TheExchang e NEWS FROM THE FINANCIAL ECONOMICS INSTITUTE AT CLAREMONT MCKENNA COLLEGE CMC PRESIDENT VOLUME 19, SPRING 2015 Hiram E. Chodosh RDS BOARD OF ADVISORS Director’s Report Peter K. Barker ’70 P’01 (Co-Chair) by Joshua Rosett JP Morgan Chase & Co. (Retired) James B. McElwee ’74 P’12 (Co-Chair) Independent Venture Capitalist THE 2014-15 Economics for his thesis titled 10b5-1 Plans Gary Birkenbeuel ’80 academic year and Earnings Management by High-Level Ernst & Young proved successful for Executives , in which he showed that firms J. Baxter Brinkmann P’16 the FEI as we manipulate earning ahead of stock The Brinkmann Corporation continued existing transactions under these plans in order to Jose Campos ’91 programming and obtain favorable pricing at transaction time. Deloitte & Touche LLP began looking to We would also like to note that one of our Heidi Nelson Cruz ’94 expand our reach in FES graduating seniors, T. Connor Schlegel, Goldman Sachs & Co. some directions. was awarded the Best Thesis in Economics, Nicholas P. Daifotis ’79 P’17 Joshua Rosett Regarding for his thesis on Strategic Risk Taking in RBC Capital Markets, LLC (Retired) continuing programming, we employed 32 Tournaments through the Lens of PGA Match Alan M. Delsman ’68 students during the Fall and Spring Play . Another FES graduating senior, Elan Deutsche Bank AG semesters, hired 8 full-time RAs last summer Bernstein, won the Outstanding Achievement Christopher Dodds P’13 P’15 and we’ve hired 7 full-time RAs for this in Quantitative Economics award. A past FEI The Carlyle Group summer, co-sponsored and participated in RA and current BMGI/Michael Larson Asset Maureen Downey ’93 the New York City Networking Trip, helped Pantheon Ventures organize and sponsored a pitch event for the See Director’s Report on page 2 Russell Greenberg ’79 CMC Student Investment Fund and two Altus Capital Partners finance conferences, brought in Randall Christopher D. Harris ’98 Kroszner as an Athenaeum speaker, and In This Issue: Damitz, Brooks, Nightingale, Turner, and Morrisset continued to support students by providing Alan C. Heuberger ’96 PG 2: Directors’ Report Continued; tutors for the Bloomberg Terminal as well as BMGI FEI Summer RAs & 2015-2016 Excel, Python, and Stata. On the initiative Stella Ho ’97 BMGI/Larson Fellows Moelis & Company front, we expanded programming in several PG 3-4: Andrew J. Kaiser P’13 areas, including data and tutoring support, 2015 NYC Networking Trip local finance-related programming, social Goldman Sachs Bank USA PG 5: Spring 2015 Student Research impact support (co-sponsoring a trip by 17 Christine Huk Mann ’87 Analysts Goldman Sachs & Co. CMC students to attend a conference and I. Joseph M. Massoud ’89 training program regarding local micro- PG 6 : SIF’s Claremont Finance Conference Anholt Services (USA) Inc. finance via the In-Lend organization), and PG 7: FEI Affiliated Faculty Publications Susan Matteson-King ’85 participated in the Research Institute Fair on Allianz Global Investors campus on April 3rd (we thank Ed Leathers PG 8: Recognizing FEI Seniors Therese Mrozek P’15 ’15, for his excellent representation of the Weston Presidio FEI at the event). PG 9: Recognizing FEI Seniors Continued; Thomas B. Neff ’76 During the 2014-15 academic year, 11 Randall Kroszner Speaks at the Ath FibroGen, Inc. students successfully completed the Financial PG 10: Where Will FEI Students Be John R. Shrewsberry ’87 Economics Sequence, and Joshua Thomas Working?; Upcoming Events Wells Fargo & Company won the prize for Best Thesis in Financial Robert P. Thomas ’99 The George Kaiser Family Foundation Julius Wang P’14 P’15 Samena Asia Managers FEI DIRECTOR Joshua Rosett ADMINISTRATOR Brian Dennis The Financial Economics Institute fosters education and research in financial economics by ASSISTANT TO THE DIRECTOR offering a unique undergraduate curricular program, the Financial Economics Sequence, Terri L. Van Eaton supporting state-of-the-art databases, and encouraging student-faculty interaction on research. 2 THE FINANCIAL ECONOMICS INSTITUTE to the President, and from 2006 to 2009 As noted in the Fall newsletter, we hired Director’s Report from page 1 served as a Governor of the U.S. Federal Aviv Caspi ’16 to provide Python tutoring Reserve System. As such, he played an and support, and he assisted in a senior Management Fellow, Andrew Dodds, won important role in the Fed’s actions to thesis analyzing text components as part of a the award for Best Senior Overall. The mitigate the financial crisis that began in broader analysis of project financing via awards were announced at the Robert Day 2008. His talk at the Athenaeum focused on crowdfunding site Kickstarter. We are also School of Economics and Finance Awards the Fed’s responses to the financial crisis, as in negotiations with an outside group to Night at the Athenaeum on May 4th. well as initiatives to improve the stability of provide support for development of access Our previous report noted the