Bullish on Chicago's stock picking talent
- Apr 19, 2016
Chicago is known for many things. Deep-dish pizza, a cursed baseball team and world-renowned architecture all spring to mind. However, you may want to add bright value investing minds to that list.
For the second year in a row a team from a Chicago-based business school has taken top prize at the Ivey Business School’s Ben Graham Centre International Stock Picking Competition. Now in its third year, the competition attracted 20 teams of MBA students from top business schools from around the world all vying for a total of $17,500 in cash prizes provided by Burgundy Asset Management and Empire Life Investments.
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This year the crown went to a team from the University of Chicago’s Booth School of Business keeping the title in the windy-city following Northwestern’s Kellogg School of Management’s victory in 2015.
In stage one of the competition, each team prepared a valuation report on a firm which was judged by a panel of industry practitioners and experts for the quality of their analysis. The top three teams were chosen to compete in-person in Toronto.
Teams from Chicago-Booth, University of Waterloo, and the Ivey Business School made it to the final round. Each team’s financial analysis skills were put to the test during a 30-minute presentation on whether or not to recommend investing in the firm.
Judging the competition were some of the most respected value investing experts in the industry. The panel included Ken Broekaert (Burgundy Asset Management), Wayne Peters (Peters MacGregor Capital Management), Robert Robotti (Robotti & Company Advisors), and Kim Shannon (Sionna Investment Managers). Each judge didn’t hold back when grilling and critiquing each team’s methods, but were impressed with all the competitors.
“I can speak on behalf of the other judges that it was quite a difficult decision for us this year,” said Broekaert. “All of the research that went behind the presentations was quite impressive, especially considering they only had one week to work on the company.”
In the end the judges felt Chicago-Booth’s team of Nick Anderson, Russell Waldman and Bradley Powell won on the strength of their primary research taking home the $10,000 top prize. Waterloo finished second and Ivey third.
“In the final round the part that was really beneficial was the feedback we got right afterwards,” said Anderson. “We had a room full of really distinguished value investors who spent an hour listening to us and followed it up with sharing their insights. That was really valuable.”
The competition was emphasized the need to work well as a cohesive team even in an industry where working independently can be the norm.
“Something that is sort of unique about the profession of investment management is that you spend a lot of time working on your own independently,” said Waldman. “So opportunities like this to work as a part of team for the sake of the competition and to listen to professionals who have many years of experience with different experiences of their own, with different approaches to investing, you learn a lot and pick up tools you wouldn’t have operating on your own.”
All of the finalists were also invited to attend the Ben Graham Centre’s Value Investing Conference the next day to hear from esteemed members of the value investing community.
“Just learning from so many greats in the industry such as Charles Brandes. He’s an example of a true value man himself who has done very well,” said Powell. “One of the best things about these conferences is you get to really network and see who you are going out in the market with.”