Finance students who apply to take part in Titan Capital Management, the premier student-run investment program at Cal State Fullerton, embrace the challenge, knowing it will give them the type of hands-on experience and savvy investment skills valued by employers.
No one, however, could have predicted the unique experience they would gain this year with a volatile stock market and the unprecedented world of COVID-19.
Not long after the Dow Jones Industrial Average reached its highest point in history on Feb. 12, TCM celebrated its first-ever first-place win in the Chartered Financial Analyst Institute Research Challenge in Los Angeles. The undergraduate team of five beat out five other universities, including such schools as the University of Southern California, Loyola Marymount and Pepperdine University.
Behind the Research Challenge Win
Team members Ali Abdelkarim, Mohammed Almatari, Phillip Law, Alex Medina and Minh-Tu Nguyen-Le were ecstatic, having spent months meticulously researching the target company, Avery Dennison; writing a 30-page research report on the manufacturer of pressure-sensitive adhesive materials; and preparing a succinct presentation defending their buy/sell/hold recommendation (i.e., whether an investor should purchase the company’s stock, sell it or do neither).
To make that call, the team had to acquire in-depth knowledge of all aspects of Avery Dennison’s business, products, competitors, suppliers and markets, as well as assess the economic, industry and company-specific factors that impact them. They split up the work to get the job done.
For undergraduate students to be competing against teams — some of which included MBA students — and winning says quite a bit.
“The team was dedicated to putting in as much time as was needed for the competition — even if that meant learning to sleep faster,” Medina quipped. “Since we dug into the company, we felt confident on stage and were able to tie our conclusions together.”
Nguyen-Le agreed that trust between team members and “giving it their all” also were instrumental in the win. “Our strong bond shined during the Q&A. The judges saw and liked that interaction.”
New Heights for Titan Capital Management
The win is extremely important to TCM and student education at CSUF, explained Kelly Ko, lecturer in finance and TCM equity program director who helped advise the team.
“The students were asked to do what they would do in the real world of the investment management business. Now that we’ve won, future students will have confidence that they can do this and compete at the highest level.”
Jeffrey Van Harte ’80 (B.A. business administration-finance), chairman and chief investment officer of Jackson Square Partners and founder of TCM, noted that “for undergraduate students to be competing against teams — some of which included MBA students — and winning says quite a bit. Successes like this enhance the legitimacy and credibility of our program with students and employers and reinforces TCM’s top-notch academic curriculum.”
Team captain Medina, who has received an employment offer from Goldman Sachs, agrees. “TCM and this competition have opened so many opportunities for me to grow as a student and individual. The program gives you hands-on experience managing real money for the school, which has allowed me to get a glimpse into what I will be doing down the road career-wise. It enables students to stand out in job interviews by having experience in the field.”
TCM team members celebrated their win, along with the internship offers they received from their mentor, Matthew Nussbaum of L&S Advisors. They were looking forward to traveling to New York City for the next level of competition.
As the calendar turned to March, though, the students’ strong sense of camaraderie, dedication and tenacity were about to be put to the test.
Student Investors Tackle the New Reality
On March 9, the Dow recorded its largest single-day point drop in history, and March 11 marked the end of the 11-year bull market. Due to the novel coronavirus, the United States declared a national emergency March 13, and CSUF converted to online instruction March 17.
Sadly, the internships were rescinded, and the in-person competition was canceled. “Hearing about the cancelation in New York City was disappointing,” Almatari admitted. “And it changes the competition because we will be judged on presentation skills virtually. We will, however, still do our best to win.”
The team now will compete against 55 other schools with a recorded presentation updated to reflect the new realities of the pandemic and economic crash. They hope to emerge as one of 10 teams that advance to the global competition on April 21.
Years from now, people will ask you how you managed the portfolio through the crisis.
Adapting to online learning and changes in the competition are just a small part of what TCM students now face. The unprecedented coronavirus crisis and its effect on the economy and capital markets have created a new set of challenges for the students as they reevaluate and adjust TCM portfolios.
Ko is straightforward and honest with the students, but also upbeat. He is advising them to keep things in perspective and look for opportunities.
“This is a unique situation for even investment pros. As an investor, you can have clarity or undervaluation, and lack of clarity creates opportunity. It’s a chance to make a mark and have a lasting impact on the program. Years from now, people will ask you how you managed the portfolio through the crisis.”
He explains that there are companies that will not only make it through this economic downturn, but be better coming out of it. With thorough research and understanding of a company’s fundamentals and risk exposure, students can find them.
“The group is really positive,” says Ko. “They are still at it, haven’t given up and want to position the fund well for the next TCM class. They will be better investors and advisers of the future because they have the chance to live through this.”
Contact: Karen Lindell, klindell@fullerton.edu