2015 Archives

SMU's top manager competition prepares students for Wall Street


The following is from the May 15, 2015, edition of Forbes. Professor Joseph Dancy of SMU's Dedman School of Law and SMU's Cox School of Business provided expertise for this story.

May 15, 2015

By Ken Kam

People have paid millions to have a single lunch with Warren Buffett. So what is it worth to take a semester long class on investing from a teacher with an outstanding track record like Warren Buffett’s?  Southern Methodist University in Dallas, TX offers just such a class taught by Professor Joseph Dancy. With graduations just around the corner, I checked in with Professor Dancy to learn how a great investor prepares students for careers in the money management industry.

Over the past 10 years, Joe’s Marketocracy model portfolio has returned a little more than 16%, which compares well with Berkshire Hathaway’s return of about 10% for the same period.

Ken:  Joe, can you tell me about your students this semester?

Joe:  I taught 2 groups of students this semester. The first group was comprised of 17 undergraduate students who were selected to manage the SMU Spindletop Fund which is a real-money energy sector fund. The second was an energy and environmental law class where the students’ career goals were more diverse.

Ken:  How do you prepare your students for careers in the money management industry?

Joe:  This semester, I used Marketocracy to run an investment competition in which students were required to come up with a compelling strategy and then make some trades and explain the results. As with most classroom investment competitions, the student with the highest return is declared the “Top Gun.”  But, in our case, on the last day of the competition, I asked the students to allocate a hypothetical $100,000 into the portfolios of their fellow students and the person who got allocated the most assets was named the “Top Manager.”

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