"It is inspiring to see the collegiate spirit and competition between our state schools transcending from the athletic fields to the finance classrooms," said Kyle J. Krause, president and CEO of Kum & Go. "We are honored that the students take such pride in their contributionsthis is a tremendous opportunity for students because they can take theory to a higher level of application."
Each year, the finance class or club at each university learns about the stock market, reviews individual company stocks and then invests the program money into the stock market. The Krause Challenge is an ongoing program, which allows classes to re-invest the money from year to year. The only guideline is that 10% of the total portfolio has to be invested in Iowa-based companies.
"The Krause Challenge class is just thatchallenging. But, at the same time very rewarding," said Adam McCullough, Krause Fund student at the University of Iowa. "The class gave me a chance to dig into financial statements, analyze the numbers, and create a working model that could be used to value a company. Now, I have a much deeper understanding of financial theory and the way it's applied by professionals around the world."
The results for the four schools from August 1, 2007 through April 30, 2008 are as follows:
Iowa: 8.10% return; portfolio performance from $211,674.54 to $228,802.77. Northern Iowa: 7.06% return; portfolio performance from $122,365.62 to $131,004.43. Iowa State: (.33%) return; portfolio performance from $195,110.48 to $194,468.70. Drake: (15.88%) return; portfolio performance from $277,115.98 to $233,105.85.During a year marked with turbulent and unreliable markets, students at all four schools were presented with a great learning opportunity as they were exposed to investing and the stock market. "The housing and subprime meltdown provided an interesting backdrop for class discussions over the past year. To have generated an 8.1% return over the contest period was amazing given the turmoil in the market," said Todd Houge, Ph.D., CFA, Assistant Professor of Finance at the University of Iowa, Henry B. Tippie College of Business.
"Our portfolio benefited from strong exposure to the energy and materials sector, as well as, limited exposure to housing and financial services. In general, our analysts positioned the portfolio based on anticipated economic weakness, a falling dollar, high energy prices and strong demand for basic materials," Houge said. "The team believes our economy will remain weak through the first three quarters of 2008, but anticipate stronger growth returning late in the year."
W.A. Krause said, "When we started the Krause Challenge, we had no idea how much it would impact the universities' finance programs. The Krause Challenge is now one of, if not the premiere finance class, at all participating universities. We're thrilled to see so many students learning and growing through the program."
West Des Moines, Iowa-based Kum & Go has more than 430 convenience stores in 12 states (Iowa, Arkansas, Colorado, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Wyoming and Wisconsin).Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.