The RISE Conference at the University of
Dayton
A National Student Investment Strategy Symposium and Portfolio
Competition
February 21-22, 2002
A report by Howard Weiss and Oren Bossin
On February 21st we made our way out to Dayton, Ohio for the RISE Symposium. Our participants included 3 students and the professor from the SMIP (student managed investment portfolio) course. This was sponsored by the University of Dayton and included many well known speakers such as Ralph Acampora and Leah Modigliani. The symposium was done in a very professional and organized way, which made it extremely enjoyable as well as informative. The symposium gave hands on expert advice from the financial industries top people.
Besides for the actual sessions, which will be outlined further on, the session provided networking opportunities between students of many different geographies around the country. We all shared similar interests in terms of investing and future career goals so there was much to talk about. There were students from Notre Dame to Perdue in attendance.
A worthy mention is the warm hospitality the students and faculty of the University of Dayton provided us. They really did a great job at running the symposium and as a guest; I felt our accommodations were excellent.
The forums were structured in a "Meet the Press" type of way, where there was a moderator, 6 panelists and a speaker. Each speaker began with a short speech about the economy or their respective specialization. Next, the moderator asked a question and following that, turned it over to the panelists for questions. After the panelists were done, the floor was opened for questions from the audience. The moderator was Dr. Robert Froehlich of Scudder Investments. He did a wonderful job in sharpening the focus of each speaker and directing the flow of conversation for the utmost benefit of all in attendance.
The first speaker was Tobias Levkovich of Salomon Smith Barney. He discussed the fundamental drivers of the market which are: 1) liquidity ; 2)earnings ; 3)valuation and investor sentiment. As every speaker to follow, Mr. Levkovich discussed the Enron scandal and he mentioned accounting inaccuracies regarding corporate profit and how what is reported to the IRS has nothing to do with what is reported to investors. As an investment strategy he recommended to be overweight Industrials, Consumer Discretionary and Financials. He also said the best hedge for Consumer Discretionary was Energy. Mr. Levkovich also discussed at length about Japans economy imploding.
The next speaker was Ralph Acampora of Prudential Securities. He outlined what entailed good research which was: 1)economics ; 2) fundamental analysis ; 3)quantitative analysis and 4) technical analysis. He also said there are 3 parts to a stock: 1) price ; 2) volume and psychology. The things we should look for in terms of technical analysis is insider activity to have a good idea of what is going on within a company. Mr. Acampora recommends cyclicals at this time such as paper, chemicals etc…
Leah Modigliani of Morgan Stanley was next on the list. Her specialty is risk adjusted performance. She defines risk as the probability of losing money and how much money. She discussed the Sharpe ratio and also discussed strategies to manage risk.
Maria Bartiromo from CNBC was next. She really did not have much to say besides for "Do the right thing". In a time when the business world is being plagued by untruths, Ms. Bartiromo took it upon herself to contribute the ethics part of the symposium.
Gerald Cohen of Merrill Lynch was next up to bat. He serves as a senior economist and made a few predictions about our current economy. He called it the mildest recession on record and predicted that the interest rates will go up if the economy expands next quarter. Mr. Cohen discussed using the spread between the 10 year treasuries and the 3 year treasuries to predict the economy. He said when commodities rise, earnings do better too. The Fed's mandate is to keep inflation low and sustain growth.
Robert Froelich was the next and final speaker on the list. His job as a moderator was done perfectly and now it was his turn to shower the crowd with his own knowledge. The global market consists of the U.S., Europe and Asia. The issues that drive the U.S. economy are : 1) falling interest rates ; 2) uptick in government spending ; 3)collapse of oil prices ; 4) tax cuts (reform) ; 5) inventory buildup. Europe is not sure if it is in a recession or recovery because indicators come out 6 months late. Also, the exportation of CEO's and CFO's to Europe is leading to cost cutting and more efficient firms there. He also discussed the launch of the Euro.
Regarding Asia, he mentioned in terms of valuation, although investments look attractive now, people are hesitant to buy there. In mentioning the recession he said the only the U.S. can lead the global market out of it.
The RISE symposium presented a tremendous opportunity to gain a first hand look at the mechanics of the financial world. Our Pace contingent learned a great deal during this trip not only from our prestigious speakers but by networking with all of the other attending schools.