Tag: apmp

Federal Reserve Bank of Minneapolis President Meets with Students

President Kocherlakota spoke to APMP students about monetary policy and it's ability to influence and prices in the US economy.

Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, spoke to students in Michigan Tech’s School of Business and Economics about monetary policy and its ability to influence employment and prices in the US economy.

Kocherlakota’s district is the second largest geographically and least populated, he said, stretching from Montana to the Upper Peninsula. As one of twelve districts, he is part of regular meetings of the Federal Reserve open market committee where Ben Bernanke, chair of the committee and Federal Reserve Board, presides.

The representatives of each Federal Reserve District Bank share information about their districts and eventually produce policy. “It’s pretty structured,” he said “And that’s good; it’s not a debate.”

The Federal Reserve is focused on two main macroeconomic variables in their policy deliberations according to Kocherlakota. Price stability–keeping inflation at 2 percent or lower–and reducing unemployment to at least 6.5 percent. They use the federal funds interest rate as the control variable to achieve these two goals.

The unemployment rate is currently at 7.3 percent, and the federal funds interest rate is targeted at 0.25 percent. He does not see that interest rate changing soon.

Questions from the students and others focused on current strategies, and the recession of 2008 seemed to be part of nearly every answer. Kocherlakota stressed that he was answering for himself, and it was not to be taken as official Federal Reserve Bank responses.

When asked about following commodities like oil and gold, Kocherlakota said the Federal Reserve does follow commodity prices.

“Oil can be seen as putting pressure on inflation,” he said. “And it’s hard to predict oil prices. In 2008, oil prices went sky high the first part of the year, but when they collapsed, as they usually do, inflation came down, too.”

The price of gold went up in 2008, due to people’s fear of what to do with their money, he said.

“The Dow Jones was down to 6,000 then,” he said. “When gold dropped in price recently, it meant people were more confident, less fearful than in 2008.”

Kocherlakota also said that the fed can control the federal funds interest rate, but other rates are based on the demands for goods today versus goods in the future. US Treasury securities are still in demand because of their low risk.

How does the global market inflation affect your decision-making, he was asked.

“It’s another factor for us to think about, that could influence our performance, but we are not like New Zealand where it’s all they think about. The US is a relatively closed economy.”

And does he think about the fiscal health of his own district over that of the US?

“We all provide information about our districts, but we make policy for the country,” he said. “Officially, Kansas City, San Francisco and Minneapolis get one vote to represent all three. We vote on national matters.”

As for his district’s economy?

“It’s doing well, but I don’t think the fed can take credit,” Kocherlakota said. “The Upper Peninsula faces challenges that are historical in nature. Montana and Minnesota have unemployment around 5 percent. North Dakota has the oil boom and is around 3 percent. They can’t find people to work in McDonalds! South Dakota is below 4 percent and a bit of a mystery. The labor market could actually be stronger, the economy could be stronger. There are still some 2008 effects.”

This story was oringally posted in Tech Today by Dennis Walikainen, senior editor, for Michigan Technological University’s University Marketing and Communication.

Trethewey Honored by Michigan Tech

School of Business and Economics alumni James Trethewey was selected as the recipient for the 2013 Distinguished Alumni Award.

HOUGHTON, MI (08/07/2013)(readMedia)– James Trethewey, an Ironwood native, was recently honored at the Michigan Technological University Alumni Reunion. Trethewey, a 1967 alumnus in business administration, received the Distinguished Alumni Award, presented to alumni “who have made outstanding contributions both in their careers and to Michigan Tech over a number of years.”

Trethewey began his career with Copper Range and soon joined Cleveland-Cliffs (now Cliffs Resources), advancing through management positions over the years. From Ishpeming to Ontario to Cleveland, he worked in positions of increasing responsibility and became vice president-controller and chief accounting officer. Along the way, he also earned his MBA from Baldwin-Wallace College.

In his final years with Cliffs, Trethewey was senior vice president of business development and worked with the senior corporate team in reshaping the company, adding international experience to his career. He was a member of the American Mining Association, the Society of Mining Engineers, and other organizations, retiring in 2007.

For Michigan Tech, he’s been on the Advisory Board for the School of Business and Economics since 1994 and has served as a trustee for the Michigan Tech Fund. He and his wife have funded the James and Dolores Trethewey Applied Portfolio Management Program (APMP) Professorship, given to APMP creator Dean Johnson, and have supported students through scholarships.

Since his retirement from Cliffs, Trethewey has remained active in social, business, and industry activities. He serves on the board of two charities, participates as a member and CEO of the limited partnership DJD Investments, and is a board member of Steel Dynamics Inc., a major US steel producer, where he also serves as chairman of the Audit Committee.

Michigan Technological University (www.mtu.edu) is a leading public research university developing new technologies and preparing students to create the future for a prosperous and sustainable world. Michigan Tech offers more than 130 undergraduate and graduate degree programs in engineering; forest resources; computing; technology; business; economics; natural, physical and environmental sciences; arts; humanities; and social sciences.

This story was written by Dennis Walikainen from Michigan Technological University’s University Marketing and Communications.

APMP Students Attend Berkshire Hathaway Shareholder Event

Michael Morrison and Austin Kuttruff at the Century Center in Omaha, Nebraska.

Applied Portfolio Management Program members, Michael Morrison and Austin Kuttruff, gathered with thousands of stakeholders at the Century Center in Omaha, Nebraska over the weekend for the Annual Berkshire Hathaway Shareholder Event. The crowd in attendance was seeking an intimate exposure to Warren Buffet who is widely considered the most successful investor in the 20th century.

