Experiential / Reality-based Learning / July 10, 2014

Wall Street Tools Give Edge to Smith Students

Wall Street Tools Give Edge to Smith Students

Bloomberg Features School’s Teaching Innovation at Global Symposium

After a recent drop in Amazon’s stock price, financial analysts moved quickly to evaluate a potential buying opportunity using real-time data from Bloomberg Professional services. So did students at the University of Maryland’s Robert H. Smith School of Business, who access the same tools with the same speed as Merrill Lynch, Goldman Sachs and other Wall Street firms.

Many business schools include professional platforms in the classroom, but Smith stands apart as a leader in reality-based learning. Its 60 Bloomberg-licensed workstations — among the most at any U.S. business school — allow Smith professors to integrate the services into a variety of courses from equity analysis to supply chain management. Overall, about 1,500 students and faculty members have engaged in coursework and research on the workstations in the past three years.

In recognition of the school’s innovation, Bloomberg invited Smith finance lecturer Joseph Perfetti to its New York headquarters in summer 2014 to demonstrate his courses at the Bloomberg for Education Symposium. About 400 Smith students access the Bloomberg platform each year in his undergraduate and graduate-level courses.

“We value working with leading universities, and business schools such as Smith, to provide the leaders of tomorrow with access to the business and financial news, data and analytics used by more than 320,000 subscribers around the world,” said Matthew Rees, Bloomberg’s head of sales for North and South America.

Working in teams, participants in Perfetti’s equity analysis courses simulate real-world trading from a $1 million portfolio using a Bloomberg product called Stock-Trak. The funds are fictitious, but everything else is real. Students write and submit analyses for each trade and compete for Stock-Trak points. At semester’s end, a higher share of points translates to a higher grade.

Such high stakes surrounding short-term trading “tends to force students out of a comfort zone,” said Perfetti, who attributes his recent back-to-back “Top 15 Percent” teaching awards to the program. “It also motivates students to spend a great deal of time in the lab and master the Bloomberg terminals.”

In addition to Stock-Trak, students use Bloomberg's company data to produce valuation for buy-sell proposals for the likes of Pfizer and IBM — just like professional counterparts at firms such as Wells Fargo and JP Morgan.

“Such real-world, experiential learning exemplifies the teaching innovation at Smith that is providing unique opportunities for students,” said Smith School Dean Alex Triantis. “In this case, we are preparing them for analyst and corporate finance positions.”

Bloomberg Showcases Smith

Professors, deans and department heads from universities around the world joined Bloomberg editorial staff members at the New York symposium, where Perfetti demonstrated in real time how financial information can be brought to the classroom.

“This is a far different experience than using the Harvard Business School case on Marriott,” Perfetti told the participants. “With Bloomberg I can show students the components of cost of capital in real time, show them how Marriott compares against peers and link to real-work economic data that will influence the understanding of risk. It is very powerful for students to walk out of the lab with custom data sets which they can manipulate into analyses that can be immediately applied,” he said.

Perfetti also explained how the Bloomberg platform supports real-money investing by Smith undergraduate and graduate students by way of the school's Mayer, Senbet and Global Equity funds. Under faculty supervision, students use these funds to invest millions of real dollars in school-managed portfolios. “The student managers use the Bloomberg terminals to do all the related analytics, portfolio management and trading,” Perfetti told his audience. “They absolutely love it.”

Competitive Edge for Students

Perfetti said students are lining up for the experiential learning. “We lifted the enrollment cap from 30 to 45 students per section and still generate lengthy waiting lists,” he said. “The students really want this practical, real-world experience.” 

Yulia Orgodova, one of Perfetti’s recent students, said she learned to access and manipulate information by creating custom “relative value” formats to compare and analyze companies’ profitability against their rivals. “Navigating through the Bloomberg system was an indispensable hands-on experience,” said Orgodova, a Master of Finance student. “It has become a tool I have used since for strategic analysis in my other classes.”

Michael Eleff, an equity analysis student who became a teaching assistant in the class, said experience with the Bloomberg platform creates advantages during employment interviews. He said his experience led to a Goldman Sachs internship. “Using my Bloomberg account has allowed me to gain real-world knowledge, which gives me a leg up in my internship,” he said.

Supply Chain Research

In addition to finance, Smith leverages Bloomberg Professional service in other disciplines such as supply chain management. Bloomberg’s SPLC database enables subscribers to track a company's customers and the percentage of revenue those customers generate.

About 180 students in the Master of Science in Business: Supply Chain Management program have used the tool over the past two years to conduct a capstone risk assessment assignment. Other MS and part-time MBA students have gathered Bloomberg-hosted data on supplier strategies of more than 1,000 companies to support Ph.D. research.

The research represents the first of its kind to be drawn from the Bloomberg SPLC database, said Thomas Corsi, the school’s Michelle E. Smith Professor of Logistics and co-director of the Supply Chain Management Center.

Adams Steven, now a University of Massachusetts Amherst faculty member, applied some of the data to his newly published dissertation in the Journal of Operations Management. “The Bloomberg data significantly provided the mechanism for measuring a firm's extent of outsourcing and offshoring along with its concentration of purchases with individual suppliers,” said Corsi, co-author and adviser along with Yan Dong, a Smith assistant professor of logistics and operations management.

In another Bloomberg-supported dissertation and forthcoming Journal of Operations Management submission, Ph.D. students Isaac Elking and John Patrick Paraskevas explored a company’s supplier strategy and measured its profitability. Smith Professor and Charles A. Taff Chair of Economics and Strategy Curtis Grimm joined Corsi in advising the study.

“The Dean’s Office and our department chair, Professor Martin Dresner, have given tremendous support to this extensive data collection effort, which is providing an opportunity for groundbreaking research,” Corsi said.

360-Degree Experience

Smith students and faculty members step into a 360-degree experience when they enter the school’s main Bloomberg labs in College Park, Md. Two rooms surround users with wall-mounted electronic boards and stock tickers with real-time stock market information on equity, fixed income and commodity markets.

Additional workstations are housed at Smith’s Shady Grove, Baltimore and Washington, D.C., sites, and in the Van Munching basement in College Park.

Many Smith students also take advantage of the Bloomberg online self-directed certification courses and exams, said Charles LaHaie, Smith Information Technology's assistant director for financial markets and research labs. “The certification confirms to employers that a student has expertise with the Bloomberg Professional software,” he said.

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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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