Latin Student Investment Fund Uses “Edge” Strategy on $50,000


Summer Crown Out of the many unique programs Latin offers its students, one that is commonly overlooked is the Latin Student Investment Fund (LSIF). With only two years of existence and 11 members, selected through an application process, the up-and-coming Fund is worth paying attention. “[LSIF] arose from an anonymous donation to be put in the hands of students to help grow Latin’s endowment,” explained LSIF’s faculty advisor Mr. Kendrick. The 11 students are independently responsible for managing the $50,000 donation, a small portion of Latin’s endowment fund. Strategies, pitches, and investing plans are based solely on student ideas. Kendrick says he will not interfere with the students’ process unless it is completely necessary. Thankfully, under the student leadership of Philip Hinkes, he has not seen the need to step in thus far. “We have designated pitching periods where people can pitch stocks (we just finished one recently). Each stock pitch is five minutes and details why we should buy that stock. From there, we usually have about 10-15 minutes of discussion or debate about the stock. Usually, after about 5-6 pitches, it’s easy to narrow it down to 2-3 stocks, and from there we vote as a group,” explained Hinkes ‘17. So far, LSIF’s 11 members have decided to invest in Kroger (a national grocery conglomerate), Vanguard Total Stock Index, and Advanced Micro Devices. Because members of LSIF have no professional investment training and are managing our school’s money, they must pitch stocks cautiously. Each member must conduct diligent research before proposing a stock. “Most of our stock choices have been on the conservative side of things […] Another thing worth noting is that we have a social responsibility provision in our charter. We refuse to invest in any company that is socially irresponsible,” explained Hinkes. For example, they avoid investing in companies related to inappropriate incomes, such as tobacco or casinos. Unfortunately, the Kroger stock has not performed well since LSIF’s June investment. However, since LSIF picked Kroger using the “edge” strategy, members are not too worried.   “We can lose money in the short term so long as we make money in the 3-5 year period. Accordingly, our strategy looks at investments 3-5 years from now,” said Hinkes. Advanced Micro Devices, a tech company that LSIF has recently bought stock in, was also chosen with this “edge” strategy. The risk of the Kroger and Advanced Micro Devices stocks was deliberately balanced with Vanguard Stock Index, a safe and traditional choice. The opportunity that the anonymous donor has given our students is a privilege that most schools do not have. “The opportunity is both challenging and humbling. Only two other schools in the country have this, so it’s pretty unique,” said Hinkes. Mr. Kendrick also appreciates the chance that students have been given. He believes that LSIF forces students to derive strategies and plans individually, which perfectly fits with Latin’s core values. In addition, members are prepared at an early age to understand the logic of investments in the business world. As we begin the final quarter of the school year, Hinkes worries that future students will not continue to appreciate the rare opportunity they have been given. “This year, we are going to be losing half our members, including the head (myself) and second in charge, Nick Rose […] We will be doing applications this spring, and hopefully, we can get a good new group of people. I’m confident Kendrick can lead us,” said Hinkes. ]]>