Investment Club wins Adirondack Cup
How would you invest $1 million?
That was the challenge the Skidmore College Investment Club faced in the 2019 Adirondack Cup, a stock-picking contest for college students interested in the investment field.
The Cup is sponsored by Adirondack Research & Management Inc., adviser to The Adirondack Small Cap Fund (ADKSX), an SEC-registered no-load mutual fund started in 2005.
At the start of the competition in October 2018, teams were expected to research and allocate a hypothetical $1 million portfolio among five small-cap stocks (defined as companies with market caps between $159 million and $5 billion). To emphasize risk management and encourage a long-term focus, industry diversification is required and students can only make changes to their portfolio once during the competition.
The Cup fielded teams from 27 colleges and universities, mainly across the Northeast, with more than 210 students participating. The goal of the competition, now having finished its eighth year, is to provide a unique setting for students to test their investment research skills using businesses not widely covered by analysts and news media.
Taking first place, the Skidmore team posted a 48.75% return during the contest, significantly beating the Russell 2000 Index, which measures the performance of small-cap stocks in the U.S. This was the largest outperformance of the index, which posted a 3.24% gain for the period, in the history of the competition.
“Skidmore posted outstanding results aided by Tesaro, a cancer therapeutic company, which was acquired by drug giant GlaxoSmithKline at an 86% premium to the team’s initial cost basis. The students took advantage of the portfolio change and reinvested part of these proceeds in iRobot (IRBT), which quickly gained 50%,” said Greg Roeder, co-portfolio manager of the Adirondack Small Cap Fund. “Congratulations to Skidmore on their well-deserved win.”
“I wish I had given the team my money to invest," said Paul Corr, a visiting associate professor of management and business and the faculty adviser for Skidmore’s Investment Club. "I’m very proud of them.”
Skidmore Investment Club Co-President Ari Caplan, a member of the class of 2019 majoring in economics and business, said he was thrilled the team placed first, especially with such excellent competition. "It was a great learning experience for Club members of all class years and it involved everything from conducting research on sectors and individual companies to devising portfolio rebalancing strategies,” Caplan said.
Damian Hammond, club co-president a member of the class of 2019 majoring in economics and business, added, “The Club is proud to have placed in the top three in back-to-back years and we are looking forward to next year’s competition!”
Rounding out the top five finishers were St. John Fisher College (41.73% return), Clarkson University (40.06% return), Rensselaer Polytechnic Institute (32.28% return) and SUNY Buffalo State (24.18% return). Other colleges participating in the competition included Bentley University, Binghamton University, Bryn Mawr College, SUNY Brockport, Grove City College, Hamilton College, Hofstra University, Ithaca College, Keuka College, Nazareth College, Penn State Behrend, Rhode Island College, Rochester Institute of Technology, The College of Saint Rose, Siena College, Southern Vermont College, Stonehill College, SUNY Geneseo, SUNY Plattsburgh, Temple University, University at Albany and Wesleyan University.
Outside of the competition, the Investment Club, which has 20 members, started investing with real money in December 2017 and now manages more than $19,000 for the College.