Fall the financial sector and provide consumer to CommonCrawl, a web imaging project, 2014 Southern California Finance protection and disclosure for credit cards for projects in finance. Conference organized by Professors Mitch and mortgages. The Lowe Institute of Second, during the Spring semester, we Warachka and Eric Hughson, with keynote Political Economy co-sponsored Professor had two teams working on projects in local speaker Professor Ivo Welch of UCLA, as Kroszner’s visit to CMC. finance, one team constructing indices by well as the Student Investment Fund pitch In January, the FEI and RDS jointly geographic and industrial sectors for event including representatives of BMGI sponsored the New York City Networking publicly traded firms headquartered in and WestRiver Capital. We followed those Trip, taking 14 students to see a range of California. A second team began research up this Spring by helping to organize the firms across a variety of service types and on measures of deal activity in California, Student Investment Funds’ Claremont sizes within the financial sector. A highlight leveraging as one source of information one Finance Conference on February 13, 2015, was our visit to the floor of the New York of the new databases purchased last Fall. co-sponsored with the Pomona College and Stock Exchange. Several students These will appear on our new website, Scripps College Student Investment Funds. interviewed with firms while on the trip, slated to go online later this year. Though The conference included a luncheon at the and some will be doing their summer not yet begun, we also plan a real estate Athenaeum with a Keynote talk by Don internships this summer with firms we analysis component for Southern California Gould ’79 POM, President and Chief visited in January. We thank Michelle real estate segments. Investment Officer at Gould Asset Chamberlain for her excellent work Looking to next year, we anticipate Management, panel sessions at the organizing and leading the trip. working more closely with the CMC Freeberg Forum, a networking and cocktail During the year, we made progress on Student Investment Fund on several reception, and dinner at the Athenaeum several initiatives. First, regarding data, we aspects of our programming. Our tentative with Keynote Speaker Shaw Wagener ’81, reviewed our existing data offerings (we plans include collaboration in bringing Chairman at Capital Group International thank Gabriel Ayala ’16 for his excellent FEI/SIF alumni to campus for information and CMC Trustee. The event was co- work compiling this review) during the year sessions, and SIF participation in financial sponsored by the Robert Day School of and added two new databases from Bureau literacy training. Economics and Finance. Van Dijk noted in our Fall report. We Finally, in closing, on behalf of myself As part of the FEI Speaker Series, the subsequently sponsored a video conference and the many students and faculty who have Institute brought Randall S. Kroszner to training session for our faculty and students benefitted from the FEI’s activities this year, CMC as an Athenaeum speaker the evening provided by a Bureau Van Dijk support I thank both Terri Van Eaton and Brian of February 12, 2015 (see article on page 9). specialist. We consider data to be a high Dennis for their excellent work at the FEI. Kroszner is the Norman R. Bobins priority for the FEI, and over the summer Also, as always, I am grateful to the Robert Professor of Economics at the University of will be looking to add several additional Day School Board members and others for Chicago’s Booth School of Business, twice databases. We are also pursuing a strategy their generous contributions which make served on the Council of Economic Advisers for incorporation of big data into the FEI. these activities possible. L Congratulations to the FEI Congratulations to the 2015-2016 BMGI/ Summer 2015 Research Analysts: Michael Larson Asset Management Fellows: AMBERISH CHITRE ’18, Economics major RACHEL DOEHR ’16, Economics major with the Financial Economics QIANYUN “CAROLE” GAO ’17, Economics/Psychology dual Sequence major BRIAN ECKHARDT ’16, BA/MA – BA degree in Economics, Master’s PHILLIP JAUREGUI ’17, Psychology/Economics dual major degree in Finance KANISHK KAPUR ’18, Economics-Accounting major with the AMBER FALKNER ’16, BA/MA – BA degree in Economics, Master’s Financial Economics Sequence degree in Finance MINGDA LIU ’17, Economics-Accounting major SEAN SAKAGUCHI, PPE/Economics-Accounting dual major with the CHENGWU “HARRIS” XUAN ’17, Economics major Financial Economics Sequence YI “NORA” ZHANG ‘17, Economics/Mathematics dual major ALBERT XU ’17, Economics and Philosophy double major CLAREMONT MCKENNA COLLEGE 3 2015 New York City Networking Trip By Brian Delaney ’16 and Kaitlyn Kelleher ’17 THIS JANUARY, THE FINANCIAL ’01 introduced Goldman’s Securities Division benefits of a liberal arts education for an Economics Institute and the Robert Day to the group.