November 2002

Students get “hands-on” experience in investment world

Dr. Rheinhold Lamb (center) meets with two members of the Osprey Investment Club, a new class that allows students to invest funds from the UNF Foundation. The two students are Mark Banieqics and Lauren Messmer.

The recent fluctuations in the stock market have been steep enough to give even the most savy investor a case of the jitters. It’s an experience that has forced many investors to seriously consider the risk they are willing to accept. There’s no way that kind of learning environment can be re-created in a classroom unless real money is used to buy real investments.

That’s exactly what happens each week in the Osprey Investment Group class of Dr. Reinhold Lamb. A select group of six graduate and six undergraduate students get to invest a portion of the UNF Foundation’s assets in stocks and fixed income securities.
The funds for the class were provided through a $500,000 donation by Jody and Layton Smith, longtime supporters of UNF and the Coggin College of Business Administration.

This is the first time for such a class at UNF, which is one of five Florida colleges to have such a program. The $500,000 UNF portfolio makes it the second largest in the state.

Lamb, who has taught a similar class at the University of North Carolina at Charlotte, says the goal is to recreate as close as possible the conditions faced by professional fund managers. To add to the realism, a professional trading room will soon be completed as the result of a $100,000 gift from State Farm Insurance. It will provide the students will access to all the research information the professionals use in making investment decisions.

The class is unusual in a number of respects. It lasts a full academic year in order to give students more experience and discourage “short-term” investment strategies. It is also very selective requiring students to apply for admission. It’s capped at 12 students although this year 25 applied.
Lamb explains that the six and six configuration was selected so that graduate and undergraduates could be paired up. Many of the
graduate students have MBAs and are holding down full-time jobs and personally investing money. This adds a dimension of experience which undergraduates may not have, he says. “Together, each pair of analyst teams has the potential to form a lifelong relationship,” he says.
Each team is responsible for analyzing a different sector. After the research is completed, they bring back recommendations to the full group. It takes a two-thirds vote by the group to approve all investments. Lamb doesn’t intervene in the student’s decisions as long as the investments comply with guidelines established by the UNF Foundation and the teams have done a thorough job of analysis. “Sure I know they will make
mistakes, but that’s part of the learning experience,” he says.
“This is another tool we have created to enable our students to learn by experience.”

There’s also a certain amount of pressure on the Osprey Investment Group. As with any actively managed investment fund, the students performance will be compared against certain benchmarks as well as with the results of the managed UNF Foundation funds.

Although there are no tests or quizzes, a student’s grade is not determined just by the performance of their fund. Lamb explains that this would encourage students to be day traders rather than investors and expose the fund to unacceptable degrees of risk. Instead, grades are based on the consistency and thoroughness with which students apply the investment criteria throughout the semester.

Brian Stewart is one of the students in the charter class. The 24-year-old senior says the class has been a wonderful learning experience. He says he applied for the class in order to get a chance to apply the theories he learned in the classroom to real life. “The reality is that all the theory you’ve learned over the past three years really means a lot and it is the application of those theories in the class that will give me a real future after college,” he said.

Stewart, who also works part time as a financial analyst at PSS World Medical in Jacksonville, says the class will be an invaluable experience to him. “The positions that were once just a pipe dream out of college now show realistic possibility because I know my stuff and have applied and tested theories for myself,” he says.

A final report on the performance of the Osprey Investment Fund will be given to the UNF Foundation Board in April.