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Bruin Value Investing gives members hands-on experience

Student investors in Bruin Value Investing hold a weekly stock pitch to choose what companies to invest in. The group focuses on investing in stocks from companies with longer life cycles.
(Carolyn Francis/Daily Bruin)

By So Jung Ki

May 23, 2014 2:03 a.m.

Aspiring student investors embarked on their first venture into the unpredictable realm of stocks as they made their first stock transaction earlier this month.

Bruin Value Investing, a student investment group with 17 members, engages in stock investment and trade to educate its members about business investment literacy.

Mike Sanghvi, the co-founder and president of the club and a third-year business economics student, said the club got approval from the university two weeks ago to employ a student-run fund to purchase stocks.

The student-run fund contains solely private funds, ranging between $100 and $500, gathered from all members of the group.

Investing with their own money pushes the members to put in a serious amount of time and energy in understanding their pitches, Sanghvi said.

He said the club’s members want to become the best investors possible and foster an investment culture on campus, he said.

Bruin Value Investing holds a weekly stock pitch where a team of a few members presents detailed research and analysis on a company that it believes the group should invest in. The group will invest in the stock pitched if it receives more than 80 percent of the vote from all members, Sanghvi explained.

Daren Zhuang, a third-year applied mathematics student and the club’s director of public relations, said the club tries to pitch stock from companies with longer life cycles to practice the technique of value investing.

Value investing is a long-term strategy of investing in the stock of a stable company at a price lower than its intrinsic value.

The strategy may not return immediate high yields, but the members are more dedicated to finding companies with undervalued stocks and investing in their long-term values, Zhuang said.

He added that the group aims to invest in a company with a “moat,” or a competitive edge, which shows its ability to survive and grow in the long run.

“We have real money on the line, and we have to be really serious about making (investment) decisions,” he said.

Because value investing focuses on the long-term value of stocks, the club implemented a contract system that allows its alumni to continue trading through the group even after graduation.

Amid the members with experience in the investment field, the club also has a majority of new members it recruited over the fall and spring quarter.

Darwin Valentine, a second-year business economics and political science student, joined the group last fall after learning about the club through the president of his fraternity, who happened to be the club’s previous president.

Every member has a different interest and background in business, and therefore educates other members in different industries, he said.

Valentine said he will purchase his first stock by the end of this quarter with his own money and observe how it grows over the summer.

Roy Choi, the chairman of Undergraduate Investment Society at UCLA and a fifth-year neuroscience student, said that he thinks Bruin Value Investing does more than the average student group by providing hands-on experience for its members.

Bruin Value Investing plans on hosting a stock pitch competition in the fall quarter with other colleges in Southern California.

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