Heavily Leveraged, Calculated Fun
The Student Investment Group lays the groundwork for investing success
by Tony Moore
October 22, 2012
SIG members (from left): Yasmine Belaoura, Chris Mueller-Wolf, Adam Volchko and Blake Lawrence, all class of 2013.
"People can beat the market by doing a number of things," Adam Volchko '13 says, explaining how the Student Investment Group (SIG) has racked up $34 million (in virtual money) since its inception. Volchko, now co-president with Marian Christian "Chris" Mueller-Wolf '13, served as the vice president of portfolio management when SIG began, and under his guidance the group has tripled its investment of $10 million, via carefully traded futures contracts (gold, crude oil and currency) and some good timing with equities.
"We made leveraged bets, but we were careful," Volchko explains, emphasizing that if he were working with real money, the bets would have been too risky, but initially the idea was to experiment and learn how it all worked.
Co-founded by Volchko, Evan Kontras '12 (Volchko describes SIG as Kontras' brainchild) and Mueller-Wolf, SIG was up and running by spring 2011. It is, as SIG's Web site describes it, "a student-run investment group that invests virtual money with mock portfolios in order to provide members with an immersive, working financial and investment education." An ongoing exercise in enhancing Dickinson's "useful education," SIG's overarching goal is to prepare its members for a life in the "real world."
"The experience in the group is well matched with a useful education," says Assistant Professor of International Business & Management Won Yong Kim, who intends to serve as SIG's faculty advisor. "Employers in the finance sector heavily prefer students who have 'real experience' in investments," and that's just what students can absorb when they join SIG.
"We've had lots of investment experience," Volchko says, "and we can pass it on to the new members of the group." Volchko has held a two-summer internship at Oakmont Capital and also works as the finance and administration analyst intern in Dickinson's Division of Finance and Administration. Mueller-Wolf has interned at Barclays in Hong Kong, Société Générale and Berenberg Bank in Frankfurt in investment banking.
"I wanted to help create SIG because I've been working in the field for a year and have found that usually people who are in these positions are Ivy League educated," Mueller-Wolf says. "SIG is a step toward giving members a chance to compete with Ivy League students entering the industry."
"We've worked for various banks and investment managers, so we've seen the politics, how the offices are run and how decisions are made," Volchko adds. "We can also impart certain networking skills that we've picked up, which you can't get in the classroom." If the idea of transcending the traditional to achieve greater goals has a familiar ring, it shouldn't be surprising.
"Dickinson is about pushing boundaries, especially under President [William G.] Durden '71, and we've drawn inspiration from his model," Volchko says. "Evan wanted to do something that hadn't been done [in this way] before here, and we're doing that with SIG."
Within the capitalist commune
"It's a communal-learning environment—a form of communalism in a sense," Volchko says with a laugh, explaining the atmosphere within the group. "Everyone's knowledge is pulled together, and you pick up stuff from almost everyone there. It's a very diverse group: Some of us are more into marketing and social media than investments, and it's come together very nicely."
Volchko and SIG are hoping to involve more first-year students in the mix, with the aim of keeping graduation from slowing the group's progress. Also, "as a first-year student, you usually won't have had internship experience, so being part of SIG, one can get a basic knowledge of investments that is not necessarily available to younger students," he says, noting that members don't have to be international business & management (or related) majors but just need to have an interest in finance and investments.
"This group can provide an edge," Mueller-Wolf adds. "So that when people work hard and are motivated, SIG gives them a chance to learn this stuff and compete on a higher level going forward."
"I believe that if [students] have a chance to get more practical experiences from the group, it will really help them in their prospective careers in the finance sector," says Kim.
Besides Volchko and Mueller-Wolf, the group comprises Ben Greene '14, vice president of securities analysis; Blake Lawrence '13, portfolio management; Yasmine Belaoura '13, internal affairs and marketing & public relations; and junior and senior analysts. Those new to the group are designated junior analysts, and, together with senior analysts, part of their job is to recommend investments to the group based on the research they conduct.
"We tell the analysts, 'Here's $10 million [that we must allocate],' " Volchko explains. " 'You're going to research stocks in your sector, they're going to be screened and you have to pitch them to the group.' Then we create a portfolio based on an Investment Policy Statement agreed upon by the group." In uncertain financial times, the fundamentals of portfolio management are something everyone should be able to grasp at a basic level, and SIG walks the line between its serious aims and having fun within the group.
"If we take it too seriously, it's not good," he says. "If we don't take it seriously enough, that's not good either. It's a balance thing. I mean, we went all out on some of those futures contracts, and we leveraged [the bet] heavily. So we had a lot of fun with it, but it was calculated fun." He thinks for a moment and then laughs. "Our first portfolio was much more loosely controlled, but we learned and grew. That's the point of all of this: learning from experience."