Weber, a Tulane business school grad, found the program invaluable. "[Business school] is a guinea-pig period in which you learn the ropes of a complicated career," he says. "[Participating in a program like Tulane's] speaks well of your ability, demonstrates your interest in an arena of the business world, and makes you more marketable."
And graduates of the program are quickly upgrading their status in the job market. Sounds like a pretty good return on their investment.
by Robert Moll, Johns Hopkins U./Photo by Pete Thompson, U. of Iowa
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