Student presentations mimic real-world decision-making in finance industry

For a second year, 32 student groups within the School of Accounting and Finance (SAF) competed in a competition that mimicked the real-world decision-making process of either financial analysts or portfolio managers.

The competition, which is part of the fourth-year Accounting and Financial Management (AFM) Investment course, was separated into two phases. The first phase consisted of student groups presenting posters on either their stock analysis or portfolio management strategy to faculty representatives. In the second phase, five finalists groups were selected and judged by industry experts.

This year, the judging panel consisted of:

• Patrizia Ferrarese, Financial Consultant
• Jeremiah Hudacin, Director, Investment Risk, Ontario Public Service Employees Union (OPSEU) Pension Trust
• Simon Kwan, Analyst, Investment Banking, Morgan Stanley Canada Limited
• Dan Lavric, Portfolio Manager, Credit, Equitable Life of Canada

“It’s definitely easier being on the judging panel than having to be a student and do all that analysis and making sure it’s right,” explains Kwan, AFM alumnus and judge.

Looking back at where I was three years ago, this course had set a pretty good foundation in terms of where I am today. Having to develop a portfolio and investment strategy and apply course techniques even on a very preliminary level is invaluable experience in my opinion.

The stock valuation required student groups to analyze the investment value of a publicly listed firm and defend their buy/hold/sell recommendations. In the portfolio valuation project, students chose an investment strategy and actively managed a hypothetical portfolio of $1 million in stocks, bonds, and derivatives over a course of eight weeks on a virtual trading platform, and analyzed the performance of their portfolio.

James Chang (4A Math/Chartered Accountant (CA)), Frank Pao (4A AFM), Benjamin Chin (4A AFM), Jonah Hu (3A CFM), and Ben Chen (4A AFM), valued the Bank of Nova Scotia resulting in buy recommendation. “I think the hardest part was trying to figure out how to value a bank.” explains Hu, member of the winning team. 

A bank is a lot different from a Tim Horton’s, Magna or Rogers. A lot of the challenges we faced were based on dealing with the cash – cash is different for a bank. The banks cash is their inventory and it also funds their business, so that was the main challenge.

Out of the five semi-finalist groups, judges believed Hu’s group was well composed, articulate and conveyed a consistent message throughout both the presentation and the question and answer period, giving them an edge over their competition. “You can get the answers right, you can do superb analysis, but if no one understands or it’s incoherent, it’s very hard for someone to buy into what you’re saying” explains Kwan.

A lot of investing is about generating and idea and being able to articulate it. At the end of the day you have to convince others to think what you are thinking.

Overall all, Hu and his teammates agree the skills and knowledge gained throughout the competition certainly helps prepare students for the real world. In the meantime, the group finishes off the competition with some friendly advice for next year’s presenters “Do a lot of valuation models, don’t short cut and say you’re going to do one model because that’s the recommended model.” advices Hu. That and of course “start preparing early.”