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The drive to learn and improve is by far the most important attribute to success.
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CMCM strives to provide its members with applicable, hands-on experience
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Learning, not performance, is the ultimate goal for the members of CMCM
The greatest single asset any student can have is ambition. With that, impossible becomes possible; without that, talent is nothing. At Carnegie Mellon Capital Management (CMCM), the investment club of Carnegie Mellon University, exceptional people with exceptional knowledge flow in and out, but the drivers to each organization’s success are the members who possess the drive and passion for the markets.
CMCM began as a long-only equities fund but has recently overhauled its structure to include both long and short positions as well as branching into options. Currently, it is divided into three sections: Macroeconomic Research, Delta-One Analytics (equity sales & research), and the Trading Team. The macro team focuses on global economic analysis and provides the D1 team reports on various sectors with profit opportunities. For example, they may look at the current environment and see a long-term bearish trend for the U.S. dollar, and therefore recommend a long position in commodity-producing companies to take advantage of the historical inverse correlation of dollar strength and commodity prices.
The D1 team researches individual companies within the sector to look for ways to maximize return. If the macro team saw opportunity in the retail sector, the D1 team would analyze the fundamentals of several companies through looking at their respective financial statements, company reports, revenue data, and so on. After they create a trading strategy, they present a stock pitch to the general body, explaining their rationale and any foreseeable risks to their strategy. One of the first pitches this year by the D1 team was a long Nike short Underarmor paired trade, focusing on how Nike can better take advantage of a weaker dollar through a globally diversified revenue stream.
Finally, the trading group is take successful stock pitches and devise entry and exit prices. Their strategies are based off of not only prior research by the macro and D1 teams, but also their own technical analysis of the stock. While the rest of the organization is more tailored towards a long-term perspective, the trading team has the flexibility to deal with short-term trades. When they are not working on previous stock pitches, they also analyze the equities and derivatives markets for possible opportunities. Currently, the group is being brought up to speed on different ways to use options to profit in up, down, and sideways markets. The plan is for the group to be actively trading both stocks and options by the spring semester.
Within all three groups, members are not required to have any knowledge of the financial markets when they join. In fact, many new members come in not knowing anything at all about what stocks are. However, those who want to succeed in the club, and later on land a better job, must be self-driven and ambitious. CMCM guides the new members along at first, but quickly takes off the training wheels and expects its members to take an initiative to learn and research the markets. I joined CMCM with minimal knowledge of the market outside of the few stocks I owned in my portfolio. However, now, as the president of the investment club, I am proof to all the members that it is not what you know that separates you, but how dedicated you are to learn.
Robert Sun is currently a junior undergraduate student at Carnegie Mellon University pursuing a degree in both Business Administration and Psychology. Starting from his freshman year, he began taking on an active role in the undergraduate investing community throughout Pittsburgh. He is the president of Carnegie Mellon Capital Management (Carnegie Mellon University), the portfolio manager of foreign exchange at The Trading Pitt (University of Pittsburgh), and the senior writer and regional director of Bulls & Bears Press.
