Dear Alumni, Students, and Friends and Supporters of the Finance Department:
As I write this summary, the financial markets worldwide are in turmoil, with credit markets freezing up – lenders are increasingly unwilling to make loans at any price and any maturity, for fear that borrowers will be unable to repay them. Equity markets are reflecting this uncertainty as well as the strong perception that global economies will fall into recession and that corporate profits will fall significantly. The DJIA is now down more than 30% from last October’s high. As a matter of comparison, the last bear market with equally strong fundamentals occurred in 1973-74 with a drop in the DJIA of 45%. That bear market lasted nearly two years, beginning in January, 1973 and ending in December, 1974. If you have concerns about your investments, retirement portfolio, etc., I strongly urge you to seek advice from highly qualified individuals who have experienced bear markets. They will better understand your frame of mind in this environment. Remember Warren Buffet’s line – Be fearful when others are greedy, and greedy when others are fearful. Of course, you might also take to heart John Maynard Keynes’ observation of the markets: Markets can remain irrational longer than you can remain solvent.
We entered the 2008/09 academic year with another major change in our Finance faculty. Dr. Frank Laatsch, a well-respected member of the Department since 1988 retired from BGSU. He continues in academics as a faculty member in the Department of Economics, Finance, and International Business at the University of Southern Mississippi in Hattiesburg, MS. I know that Frank would enjoy hearing from his former students as he moves to a slightly warmer climate (does it ever snow in Hattiesburg, Frank?).
The Finance Specialization continues to be a strong program within the College of Business Administration. In 2007-08 there were 225 students in the Specialization, level with the numbers for the last 3 years, but well above the 2004 level of about 180 students. These 225 students represent approximately 10% of the total undergraduate enrollment in the College. Finance continues to be the 4th largest specialization, in regards to number of students, in the College. We graduated 58 students this past May, one of the largest Finance graduations in some time. Another positive note: scholarship funds, made available by generous donations from our supporters and friends, totaled over $22,000 for the coming academic year, a 70% increase over 2006/07 scholarship funds. We appreciate the support that several of you provide.
The Financial Management Society, our student organization, had a really good year. The number of student members in the organization totaled nearly 60, a modern day record for registered students. Several
speakers graced us with their presence over the course of the academic year; and, 25 of the students took a trip to Chicago in April to visit the option and futures exchanges and to do some sightseeing around Chicago.
Students in FIN 435/MBA 551 (Portfolio Management), as part of their course activities, reviewed various i-share products for suitability and attractiveness, and made recommendations for certain of these investment vehicles to be added to the portfolio of the Student Managed Investment Fund. As indicated in last year’s newsletter, $250,000 of BGSU Foundation funds were made available for this purpose. The value of the fund reflects the general trend in the markets and is down approximately 20% from its beginning value. The fund contains i-share ETFs that represent investments in domestic and international equities as well as in fixed income. The experience gained by the students in this endeavor is invaluable and we owe a debt of gratitude to the
Foundation and its Investment Committee for enabling us to invest these funds.
One final note, two of our students, Jeff Fichtelman and Ryan Griffith, formed a team to analyze a chosen company’s investment suitability as part of Northwest Ohio’s 1st Annual University Investment Research Challenge promoted by the CFA Society of Toledo, BGSU, and UT, with support from the CFA Institute. They competed against a team from UT in April and were awarded First Place based on the judges’ opinion that they made the best combination of the written and oral presentations of their report.
We have had many bright students come through the Finance Specialization, and we hope to have many more. Any support you can provide (money, time, talent, etc.) to help them, or to help us help them, is always greatly appreciated.
My best to you and to your families and loved ones. Best of luck in this difficult economic time.
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