Want to help students master the market? Put cold, hard cash in their hands and let them loose.
By Dustin Racioppi
At first glance, the only element missing from Drew’s Wall Street Semester is a Brooks Brothers starter suit. For a semester that starts at the beginning—What’s a stock?—and finishes with students having walked the floor of the New York Stock Exchange, the program has become an invaluable primer for students entering the job market. But that’s also where the limitations of the current Wall Street program are revealed. Knowing that his students lacked the real-world experience needed to get from job interview to job offer, economics professor Marc Tomljanovich, the director of the Wall Street program, often wondered, “How do we build up that momentum?”
The answer, he believes, is in The Fund, a student investment group powered by about $20,000 in startup cash from the Wall Street Semester program and private donations. The group hopes to raise $100,000 in donations to invest, says Kenneth Alexo Jr., vice president of university advancement.
The Fund is being touted as a bridge from Madison to Manhattan while creating a meaningful selling point to attract students to the university. “Basically I’m trying to show the value added of coming to Drew,” says Tomljanovich. “I can make the argument why [business] students should come to a liberal arts college.”
The few liberal arts schools offering programs using real money in the markets often prohibit students from making trades, Tomljanovich says.
The Fund is as hands-on as it gets without bursting a blood vessel on the stock exchange floor. Students—you may call them analysts—will meet at least twice a week to update their portfolio and pitch to The Fund’s board, says president Megan Modic ’14. They make the decisions—what stocks to buy, sell and trade and how their portfolios are allocated.
“We’re giving a level of student-run autonomy that a lot of other liberal arts schools aren’t providing,” Modic says. “We’re trying to give them a chance to compete with the kids who go to the schools where that’s all they focus on.”
Meanwhile, Tomljanovich will be in the shadows acting as a guide. He will examine the portfolios and review stock pitches, but he says his approach is hands-off. There are safeguards in place—no leverage, no sinking all the money into one stock—to keep The Fund from folding based on a bad decision.
“We don’t want things that are too destabilizing or too speculative,” says Tomljanovich.
Students can expect a little outside help. The Fund’s chief financial officer, R.J. Voorman ’14, says Drew alumni working on Wall Street have already lent their expertise to members.
By its nature, The Fund will be demanding. Tomljanovich says members will run a webpage, have a heavy social media presence and videocast their stock pitches.
“We expect a lot of time commitment, and we expect them to go to the meetings,” says Modic. “When a program is setting you up so well, you wouldn’t want to miss the opportunity. That’s the environment we want to create, where you wouldn’t dare want to miss a meeting.”
The Fund is not exclusive to business majors and, after a successful interview, is open to all, from first-years to seniors, says Tomljanovich.
Mobile apps and online games give a virtual glimpse into market trading, but it’s a whole different experience on the Big Board, says Voorman. With a freshly opened private online trading account, he says he’s battled frequent bouts of nausea watching his moves play in the market.
“You can pick 1,000 shares of Nike on a game and go have a cheeseburger and not even think about it,” says Voorman. “But when you’re doing it with real money, you’re investing in your knowledge.”