Announcement: Upcoming Applied Investment Management (AIM) Events in Chicago Have Been Scheduled

Dr. David Krause and students in the AIM Class of 2011 will be visiting Chicago twice in October and November. These are the upcoming AIM events in Chicago:

Marquette CIRCLES Event
Wednesday, October 27th, 2010
Union League Club of Chicago

Pre-CIRCLES AIM Student Stock Presentations: Five current AIM students in the Class of 2011 will be pitching their stock research recommendations beginning at 5:00 p.m., prior to the CIRCLES Roundtable event which begins at 5:45 p.m. The presentations will occur in the same room as Dr. Krause's roundtable discussion (room to be announced).

5:45 Roundtable Discussion: Why Hedge Funds Belong in Individual Investor Portfolios in the 21st Century.   David Krause, Director, Applied Investment Management Program, Marquette University; and Chris McGuire, Comm ’91, Chief Investment Officer, Phalanx Capital Management, LLC.


AIM Chicago 'Road Show'
Friday, November 12th, 2010
CCS Conference Room, 155 N Wacker, Suite 1790, Chicago, IL 60606

Eight current AIM students in the Class of 2011 will be pitching their stock research recommendations:

Session One: 11:00am-12:00pm
Lunch Break: 12:00pm-12:15pm
Session Two: 12:15pm-1:15pm

The event is being coordinated with Marquette University's Chicago Advancement Office. Please contact Brian J. Liedlich (Business '83), Managing Director of Regional Development - Midwest, Marquette University, (312) 739-2155, Cell: (847) 922-5856, e-mail: brian.liedlich@marquette.edu about these events.

More details will follow during the next several weeks, including a link to access the student stock write-ups.

More of the Dan Fuss Interview with Morningstar: Interest Rates Look Set for Long-Term Rise

The size of the Treasury's borrowing requirements should lead to a secular rise in rates, says Loomis Sayles' Dan Fuss (Marquette alumnus and AIM program supporter). See the video:

Dan Fuss Interview: Treasuries Priced Higher Than a Kite

Dan Fuss, CFA (MU alumnus and AIM supporter), Vice-Chairman of Loomis Sayles, thinks investors looking for opportunities outside of Treasury bonds need to stay flexible. Watch his interview with Morningstar:

Marquette Finance Students to Visit Daruma Asset Management During Their NYC Trip in October

In a couple of weeks, about 25 Marquette finance students and Dr. David Krause will visit Daruma Asset Management in New York City. Daruma invests in a high-conviction portfolio of no more than 35 small-cap stocks. The firm is 100% employee-owned and manages roughly $1 billion for public and corporate pension plans, endowments, foundations and individuals.

AIM program director, Dr. Krause said, "We are looking forward to visiting Darmua again. Mariko, Patty, Neal, and everyone else at the firm rolled out the red carpet for us. We enjoyed the opportunity to talk with them about their investment philosophy and process."

Krause continued, "I think they have one of the best monthly investment newsletters in the business. I encourage my students to read these regularly. They are very insightful in understanding the small cap fundamental investment process. Mariko Gordon and her team do an outstanding job in discussing various investment topics each month."

Daruma practices true active management by owning only their most compelling ideas. They buy stocks with the potential to go up 50% or more over the next two years, with a reward-to-risk ratio of three to one. How have they done?

Their strategy has resulted in outstanding long-term performance with average annual portfolio turnover of 40%. Daruma's small cap composite performance net of fees annualized since inception [07/28/95 to 06/30/10] has been 11.7% versus 6.3% for the Russell 2000 index. 

By the way - what is a Daruma? Daruma (dah-ROO-mah) was a fifth-century Indian monk who reached China after a perilous three-year sea voyage and became the founder of Ch'an (Zen) Buddhism. He is said to have trained the warrior monks of the Shaolin temple in Kung Fu, crossed the Yangtze River on a reed and meditated continuously for nine years (losing his arms and legs in the process). Daruma embodies resoluteness, perseverance and resilience. Many of the tenets of Zen Buddhism (separating illusion from reality, nonattachment to emotions and ideas, self-discipline and embracing impermanence) are also key to successful investing, and many of the qualities Daruma is best known for are those that Daruma seeks to emulate every day. Check out their monthly newsletters.

The Research Puzzle Blog

 

Today the AIM blog was linked to The Research Puzzle Blog - research puzzle pix.  It's a digest of interesting investment items from across the landscape that comes out three times a week. Tom Brakke is the editor of the blog and he used to teach in the applied finance program at the University of Minnesota's Carlson School. He is interested in research being done by the various student-managed investment funds.

 

His original site is the research puzzle, where he writes essays about once a week on the "how" of investments:  how investment decisions are made and how the business operates.  For instance, one useful article that Mr. Brakke recommends is about unpegged valuations (PEG ratios). He indicates that he has a number of professors and students that read my site and invites the AIM student to be among them.

Brandon Nelson, CFA (Founder & CIO), Timpani Capital Management Visited the AIM Program

On Monday, October 4, Brandon Nelson of Timpani Capital Management visited the students in the AIM program. Mr. Nelson, a former Wells Capital Management portfolio manager, launched Timpani in April 2008 with the backing of Frontier Partners. The small-cap growth firm began running money for clients in Q2 2008.

