Tuesday, November 2, 2010

Brian Andrew of 1492 Capital Management Visited the AIM Program Yesterday

Brian K. Andrew, CFA, Principal, Chief Operating Officer, and Chief Compliance Officer of 1492 Capital Management, visited the AIM program on November 1. Brian has worked in the money management industry as an analyst, portfolio manager, Chief Investment Officer and business head since 1987. He has provided investment advice to individual and institutional investors through separate account, co-mingled and mutual fund investment vehicles. Brian joined 1492 Capital Management in 2008 and is responsible for the overall management of the firm including operations and compliance.

Brian Andrew
Dr. Krause, AIM program director said, "It was a pleasure to have Brian back to the AIM program. He has been a frequent guest lecturer and adds considerable value to our classroom discussions. Brian focused on valuation and the sell discipline - a very important topic that is not often emphasized in standard investment courses or texts. We spend weeks, if not entire courses, on the buy discipline; however, rarely focus on the sell process."

Dr. Krause added, "Brian talked about the two strategies that 1492 Capital management offers - their growth and value products. It was interesting for the students to hear about the different valuation processes that they follow as they consider growth and value equity opportunities. I know that the students appreciated Brian's discussion about the importance of enterprise value and earnings normalization in the evaluation process - especially in the current market environment. Another important point that Brian emphasized was the need to understand the specific industry metrics in considering investment opportunities. He did a nice job with the balance of art and science in evaluating equity opportunities."

"Brian's dissuasion about the sell discipline - and how it fits into his firm's risk management strategy - was highly useful," Krause said. "A weakness that we have experienced in the AIM program has been the lack of a strong sell discipline. We unfortunately have ridden several stocks up and then back down to their original purchase price. Using some of the risk controls and stop loss screens that Brian presented should help future AIM classes establish better discipline into knowing when to sell stocks. I think we're pretty good with the buy discipline; however, Brian gave the class some excellent insights into how we can improve the sell discipline."

Brian was the CFA mentor to last year's AIM Global Investment Research Challenge team. The team won the Wisconsin CFA Challenge and advanced to the Americas' Challenge in New York.  Krause commented, "Brian was an excellent mentor. He asked questions and got the AIM students in the CFA Challenge to think about issues that they might not have considered. Rather than tell them how to do a fundamental analysis of Brady Corporation, he asked questions that allowed them to begin to think like equity analysts. The entire team appreciated Brian's efforts to be a part of the CFA's Global Investment Research Challenge."

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