NTU's Self-Organized Student Team
Won the First Prize
in the U.S. $10 billion Financial Olympiad
The economy is in a slump. Instead of finding a part time job to make some extra income, it is better to participate in a contest to win prize money! The "GDAA Financial Olympiad - Global dynamic asset allocation national challenge" under the supervision of the Ministry of Education was co-hosted by the National Central University, the National Jiao-tung University, the National Tsing-hua University, and Feng Chia University, in which 82 teams with over 500 members participated, each team trying to come up with the best ways to spend the virtual U.S. 10 billion virtual investment capital.
The challenge was a rigorous competition which lasted for 18 weeks (from August to early December). With assets(77 assets in total) allocated over five capital markets(stocks, bonds, foreign exchange, raw materials, and real estate), the Olympiad rated the teams' three capabilities, which were: performance capability, risk management capability, and marketing capability. The seven elite teams that made to the finals had a final competition on December 12th, 2009, where the "Vulture" team, comprised of students from NTU and from the Takming University of Science and Technology, won the top prize with an annualized compensation rate as high as 40.78%, and the annualized standard deviation, which represented the degree of risk fluctuations, was controlled under 8.73%. Owing to its ability to pursue absolute returns and to reap stable profits, the Vulture team was able to win the top prize. Dr. Wei-Ling Chiang, President of National Central University, handed the Vulture team the top prize trophy "The Gold Award for the Best Funding Team" and N.T. 200,000 dollars in cash. He even encouraged the students to participate in the Olympiad again next year when the Olympiad becomes international, so that a team from Taiwan can win the top prize!
Professor Hsien-Fa Lowe of the hosting Feng Chia University, had this much to say: "Where the heroes are, without a battlefield and a warfare no one really knows. But a real talent can be detected through competition. The winning students cannot be taken for granted. Their victory is hard-earned, and they should establish a consensus among themselves. Besides winning, they must harbor an attitude of sharing and learning when they enter the competition, and they should compare themselves with the other students to augment their own strength." Captain of the Vulture team, Mr. Po-Sheng Chang, is only 19 years old this year. He is a student of the Department of Electrical Engineering of NTU. He led the Vulture team to participate in the Olympiad competition, whose members included Mr. Yi-Ping Lin and Mr. Jin-Chuan Wang from the Department of Finance, Miss Ting-Shuan Lee from the Department of Political Science and Mr. Ching-Yu Chen and Mr. Yen-ting Wu from the Takming University of Science and Technology. Mr. Yi-Ping Lin, a student from the Department of Finance of NTU said:"Participating in the Olympiad competition allowed us to put what we learned in class to practical use, and made us become aware that the real marketing situation is a lot tougher than the tests we had. In order to achieve good scores, we had to spend a lot of time every day watching the data from the real markets. I'd say it was a very good training for us all." The Vulture team allocated their assets primarily on bonds (mainly the U.S. commercial real estate high yield bonds, the U.S. corporate bonds and the new market bonds) and the stock market, and their investments were coupled with raw materials and foreign exchange. Their investment strategy was to search for undervalued markets, and allocate their assets evenly over markets which they thought would bring in steady profit. They also made use of the advantages of modern technology. Every Sunday, they spent 2-3 hours on the internet to exchange their ideas on the market and to discuss trading strategy. That they were able to win the top prize was the result of a division of labor. Po-Sheng Chang and Yi-Ping Lin were responsible for the overall economic analysis, Ching-Yu Chen and Yen-Ting Wu provided the technical analysis, while Jin-Chuan Wang and Ting-Shuan Lee were responsible for marketing, raising the reputation of their funds!!
According to the plans of the Ministry of Education, two years from now basic financial education will be incorporated into the curriculum of the current nine-year obligatory education system, whereas it will become a subject in the basic scholastic aptitude tests in five years time. Professor Jenher Jeng, CEO of Global 5 Capital Management Ltd., said in his capacity as chief implementation official of this event:"The crucial gap in financial education lies in the lack of practical experience and in the inability to connect to current events. To make up for this deficiency, we can only rely on encouraging the students to participate in competitions and at the same time give them succinct teaching materials that link up to current events. Correct investment concepts and financial management capability cannot be achieved by one big step. Instead, they can only be accrued through years of practical management and financial analyses. When we know where the hidden business opportunities are in the financial markets and when we become aware of the hidden risk factors, we can really talk about capital management. No matter whether you are rich or poor, financial management capability is the common chips that an adult or a child can have in his lifetime. The sooner one accumulates the right amount of chips, the better. In order to cultivate Taiwan's competitiveness, to instill in our future masters the right concepts and financial outlook, Taiwan has taken the first bold step by mandating that basic financial education become part of the nine year obligatory education curriculum. However, the crux of the issue is that whether the students can put what they learned in classrooms to real use. Consequently, we as teachers should actively encourage students to participate in competitions, so they can accumulate practical experience, and what they have learned in classrooms can be put to real use. Otherwise, students would be just taking one exam after another, and the real financial world is still far away from them. By participating in these competitions, they can demonstrate their real strength, and even win prizes!!" For more information about the Olympiad, please log onto: http://gdaa.morgenstern.com.tw/gdaa-olympiad.html。