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 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 thirty-one active members and four alternates. Faculty advisors to the CIG are Col. Cliff West and Col. Bob Moreschi. New this year was an additional officer position: Vice Chair for Education. This officer was charged with developing a series of investment education presentations for the general membership.

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 followed the uptrend in the market but after adjusting for fees, the combined portfolio outperformed our benchmark, the S&P 500 Stock Index.

CIG Recent Performance Record 

Time Period  Portfolio A  Portfolio B  S&P Stock Index 
4-4-10 to 12-31-10     8.8%     11.0%          6.7%
12-31-10 to 4-6-11     7.7%      6.8%          6.2%
4-4-10 to 4-6-11   17.2%    18.6%        13.3%

Considering that over these bullish time periods the portfolios usually held 5% to 10% 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.

In November, fourteen cadets and Col. Moreschi traveled to NYC on the ninth annual investment trip. Highlights included informative meetings at four financial services firms, comprised of Bloomberg (financial data and software provider), Liquidnet, Inc. (institutional electronic trading platform), Rainier Investment Management, Inc. (money management), and TM Capital (investment banking).  Several NYC alumni again hosted the cadets to dinner, this year at O’Reilly’s Pub.