PLATTSBURGH — They may not have their college degrees yet, but some Plattsburgh State students have earned something quite valuable — returns on their investments.
Members of the college's Student-Managed Investment Portfolio Club and Stock Market Club have emerged as top contenders in the Adirondack Cup, a small-cap stock-investment competition sponsored by the Adirondack Small Cap Mutual Fund.
$1 MILLION TO PLAY WITH
A total of 18 colleges and universities in New York and New England are participating in the cup, which challenges each team to manage a hypothetical $1 million portfolio, made up of five small-cap companies from different sectors of the Russell 2000 Index.
Though the students aren't investing real money, their success in the cup is based on the actual worth of the stocks they choose.
The students created their portfolios on Oct. 1 and will manage them until April 6, at which time the team with the highest investment returns over the six-month period will win the cup.
The most recent standings, published March 2, show Plattsburgh State in second place with a 24.3 percent return on its investments. Plattsburgh, which trails Ithaca College by 5.5 percentage points, is one of four teams currently beating the market's 13.2 percent return.
"Plattsburgh has done quite well since they've started," said Greg Roeder, a portfolio manager of Adirondack Small Cap Mutual Fund.
Roeder and fellow portfolio manager Matt Reiner, both Plattsburgh State graduates, conceived the idea for the contest last summer and thought it would be a good way for college students to gain insight into stock-market investing through smaller companies.
PICKING THE STOCKS
Small caps are less complex, Roeder explained, but they don't require any less research by potential investors.
Charles Linder, portfolio manager of Plattsburgh's Student-Managed Investment Portfolio and Stock Market clubs, explained that the team chose their stocks by first identifying potentially profitable market sectors, such as cloud computing and agriculture.
The students then looked at large companies within those sectors, such as Apple and Perdue Farms and tried to find small-cap companies with similar models to add to their portfolio.
"It's cool that we got an opportunity to manage this different branch of stocks," Linder said.
For the past year, the main focus of Plattsburgh's Investment and Stock Market clubs has been to manage the $10,000 endowment received last year from the college's School of Business and Economics.
Unlike the group's Adirondack Cup portfolio, the endowment is real money, which the students are working to invest wisely.
Still, students said, competing in the Adirondack Cup has been valuable for the group.
"It more about the learning right now," said C.J. Saunders, the clubs' lead analyst.
Khary Ward, Plattsburgh's assistant portfolio manager, explained that many of the other schools involved in the cup have trading rooms with Bloomberg Terminals to aid in their investment decisions.
The Plattsburgh team, however, does not have access to such tools and instead uses free services, such as Yahoo! Finance, to investigate stock options.
Saunders said his group is happy with its final picks and hopes its investments will ultimately emerge as better choices than those of the competition.
"We're good where we're at, so we're kind of hoping they (the other teams) make a mistake," he said.
The team that wins the Adirondack Cup will be given the chance to share its investment thesis with Roeder and Reiner at a special luncheon in Albany on April 19.
Who that team will be, however, remains to be seen.
"The market is volatile, so we don't know what's going to happen to the stocks," Ward said.
Email Ashleigh Livingston at: firstname.lastname@example.org