A team of eight Georgetown McDonough Master of Science in Finance (MSF) students won the “Best Hedge Fund Strategy Award” from the Peeptrade University Challenge for their investment approach that turned a $1 million portfolio of stocks, options, and exchange-traded funds into $383 billion.
Georgetown McDonough students Jeff Cloud (MSF’18), Meghan Comiskey (MSF’18), Nicole Drewery (MSF’19), Stephen Freilich (MSF’18), Rafael Gutierrez (MSF’19), Jonathan Levi (MSF’19), Piro Polo (MSF’19), and Christine Young (MSF’19) set a global record in paper trading returns with their 38.3 million percent return over two months. Freilich, Levi, and Polo presented their strategy to a team of distinguished judges at the competition, which invited teams from 50 top business schools from around the world to compete in managing a $1 million portfolio. The team’s strategy involved, for example, investing in call options — which are analogous to borrowing money to buy a stock — on exchange-traded funds (i.e., stock-like versions of mutual funds).
“The Peeptrade Challenge was a great all-around experience,” said Levi. “As head trader and team captain, it was thrilling and rewarding to see such a positive performance, having turned $1 million into $383 billion over just eight weeks. Also the challenge was a great opportunity to get to know other MSF students both personally and professionally. We are proud of our achievements and are honored to have represented Georgetown McDonough.”
“Being a part of the Peeptrade University Challenge was great real-world experience as to how to manage a portfolio from start to finish,” said Young. “While we learn about finance in a textbook setting in the MSF program, practicing different theories and pricing models is different when all variables in the outside world are not constant. We worked creatively as a team to come up with our IPS/core portfolio model and to see the whole process though. We learned a lot about trading by using technical analysis and reading the markets to take advantage of current market conditions.”
Team advisors include Thomas Cooke, distinguished teaching professor and James Angel, associate professor of finance.
“We never thought we would see something like this. Watching Georgetown McDonough's team presenting their investment strategy that generated these unprecedented returns in a virtual environment was fascinating.”
— Juan Mendoza, founder and CEO, Peeptrade
“Unlike many of the competing schools, our students are employed full time and spend evenings and weekends working to bring about the best possible results,” said Cooke. “This year’s team developed a strong investment policy statement and worked within that framework. Over a period of eight weeks, the team invested in any number of options that benefited from the economic uncertainty generated from Washington. The U.S. and global markets fluctuated during the contest period, and the team recognized and identified special opportunities.”
“The 2018 Peeptrade Investment Challenge provided Georgetown McDonough students with the opportunity to make investment buys and sells outside of the classroom,” said Allan Eberhart, professor of finance and director of the MSF program. “We were thrilled to compete and are excited to receive this recognition among strong competition from other leading business schools.”
Eleven teams were selected for the final event on April 21 based on the successful performance of their portfolios, including Hong Kong Baptist University, Loras College, Universitat Autonoma de Barcelona, University of Chicago, University of Oregon, University of Southern California Marshall School of Business, University of Wisconsin-Milwaukee, University of Technology of Sydney, and Vlerick Business School. They presented and defended their investments to a panel of judges from the investment management industry. Winners were selected based on the strength and articulation of their strategies, not just the growth of their portfolios.
“We created the Peeptrade Challenge to give students a real money management experience, but we never thought we would see something like this,” said Juan Mendoza, founder and CEO, Peeptrade. “It is just unbelievable. Watching Georgetown McDonough's team presenting their investment strategy that generated these unprecedented returns in a virtual environment was fascinating. We are thrilled to see that the challenge is also now a platform where young talent can get discovered.”
Levi is in the early stages of developing a business plan to establish a hedge fund, Blue Condor, which has been reserved in Delaware and would be open to accredited investors.