Hamline News


Student stock traders

For almost two decades, Hamline students have been helping to grow the university’s endowment—and beating Standard & Poor’s 500 index

By Lynette Lamb

How often do students in finance classes get the chance to invest real money? That’s exactly what’s offered each semester in FIN 1010: Starting Your Financial Life and Applied Investing, taught by School of Business senior lecturer Dan Lehmann.

Lehmann, a former senior executive in multinational companies such as Pfizer, Novartis, and Syngenta, oversees an undergraduate class—open to all years and all majors—in which the students themselves act as portfolio managers, deciding how and where to invest a small portion of the university’s endowment.

Over the course of the semester, students work with two portfolios—one as active investors and one as passive investors. As active investors, they buy and sell individual stocks. As passive investors, they buy mutual funds or exchange traded funds that another group manages.

“These two investing strategies get at the heart of the ongoing, heated debate in the investing industry of active versus passive investing,” Lehmann said.

The value of this experience is undeniable, said Bryce Doty ’88, a trustee whose daughter also attends Hamline. As a senior vice president at Sit Fixed Income Advisors in Minneapolis, Doty is immersed in the world of finance.

“As an employer of investment personnel, it makes a big difference to me when someone already has a basic understanding of the nuts and bolts of what we do, how we do it, and why,” he said. “It’s always valuable to have taken standard business classes, but it’s also really helpful to have had a practical, hands-on application of what you’ve learned before you look for a job in the real world.”

The students love it too, said Jack Friesen ’18, an economics major. “My favorite part of the class was the buying and selling portions,” he said. “It was the most interactive and thought-provoking part, filled with discussion and critical thinking.”

Beating the Odds

Lehmann and some of his best students update the Hamline board of trustees investment committee annually on how the student funds are doing. In the past, Margaret Tungseth, vice president of finance and administration, has visited the class to explain how the university’s endowment is invested, how it’s managed, and how the student funds fit into the big picture.

In the 17 years since the class began, Hamline finance class students have taken the fund from $35,000 to $250,000, said Lehmann, who has taught the course since 2008. Each student must make two presentations per semester—an update on a stock or fund and an update on the purpose behind a buy or sell.

The students “have done a fantastic job managing this fund,” Doty said. “They’ve beaten the Standard & Poor’s 500 routinely.

“They’ve tended to choose big, good, well-known companies,” he added, “and they’ve liked technology, so we’ve ridden the Google, Amazon, Apple wave. And then there’s the pizza company that showed a 1,000 percent increase!”

The investment success of the class—coupled with a challenge before the board of trustees to come up with some big ideas for the university’s upcoming fundraising campaign—has led Lehmann and Doty to propose to the board that it increase the size of the students’ fund from $240,000 to $5 million. This amount, Doty said, would allow for two investing classes in the future—the existing one and a more elite class composed of finance majors.

“That second course would provide an amazing opportunity for business school students, would increase the amount of endowment money we have to pay bills, and would mean we would have one of the largest student-managed funds in the country, certainly at the undergraduate level,” Doty said. “It would really put our business school on the map.”

Life Lessons

Although the investment part of FIN 1010 gets the most attention, the financial literacy component is also invaluable, Friesen said.

“The information we got about retirement savings and life expenses is hard to find within the structure of modern schooling. These are generally things people have to learn on their own, so a class that teaches these elements would be useful for anyone attending Hamline.”

Financial literacy is one of Lehmann’s chief goals for his students, as well.

“I don’t pretend that I’m encouraging them all to become traders or stock pickers,” he said. “But by the end of this class, my students should know enough to put together a reasonable portfolio with a 401(k) and know how to budget for cars, homes, and retirement. ”If the steadily growing Hamline funds are any indication, they’ve learned well."