December 12, 2001

Students at UCLA Anderson had the opportunity to discuss their favorite stock picks on live television. The 10 full-time MBA students were featured in a segment of CNBC's "Power Lunch" on Dec. 12, and described their experiences as portfolio managers in the UCLA Anderson's Student Investment FFund, a course that gives MBAs hands-on practice in investment management.

The show's anchor, Bill Griffeth, interviewed three of the students live via satellite about their investment choices. CNBC has been doing a series of interviews with business school students participating in investment programs and clubs at a variety of universities.

"Power Lunch" producer Peter Frangie said the segments on student investment clubs and programs have proved increasingly popular. "It's been interesting to hear different takes on the market outside of Wall Street, and it's a great opportunity for these kids to have legitimate conversations about the economy, the market and their investments on national television," he said.

The Student Investment Fund is unique in that it is actually an academic course, as well as a Fellowship, offered on a competitive basis each year to 10 second-year MBA students. Taught by William Cockrum, a consultant and adjunct professor, the 18-month intensive curriculum provides a chance for students to manage a $2 million diversified portfolio, using capital originally donated to UCLA Anderson in 1987.

In addition to managing the fund, the students visit about 30 investment managers--many of whom are part of the UCLA Anderson alumni network--who discuss different investment philosophies, styles, and organizations.

"The Student Investment Fund has probably been one of my best learning experiences at the school," said Amrith Nagpal, a student in the program who contacted CNBC. "It's so hands on and practical. Hopefully it will help us prepare for future careers in investment management," Nagpal said.

For the first six months of the program, the students manage the fund as a group. The equity portion is divided into growth and value funds, each managed by a team of five students. During the last six months, the students become independent managers, handling about $130,000 worth of equities each.

The slowing economy and impact of the Sept. 11 attacks have challenged this year's group of fledgling investors. They feel they have done well--the fund has declined by 4 percent since May, while the S & P 500 is down 10 percent.

The growth team decided to increase its exposure to the tech sector in October, figuring that the NASDAQ had more upside potential than the NYSE, said Richard Gammill, a student participating in the growth team. "We increased our investment in Intel. The timing couldn't have been better. Since the investment was made, Intel is up 50 percent," he said.

Meanwhile, the value team picked Public Storage, now up over 25 percent, as one of its top picks. "We selected it when we took over in May, as we felt it would protect us in a recessionary economy," said Shawna Phelan, a student on the value team. "Public Storage is a great defensive stock to own, especially in difficult economic times when people, unfortunately, are forced to downsize their homes and apartments and therefore need storage space."

Gammill said the Student Investment Fund has taught him a lot about the psychology involved with being a good investor. "I have learned that investing as a group, in which I have to explain my investment decisions and defend my ideas, helps make me a better investor," he said.

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