Michael said that one of the biggest takeaways from listening to Buffett was “you have to love something to do well at it.” Being Finance majors, the two Michigan Tech School of Business and Economics students jumped at the opportunity to attend the shareholder event and learned about the passion that is required to be successful. The opportunity to meet Warren Buffett, his company, and its subsidiaries is highly coveted in the world of finance. Their itinerary included watching a movie about Buffett’s company, and the opportunity to ask him questions in an open forum.

Given the Warren Buffet is 82 years old, some shareholders had concerns about the future of Berkshire after he eventually steps away. However, Buffett addressed these concerns with confidence in his company and the people who work there, saying:

The priority is that all of us continue to zealously guard Berkshire’s reputation. We can’t be perfect but we can try to be. As I’ve said in these memos for more than 25 years: We can afford to lose money – even a lot of money. But we can’t afford to lose reputation – even a shred of reputation.

Buffet told an Omaha news crew that he’s not going anywhere anytime soon, but there is a solid plan for when he does eventually step down. The people who will continue his legacy know the steps they must take to continue to be successful.

Overall, the trip was a great learning experience for the two students which was financially supported by Joe Dancy and the LSGI Advisors Inc.

Business and Economics students compete in Global CFA Institute Research Challenge

In 2013, Michigan Tech students qualified and competed in the CFA Institute Research Challenge for the first time.

Students in the Applied Portfolio Management Program are expanding their resumes by competing in another investment competition and gaining valuable real world experience.

The CFA Institute Research Challenge was introduced to a global audience in 2006 and is considered, “the investment Olympics” for university students.  The event which hosted more than 3,000 students from over 650 universities, 89 businesses, and 106 societies in 55 countries and territories.  This challenge is an annual global competition which provides hands-on mentoring and intensive training in financial analysis and professional ethics.  Despite 2013 being the first year they competed in this challenge, our finance and economics students were able to advance to the global final of the event.

By compiling the highest combined report and presentation score and winning the regional competition, Michigan Tech qualified for global final.  “As a team we set aside many hours of our time to research, compile, analyze, prepare, rehearse, and finally present our findings to a panel of judges. The true amount of work this project entailed is staggering, however we are thankful for the opportunity afforded to us,” said senior Finance major, Justin Wilson.   Joining Justin to represent Michigan Tech was fellow Finance major Jessica Zaiki as well as economics majors Eli Karttunen and Anna Paul.

Each student was tested on their analytic, valuation, report writing and presentation skills and gained real-world experience as they assumed the role of a research analyst.   Upon the team’s return, Jessica Zaiki noted that having the exposure to the CFA institute, investment professionals, and the high caliber of competition at the Americas competition expanded her knowledge of stock analysis and furthered my interest in pursuing a CFA in the future.

The experience was valuable for our students and it is a competition we look forward to having continued participation and success at in the future.  Financial support for the student participation was provided via the James and Dolores Trethewey APMP Professorship.

APMP Students Win CFA Challenge in Kalamazoo

Michigan Tech APMP students placed first in the CFA Challenge. (L to R: Anna Paul, Jessica Zaiki, Justin Wilson, Eli Karttunen, and APMP Director Dean Johnson)

Michigan Tech’s student team took first place at the CFA (Chartered Financial Analyst) Institute Research Challenge held in Kalamazoo recently. With the win, the team advances to the Americas Regional competition to be held in Toronto, March 20-21.

In the challenge, the students from five universities analyzed Perrigo, a pharmaceutical company, and made investment recommendations to them. The Michigan Tech team had traveled to Perrigo’s headquarters last semester to begin their research. The challenge was held on the campus of Western Michigan University.

“We based our recommendation on four basic factors: strong business fundamentals, sustainable growth factors, positive industry outlook and limited risk factors,” said team member Jessica Zaiki. “Paired with strong financials, these fundamentals gave us an overall buy recommendation for Perrigo.”

Teammate Anna Paul added, “Since we’ve made our recommendation, the Perrigo’s price has risen and is approaching our target price.”

“The team had to prepare written reports and oral presentations to a panel of Wall Street executives,” said advisor Dean Johnson, the James and Delores Trethewey Professor in the School of Business and Economics. “It’s a wonderful opportunity for students to have a real-world experience of what it’s like to make an investment recommendation.”

The Tech students participating are also members of the Applied Portfolio Management Program (APMP), a student group that invests more than $1 million in the stock market.

Other schools participating in the competition were Grand Valley State University, Ferris State University, the University of Toledo and Western Michigan University.

The Research Challenge was hosted by the CFA Society of West Michigan, an association of investment professionals: portfolio managers, security analysts, investment advisors, and other financial professionals.

Jeff Tryka, CFA Society of West Michigan president, congratulated Michigan Tech and said, “This is the third year we’ve sponsored the competition, and each year we have seen the quality of research and presentations improve on those of previous years, so it’s clear that every student who participated in the competition should be proud of their accomplishment.”

“We’re very excited to be heading to Toronto to represent Michigan Tech and the whole region to the next level,” said team member Eli Karttunen. “It’s an amazing opportunity for which our hard work is paying off.”

Financial support for the students’ participation in the CFA Challenge also came from James and Dolores Trethewey.

Written by Dennis Walikainen, senior editor in University Marketing and Communications.