Investing in the stock market does not have such great associations for the college generation. Perhaps the first prick of our collective consciousness in that area was the disastrous dot-com bubble burst back in elementary school and from there it was only rough sailing all the way to the financial crisis and Madoff’s Ponzi scheme.
These disheartening memories do not exactly make your average College Joe very eager to join in on all of the heartache of investing.
However UR juniors and financial economics majors Matt Murphy and Peter Wen are working against these opposing tides to make investment just a little bit cool again. Welcome to Meliora Capital Management.
Less formally referred to as simply ‘investment club,” Meliora Capital Management challenges UR students to contribute a hefty $500 to a fund that will be invested into the stock market through a process involving extensive research, discussion and a vote from every member.
The group is not simply a student club it is an official limited liability company in the state of New York with its own mailbox, Web site, bank account and so on.
At present, it is comprised of 37 members all of whom are ‘owners” of the company and over $25,000 to invest.
Murphy and Wen modeled the company on the investment clubs of other universities some of which, such as Duke and Boston College, are well-established traditions and are even granted access to portions of their respective endowments.
‘I was talking to one of my friends that goes to Duke about the investment club at his school and I thought to myself, “Why isn’t there one here at UR?'” Wen said of his inspiration for the group. ‘I brought up the idea with Matt, who’d also been wondering the same thing, and from there we just sort of started slowly building up the club.”
While a student group with a $500 minimum is pretty unusual, Wen and Murphy were determined to make Meliora Capital Management a legitimate company and not just another resum builder.
‘Part of the reason we require real money is because we wanted to attract people who were actually interested in learning about this stuff,” Wen said. ‘When you have $500 sitting on the line, your incentive to participate and learn about what your money is going to be invested in is much greater.”
Dealing with real money is not just an incentive to keep members interested, Murphy noted. It also makes for a real-life application of the principles of economics and finance.
‘An investment club is a chance for us to apply what we’ve learned, see some real results and learn from them,” he said.
The group made their first investment decisions on Tuesday. Four different research groups focusing on 10 different sectors of the economy presented their top two stock picks for each sector, and the entire group voted on their top pick for each.
This first round of investment is a big step for Meliora Capital Management which Murphy and Wen hope to build on as the year goes on.
‘I would hope that the group will have 50 members by the end of this year,” Murphy said. ‘I’d like to see the group continue to grow to over 100 members someday.”
Murphy and Wen’s hopes of a larger group are evident in their openness to any interested members of the UR community.
‘This group isn’t only for finance and economics students,” Murphy said. ‘We have biology majors, engineers, English majors, etc.”
The organization is in the process of making this open quality more official by achieving SA recognition something Murphy and Wen say they are eagerly seeking out. ‘SA recognition would be great because it would allow Rochester alumni to learn about the club and help support it,” Wen said.
‘The main focus this semester was just getting started and showing the school that we are serious about this group,” Murphy echoed.’We’d like the campus to view this as a great asset to the school and we are hoping to receive recognition soon.”
With or without this recognition, Meliora Capital Management is certainly an influential new group to look out for on campus.
Those students that work up the courage to independently invest their money may find that they are not just adding to their personal financial prospects they are adding one more layer to the opportunities of UR student life.
Healy is a member of the class of 2011.