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Top 3 Things I Learned at Runnymede This Summer

The following post was written by our summer intern, Avery. We enjoyed having such a sharp, energetic, and well-adjusted young man help us with various projects and share his fresh perspectives. We wish him lots of success in his senior year of high school and all future endeavors.

My name is Avery Bicks. I am seventeen years old, and I attend the Collegiate School on the Upper West Side of Manhattan. After taking an introductory course in Macroeconomics during the fall of my junior year, I immediately became interested in learning more about the economy and different investment strategies. My desire and need for more knowledge became more pronounced when my friends and I signed up for the stockmarketgame.org, where we saw our portfolio, well, crash and burn. Despite my shortcomings in the stock market game, I wanted an opportunity to learn from the best in order to sample the real business world and learn more about investing. Fortunately, this summer I was able to intern at Runnymede Capital Management where Sam, Andy, and Chris taught me more about portfolio mangement and the economy than I could learn in a whole year of school. Here are three major points that I took away from my time at Runnymede this summer.

There is no substitute for your own research and unique thinking

As I began investing my “$100,000” in the stock market game, I focused on not putting “all my eggs in one basket,” and really trying to “diversify” my portfolio. With my bulletproof investment strategy in place, I invested in whatever Jim Cramer and the Wall Street Journal told me to. After my first day at Runnymede, I realized this was completely the wrong approach. The Runnymede investment team has compiled countless hours of independent, sometimes tedious research, which helps them to identify the stocks that promise to have steady earnings and consistent growth. In addition to developing proprietary research, the Runnymede team has developed their own disciplined investment strategies, which revolve around investing in quality assets. After walking me through the Runnymede investment approach, Andy assigned me three companies and asked me to conduct my own research to determine whether or not I thought the companies fit the Runnymede mantra - “invest in the best.” Ultimately, by conducting only a little bit of my own research, I learned how important it is to really study a company’s management, its earnings, and growth drivers before investing.

Kerchunkers, baby!

kerchunkWhile reading the Runnymede website, I kept coming across the word “kerchunker.” A “kerchunker” is a word that Runnymede created to describe a service-sector company characterized by predictable, visible earnings growth. Although kerchunkers are not necessarily the flashiest and most exciting companies, I learned that they are undoubtedly great companies to invest in. Unfortunately, at the time of the stock market game I was investing in the most exciting and least consistent stocks where I believed I could hit a homerun. After researching more kerchunker companies, I discovered the tremendous reward of investing in more predictable companies with consistent earnings and growth. Motivated by the thought of rapidly growing my stock market game portfolio, I passed up on the slower, more consistent kerchunker, which left me with a highly volatile stock portfolio.

Timing is everything

At the beginning of the summer, I was lucky enough to be invited to accompany Andy to a lecture by Prof. Christopher C. Geczy, Ph.D. of The Wharton School entitled “Has Diversification Failed Us?” As the lecture began, I found myself swimming in dense and difficult information. In order to follow along and be as engaged as possible, I focused on trying to take away just three things from the presentation. The most interesting piece of information I took away was how critical timing is when it comes to the return on your investments. After seeing a graph that depicted the relationship between inflation rate, market returns, and their impact on the value of portfolios, I was able to really appreciate the art of timing. Portfolios that were subject to high inflation and low market returns during October of 1968 wound up failing the retiree by the age of 92. On the contrary, portfolios that were exposed to the better market conditions in January of 1969 continued to grow steadily by the time the retiree was 92. After seeing this graphic, my next logical question was, “Why aren’t people spending more time trying to time the market?” In short, I was told that people don’t spend too much energy trying to time the market because the market is impossible to always time perfectly. By the end of the presentation, it became clear how important it is to time your investments.

In Conclusion

As my summer is coming to a close, I have had ample time to reflect on my internship at Runnymede. I am only beginning to realize how invaluable and eye-opening my internship has been. Although I still have much to learn, the Runnymede team has given me a solid understanding of different investment strategies, shown me the value of proprietary research, and the importance of always acting in the best interest of a client. Growing up in a time where many associate bankers and brokers boast greed and immorality, the staff at Runnymede has provided me with a perfect example of what it truly means to look out for your clients and operate a moral, honest business. As a result, Runnymede has given me an excellent first exposure to the business world, strengthening my desire to work in this field. Regardless of what job my future holds, I look forward to taking what I have learned at Runnymede and applying it to my studies and wherever I can.

Thanks for everything!

What were your favorite summer internships? Did your experience shape your career path? What did you learn?

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About the Author: Chris Wang

Chris Wang

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