Putting Knowledge to Work

Putting Knowledge to Work

For the last 22 years, students from 24 of the region’s top universities have grown TVA’s $12 million Investment Challenge Program (ICP) into one of the nation’s largest and most successful student-managed investment programs.

“It’s inspiring to see that ICP has advanced over 10,000 students’ financial education over the last two decades,” says Tammy Wilson, TVA Vice President, Treasurer, Chief Risk Officer and Investment Challenge Program executive sponsor. “Each year we look for new ways to help our students build skills that will propel their professional careers.”

To understand what makes ICP a valuable learning tool, Wilson asked Dr. Floyd Tyler, one of ICP’s founding professors when he served as Assistant Professor of Finance at The University of Memphis, to share his perspective about the program. 

 “I am a huge believer in ICP,” says Dr. Tyler, now President and Chief Investment Officer at Preserver Partners. “As a professor and investment manager I know firsthand how the core skills that ICP teaches have a positive, long lasting impact on students.”

Here, Dr. Tyler (pictured, right) shares his thoughts on the ICP program.

What got you into finance?

I grew up in inner city Memphis (Tenn.). My parents knew the value of an education. My father wanted me to be a pharmacist; however, spending my days in a chemistry lab was not my passion. I wanted to be around people and I was curious about how markets worked. I went over to the business school and I talked to an advisor about economics, finance, the stock market and dealing with money.

I realized that if I learned about money, I could take care of my family over the long run.

Once I got into the first economics class taught by Dr. Bob Figgins, it was an epiphany. I understood the charts, the concepts and it made perfect sense. I graduated from UT Martin with a degree in economics. Then went Carnegie Mellon for a Master of Science in Public Management Policy. I also earned my doctorate in finance at Florida State University.

How did you get involved with ICP?

It started when the University of Memphis hired me to teach an upper-level investments course in the late 1990’s. I’m proud to say I was one of the first faculty advisors in the ICP program. I thought it was a great idea. For the first time, I could give my students the practical experience of managing real dollars with faculty oversight and appropriate guard rails. You can teach about fundamental analysis and portfolio construction. However, ICP is a teaching tool with real money and performance benchmarks. It was a great idea at the time, and I still think it is a great idea.

How can ICP students benefit from the program?

As a young person in college and when I was teaching, you didn’t get a lot of interaction with professionals outside of alumni receptions or career fairs. ICP has evolved to provide exposure to working professionals and the students are better for it. Building your professional network is just as valuable as learning to invest.   

In addition, ICP can help guide your career choices. If ICP was an option during my undergraduate work at UT Martin, I believe I would have gone right into the investment industry.   

I don’t regret getting a doctorate. Nevertheless, I think investment management is what I was born to do.  ICP would have gotten me on that path to where I am today sooner.

Does ICP teach more than investing?

Yes. As a professor and now as an investment manager, I know first hand the positive, long lasting impact ICP has on students. I often have interns and hire for entry-level positions.

ICP teaches quantitative and qualitative skills. ICP is an opportunity to be part of and work as a team. Investing is the hook to teach those skills.

Unlike textbook work, you are doing real analysis. There is real stress; something we can’t duplicate in the classroom. You see the stock price moving either against you or for you. While the technology we use to do the analysis has changed over 20 years, the skills I mentioned remain relevant over the decades. ICP is one of those benefits that can enrich your educational experience. Don’t pass it up. 

What is your opinion on student investment programs like ICP?

I think every university should look at adopting a student investment program if they have the faculty capacity to do it well.

ICP is an important tool in the university’s curriculum and an advantage for those universities that have them. It benefits students by advancing putting textbook knowledge to work with real money with accountability and monitoring. When I taught ICP, the students’ portfolio did just fine. ICP allows students to develop themselves to be better professionals.

What career advice can you give students?

A bachelor’s degree is not as unique today as it was 30 years ago. When I look at entry-level candidates, I look at the things they have done to enhance their knowledge and skills beyond their degree. If person “A” has ICP experience and person “B” does not – with all things being equal, we will give person “A” a much harder look because of ICP.

I know ICP students demonstrate successful team building skills, presentation skills and analytical ability. Those are the skills that I’m looking for when filling entry level positions. 

In addition, I encourage students to participate in as many career-building activities as you can in school. Look at Toastmasters or civic groups. Build a mosaic of extracurricular experiences. That way when you start looking for that first position you have a portfolio of experiences and skills to offer that company.

2019 Investment Challenge Annual Conference

Teams of students whose portfolios outperformed the market in 2018 celebrate their accomplishment alongside Executive Vice President and Chief Financial Officer John Thomas, TVA’s Board Chair Skip Thompson, and Vice President, Treasurer, and Chief Risk Officer Tammy Wilson.

Mississippi University for Women – Alpha of 511bps; performance award earned of $5,134
Austin Peay State University – Alpha of 481bps; performance award earned of $4,824
Murray State University – Alpha of 414bps; performance award earned of $4,131
Western Carolina University – Alpha of 361bps; performance award earned of $3,589
University of Mississippi – Alpha of 316bps; performance award earned of $3,124
University of North Alabama – Alpha of 216bps; performance award earned of $2,112
Union University – Alpha of 108bps; performance award earned of $1,044
Alabama A&M University – Alpha of 107bps; performance award earned of $1,034
Mississippi State University – Alpha of 45bps; performance award earned of $427

ICP Alumni talks about his career through the 2008 crisis

Baptism by Fire

When Jeff Givens started his financial career in 2008, little did he know that he would have a ring side seat to the greatest financial meltdown since the Great Depression. Here, he shares his Investment Challenge Program experience during the collapse and how it helped shape his career.

