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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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Cadet Investment Group (CIG)

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 middle-sized growth stocks while Team B invests only in large capitalization value 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. There are 31 active members and four alternates. Faculty advisors to the CIG are Col. Cliff West and Col. Bob Moreschi.

This year’s officers instituted a significant change in the investment process, with the implementation of a “top down” investment style. Members were 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 were the primary source for information about stock positions to sell and new stocks to purchase. Performance followed the uptrend in the market but after adjusting for fees the combined portfolio outperformed our benchmark, the S&P 500 Stock Index. Year over year from April 20 2009 to April 20 2010 the net return to the CIG portfolios was 50.0% while the S&P 500 rose 46.2%. YTD in 2010 through April 23, the net return of the combined portfolios was 10.0% but the S&P 500 only rose 9.2%. Considering that over these bullish time periods the portfolios usually held 10% to 15% of their assets in cash, the investment returns have been outstanding. Performance in excess of the benchmark continues the trend of the past several years.

After an aborted attempt in February to travel to New York City on the 7th annual investment trip (postponed due to 20+ inches of snow in Manhattan) 11 members and Col. Moreschi did make it to the Big Apple in April.  Highlights included informative meetings at 4 financial services firms, comprised of Bloomberg (financial data and software provider), Cramer Rosenthal McGlynn (a private money manager), Merrill Lynch (wealth management group), and TM Capital (investment banking).  Several NYC alumni again hosted the cadets to dinner, this year at Bobby Van’s, a fabulous NYC steakhouse.