[Post by Sougata Basu, MBA Class of 2010]
Prior to joining the MBA program at Boston University, I was learning some basic concepts in Finance. When I was reading about “Derivatives”, I came across this quote from Warren Buffet. I didn’t understand what exactly “mass destruction” meant in this context. Within the first month of my MBA program, a number of reputed companies like Lehman Brothers went bankrupt. Now we know why Warren Buffet was against the excessive use of derivative instruments.
The MBA Finance Club at Boston University is setting up an Investment Fund to be managed by students under the guidance of Professor Scott Stewart, who is the Faculty Director of the MSIM program. He joined BU after a 16-year fund management career, including founding and leading a $45 billion global investment team at Fidelity Investments. The Student Investment Fund is similar to a mutual fund and is a great platform for students to learn investment management. So we want students to research and conduct thorough fundamental analysis and not engage in any speculative stock or derivative trading.
The management team of the Investment Fund consists of Portfolio Managers and Analysts. The Analysts will research a particular company within their preferred industry and present their recommendations to the Portfolio Managers. The Portfolio Managers will decide on the asset allocation and regularly track the fund’s performance. We hope this hands-on experience will serve as a good base for future careers in Asset Management, Hedge Funds or Private Equity.