Invested in Their Work

Smile! Members of the Amrhein Investment Club with RISE keynote speaker Robert Froehlich of Scudder Investments. From left: faculty advisor Linda Ravelle, Matthew Seaman, CGS, Dina Liberatore ’03, Froehlich, Amanda Laury ’04, Richard Villone ’04, James Generoso ’04, Borko Milosev ’04.

To the untutored, the ups and downs of the stock market may seem unpredictable—if not downright unfathomable. But to the Amrhein Investment Club, they’re as traversible as the rise and fall of Bethlehem’s streets.

The club members proved it at a national gathering of college and university student-run portfolio management groups earlier this year.

Moravian’s investment club, a student organization that began with $20,000 in seed money in 1962, placed third and fifth in parts of the second annual Redefining Investment Strategy Education (RISE) symposium, held February 21-22 at the University of Dayton (Ohio).

The RISE conference brought together student investment groups from 61 colleges and universities in the United States and Canada. Participants ranged from small liberal arts colleges to graduate business programs at major universities.

The event included a day of discussion with investment professionals, including a satellite address by Maria Bartiromo, business and finance correspondent for CNBC’s “Squawk Box.”

“I had originally intended to bring the officers of the Amrhein Investment Club so they could learn more about how other funds are managed,” said faculty advisor Linda Ravelle, associate professor of economics and business. “I entered them into the competition without thinking that we would get very far, since our returns were not that large.”

For the period November 2000 to November 2001, she said, the club’s income fund earned 2.41% and its balanced fund 2.38%. However, because markets were down over the period—the Dow Jones Industrial Average fell 4.21%, and other markets lost even more—the club’s returns were surprisingly healthy.

We managed to accomplish these positive returns with very low risk,” Linda said, “which helped to boost our risk-adjusted performance relative to other funds.”

For the competition, five schools’ funds were selected in each of three investment categories. Two of the Amrhein club’s four funds qualified as semi-finalists.

The Moravian students rushed to polish their PowerPoint presentations for the judges’ panel. Winners were selected for risk-adjusted returns and presentation quality.

“My students were very nervous once they realized the caliber of school they were up against, but they really did a great job in their presentations,” Linda said. “It was challenging because they had never attended an investment conference and did not know what to expect. They also had to field questions from the judges regarding investment decisions, management process, and plans for the future.”

In the value category, Moravian placed third after Stetson University, DeLand, Fla., and the University of Dayton. “We were happy to earn third place because both schools have well-funded and professionally supported portfolio management programs,” Linda said. At many schools, students manage the portfolios as part of a class, whereas Moravian students (“and their advisor,” she added) do all their work on a volunteer basis in their spare time.
In the growth category, graduate students in the M.B.A. program at Purdue University placed first, followed by Millsaps College, Jackson, Miss.; Northern Arizona University; University of Oregon; and Moravian. “Purdue won with a 51.2% return for the year!” Linda said.

Moravian’s participants were James Generoso ’04, Boonton Township, N.J., club president; Matthew Seaman, CGS, past president; Borko Milosev ’04, Yugoslavia, income fund manager; Richard Villone ’04, Chester, N.J., growth fund manager; Dina Liberatore ’03, Nazareth, international fund manager; Amanda Laury ’04, Walnutport, secretary. Kaitlyn Cerco ’04, Clarks Summit, helped prepare the presentations, but she caught the flu and was unable to attend the conference.

The investment club started with a donation from Moravian trustee Irving S. Amrhein. Some money has been added along the way, but most of the fund’s assets, which now total more than $1 million, have been earned. Income goes to support College scholarships and the club’s activities.

“We have a regular attendance at the weekly meetings of about 15 students, although the total list of members is much longer,” Linda said. Though open to all students, the club’s members tend to be from the economics and business department.

And Purdue’s secret? Linda said: “They were very proprietary about their performance. We were not allowed to see presentations made by groups in our investment category, and they did not want to share any information.”

“I suspect that this level of return is not sustainable, but I cannot say for sure,” she added. “My students are trying to figure it out!”

Gulp! Having placed in the finals, Amrhein Club members ready their PowerPoint presentations for the judges. Foreground: Dina Liberatore ’03, Amanda Laury ’04. Background, from left: Richard Villone ’04, Matthew Seaman, CGS, faculty advisor Linda Ravelle.