A group of Hopkins students received more than $20,000 to invest in the stock market this year.
With an endowment of $100,000, the Marshal L. Salant Student Investment Team is given $20,000 each year. Hopkins alumni Marshal L. Salant, current Vice-President of Morgan Stanley, donated the money three years ago to help Hopkins students learn about finance.
The students invest thousands in the stock market, and if the students yield a profit from their investments, any funds that are above 5 percent profit will be used to fund University scholarships. The team members are not eligible to be recipients of the scholarships. Because of the slow economy, the team has not yet earned a profit to provide a scholarship.
The team is overseen by three faculty advisors, but a core group of students makes all financial decisions about investing the money. Carl Christ, one of three advisors for the team, said that the team has exceeded its original limit of six to eight students, growing to 11 students this year.
Advisors select the students in an application process each spring. Applicants must turn in a transcript, resume and letter explaining their interest in the program. Christ said the overlap of the leaving team and the newly chosen team should lead to shared communication and advice that will make the team more successful over time.
"I think it is a wonderful education for the students involved," said Christ.
Junior Erin Silverman helped found the team in 2001, which now meets once a week, in addition to meeting for additional speakers and advisor meetings.
Silverman said that the team makes all decisions about what stocks to buy, although students are bound by University rules about investing.
These rules include: "No single stock can be more than 10 percent of the portfolio, no margin accounts -- therefore no buying on the margin and no short selling, no derivatives, and no trading anything that isn't on a US exchange, but it can be a foreign company."
Aside from these rules, "In terms of individual stocks, [the advisors] haven't stopped us from buying anything," she said
Two or three people meet in teams to monitor two industry sectors of the stock market. The team has its own Internet brokerage account, controlled by the Office of the Treasurer. Students cannot have direct contact with the money they are investing, as the Treasurer's Office controls the password. Trading students must fill out a buy or sale form, and the trade is in turn made by an employee of the Treasurer's office. According to Silverman, this creates a slight time lag in which purchasing prices can change.
"The best thing about it is that it is real money, and if we do well then the profits will go to scholarships," said executive committee member Karn Kampoor, "04.
Freshman Deanna Berchtenbreiter said her mom is a portfolio manager. "I thought this was the most realistic experience I could have to show me what she does ... Because Hopkins has so few business offerings, I was impressed they offered this [experience] outside of a four-credit class," she said.
