Thursday, March 29, 2007
Students who are members of an elite group at St. Cloud State University – the Husky Growth Fund – are also news junkies. Every day, the minute they wake up, they want to know what’s going on in the world. They’ll read The Wall Street Journal and The Washington Post online, maybe check market news at SmartMoney.com and similar sites, skim the Star Tribune (Minneapolis) and Pioneer Press (St. Paul) and “tune in” to CSpan – all in order to stay on top of state, national and international developments that could have an impact on the stock market.
The news junkies work hard to stay abreast of the news and markets because they perform as security analysts, investment advisers and managers of an actual $100,000 portfolio, the Husky Growth Fund.
Investment funds are offered at many colleges and universities, but not all use real money, according to Assistant Professor Howard Bohnen, who has advised the group since its formation in 1999. Nearly all are run by graduate students rather than undergraduates, who are in charge at SCSU. And, most investment funds “run” by students give them research experience, but students are not allowed to trade stocks and all decisions are made by a governing board.
“We do it from top to bottom – research, buying, selling, all of it,” said Eric Winter ’06, St. Cloud. He has graduated from the group, but participates as a de facto member while working on his master’s in the SCSU economics program.
Husky Growth Fund members meet weekly to report on their research and make recommendations, then vote to decide which stocks they’ll buy and sell. They’ve made some smart decisions. After Hurricanes Katrina and Rita hit the mainland in 2005, for example, the group decided to invest in lumber, concrete, asphalt and other industries likely to prosper during recovery efforts. “Normally we’re a growth fund,” said Winter, “but when something like that happens, you can’t be stupid.”
The $100,000 the SCSU Foundation provided to establish the fund has gone up and down as the stock market has fluctuated and as students have made hundreds, if not thousands, of investment decisions.
“The goal of the fund is to teach, not to outperform the market,” said Bohnen. Nonetheless, during Winter’s senior year – a year when stock market performance was tepid – the Husky Growth Fund performed admirably. As Winter described it at the time: We’re smokin’ our benchmarks.”
To accomplish that, said fund alumnus Travis Deters, "you need a broad perspective on what’s going on in the world." Whether it’s upcoming elections, a tsunami, a war, a housing slump, changing interest rates or fluctuations in the oil market, said Winter, "Instability, any instability, makes markets nervous” and must be considered in making trading decisions.
As a result, “You have to do a lot of the critical thinking on your own,” said Deters ‘06, of St. Cloud, who was fund president before he graduated with a degree in economics in December. “It’s a whole different deal from reading a textbook.”
Husky Growth Fund members find that the best textbook of all is the media. “What happens out there affects the markets,” said Winter. “We work hard to understand what’s going on in the world, not just what’s on the 9 o’clock news.”
Talent search taps Husky Growth Fund
Whenever Doug Ringeisen ’03, Lakeville, hears of career opportunities at places like Lifetime Fitness, where he’s in charge of operations analysis, he points recruiters in the direction of the Husky Growth Fund. “These are people who are used to going above and beyond, solving problems, being passionate about what they do,” said Ringeisen. “That’s where I go to look for talent.”
Husky Growth Fund members are, in effect, pre-screened, Ringeisen noted. Junior and senior finance and accounting majors in the G.R. Herberger College of Business are eligible to go through a formal application and interview process, during which they have to demonstrate academic excellence and a strong understanding of financial markets. Applicants are evaluated by Assistant Professor Howard Bohnen, who has guided the Husky Growth Fund for many years, but also by fund members.
“They’re smart people,” Ringeisen said of the students who do the screening as well as those who make the cut. “And they’re determined to learn.”
Students in the 15-member group earn just three credits for three semesters of participation. “One semester in the Husky Growth Fund is probably more work than any other class they have,” said fund alumnus Ringeisen. “You are dealing with real dollars and you want to grow those dollars – so you have to be much more mindful in the decisions you make.”
Investing in careers while learning to invest
When Husky Growth Fund students enter the job market, they find it relatively easy to get recruiters’ attention. Fund graduates are of special interest to brokerages, asset management firms, trust companies and the like because they’ve done the real thing. “We’re the only 15 people recruiters see who have this kind of experience,” said Travis Deters ’06, of St. Cloud.
The experience is especially valuable, according to one alumnus of the group, because of Assistant Professor Howard Bohnen’s approach to advising them. “He’s like a coach,” said Deters, who recalls that members are given plenty of rope. “Go to work,” the professor would say. “I’m just here to make sure you don’t run off with the money.”
Bohnen lays low during group meetings (“It’s my job to keep my mouth shut”), but he speaks up when he has a chance to facilitate students’ move from college to careers. Said Deters: “At half of our meetings the professor says, ‘I got an e-mail, they want Husky Growth Fund people.’” It’s true, Bohnen said, recalling that more than once St. Cloud State University graduates have been up against candidates with Ivy League MBAs – but then the adviser gets a call. “Thanks for the recommendation – I got the job.”
“This is experience that sets you apart from the rest,” say Husky Growth Fund members. It’s experience some would not otherwise have. Deters grinned broadly when he was asked whether he invests in the stock market for himself. “I had to pay my way through school. No, I don’t have a portfolio of my own.”