Finance students practice theories with $50,000

MOSCOW, Idaho (AP) — University of Idaho finance Professor Mario Reyes stalks before his class of investor neophytes, firing off pointed questions to students by name.

This session of his securities analysis class focuses on picking stocks, and Reyes wants to know how the 35 class members plan to dig up the information that will tell them when to buy, sell or hold.

"How can we learn about the tools and the techniques and the models so that we can make a report?" Reyes asks.

The attentive students, most with laptops at the ready, are quick to name newsletters, Web sites and financial television shows that offer the analysis that can make the difference between a boom or bust year.

And attentive they had better be. Along with students at 18 other schools, they have $50,000 in cash, courtesy of investment firm D.A. Davidson & Co., based in Great Falls, Mont., to invest as they see fit on the open market.

While many colleges and even high schools have mock investment programs, the D.A. Davidson money is real.

Each student investment program gets to keep half of the profits over 5 percent.

And if the students lose money, Davidson eats the cost.

"The pressure is going to be good," says Dave Church, 22, a Grangeville senior majoring in marketing and finance. "It's going to make us work harder."

"Yeah, it's good to give us more of a real-life experience," agrees classmate Pete Schindele, a 22-year-old accounting and finance major from Boise.

The securities analysis class is the first group to get its hands on this year's $50,000.

The fund will be taken over next semester by Reyes' portfolio management class.

The UI and Washington State University joined the Student Investment Program in 1994.

Investment returns since then vary from year to year. But overall, both programs have seen profits, according to statistics from the Great Falls office.

The UI has seen a $42,899 total gain and been able to keep $27,928.

WSU has $62,073 in total gains and has kept $50,731.

D.A. Davidson & Co. started the investment program in 1985 at Montana State University.

Over the last 19 years, it has grown to include 19 schools that each get $50,000 to invest, bringing the total investment to nearly $1 million per year.