Meticulous ain’t save your hide

Businessweek takes a look at the results of some of the MBA student-run investment funds.

This year the learning curve is steeper than most. Two days after the SMF class’s first purchases, the Dow Jones industrial average tumbled 800 points and finished the day below 10,000 for the first time since 2004. The class’s meticulous mathematical modeling and historical analysis suddenly meant nothing as the MBAs saw stocks they thought were safe bets—Johnson & Johnson (JNJ), Procter & Gamble (PG), Exxon Mobil (XOM), and IBM (IBM)—crash and burn.

It still fascinates me that speculating and investing, something that used to be a lot wilder and woolier — think in the days of the railroad barons and the pre-crash Twenties — has gotten so far from its roots in the halls of the university. All this math and statistical modelling and we’re still suffering the same fates, if not worse; at least in olden times workers stuck to their work and socked their money away. Often now, it’s at the mercy of those who take a much keener interest in money and markets.