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 and funded 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 member served in the capacity of Vice Chair of Education. There are 31active members and four alternates. Faculty advisors to the CIG are Col. Cliff West and Col. Bob Moreschi.

The group uses a “top down” investment style. 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.

The small cap group began the academic year with about $143,411 and finished April with $163,279, a gain of 13.9%, net of fees. The large cap group began the year with $134,154 and finished April with $153,689, a gain of 14.6%, net of fees. Over the same time period the S&P500 Stock Index gained 10.6%.

 

Time Period 

Combined Portfolios A&B  S&P 500 Stock Index 
October 2006-April 2013

58.5%

19.1%

April 2012-April 2013

14.2%

14.0%

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. In August 2013, a third group will be added. There will be a large cap, a mid-cap, and a small cap portfolio. Each group will begin the academic year with $100,000 and will continue to maintain the portfolios over subsequent summers. The expansion to three groups means an additional 12 cadets will be added, bring total membership to 43 regular members and four alternates.

In November 2012, ten cadets along with Cols. West and Moreschi traveled to NYC on the 10th annual investment trip. Highlights included informative meetings at Bloomberg (financial data and software provider), JP Morgan (trading), and TM Capital (investment banking). Several NYC alumni (and CIG alums!) hosted the cadets to dinner at O’Lunney’s.