Published: Thu Feb 3, 2011A group of Tennessee Tech University business students outperformed Wall Street and other university groups to win TVA's Investment Challenge in 2010.
By posting a 34.67 percent return, the TTU students beat the S&P 500 return by more than 19 percentage points, plus they topped the average return for competitors by almost 17 percentage points.
Since the challenge's inception in 1998, Tennessee Tech students have won the challenge four times—1998, 1999, 2007 and 2010—and have come in second twice.
"The Investment Challenge is not a simulation or paper portfolio. This is real money that TVA will one day use to decommission nuclear plants," said Deryl Martin, the TTU finance professor who leads the class. "These students are part of TVA's financial success."
The best performing stocks for TTU students included Netflix, Apple, Amazon and Cree.
TTU's performance netted its College of Business a cash prize of about $12,200.
Martin credits last's spring's opening of the new $150,000 Heidtke Trading Room as giving this year's students an edge. In the room, they had access to market data though a stock ticker and they could view the rise and fall of stock exchanges worldwide, commodities, currencies, individual funds or sets of funds, and market newsfeeds from a wall of high definition television screens.
In TTU's program, students recommend and discuss potential purchases. After individual research by each member, the class votes whether to purchase the stock.
"Each student is put in charge of a sector of stocks, allowing each to become an expert in 30-40 different stocks," said Martin. "They make selections that include big-name companies and little known-companies that they've researched."
Undergraduate and graduate on-campus students made up the investment team.
"The Heidtke Trading Room and our student-managed investment funds place TTU's College of Business shoulder-to-shoulder with the top business schools in the nation in its ability to provide students a quality education in finance with real-world experiences," said College of Business Dean James Jordan-Wagner.
In 1998, TVA allocated $1.9 million from its Nuclear Decommissioning Fund to initiate the Investment Challenge. Originally, 19 universities received investment funds of $100,000 apiece. The program has expanded to include 24 universities, and the funds total approximately $10 million.
Participating universities include Middle Tennessee State University, Austin Peay State University and Tennessee State University as well as the University of Tennessee-Knoxville, University of Mississippi and University of Kentucky.