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AIM class provides hands-on experience

Mel Flanagan | Tuesday, December 4, 2012

Notre Dame’s Applied Investment Management course (AIM) is true to its name: It allows students to directly apply their knowledge of equity evaluation and research through the management of a live portfolio of University funds.
The handpicked students in the class, comprised of undergraduate seniors in the fall and MBA students in the spring, manage approximately $6 million of the University’s endowment fund through the buying and selling of stocks.

Executive-in-Residence Jerry Langley, one of the faculty members that oversee AIM, said Notre Dame created the course in 1995 with the intent of teaching students how to evaluate U.S. stocks and manage a live portfolio.

“[The University] felt the students should have a hands-on experience learning equity evaluation, and it means a lot more when it’s real money, not play money,” he said. “We’ve put additional money into the fund since, and the fund has done quite well.”

Before each semester, the approximately 25 students each choose a stock from the portfolio out of a hat.

The students then present six reports on the stock over the first half of the semester, including an overview of what the company does, an analysis of the industry and an earnings forecast.

“They wind up doing an intrinsic evaluation, saying this is what we believe the stock is worth intrinsically, compared with the stock exchange,” Langley said. “And then they say buy or sell.”

After that process ends right before fall or spring break, students choose their own stocks to research for the second half of the course, and they repeat the process.

At the end of the semester, the students make a decision about the stocks in the portfolio.

“This semester they were left with 54 stocks to vote on,” Langley said. “They sold a few of the ones we held and bought some new ones, and they left 25 stocks in the portfolio for the spring.”

Senior Alex Vander Linde, a student in this semester’s AIM class, said he particularly enjoyed seeing that $250,000 of the endowment fund was spent to buy a stock that he personally had recommended.

“It is really refreshing being in a class with direct practical application, instead of learning about theoretical concepts,” he said. “And knowing that you and your peers are in charge of a large amount of money serves as a great motivation to do your homework.”

While the course’s six credit hours commanded the most effort he has put toward a class, Vander Linde said the benefits he has reaped from AIM far outweigh the workload.

“After graduation I plan to work in investment banking where financial analysis is performed on a daily basis,” he said. “The skills I learned in this class will prove helpful, but even more importantly, learning how other people look at companies and think about stocks has given me a perspective I never imagined when enrolling in this class.”

Langley said the brightness of the students stands out as the main reason he enjoys teaching AIM. In order to register for the course, students must submit a resume, a grade transcript and a statement on why they would like to be in the class.

“Because it’s handpicked, we get typically the top students applying for the class,” Langley said. “The class is very well known on Wall Street and in the financial services industry. The students who get in are highly desirable so I get to work with the best and the brightest.”

Senior AIM student Sam Beres agreed the hardworking nature of the students in the class provided a unique learning opportunity.

“The students in AIM really made it what it was,” he said. “A lot of what I learned actually came from them.”

Beres said he chose to apply for AIM because of its prestigious reputation as a demanding yet extremely rewarding finance class.

“I was told it was the best hands-on investing experience you could receive here at Notre Dame as a finance student,” he said. “Also, having the opportunity to manage a small portion of the University’s own money and network with top finance professionals across the nation was really too good to pass up.”

AIM students are given several opportunities to network with investment professionals, Langley said. Alumni who work in the field often spoke to this semester’s class on the Fridays before football games.

Additionally, the AIM class traveled to Chicago and New York to meet with investment professionals and gain exposure to different forms of investment.

“Talking to successful professionals at great firms helped us gain insight on how others go through the security research and analysis process and how they make investment decisions,” Beres said. “The networking opportunities we had during them were probably the most important takeaway.”

The trips to Chicago and New York not only offered great contact for the future, Vander Linde said, but they also provided the students with incentives to work hard in their professions.

“We were lucky enough to speak with two billionaires on these visits, which was a pretty motivating experience,” he said.