Nelson was joined at Timpani in 2008 by Ryan Isherwood, an analyst on Nelson's small-cap growth team at Wells. Mike Klenn (AIM '10) joined the firm this past summer.

Mr. Nelson has been Chief Investment Officer of Timpani since its inception. He received his B.B.A. in Business Administration and his M.S. in Finance from the University of Wisconsin and has earned the right to use the CFA designation. Ryan Isherwood graduated from UW-Madison in 1999 with his B.B.A. in Business Administration and his M.B.A. from Notre Dame in 2005. Ryan also is a CFA charterholder.

During his visit to the AIM program, Brandon talked about the investment philosophy and process at Timpani. He said that they believe that "earnings drive stock price performance." By combining fundamental research with an analysis of market sentiment, he believes that Timpani can identify and exploit the 'perception gap' that exists between a company’s business strength and the market’s expectation of that strength. He said that this perception gap exists because the market is slow to react to incremental, relevant changes in a company’s fundamentals.

Dr. Krause, AIM program director said, "It was a pleasure having Brandon visit us. As an independent investment management firm with a single focus on small cap growth equities, it was interesting to hear him talk about their investment process. Timpani - like the AIM Fund - is dedicated to fundamental, bottom-up stock selection. The discussion of the perception gap wa useful and the students had many questions about Timpani's investment process."

Timpani's Small Cap Growth Equity product is benchmarked to the Russell 2000 Growth Index. Krause concluded, "Brandon, Ryan, and Mike are passionate about equity investing. It is refreshing to be in the company of such dedicated professionals. I know the students appreciate their efforts to help mentor them."

Marquette AIM Students Selected to Participate in Global Investment Research Challenge

The CFA Institute Global Investment Research Challenge offers students the unique opportunity to learn from leading industry experts and compete with peers from the world’s top finance programs. AIM program director, Dr. David Krause said, "The GIRC promotes best practices in equity research among the next generation of analysts through hands-on mentoring and intensive training in company analysis and presentation skills. It is an outstanding event - we appreciate the local and national effort that goes into organizing the Challenge each year."
 
The CFA Challenge gathers students, investment industry professionals, publicly traded companies, and corporate sponsors together locally, regionally, and globally for a real world competition. Participation in the challenge promotes best practices in equity research and company analysis, as students research, analyze, and report on a company as if they are practicing analysts.  Additionally, all participants are introduced to and held to the standard of the CFA Institute Code of Ethics and Standards of Professional Conduct.

Dr. Krause commented, "The Challenge rules are very clear. I especially like the rule that each competitor is required to complete the Ethical Standard for Investment Professionals course.  Not only are we proponents of high ethical behavior at Marquette, but we are embracing more interactive curriculum - including CFA webcasts."


Local CFA societies host and launch an Investment Research Challenge in conjunction with the participating universities. The universities assemble teams of 3 to 5 students who work directly with a company in researching and preparing a company analysis.The team’s final presentations are locally evaluated by high-profile panels of heads of research, portfolio managers, and chief investment officers from the world’s top firms.The local champions advance to regional competitions in the Americas, Asia, and Europe and then to the global finale.

"We were fortunate to compete at the Americas' regional level our first two years of involvement in the GIRC," said Dr. Krause. "We are looking forward to this year's competition; however, we take nothing for granted. In fact, we have found that the local competition and grading was as stringent as what we experienced at the regional level of the GIRC."

Krause said, "We have many qualified students who wanted to be a part of the GIRC team. I wish we could include more than 5 students; however, we understand that 5-member teams make the most sense." In very close voting, this year's CFA Global Investment Research Challenge team from Marquette University consists of:

–        Luke Darkow

–        Kristin Holzhauer

–        Mark Rutherford

–        Christina Starkey

–        David Zakutansky

Network with alumni and hear Buzz Williams at New York CIRCLES

Please join fellow Marquette University alumni and friends at CIRCLES in New York.

CIRCLES connects professionals based on industry and interests. Network with Marquette alumni and friends in various business sectors to find employees, mentors and business associates.

When: Tuesday, October 19
Where: Hearst Tower, 300 West 57th Street, New York
Time: 5:30 p.m. FOCUS SESSIONS

College of Business Administration Centennial Celebration

Finance Panel Discussion: "Beyond the Financial Crisis" featuring Steve Czech, Bus Ad ’86, FrontPoint Partners LLC; Scott Schroeder, Bus Ad ’92, Grad ’96, Law ’96, Balyasny Asset Management L.P.; Ben Somers, Bus Ad ’98, Elementum Advisors; and David Krause, Ph.D., College of Business Administration

Centennial of Journalism at Marquette Celebration

Communication Panel Discussion: "Trending Now" featuring Gail Collins, Jour ’67, The New York Times; Jay McGill, Jour ’76, Hearst Magazines International; Chuck O’Neil, Sp ’74, The Daily Show with Jon Stewart; Tom Smith, Comm ’93, Ogilvy Public Relations Worldwide; and Lori Bergen, Ph.D., dean, J. William and Mary Diederich College of Communication

Time: 6:45 p.m. KEYNOTE PRESENTATION
Buzz Williams, head coach of Marquette men’s basketball

REGISTER ONLINE. For questions or special needs, please contact Emily Carroll at (414) 288-8484 or emily.carroll@marquette.edu.