Sarah Blumenthal PO ’15 helped initiate a $40,000 investment deal as a first-year in college.
Blumenthal, along with other members of Sagehen Capital Management (SCM), Pomona College’s student investment fund, had noticed a widespread trend of people watching shows on the Internet rather than on TV sets. Applying this knowledge to the stock market, they made the pitch to the rest of SCM to invest in a media company in the online streaming industry. The majority of SCM agreed to move the play forward, and they invested a chunk of the more than $1,000,000 they have at their disposal.
SCM is one of five student investment funds at the 5Cs. Although the funds vary in endowment sizes and number of students involved, they all serve the same purpose: to provide Claremont students with real-world investment experience.
“It’s kind of like taking things we see in real life and translating that into money,” Blumenthal said.
The funds get their endowments from alumni donations, except for Harvey Mudd College’s fund, which was started with both student-raised money and money from the school’s endowment. All of the funds donate a portion of their gains back to their respective schools.
Although SCM has the largest endowment out of Claremont’s student investment funds, the other colleges’ groups have sizable endowments as well. The student investment fund endowments outside Pomona range from $400,000 at Claremont McKenna College to $47,000 at Pitzer College.
“In a class like Corporate Finance, you learn what the things are, but you’re not actually experiencing it,” Julia Ogburn SC ’13 said.
While the student investment funds aim to gain money, the students are able to learn from their mistakes if the funds lose money.
“Not every stock we have performs well,” Ogburn said of the Scripps College fund. “But that’s part of the learning. Like, if something fails, why did it fail, why was it not a good investment?”
Dustin Zubke HM ’13, president of the Mudd Investment Fund, said that being a member of the fund has given him experience for personal investments.
“I’ve learned that evaluating the value of an investment with a group of people is a good exercise,” Zubke said. “Having people voice their views on stocks is better than doing it by yourself.”
The student investment funds also provide an opportunity for networking and connecting with alumni.
Robert Day CM ’65, who has been listed by Forbes Magazine as one of the World’s Richest People, has Skyped in to a CMC Student Investment Fund meeting to watch a pitch. Michael Larson CM ’80, Chief Investment Officer of the Bill Gates Foundation and Bill Gates’s personal money, has also been involved in CMC’s fund.
“You’re able to develop personal relationships with leaders in the field,” said David Hirsch CM ’13, CEO of CMC’s Student Investment Fund.
The investment funds, while helpful for those interested in pursuing a career in finance, are not only for economics majors.
Cranley Lockhart PZ ’13, president of Pitzer’s Student Investment Fund, said, “No matter what background you have, there’s something that you can contribute to an investment decision. There’s always something that you understand better than somebody else.”
“I think the most important thing, no matter what you’re interested in, even if you’re a lit major, is making sure that you’re reading the news and that you’re up on current topics,” said Viken Douzdjian CM ’13, chief investing officer of CMC’s Student Investment Fund.
While the funds at Pomona, Pitzer and Harvey Mudd are open to everyone who is interested, Scripps’s and CMC’s funds have limited space and an application process.
“There’s not enough room for everyone who wants to be in it,” Hirsch said. “For students to get enough experience, we need to limit the size.”
Although not everyone involved in the student investment funds plans to go on to careers in finance, the experience provides skills for those students who do.
“It definitely was a large contributor in terms of the actual technical skill set that you have to develop in terms of presenting your ideas, understanding what goes behind an investment decision,” said Hirsch, who plans to go into investment banking after he graduates.
Douzdjian said that participating in the fund led him to major in economics.
“I actually came in as a bio/chem major, and when I got invested in SIF that totally changed my focus, and I got really interested in finance,” Douzdjian said. “I’m really thankful.”