On a recent Saturday morning, about 40 students arrived in a classroom in the Science Center to participate in a rigorous, eight-hour workshop on how to manage investments. They spent the day learning the ins and outs of Excel and fine-tuning their math and quantitative skills. By the end, they had to build an income statement model in Excel, being able to change assumptions and predict an income statement forward.
It would be easy to mistake this course as the exclusive domain of an economics major or anyone predestined to work for a major investment bank, but it was actually much more accessible and applicable to all students, says John Pierce, co-chair and lead portfolio manager of the Oberlin Student Finance and Investment Club (OSFIC), the group that hosted and organized the event.
The workshop was run by Training the Street, an outside firm that provides targeted curriculum and training programs for investment banks and undergraduate and graduate institutions alike. This is the second year that Pierce and the club brought the workshop to campus.
The intent was to offer a program that resonates with anyone who may be managing money in the future, such as a 401(k). “This seminar looked at how to manage an investment. Most people managing their own 401(k) aren’t going to be picking individual stocks, but we want them to understand the process,” explains Pierce, a third-year economics major from Ridgewood, New Jersey. “That’s the message we’ve been trying to sell for our club. We want to teach you the core skills of finance, and we also want to be educating students who have no interest in finance but are just interested in managing money and stocks. We want to cater to those people, too.”
When Pierce and co-chair Abraham Davis, a fourth-year, assumed leadership of the club two years ago, they made a conscious decision to reach out to as many students as possible.
“It doesn’t matter if you’re a biology major or an English major. Oberlin students are going to create something great. They’ll have money in the future. We want you to be able to do something with it instead of putting it under a mattress and hiding from the financial world,” Pierce says.
What started as a $50,000 donation in 2004 from Oberlin alums Bela Szigethy ’77 and Stewart Kohl ’77 has evolved into a diverse portfolio, currently valued at more than $300,000, driven entirely by students. About 3 percent is paid out to the college’s general scholarship fund each year.
Throughout the school year, the OSFIC team offers workshops to prepare students for their winter term and summer internships, as well as seniors entering full-time jobs. Since Pierce and Davis took over, the club has doubled its membership; they’ve revamped the club’s investment strategy, placing greater emphasis on fundamental valuation techniques; and they’ve outperformed relative to the S&P 500 benchmark for a second consecutive year.
“It’s been a tough market,” Pierce says. “In 2015 we outperformed really well, but this year we’re hugging the benchmark. Q1 of 2016 was tough. The market was down hard in Q1. We had the wrong call in the energy market going into Q2, but we’ve rebounded from that. Our Q3 was really good—that comes as equity prices rebounded post-Brexit. Now, what we’re trying to figure out is, where do we see equity prices. There’s news that there’s going to be a fiscal spend and cutting corporate tax rates. What does it mean for lowering corporate tax rates? We know spending will benefit some companies more than others. We’re making sure that we go deep into each company’s story.”
Pierce says the club’s officers spend about 10 hours per week on market research. Fourth-year Jillian Hostetler joined the club last spring on the suggestion of Visiting Professor Ed McKelvey ’68, who returned to Oberlin in 2011 after a career in banking, mostly recently at Goldman Sachs.
“As the head of Industrials, Materials, and Energy, I get to be an authority on a lot of different companies and industries, and it's really interesting to see how each sector works,” says Hostetler, an economics major from Algonquin, Illinois. She participated in the Training the Street (TTS) workshop last year before securing a winter term internship with a Washington, D.C. investment firm.
“I think It's awesome that Training the Street comes to Oberlin to work with us, because without these workshops, I would not have the knowledge that I have today,” she says. “TTS is very accessible, so all majors can apply, and whether you want to use the skills you'll learn to pursue a career in finance, or perhaps learn to manage your own portfolio, there's something for everyone to learn. I also use the materials we get at the workshops to help me prepare for job interviews. This year, I got to learn about projecting future company revenues, which is something that the managers at my internship site did while I was there.”
Pierce says a liberal arts background brings a different—but necessary—perspective to the table when competing against applicants from traditional business schools. “Companies want different viewpoints and people who are intellectually curious. One of the things I’ve highlighted is that you can make a great salary and change the world. You don’t have to choose between the two.”
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