JOSEPH W. BRUZZESI
The Portfolio of Responsible investments under Student Management (PRISM) is a club in the business school that goes highly unnoticed by the University community. PRISM is a student-run organization that invests over $300,000 of The University’s endowment. The objective of the group is to safeguard and grow The University’s capital while providing in- depth learning about the investment process to its members.
PRISM started the year off Sept. 4. While average participation in meetings in past years was between 25-35 students, the first meeting attracted over 45 students. The Alperin Financial Center was a bit crowded because of the larger than expected turnout, but the first meeting ran smoothly. Major topics of discussion were the U.S. macroeconomy, the impeding debt ceiling decision, the portfolio and student internships. The club is approaching the apparent recovery of the U.S economy in a critical manner. While major news sources have painted a grand picture of an improved economy, members of the club beg to differ.
For example, the club discussed the labor market, an essential market referred to by politicians and media. While this rate has been falling, to the 7.3 percent range: a number of individuals pointed out some interesting facts. One member explained the composition of this percentage, the proportion of unemployed individuals to the labor force. He noted that while the rate had certainly improved, it was not because the job market improved, but because more individuals stopped looking for work. The labor force participation rate measures what percentage of individuals are working or actively looking for work. This rate is currently the lowest it has been in nearly 10 years. Club members will be running a regression to see what percent of the drop in the unemployment rate is explained by the drop in labor force participation.
The discussion then turned to the debt ceiling. As the country is on the brink of war with Syria, and faces the affordable health care act, and an ever-increasing budget deficit, theories arose from across the room. Some students believed cuts to government programs were needed because spending in defense and social benefits has increased to unsustainable levels. After a look at the implications of not raising the debt ceiling, the club came to the conclusion that raising the debt ceiling was inevitable.
What about Federal Reserve (The Fed) tapering? The club came to a strange conclusion: stock markets should rise either way. Awash with liquidity in recent years, stock prices are soaring to pre-recession levels and seem to be poised for a secular bull market. Members felt that if the Fed began tapering, that would signal that the economy has the foundation necessary to sustain itself, which would ultimately be optimistic for the future of corporations. Even if the Fed decided not to taper, the general outlook is that markets will continue to flourish as quantitative easing has raised stock prices to date.
PRISM members have had an annual track record of placing in jobs at top firms. Alumni of the club work at top investment banks, accounting firms and other prestigious firms in financial markets. A short list of firms that alumni work at includes Goldman Sachs, Morgan Stanley, J.P. Morgan, UBS, Price Waterhouse Coopers (PWC), Deloitte and many others. On Wednesday, members were fortunate to have a 40- minute conference call with past PRISM president Joseph T. Muoio on Wednesday. Muoio reminisced about his days as PRISM’s president and explained the strengths, weaknesses, opportunities and threats currently facing the PRISM portfolio. He also gave career advice and talked about how PRISM prepared him for his current job. Muoio is currently a fixed income analyst for Sum Ridge Partners, a firm co-founded by Thomas O’Brien, the current chairman of The University’s President’s Business Council. Muoio will be on campus Sept. 27th to speak to faculty and students.
Several current members of the club are currently enjoying the benefits of hard work: job offers. Victor Shaeffer, one of the executive chairmen, has accepted an offer in the audit department at PWC. After working for PWC in Harrisburg, Shaeffer will begin working at PWC in New York City after he graduates. Another executive chairman, Brian Lopes, worked in hedge fund services for accounting firm Rothstein Kass. After a nerve-racking last few weeks of summer, the finance and accounting major received a full-time offer and has until December to accept it. PRISM financial analyst John Pouso received an offer from Deloitte after working for the company in New York City. Pouso accepted and also begins work in September. He hoping to maintain an auditing position in the financial services sector. These are only a few of the opportunities that students participated in. Other industries in which students interned included investment banking advisory, private equity and public relations.
PRISM meets in the Alperin Financial Center every Wednesday night at 7 p.m. The club is open to all majors in the business school. A topic of discussion on Wednesday was involvement. Leaders of the club are trying their hardest this year to involve the more than 45 members.
Assignments for students range from following news on a company in the portfolio and target companies, to valuation, economic analysis and more. Upperclassmen have historically assisted underclassmen in valuation techniques to make decisions on buys or sells.
For more information on getting involved with the PRISM group, email me at email@example.com, Brian Lopes at firstname.lastname@example.org.
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