The Value Investing Group at the University of Southern California (USC) is a prominent student organization focused on the principles of value investing. With over 100 active members, it has become one of the largest and most active value investing student groups in the world. The group’s activities center around promoting long-term, fundamentals-based investing principles on campus and providing members with practical experience in equity analysis and portfolio management.
In weekly meetings, experienced members present stock pitches focusing on intrinsic value estimation using discounted cash flow analysis. Guest speakers from top value investing firms also regularly share their insights with members. Through its innovative student-managed fund, members get hands-on experience managing a six-figure portfolio by applying the timeless investing wisdom of legends like Warren Buffett and Benjamin Graham.
Overall, the Value Investing Group at USC plays an invaluable role in propagating value investing ideals among finance students on campus. Its emphasis on long-term horizon investing, margin of safety, and investing based on intrinsic business value rather than speculation is much needed in today’s world of high-frequency trading and momentum chasing.
Promoting long-term investing principles
The Value Investing Group at USC strongly advocates long-term investing focused on business fundamentals. Its weekly meetings typically revolve around detailed stock pitches, where members conduct in-depth analysis into a company’s financial statements, industry dynamics, management quality, and valuation to estimate intrinsic value. Short-term price movements and technical analysis get minimal attention. There is a strong focus on maintaining a long investment horizon and tuning out the market’s day-to-day noise. Guest speakers from prestigious value firms like Ruane, Cunniff & Goldfarb also regularly visit to reinforce the merits of long-term, fundamentals-driven investing. Through its curriculum and activities, the Value Investing Group arms members with the patience, discernment and wisdom to think like business owners and minimize trading.
Teaching sound valuation techniques
The Value Investing Group provides members with a rigorous education in equity analysis and valuation. Members learn essential skills like reading financial statements, analyzing competitive dynamics, assessing management capability, and intrinsic value estimation using discounted cash flow analysis. During stock pitches, assumptions are thoroughly scrutinized and defended. Conservative assumptions, reasonable growth estimates and sufficient margin of safety are emphasized. Members also get exposed to advanced valuation techniques like sum-of-the-parts analysis and comparables. The group’s training curriculum is largely modeled after the value investing courses at Columbia and Stanford Business Schools. Members who sincerely apply these lessons gain skills that readily transfer to investment activities after graduation.
Offering real-world experience
The Value Investing Group manages an active student-run investment fund with actual money from the university’s endowment. The fund was started with an initial $100,000 investment and has grown significantly since inception. A portfolio management team of 5-6 members actively manages the fund by selecting stocks based on the group’s value investing principles. This hands-on experience of managing real capital provides members with invaluable real-world investment experience before graduation. The process instills discipline, prudence and accountability. Members involved with the fund also get great talking points for job and internship interviews.
Through its emphasis on long-term fundamentals-based investing, rigorous valuation training and hands-on portfolio management experience, the Value Investing Group at USC plays a vital role in advancing sensible investing ideals aligned to those espoused by legendary investors like Warren Buffett and Benjamin Graham. Its efforts help counterbalance many of the short-sighted speculative tendencies prevalent in today’s financial world.