MIG investments profitable

By April DeJarlis

In its eight-year history the students who have tried their hand at investing through the Macalester Investment Group have seen the portfolio rise in value by 47 percent, an average annual return rate comparable to the growth rate of the college’s endowment.The MIG is a student-run organization that aims to “apply real world investment in an educational setting,” group co-chair Alex Horn ’11 said.

Founded in 2001, the MIG began its stock market endeavors with a donation of $17,000 from alumni. Today the group’s portfolio of 13 stocks adds up to $25,000, with the choice of stocks regularly outperforming the S&P 500 and the Dow Jones indices. The profit translates to an average annual return rate of five percent, a slightly lower figure than the college endowment’s average annual return rate of 5.4 percent over the last decade.

The organization has doubled its membership since its inception, with roughly 30 regular members including Horn, co-chair Josh Paulson ’10 and board members Krasimir Tomov ’10 and David Lopez ’10.

Contrary to the typical goal of investing, the MIG’s purpose is not to make a profit for the sake of gain. Instead the members just want to “learn and have fun learning,” Paulson said. Since its funding comes from alumni, the stocks would absorb back into Macalester’s endowment in the event of MIG’s discontinuation.

The members place importance on basing investments on trends in everyday life, diversifying stocks among industries and anticipating stock activities. Their recent investment in Apple Inc. stemmed from seeing more students on campus with Apple computers. The gamble paid off, as did investments in gold and oil drilling, shipping and liquor companies.

But just as in the real world, investments don’t always do well. MIG’s stocks in Southwest Airlines failed to return last year because of the lagging airline business. Even if the group experiences stock setbacks, they use it as a learning experience.

“If money is lost, it’s no one’s fault,” said Tomov. “Part of learning is sometimes to fail, and we can analyze why it went wrong.”

MIG meetings begin with a brief update on how their stocks are faring. Small groups are assigned to a certain stock and monitor its progress throughout the week. Meetings may consist of presentations based on members’ classes or feature guest speakers from the Twin Cities economics scene.

Meetings are typically informal, but members are serious about deciding in which stocks to invest. Each proposed stock needs a majority vote of members in order to make it into the group’s portfolio, and there is no overarching authority to change the group’s decisions. Many members put their involvement in the group on resumes, so there is an incentive to choose stocks wisely instead of frivolously.

MIG welcomes students of all academic backgrounds at meetings, since the group believes an understanding of the stock market is not just for economics majors. Meetings are 7 p.m. on Thursdays on the third floor of Carnegie Hall.