Donna Potter
Executive Secretary

P:  (540) 464-7234
F:  (540) 464-7005

Virginia Military Institute
345 Scott Shipp Hall
Lexington, VA  24450

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The Cadet Investment Group

The VMI Foundation founded the Cadet Investment Group (CIG) in 1986. The group’s mission is to learn about investing and the stock market. To do this, members serve as investment analysts and portfolio managers. Divided into two teams, each team has its own investment style and methodology. Team A focuses on small and middle-sized stocks while Team B invests in large capitalization stocks. CIG is open to all 3rd, 2nd and 1st class cadets, without regard to major. The group is managed by a Chairman, and each group has its own president and vice president. One or two members will serve in the capacity of Vice Chair(s) of Education. There are thirty-one active members and four alternates. Faculty advisors to the CIG are Col. Cliff West and Col. Bob Moreschi.

The group continued to use a “top down” investment style, initially implemented last year. Members are divided into three-person sector teams, tasked with analyzing their sector and making recommendations on the amount of dollars to invest in each sector. These teams also are the primary source for information about stock positions to sell and new stocks to purchase. Performance was mixed as in the near-term the portfolio lagged the broader market but over the longer-term (adjusting for fees) the combined portfolio outperformed the benchmark S&P 500 Stock Index.

                        CIG Recent Performance Record 

Time Period 

     Combine Portfolios A & B 

            S&P Stock Index 

12/30/11 - 4/27/12

9.3%

11.6%

12/31/10 - 4/27/12

8.0%

11.6%

9/29/06 - 4/27/12

37.4%

5.1%

April 2011 - April 2012

1.0%

3.5%

April 2010 - April 2012

18.7%

15.6%

Considering that over these time periods the portfolios usually held 5% to 10% of its assets in cash, the investment returns have been outstanding. Since fall 2006 the Group has not been required to liquidate the portfolio each summer. Top performers still in the portfolio since that policy change in large cap stocks is Norfolk Southern, up 101.25%, and in small/mid cap stocks is Monster Beverage, up 325.96%.

In November, nine cadets along with Cols. West and Moreschi traveled to NYC on the ninth annual investment trip. Highlights included informative meetings at three financial services firms, comprised of: Bloomberg (financial data and software provider), Barclay’s Capital (trading and investment banking), and Global Hunter Securities (traditional sell-side brokerage firm). Several NYC alumni (and CIG alums!) hosted the cadets to dinner at O’Reilly’s Pub