JSE/Liberty Investment Challenge: UWC students prove to be a great investment
What would you do with a million Rand? Would you buy a really fast car? Or a nice house? Or maybe you'd save it for a rainy day? Or do you have the guts and skill to invest it, and try your luck on the stock market?
That's what a team of third year Finance students at the University of the Western Cape (UWC) did with the R1,000,000 they were given to invest from March to September this year in the 40th anniversary JSE/Liberty Investment Challenge. In this case, it was a virtual trading platform – but the prizes they received for their stellar performance were very real indeed.
The UWC team, dubbed the Sky Divers, consisted of Trevor Chatukuta, Abonga Sodawe, Dube Mzwakhe and Athenkosi Mjebeza, with the supervision and mentorship of Prof Andy Heng-Hsing Hsieh, Head of the Department of Finance at UWC's School of Business and Finance.
The Sky Divers blew the competition out of the water, scoring a 114% return on investment over the six months of the Challenge (a net profit of R1,140,000!), handily dominating Wits' Tripod Traders in second place (with returns of 86%) and third-placed UCT team White Hare Capital (with returns of 68%). Their victory earned them R25,000 and an all-expenses-paid trip to Brazil, at an awards ceremony held in Sandton, Johannesburg on 18 October 2013.
For forty years, the JSE/Liberty Investment Challenge has provided an opportunity for students to learn more about investing on the JSE (Johannesburg Stock Exchange), as well as the larger role that such investment plays in South Africa's economy. The Challenge helps participants learn more about the fundamentals of investment strategy and encourages them to research and strategise issues around trading.
Participating teams were given an imaginary sum of R1,000,000 to invest in JSE-listed shares, and the performance of their investments was monitored and measured closely against teams from other universities – with a record-breaking 41 universities and an incredible 4,320 students participating in this year's challenge.
The UWC team believes that the game format allowed them to have fun, while applying the knowledge and skills they had acquired during their studies in the real world of investment.
“The ever-fluctuating stock prices added several twists,” says Trevor, “and we made money, and lost money, and made money again, and had heated debates. But the most interesting part of the game was when the competition became intense in the last few months. Our fellow contestants were tactical and at times took the lead near the closing stages of the game, which kept the adrenaline high. We had to be innovative and tactical to come up with few a strategies to win the game.”
Prof Hsieh attributes the Sky Divers’ stellar performance to three things: their hard work, the way they applied their classroom knowledge, and their ability to make decisions based on facts, rather than emotions. He encourages all students to participate in the competition.
“The Challenge is a perfect platform for finance students to practice what they learned in class, and for other students to learn as well. They gain invaluable real-life experience with virtual money, so they’re allowed to make mistakes. It’s a game that you can only win, even if you lose.”