Anyone who watches their 401(k) can tell you that 2018 was a challenging year to identify investment opportunities, particularly in the second half of the year. For the university students who manage more than $12 million in TVA’s Investment Challenge Program (ICP), delivering results and overcoming challenging market conditions is par for the course. “I was in ICP in 2008 during the meltdown,” says Jeff Givens, who participated in the ICP 10 years ago and now works as a retirement planner for Fidelity Investment. “This year’s class will look back on 2018 as their baptism by fire that will set them apart from all others because they had to learn more and work harder to succeed.” Because of the similarities between the 2008 and 2018 market, it was perfect timing to talk to Givens, a Tennessee Tech MBA graduate. Givens told us “ICP served as a catalyst to get into this industry. I was an MBA student during the recession of 2008. There were so many people struggling how to define and redefine retirement. I wanted to help them plan for success.” GivensFrom that point, Givens (pictured at right) was off and running as an educator, coach and helping hand to help people plan their financial future. We caught up with him to answer a few questions.

You did not start in finance. How did you get into the field?
No, I didn’t. I started in environmental science. I was actually an intern with TVA at Norris in the GIS — Geographic Information Systems — while going to graduate school at the University of Tennessee. Then I worked at a GIS company in Knoxville. I enjoy GIS. I wanted to do more field work, but my job was focusing on the technical side of the business. So, I elected to go into sales. I was successful and moved up into management. Long term I felt that it was not a good fit for me and that’s when I attended Tennessee Tech to earn an MBA with a concentration in finance. One of my best friends finance in college and took ICP and said it was really hard. I enrolled in the ICP as an elective after completing my first graduate level finance course. I didn’t know if I was ready for it, but I took the course and it really helped define the road I wanted to go down, which led to the decision to become a financial advisor. It was really ICP that got me into the field.

 How is your career developing?
Nicely. In 2009, I began my career with Edward Jones. I was building my own practice. But I really wanted to do more coaching and helping people on a larger scale. I wanted to spend more time with clients than going out to find clients. Then, I was approached by Fidelity 2013. Fidelity needed a dedicated planning and guidance consultant who would work specifically with TVA employees providing guidance and investment education. I’ve been in this role for the past six years.  

How did ICP help your career?
ICP gave me the investing background to succeed. It built a lot of credibility, especially in the beginning of my career as I was working to acquire various certifications. There is a tremendous amount of research that goes into picking stocks. Having that knowledge especially in the beginning when I entered the field gave me an advantage. For example, at Edward Jones when analysts made buy and sell recommendations, I could walk clients through how the analysts came to those decisions. I was able to help clients build a balanced portfolio to help achieve their financial goals. Sounds like you have a mission to serve. Tell us about it. One of the reasons I went into finance was because I was an MBA student during the recession of 2008. There were so many people struggling how to define and redefine what retirement looks like and how to manage their money. My technical background coupled with my sales and finance experience works together perfectly. I felt the responsibility to work with families and individuals through those tough times. That is how I ended up in this roll to serve others that’s similar to TVA’s mission of service.

Going though ICP in the midst of the great recession, is there an experience that stands out to you?
Absolutely. I’m in the ICP class and we are right in the middle of the biggest financial crisis since the Great Depression. I was really shocked to see how many people allowed that event to impact their ability to retire. Many families didn’t have a plan. If they did have a plan, they didn’t have somebody to manage their strategy. ICP opened my eyes to how financial matters affect lives. I wanted to get into this field because people were really doing the opposite of what they should be doing. When there’s a lot of volatility in the market, it’s really a buying opportunity.

What is your take on student investment programs like ICP?
I was blown away. I didn’t think it was possible to let students manage money. At first, I thought it was play money or monopoly money. Then I quickly understood the gravity of the situation. Its real money and a real client. This wasn’t pretend trades. We had to go in and do our due diligence before we would make a recommendation. Today, working with TVA employees, I’ve been able to keep up with the ICP program. The students have outperformed the S&P by 57 basis points over the past 21 years. That is a cumulative return of more than 38 percent.

When you look at those numbers how can anyone be critical of that?
This year, there were nine ICP outperformers. Hats off to the students because there was a lot of volatility in 2018. There were a lot of professional investors that preferred to sit on the sideline. Bottom line, I think ICP does a really good job helping students define what risk looks like and the importance of diversification. ICP is a great learning tool because students have to put in a lot of time and effort into building their recommendations, and they have to convince a jury of their peers and professor that they make sense.

What would you tell students looking into ICP?
My recommendation is to just get as much out of it as you can.

How many opportunities in college are there to take theory and put it into practice?
Maximize those opportunities to pick your career path. For me, ICP served as a catalyst to get into this industry. I was not sure what direction I wanted to go in. Starting out, I had an MBA with a concentration in finance. However, I did not have the accounting background that was required for many jobs. ICP helped me leverage my background and I made a seamless transition into this career path.