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Investment Club Releases Results

John Hobart
Graduate student John Hobart gives a presentation on the Investment Club's results.

Oklahoma City University’s Investment Club released the results of their eight-month-long investment portfolios today, marking this academic year the 12th profitable year and continuing their streak of never losing money.

For the past 12 years, the Investment Club — which includes one undergraduate team and one graduate team — have been loaned $200,000 at the beginning of each fall semester by alumnus and business school namesake Herman Meinders. The interest-free loan is given with the hope that the students will learn about the different aspects of investing.

“There is no better scenario than putting money in students’ hands and letting them work with it in the real world,” said graduate team leader John Hobart during his end-of-year presentation. “The learning experience was second to none.”

Meinders encourages the students to be proactive and take calculated risks. The startup money is divided evenly between the two teams. The investment decisions are solely up to the students; neither university faculty nor Meinders instructs them how to invest the money.

Each week the teams meet and discuss news that may affect their portfolios, and decide if any actions need to be taken with their existing shares. Once a decision has been made, the students inform the club’s sponsor, finance professor James Ma, of their decision and he calls the orders in to UBS, the club’s brokerage firm. While the students make all the decisions relating to their portfolio, Ma is available to offer advice when they need it.

If the students are profitable in their trades, at the end of the academic year the no-interest loan is repaid and the profit is put into a scholarship fund. If they are not, then the remaining money is given back to Meinders and he incurs the loss. The students and university are under no obligation for the losses. Luckily, since the start of the club 12 years ago the students have paid Meinders back in full and contributed to the scholarship fund each year. In their most successful year, the club made close to $50,000 from their investments.

The students’ success hasn’t come without their fair share of stress and close calls. In 2009 the stock market crashed, and to be safe, the students decided to cash out all of their shares. Ma said that once Meinders heard about this, he told them to stay in the market because “losing is just another part of learning.” His faith in the students was well warranted because despite the crash the students still managed to repay the loan in full that year.

At the end of each school year, the two teams meet with Meinders, OCU board of trustees member Mo Grotjohn, business school Dean Steve Agee and Ma to discuss their performance.

This year the two teams generated $11,794.46 profit, which will all be contributed to the business school scholarship fund. The undergraduate team consistently outperformed the S&P500, a feat many professional fund managers have struggled to achieve.

The club is open to all OKCU students, regardless of their major. In fact, the club’s president, Sylvia Hayes, is a biology major.

Sophomore accounting student Annaleiz Palacios led the undergraduate results presentation, and said the experience was helpful not only for learning about investing, but also about working with a team.

“I like how everyone was comfortable with making suggestions,” Palacios said. “As a team, we were able to discuss our ideas and determine whether we were making good decisions. It helps take off the pressure when you can rely on a team.”

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